Land and Environment Court New South Wales Medium Neutral Citation: Azizi v Council of the City of Ryde; Alnox Pty Ltd v Council of the City of Ryde [2021] NSWLEC 40 Hearing dates: 22 April 2021 Date of orders: 30 April 2021 Decision date: 30 April 2021 Jurisdiction: Class 3 Before: Moore J Decision: See orders at [122] and [123] Catchwords: COMPULSORY ACQUISITION - Respondent acquires land for public recreation purposes - land zoned R2 Low Density Residential prior to rezoning for public recreation - land compulsorily acquired from each Applicant after successful hardship applications - Applicants dissatisfied with Valuer General's compensation determinations - Applicants commence proceedings seeking higher compensation - dispute as to whether Valuer General's future land zoning basis for compensation is correct - Applicants contend future zoning would be R4 High Density Residential - Respondent contends zoning would remain R2 Low Density Residential - Consent Orders in related Supreme Court proceedings resulted in advance payments to each Applicant - advance payments significantly less than 90% of the compensation determination made by the Valuer General in each instance - each Applicant now seeks an order requiring the Respondent to make an additional payment to bring the total advance payment to 90% of the Valuer General's compensation determination - Respondent contends in each proceeding that the Valuer General's compensation determination is too high and that 90% of the Valuer General's determination would exceed the amount that will be the outcome in each proceeding - Respondent has paid $5 million into its legal representatives' trust account to protect each Applicant's compensation position but resists paying additional advance payment amounts direct to each Applicant - Respondent proposes continuation of the trust account regime which had been established pursuant to this Supreme Court proceedings' Consent Orders - consideration of the statutory regime in the Land Acquisition (Just Terms Compensation) Act 1991 (the Land Acquisition Act) concerning advance payments - Applicants submit there is no power to withhold advance payments as proposed by the Respondent - held that there is no discretionary power to withhold the statutorily mandated advance payments - held that there is power to order the Respondent to make the additional advance payments sought - additional advance payments ordered to be made DISCRETION - appropriate to consider issues of discretion on a contingent basis - statutory regime in the Land Acquisition Act for recovery of monies when advance payments exceed the quantum of compensation determined by the Court - consideration of whether Respondent has an arguable case in support of its future zoning position - held Respondent has an arguable case in support of its future zoning position - nature of the financial information concerning each of the Applicants - necessity to evaluate evidence as to whether each applicant would be able to repay any overpayment of monies made as advance payments - taking into account the advance payment already made to Mr Azizi, no basis to conclude he would not be able to make any required repayment - if power to maintain Respondent's trust account regime, it would not be appropriate to exercise it in Mr Azizi's proceeding - taking into account the advance payment already made to Alnox Pty Ltd, there is a proper basis to conclude Alnox Pty Ltd would not be able to make any required repayment - if power to maintain Respondent's trust account regime, it would be appropriate to exercise it in the Alnox Pty Ltd proceeding COSTS - costs follow the event in Class 3 compensation proceedings - both Applicants succeed in obtaining orders sought in the relevant Notice of Motion - Respondent ordered to pay Applicant's costs of the relevant Notice of Motion Legislation Cited: Land Acquisition (Just Terms Compensation) Act 1991, ss 4, 48, 66 and 68 Land and Environment Court Act 1979, ss 16 and 23 Land and Environment Court Rules 2007, r 3.7 Ryde Local Environmental Plan 2014 Uniform Civil Procedure Rules 2005, r 42.1 Cases Cited: Blacktown City Council v Concato [2018] NSWSC 1039 Brock v Roads and Traffic Authority of New South Wales (No.2) [2012] NSWLEC 114 Council of the City of Ryde v Azizi [2019] NSWSC 1605 Gosford City Council v Valuer-General (1996) 90 LGERA 413 Haig v Minister Administering the National Parks & Wildlife Act (No 3) (1996) 90 LGERA 408 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 Sydney Water Corporation v Caruso and Ors (2009) 170 LGERA 298; [2009] NSWCA 391 Taylor v The Owners of Strata Plan 11564 and Others (2014) 253 CLR 531; [2014] HCA 9 Category: Procedural rulings Parties: 168439 of 2020 Raymond Boutros Azizi (Applicant) Council of the City of Ryde (Respondent) 168457 of 2020 Alnox Pty Ltd (Applicant) Council of the City of Ryde (Respondent Representation: Counsel: Mr I Hemmings SC/Mr T Poisel, barrister (Applicant in both matters) Mr M Hall SC/Ms J McKelvey, barrister (Respondent in both matters) Solicitors: Madison Marcus (Applicant in both matters) Bartier Perry (Respondent in both matters) File Number(s): 168439 and 168457 of 2020 Publication restriction: No TABLE OF CONTENTS Introduction The present proceedings. The Notices of Motion Representation The hearing of the Notices of Motion The issues on the Notices of Motion The relevant statutory provisions Introduction The Land Acquisition Act Introduction The relevant provisions of the Act The Compensation Notices The evidence The hardship evidence The submissions on the power of the Court Introduction The Azizi interests' position The Council's position Consideration Discretion Introduction Town planning issues The Azizi interests' ability to repay if required Introduction The relevant correspondence between the legal representatives Hardship evidence The position of Mr Azizi The position of the Company Timing for requiring payment Costs Orders Judgment Introduction 1. On 24 August 2018, the Council of the City of Ryde (the Council) compulsorily acquired three parcels of land in North Ryde for the purposes of extending Blenheim Park. One of the parcels of land was acquired from Mr Raymond Boutros Azizi (Mr Azizi), whilst the remaining parcels were acquired from Alnox Pty Ltd (the Company). For the purposes of these two proceedings, it is appropriate to refer to the dispossessed owners collectively as the Azizi interests unless separate identification is required. 2. The land was compulsorily acquired by the Council pursuant to the Land Acquisition (Just Terms Compensation) Act 1991 (the Land Acquisition Act). The necessity for such acquisition arose as a consequence of the Council having rezoned the land from R2 Low Density Residential to RE1 Public Recreation pursuant to the Ryde Local Environmental Plan 2014 (the LEP). 3. These compulsory acquisitions were triggered by applications made to the Council by the Azizi interests seeking to invoke the hardship provisions in Pt 2 Div 3 of the Land Acquisition Act. 4. It will be necessary, later, to return to a little detail of the matters raised by the Azizi interests in their applications seeking the application of the hardship provisions of the Land Acquisition Act. 5. The processes relevantly arising under the Land Acquisition Act involved the Valuer General making a determination as to the appropriate level of compensation to be paid to each of the Azizi interests. Although there are other financial elements actually or potentially arising under the Act, those might properly be regarded as ancillary matters and play no part in these interlocutory proceedings. 6. Initially, the Valuer General made determinations as to the appropriate compensation to be paid to each of the Azizi interests. The Valuer General's process for doing this was challenged by the Council in the Supreme Court. On 20 November 2019, the Valuer General's process was held to be defective and needed to be undertaken again (Council of the City of Ryde v Azizi [2019] NSWSC 1605 - the Supreme Court proceedings). It will be necessary, later, to return to address one element of the decision of Payne J in the Supreme Court proceedings. 7. However, as an outcome of those proceedings, the Council and the Azizi interests agreed to a regime established by Consent Orders, whereby money was advanced to each of the Azizi interests directly and some other payments were made to third parties on behalf of the Azizi interests. These payments to third parties were as requested by each of the Azizi interests. However, in the present context, it is to be noted that there is no controversy concerning this process. 8. As part of the Consent Orders arising out of the Supreme Court proceedings, additional sums were also lodged by the Council with its legal representatives to be held in trust pending the further compensation determinations required to be undertaken by the Valuer General. In total, $5 million was paid by the Council into the trust account. 9. Although the obligation to maintain that balance in the Council's legal representatives trust account no longer arises (as a consequence of the Valuer General having undertaken the fresh compensation determination process required as the outcome of the Supreme Court proceedings), the Council has maintained that financial arrangement and now seeks to rely upon it for the purposes of the Notices of Motion with which I am dealing in these proceedings. The present proceedings. 1. The Valuer General, having undertaken fresh valuations of the compulsorily acquired parcels of land, determined that the compensation payable was to be: 1. $3,981,185 to Mr Azizi; and 2. $5,994,438 to the Company. 1. Each of the Azizi interests has exercised the right given by s 66 of the Land Acquisition Act to appeal to this Court against the relevant quantum of the compensation determinations set out above. The two proceedings were commenced on 5 June 2020. 2. Each of the Azizi interests contends that the Valuer General's determined compensation is too low. The amounts which the Azizi interests now contend are the appropriate compensation amounts are: 1. $7,364,060 to Mr Azizi; and 2. $11,335,940 to the Company. 1. It is to be noted that interest at a prescribed rate accrues with respect to this compensation until the total required compensation is paid. Questions of interest accrual only require consideration in a limited, later regard. 2. It is to be observed that, although the Council has no freestanding statutory right to challenge the Valuer General's determination (Gosford City Council v Valuer‑General (1996) 90 LGERA 413), it is able to do so in circumstances where there is, as here, a contested claim on behalf of the dispossessed landowners proposing that the Valuer General's determination was, in each instance, too low and should be increased. 3. As a consequence, in each of these proceedings, the Council proposes to argue that the correct amount of compensation payable to each of the Azizi interests should be less than that determined by the Valuer General for that interest. Such an outcome is one legally capable of being the result in the proceedings brought by each of the Azizi interests. 4. It will also be necessary, later, to describe in a little more detail the nature of the competing positions advanced on behalf of the Azizi interests and on behalf of the Council as providing an appropriate evidentiary basis upon which this Court should, acting as the judicial valuer, determine the compensation to be paid. 5. The Land Acquisition Act establishes further statutory process elements to which I will need to turn. The first of them is an advance payment regime established by a combination of ss 48 and 68(2)(a) of the Act, whilst the second is an overpayment recovery regime - this being established by s 48(6) of the Act. It is sufficient, for present purposes, to note that the payments earlier described as having been made to each of the Azizi interests did not arise, in a formal sense, pursuant to the advance payment regime but were as a consequence of Consent Orders (now expired) arising from the Supreme Court proceedings. The Notices of Motion 1. On 14 January 2021, each of the Azizi interests filed a Notice of Motion seeking that the Council be ordered to make further payments so that the full advance payments required by s 68(2)(a) of the Land Acquisition Act would have been made to the Azizi interests. 2. Although, at the time that the Notices of Motion were filed, there appeared to be a dispute in each proceedings as to the quantum of further advance payment which I might order, if I was satisfied that it was appropriate to do so, that position was resolved by the time of the hearing before me on 22 April 2021. 3. At that hearing, Amended Notices of Motion were filed in court for each of the Azizi interests and leave given, without objection from the Council, to rely on the amended motion in each instance. The terms of the amended motion in the proceedings on behalf Mr Azizi of are: 1 An order, pursuant to s 66 of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW), s 16 (1), (1A) of the Land And Environment Court Act 1979 (NSW) and/or any other enabling power of the Court that the Respondent pay to the Applicant 90% of the amount of compensation in the Compensation Notice dated 10 March 2020 ($3,981,185), less [$2,000,000], plus interest from 24 August 2018 (Acquisition Date). 2 Costs 1. The amended motion on behalf of the Company is in identical functional terms, with the amount being sought being $5,994,438 less $3,000,000 already paid plus interest from 24 August 2018, rather than that set out above in the amended motion for Mr Azizi. Representation 1. The Azizi interests were represented by Mr I Hemmings SC and Mr T Poisel, barrister. The Council was represented by Mr M Hall SC and Ms J McKelvey, barrister. Concise but comprehensive written submissions had been filed for the parties prior to the hearing. To the extent necessary, reference will later be made to those submissions. The hearing of the Notices of Motion 1. The hearing took place in court on Thursday 22 April 2021. No oral evidence was required. The issues on the Notices of Motion 1. The issues presently in contest can be summarised as being: 1. For the Azizi interests, Mr Hemmings proposes that the legislative scheme contained in the Land Acquisition Act provisions relating to advance payments mandates that, Compensation Notices having been issued to each of the Azizi interests and each of the Azizi interests having sought the making of payments to them (or on their behalf) pursuant to s 48(2)(a), the legislative scheme requires that the additional amounts sought for each of the Azizi interests was mandated to be paid by the Council. The earlier set out nominated amount sought by each of the Azizi interests' motions represents the difference between the amount paid to the relevant interest (or disbursed on its behalf as requested), and 90% of the amount of compensation determined by the Valuer General to be appropriate to be paid for the land compulsorily acquired; and 1. The position advanced by Mr Hall for the Council does not dispute the arithmetical accuracy now advanced on behalf of the Azizi interests, nor the requirement for an advance payment of 90% of the Valuer General's valuation determinations concerning the land acquired from each of the Azizi interests. However, it is the Council's position that the amount necessary to satisfy payment to that level has been paid by the Council into a trust account (as evidenced by Exhibit 2) and that this is a sufficient and appropriate fashion in which to provide appropriate protection to the Azizi interests of the balance of the advance payment sums. It is submitted by the Council that I have power to conclude that continuation of the protective regime should be mandated by appropriately crafted orders of the Court, as a matter of discretion, having regard to the impecuniosity of each of the Azizi interests. Maintenance of this regime also provides an appropriate protective mechanism for the Council against what the Council submits is, at least for present purposes, the sufficiently arguable prospect that the Council will succeed in establishing that the Valuer General's compensation determination is, for each of the Azizi interests, too high. Retention of the $5 million demonstrated by Exhibit 2 as being held by the Council's legal representatives for the benefit of the Azizi interests (if the Valuer General's compensation determinations are upheld or exceeded) provides not only financial protection for the Azizi interests but also for the Council. The necessity to provide financial protection for the Council arises because, the Council submits, the impecuniosity of each of the Azizi interests, if the full 90% (plus statutory interest from the date of acquisition) is paid, means there would likely be no recovery of any excess amounts paid if the Council was successful on the merits. That improbability rendered it appropriate that I exercise, as a matter of discretion, the power which the Council submitted I should conclude was available to me to protect the positions of the Azizi interests and of the Council in the fashion proposed by the Council. The relevant statutory provisions Introduction 1. As can be seen from the terms of the Amended Notices of Motion being addressed, elements of s 16 of the Land and Environment Court Act 1979 (the Court Act) are relied upon for the Azizi interests as providing the necessary statutory foundation to permit me to make the orders now sought by each of the Azizi interests in the relevant proceeding. As the existence of power to make the orders sought was not disputed by the Council, it is unnecessary to set out this provision. 2. As there is nothing in contest concerning the Azizi interests' invocation of the hardship provisions in the Land Acquisition Act, it is unnecessary to set out those provisions. However, several provisions of that Act are relevant in my consideration of matters here in contest. The Land Acquisition Act Introduction 1. As a preliminary matter, it is to be noted that s 4(1) of the Land Acquisition Act defines "An authority of the State" as including a body such as the Council. The relevant provisions of the Act 1. The relevant provisions are in the following terms: 48 Advance payments of compensation etc (1) An authority of the State may, at any time after land is acquired, make an advance payment of compensation to any person who the authority considers is entitled to the compensation. (2) An advance payment may be made on application by the person or without any such application if the person agrees to accept the advance payment. (3) … (4) A person who receives an advance payment of compensation which exceeds the amount of compensation to which the person is entitled must repay to the authority of the State the amount of the excess. (5) … (6) Any amount due to an authority of the State under this section may be recovered as a debt in any court of competent jurisdiction. 66 Objection against amount of compensation offered (1) A person who has claimed compensation under this Part may, within 90 days after receiving a compensation notice, lodge with the Land and Environment Court an objection to the amount of compensation offered by the authority of the State. (2) If any such objection is duly lodged, the Land and Environment Court is to hear and dispose of the person's claim for compensation. (3) … (4) … 68 Payment of compensation arising from court proceedings (1) … (2) Subject to any such agreement or decision— (a) if the authority of the State gave the owner concerned a compensation notice—the authority is required to pay 90 per cent of the amount of compensation offered in the notice (as an advance payment) within 28 days after the authority is given notice of the institution of the proceedings or (if the owner does not accept that advance payment) the authority is required to pay 90 per cent of that amount into the trust account kept under this Part, or (b) … 1. It is also to be noted that s 49 of the Land Acquisition Act provides for interest to be paid on compensation entitlements from the date of acquisition until compensation payments are finalised. It is not necessary to quote this provision. The Compensation Notices 1. It is to be noted that Compensation Notices were given to each of the Azizi interests. These were dated 10 March 2020 and are in evidence in Exhibit 1 at Tab 8 (Alnox Pty Ltd's notice) and Tab 9 (Mr Azizi's notice). The relevant paragraph in Alnox Pty Ltd's notice was in the following terms: 8. If you lodge an objection with the land and Environment Court you will be paid an amount of $2,651,974.70 being 90% of the difference between the determination of compensation of $5,994,438 (inclusive of GST) and the advance payment of $3,047,799.45 paid on 29 March 2019, within 28 days after notice of institution of proceedings is given to The Council of the City of Ryde and the matter of compensation will be determined by the land and Environment Court. 1. Apart from the different relevant money amounts, Mr Azizi's notice contained an identical paragraph. The evidence 1. As there was no computational difference between the parties and the relevant statutory framework is identical, the evidence and submissions were taken to be common to the extent relevant. The evidence on behalf of the Azizi interests comprised an affidavit from Mr P Jayne, legal representative for the Azizi interests, and a folder of documents which had been exhibited to his affidavit. This folder of documents became Exhibit A. 2. The evidence for the Council comprised: 1. A folder of documents (Exhibit 1); 2. A trust account statement from the Council's legal representatives, showing a balance of $5 million recorded in the trust account ledger as being held on account of the Council for the purposes of these proceedings - thus demonstrating, on the Council's case, that funds were held in trust of a sufficient sum to satisfy any award in the Azizi interests' favour of the compensation amounts determined by the Valuer General to be appropriate (Exhibit 2); 3. Elements of an affidavit of Mr Patrick Azizi dated 24 September 2020 (of which only paragraphs 56 and 57 were tendered; these being for the purposes of validating the hardship applications made on behalf of both Azizi interests seeking to trigger the compulsory acquisition process). These paragraphs became Exhibit 3; 4. An element of an affidavit of Mr Azizi dated 24 September 2020 (of which only paragraph 5 was tendered for the purposes of his adoption the hardship application validating material described above emanating from Exhibit 3). This paragraph became Exhibit 4; and 5. Extracts of the expert report of Mr Jeff Mead, the expert town planner retained by the Council. Mr Mead's expert report had been served by the Council in support of its substantive position concerning what would have been the highest and best use of the properties acquired from the Azizi interests (setting aside the zoning change giving rise to the compulsory acquisition of the properties). This extract became Exhibit 5. The hardship evidence 1. As earlier noted, the compulsory acquisitions of the properties from the Azizi interests had been triggered by the Azizi interests successfully invoking the hardship provisions of the Land Acquisition Act. The material submitted to the Council on behalf of the Azizi interests in support of the invocation of these provisions was in evidence at Exhibit 1, Tab 1. 2. It is unnecessary, for present purposes, to address this material in any detailed fashion. However, two matters are to be noted concerning the information in the hardship applications. First, the general accuracy of the hardship application documentation is not now disputed by the Azizi interests or by the Council. Second, the relevant material from Exhibit 1 was dated February 2018. 3. It will later be necessary to return to the role to be played by this material on these Notices of Motion. The submissions on the power of the Court Introduction 1. I have earlier noted that the written submissions were filed prior to the hearing. These made it clear that the parties each saw the Notices of Motion in separate, differing contexts. The context for the Azizi interests simply related to seeking to have top-up advance payments made with the position being understood to be, primarily, one relating to matters of computation of quantum. 2. The written submissions on behalf of the Council approached the matter in an entirely different fashion. As earlier noted, as a consequence of the Consent Orders made in the Supreme Court proceedings, the Council had established a regime whereby $5 million had been paid into its legal representatives' trust account against the potential eventuality that additional compensation was payable to the Azizi interests. The Council argued that, in these Class 3 proceedings, the protective regime (for both the Azizi interests and the Council's interests) should be maintained, as a matter of discretion, pending final determination of compensation entitlements for the Azizi interests in the substantive proceedings. The Azizi interests' position 1. The position advanced by Mr Hemmings on behalf of the Azizi interests as to why the orders sought should be made was not complex. In essence, it was that the language of s 68(2)(a) of the Land Acquisition Act established a mandatory regime so that, after a Compensation Notice had been given, the acquiring authority was given no discretion and was mandated to make an advance payment of 90% of the amount specified in the notice given to the dispossessed landowner. 2. Mr Hemmings' reply submissions repeated this position, putting that nothing which had been advanced on behalf of the Council provided any basis to import some notion of flexibility or discretion into this statutory regime. 3. Mr Hemmings rejected the proposition put on behalf the Council that, impecuniosity having been raised for the Council based on the Azizi interests' hardship applications, this placed an onus on the Azizi interests to prove the proposition that they would be able to repay any excess from the advance payment should the compensation ultimately awarded be less than the total amount of the advance payments made to each of the Azizi interests. The Council's position 1. The position advanced for the Council was: 1. First, that there was a power, akin to staying a financial judgment pending appeal, that gave me a discretion to consider continuing the protective regime that had been established by the Council's payment into its legal representatives' trust account; and 2. Second, as a matter of discretion, the power to maintain that mutually protective regime should be exercised in each of these proceedings as: 1. the Council's town planning evidence (Exhibit 5) demonstrated that it had an arguable case that R2 Low Density Residential zoning pursuant to the LEP was the appropriate planning basis upon which to assess compensation for each of the Azizi interests; and 2. the impecuniosity of each of the Azizi interests (as demonstrated by the hardship application material provided to the Council in February 2018) demonstrated that there was no realistic prospect that either of the Azizi interests would be able to repay any overpayment to which the Council might become entitled pursuant to s 48(6) of the Land Acquisition Act, if the Council succeeded in having compensation value determined on the basis of the zoning for which it contended. 1. For the purposes of this portion of my consideration, it is appropriate to set out the submissions made on behalf the Council concerning what it proposes is the power to maintain the mutually protective regime which it has established. 2. As I have earlier noted, written submissions had been provided for the Council. These addressed both the question of power to take the course proposed and the merit justification for doing so. The written submissions provided, as part of their introduction, a useful summary of both these elements. For present purposes, it is appropriate to set out the elements of the summary addressing the question of how I was said to be enabled to do what was sought rather than the reasons why I should do so. This element of the summary in the Council's submissions (at 2.4 to 2.7) was in the following terms: 2.4 The Court has a general power, when a payment is made under its auspices and there is a prospect of its being required to be repaid, of imposing terms to prevent the right to repayment being rendered nugatory. In the context of an appeal this has been described as deriving from the inherent power of the Court to do whatever is necessary to prevent injustice in relation to the proceedings of the court: Tolj v O'Connor (1988) 13 ACLR 653, quoted in the commentary to UCPR 51.44, in Ritchie's at [51.44.5]. 2.5 Although the most common application of the principle is in relation to stays pending appeal, that is only the most frequent emanation of a more general power. Other examples of the same or an analogous power include imposing terms, including part payments or the giving of security, when setting aside statutory demands, or when staying or adjourning bankruptcy, winding-up or possession proceedings. Each involves the court preventing or delaying a party receiving or enjoying a present right because the further course of the proceedings might reverse that right and there is a danger that repayment or restitution would be impossible. 2.6 That power can and should extend to a payment under s 48 of the Just Terms Act. It has already been applied (with respect, correctly) to relieve an acquiring authority of the obligation to issue an offer of compensation: Blacktown City Council v Concato [2018] NSWSC 1039. That was done expressly to prevent the obligation to make an advance payment from arising. The current situation is wholly analogous. 2.7 When exercising that power, the Court attempts to balance justice to the party entitled to the payment, while protecting the potential right to repayment. Typical methods of doing that include ordering a part payment; ordering that money be paid into Court or into a trust or controlled monies account; or requiring the giving of security. Such conditions can readily be crafted here. The same parties agreed to such conditions in 2020 and the Respondent proposes that the same regime continue to apply. 1. Mr Hall's oral submissions, and the more detailed elements later in the Council's written submissions, expanded on this outline as well as on the matters arising as to why I should exercise the discretion said to exist for the claimed payment sought by each of the Azizi interests. 2. Having read the written submissions for the Council prior to the hearing, I asked Mr Hall, at the commencement of his oral submissions, why I should consider that the decision of Campbell J in Blacktown City Council v Concato [2018] NSWSC 1039 (Concato) was of assistance to me in light of the subsequent decision by Payne J in the Supreme Court proceedings where his Honour had expressly explained why the decision in Concato was incorrect. As a second matter, I asked how the Land and Environment Court, as a statutory court, had any inherent power to do what was proposed by the Council. 3. As I understood his position with respect to Concato, it was that the Council was not seeking to have me stay the statute, in terms, but was seeking to have me defer the making of any further payment direct to the Azizi interests pending the outcome of the substantive proceedings which would determine their total entitlement to compensation. Consideration of this, properly understood he said, was akin to staying a judgment pending an appeal in a fashion where the potentiality for the outcome was not extinguished but was merely set aside pending later consideration and determination of the substantive elements in dispute between the parties. 4. By doing this, Mr Hall submitted I would not be preventing the operation of s 68(2)(a) of the Land Acquisition Act, I would merely be intervening in part of the implementation process rather than defeating the process. This, by analogy, was quite a conventional action in circumstances where there was a proper basis to stay for preservation purposes when there was a risk that making further payments to each of the Azizi interests risked the Council not being able to recover any payment to which it might be entitled as a consequence of the outcome of the substantive proceedings. 5. Because this was an entirely conventional process, it fell within the ordinary ancillary powers of this Court and the question of additional inherent powers accruing to the Supreme Court did not arise, as powers of that nature were not sought to be invoked in these matters. 6. Mr Hall then submitted that, for the purposes of determining whether or not I should exercise this power concerning further payments to each of the Azizi interests, there was a conventional two-step process required to be undertaken. This process was that the Council first needed to establish that it had an arguable case that the outcome of the substantive hearing would be in favour of the Council's position; thus the Court would determine the compensation for each of the Azizi interests as less than the amount which was to be derived from calculating 90% of the compensation sum determined by the Valuer General. The second step then required the Council to demonstrate that there was a real possibility that, if the Council succeeded in the first step of the process, it would be improbable that the Council would be able to utilise s 48(6) of the Land Acquisition Act to recover any overpayment from either of the Azizi interests. 7. In support of the first step in the process, Mr Hall took me to the material from Mr Mead's report in Exhibit 5 as providing a proper basis upon which I should be satisfied that the Council had a sufficiently arguable town planning case on its merits. He submitted that it was not necessary that the Council demonstrate that the case was, prima facie, one which would be successful - merely that it was sufficiently arguable (this being a lower threshold test) for present purposes. 8. He then submitted that the financial information provided to the Council for each of the Azizi interests for the purposes of invoking the hardship provisions of the Land Acquisition Act demonstrated that there was a real prospect that each of the Azizi interests would be unable to repay any overpayment which the Council was otherwise entitled to recover. The hardship material (Exhibit 1, Tab 1) clearly demonstrated that there would be such an inability to repay in each instance. 9. In summary, the Council's position was that I had power to decline to make the orders sought in each of the Notices of Motion. Further, on a proper consideration of the evidence tendered for the Council, I should be satisfied that each of the steps necessary to exercise the power were satisfied and, as a matter of discretion, the Council had thus established a proper basis upon which I should do so. Consideration 1. It is, first, appropriate to set out the relevant statutory provision here, requiring consideration. That provision, s 68(2)(a) of the Land Acquisition Act is in the following terms: (a) if the authority of the State gave the owner concerned a compensation notice—the authority is required to pay 90 per cent of the amount of compensation offered in the notice (as an advance payment) within 28 days after the authority is given notice of the institution of the proceedings or (if the owner does not accept that advance payment) the authority is required to pay 90 per cent of that amount into the trust account kept under this Part 1. There is no dispute that the necessary triggers for its operation, being the serving of Compensation Notices on each of the Azizi interests and the commencement (and giving notice of) proceedings pursuant to s 66(1), has taken place as these notices were in evidence as earlier noted and these proceedings speak for themselves. 2. As can be seen, alternative scenarios arise from the operative elements of the provision. The second of them is not relevant as each of the Azizi interests has sought to have the 90% advance payment based on the Valuer General's compensation determination made to each of them. 3. The language which is used by the terms of the statutory provision is clearly one which, on its ordinary understanding, mandates the making of the payment to the full value of the 90% of the Valuer General's compensation determination. The language of the statute does not, in terms, provide for any discretion in this regard. 4. The Council, however, relies on the process adopted by Campbell J in Concato as being appropriate to be applied here. Mr Hall submitted that doing so would not constitute staying the operation of the statute but would be interrupting the flow of payment in a permissible fashion. I am unable to accept this proposition. 5. In the first instance, it is appropriate to consider how Campbell J approached the issues in contest in Concato (given that the ordering of the proposed stay was contested) and how he reached the conclusion that the making of such a stay was appropriate. 6. Campbell J addressed the question of power by setting out the nature of the legal issue which had been raised before him before dealing with the question of his power to intervene in the fashion proposed. This is set out at [8] to [16] of his Honour's decision. Having determined that he did have power, his Honour then proceeded to address the question of whether he should exercise that power. It is unnecessary to set out his Honour's reasoning process in that latter regard. It is sufficient to note that the orders made in Concato established a contingent protective regime subsequently reflected in the Consent Orders in the Supreme Court proceedings and sought by the Council to be maintained as the outcome of these Notices of Motion. 7. It is appropriate to set out [8] to [16] of the decision in Concato in order to understand the analysis of Payne J in the temporally later Supreme Court proceedings (where his Honour held that this element of the decision in Concato was wrong). The relevant portion of the decision of Campbell J in Concato was in the following terms: The legal issue 8 Section 42 of the Act is a key provision of the regime for compensation established by the Act. Section 42(1) is in the following terms: An authority of the State which has compulsorily acquired land under this Act must, within 45 days after the publication of the acquisition notice, give the former owners of the land written notice of the compulsory acquisition, their entitlement to compensation, and the amount of compensation offered (as determined by the Valuer-General). The period of 45 days cannot be read literally given that in this case, and I assume in others, the determination of compensation by the Valuer-General had not occurred during the first 45 days following the publication of the acquisition notice on 9 March 2018. 9 Section 66 of the Act permits the former landowners to lodge with the Land and Environment Court an objection to the amount of compensation offered by the authority which has acquired their land. Where an objection is lodged the owners' claim for compensation proceeds as a de novo assessment by that Court. This means the former owners may effectively challenge, or obtain a merits review of, the Valuer-General's determination. The acquiring authority, here the plaintiff, has no corresponding right of challenge or merits review: Gosford City Council v Valuer-General (1996) 90 LGERA 413. This leaves the plaintiff "with the more onerous task of moving (this Court) to quash the Valuer-General's determination on administrative law principles": Council of the City of Gosford v Cunningham [1997] NSWCA 81. In Gosford v Cunningham Mason P observed that there was no issue about the Supreme Court's jurisdiction to entertain such an application. This, of course, has been clearly established by Kirk v Industrial Court of NSW (2010) 239 CLR 531; [2010] HCA 1. Hence, the principal proceedings. 10 The plaintiff is concerned about the need to comply with its legal obligation under s 42 of the Act now that the Valuer-General has made the determination of the compensation to which the landowners are entitled. Given that it impugns the legality of that determination, it might have decided to take no action until the present proceedings are finalised, adopting the view that as the determination is of no legal effect, s 42 is not engaged. 11 However given that the landowners have a right under s 44 of the Act to accept a s 42 offer of compensation and to receive payment of the compensation within 28 days of completion of legal formalities such as the provision of a duly completed deed of release and indemnity, the plaintiff has considered it prudent to apply to the Court for an appropriate interim order to protect its position. Nature of the relief sought 12 In express terms, the notice of motion seeks an interim declaration in terms that the plaintiff is not required to comply with s 42 of the Act pending determination of the proceedings. I confess to having difficulty with the idea that an interim declaration, if such an order is available, can do the work required. Doubtless the Court has ample power under s 66(4) Supreme Court Act by interim injunction to preserve the status quo pending the resolution of proceedings: but whom to injunct in this case? 13 Were this matter an appeal, or where the decision maker is a court or tribunal, there would be no legal difficulty in granting a "stay" even if the juristic basis of the order may be a little obscure. See: Secretary of the Treasury v Public Service Association [2014] NSWCA 14 at [13]-[16], Basten JA. 14 In the case of Re Kerry [2010] NSWCA 232 Young JA said (at [16], [21]-[23]): "[16] I have no difficulty at all with the idea that when seized with an application for certiorari the Court might make a stay order of the whole of the decision made below and probably a discrete part of it. Nor have I any difficulty with the situation where the subject matter of the litigation is to be preserved until the hearing of the matter. The problem only occurs where what is being sought is some adjustment of the order below for purely personal concerns of the litigants. ... [21] However, although I have some doubt about the matter, it seems to me that the preferable view is that an application for a prerogative order under s 69 of the Supreme Court Act 1970 comes within the ambit of the word "proceedings" as used in s 66. One gets confidence in saying this because of the use of the word "proceedings" in s 69(1)(f) of the Supreme Court Act. [22] Although s 66 has been taken from earlier legislation which was more concerned with injunctions in ordinary actions between subjects, it seems to me that reading it in context it does cover the instant situation. [23] Accordingly, if an application is made to this Court under s 69, in my view the Court has jurisdiction either to stay in whole or in part the decision which it is sought to review or to grant the appropriate injunction to hold the status quo pending the hearing of the appeal or, as in this case, to grant an injunction that is ancillary to the relief being sought on the application." 15 In the context of an appeal, it has been said that the power to order a stay is incidental to the right of appeal and derives from the inherent power of the Court to do whatever is necessary to prevent injustice in relation to the proceedings in the Court: Uniform Civil Procedure (NSW) ("UCPR"), r 51.44.5 and the cases there referred to. This case is not an appeal but if the source of the power to grant a stay is inherent, it may be said to be incidental to a right to seek an order in the nature of prerogative relief as Young JA explained. On the other hand, Basten JA has pointed out that s 23 of the Supreme Court Act may have a limited operation in judicial review proceedings (see: Secretary of the Treasury v Public Service Association at [13]). In that case his Honour sourced the power to grant a stay to the express terms of UCPR 51.44 which applies to proceedings in the Court of Appeal generally (not just appeals). But this rule does not apply to proceedings in the Supreme Court generally. UCPR 50.7 is a cognate provision, but it applies only to appeals to the Court not assigned to the Court of Appeal. An application for judicial review invokes the original, not the appellate, jurisdiction of the Court. 16 I am satisfied, however, for the reasons given by Young JA in Re Kerry that I have power to grant a stay of the legal effect of the Valuer-General's determination of the amount of compensation payable which will have the effect of obviating the need for the plaintiff to comply with s 42 of the Act pending disposition of the proceedings. 1. In the Supreme Court proceedings, Payne J explained, comprehensively, at [167] to [175], why the approach which had been taken in Concato did amount to a purported stay of the operation of the mandated statutory process in an impermissible fashion. It is convenient to set out the entirety of his Honour's decision in this regard: The stay granted in this case 167 Before leaving this case there is an important issue of principle raised by the way in which this case came to be heard in this Court many months after the statutory time limits in the Just Terms Act, in particular s 42. 168 It will be recalled that a judge of the Court made orders by consent on 15 March 2019 staying the effect of the Valuer-General's Determinations of Compensation as follows: "1. The legal effect of the third defendant's determination of compensation of 21 December 2018 in respect of the plaintiff's compulsory acquisition of land identified as Lot C in Deposited Plan 410408 (known as 86 Blenheim Street, North Ryde) and Lot D and Lot E in Deposited Plan 410408 (known as 12A and 14 Epping Road, North Ryde) from the first and second defendants, respectively, is stayed until the final disposition of these proceedings on the following conditions: … 2. Order (1) does not derogate from the plaintiff's statutory entitlement to obtain a deed of release and indemnity, and the title document to the property on completion of the first and second defendants' claim for compensation." 169 Those orders replicate the orders made by another judge of the Court on 6 July 2018 granting a stay in a case which apparently raises similar issues to the present case: Blacktown City Council v Concato [2018] NSWSC 1039. I was informed from the bar table that the former owners took the view that as a stay was unsuccessfully opposed in Concato, the appropriate course was to consent to orders in the same terms in this case. 170 I am persuaded that Mr Kirk SC correctly identified the juridical problems with the Court granting a stay of the operation of a statutory scheme: "KIRK: You may or may not require a lot of persuasion to do that [grant an injunction], but you can injunct people. You can't injunct an Act. At least it is not yet, to my knowledge, been established. I'm not saying it's impossible, but it has not yet been established in Australian law you can injunct an Act; and if you can't injunct an Act, you can't stay an Act. The closest it came constitutionally, I think, was in the Castlemaine Tooheys' litigation …" 171 In Elliott v Minister administering Fisheries Management Act 1994 [2018] NSWCA 123 Basten JA (with whom Beazley P and I agreed) said: "[93] The power of a court to grant an interlocutory injunction to protect the interests of parties adversely affected by legislation, in circumstances where they seek to challenge the constitutional validity of such legislation, was established by Castlemaine Tooheys Ltd v State of South Australia. That case involved South Australian laws designed to require that manufacturers of bottled beer use refillable bottles. The law was challenged under s 92 of the Constitution. The plaintiffs, being bound by the law they sought to challenge, sought interlocutory injunctions restraining the State "from enforcing or causing to be enforced against the goods of the plaintiffs in interstate trade and commerce". Mason ACJ accepted that there was jurisdiction and power to grant an interlocutory injunction in such a public law case, including a constitutional challenge to the validity of the law. He stated that: "In order to secure such an injunction the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction." [94] The Chief Justice noted a number of cases in which the jurisdiction had been conceded, but in none of which did the court restrain the defendant from commencing prosecutions for breach of the statutes whose validity was impugned. He also accepted a statement in a Canadian case that "the balance of convenience normally dictates that those who challenge the constitutional validity of laws must obey those laws pending the court's decision." The harm to be suffered by the manufacturers was to be weighed against the damage to the public interest underlying the regulatory provisions. The application for interlocutory injunctions was dismissed. [95] A similar jurisdiction was invoked in Richardson v Forestry Commission, although the boot was on the other foot. The Commonwealth Minister sought an interlocutory injunction restraining the Tasmanian Forestry Commission and a logging company from undertaking operations in the Lemonthyme and Southern Forests of Tasmania, pending determination of the validity of the Commonwealth legislation. Mason CJ granted interlocutory relief to enforce the challenged legislation." (Footnotes omitted.) 172 Basten JA explained the position in England and Wales which is arguably different. In R v Secretary of State for Transport, Ex parte Factortame Ltd (No 2) [1991] 1 AC 603, the owners of some 95 Spanish fishing vessels, which had been, but could no longer be, registered in Britain, sought interlocutory relief allowing them to continue to fish in British waters, pending the determination of their challenge under the European Communities Act 1972 (UK) c 68 to the relevant provisions of the Merchant Shipping Act 1988 (UK) c 12. The UK courts initially held that they were unable to grant relief which would in effect suspend the operation of British law. In response to a ruling of the European Court of Justice that such a jurisdiction existed, interim injunctions were granted. 173 Basten JA in Elliott explained that it is not necessary to compare the approach adopted in Factortame with that adopted in Castlemaine Tooheys Ltd v State of South Australia (1990) 169 CLR 436; [1990] HCA 1. That was because there is no doubt that the power to grant an interlocutory injunction against the authority responsible for enforcing the law is available in circumstances where regulations are challenged on the basis of inconsistency with the empowering statute. Usually one would expect the application for an interlocutory injunction to be resisted by the body charged with enforcing the public interest underlying the impugned legislation. The public interest is likely, in accordance with the principles stated in Castlemaine Tooheys, to hold sway. Even in Factortame the relief ultimately granted was an interim injunction. 174 I am aware of no authority, which permits the grant of a "stay", in effect, of the operation of an Act of Parliament. In particular I am unable to agree that the decision of Young JA (sitting on his own as referrals judge) in Re Kerry [2010] NSWCA 232 provides any support for the proposition that the Court has jurisdiction to stay the operation of a statute. In Re Kerry, what Young JA actually decided was that the Court had jurisdiction to grant a mandatory interim injunction (in that case permitting access to a child) ancillary to relief sought under s 69 of the Supreme Court Act. Assuming that is so, I do not think that the case supports the existence of a jurisdiction to stay the continuing operation of a statute. 175 I accept Mr Kirk's pithy analysis - "if you can't injunct an Act, you can't stay an Act". The judgments in Castlemaine Tooheys and Elliott, which are inconsistent with the existence of such a jurisdiction, were apparently not brought to the attention of the Court when granting the stay. The stay of the "legal effect of the third defendant's determination of compensation" granted in this case, in my respectful view, should not have been granted. Whatever the form of injunction, if one had been sought, each of the matters described by Mason ACJ in Castlemaine Tooheys, including the undertaking as to damages and the balance of convenience, would necessarily have been addressed. 1. Although the relevant statutory provisions of the Land Acquisition Act, in the decisions set out above, were not identical to those involved for these motions, the underlying operative effect of the statutory scheme, in all of the instances, is sufficiently similar to render this irrelevant. 2. In this instance, I have no basis upon which I could conclude that the analysis of Payne J in the Supreme Court proceedings is clearly wrong and that the position adopted by Campbell J in Concato should be followed. 3. What is here sought for the Council is intervention in the mandated process established by the first element of s 68(2)(a) of the Land Acquisition Act. Even though a compliant regime could undoubtedly permit the payment of money pursuant to the provision to occur via the medium of a solicitor's trust account, there is nothing immediately obvious that permits there to be the establishment of some contingent gateway in such a process in the fashion sought by the Council. 4. Although Mr Hall has valiantly sought to persuade me that what is here proposed for the Council does not constitute effectively injuncting the statutory regime in the fashion held by Payne J to be impermissible, there is, in reality, no distinction to be drawn between the circumstances considered by Payne J in the Supreme Court proceedings and that which is here proposed for the Council. 5. I am therefore satisfied that, on the basis of the reasoning in the Supreme Court proceedings, I do not have power to intervene in the fashion here proposed for the Council concerning the Notices of Motion moved for each of the Azizi interests. 6. For completeness, I turn to consider whether there is any inherent ambiguity in the language used in s 68(2)(a) of the Land Acquisition Act which would potentially provide a basis causing it to be read in a fashion other than that which would flow from a natural reading of the language of the provision. 7. It is clear from what was written by the plurality in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28, in the oft-cited elements at [70] and [71], that the meaning of the provisions of a statute is to be ascertained by examining the context in which the language of those provisions is used and seeking to give effect to the purpose and language of the provisions. 8. However, more recently, in Taylor v The Owners of Strata Plan 11564 and Others (2014) 253 CLR 531; [2014] HCA 9, the High Court dealt with the question of what is appropriate to do if one is faced with a conundrum as to how a statutory provision might be understood. The plurality (French CJ, Crennan and Bell JJ) said, at [37]: Consistent with the Court's rejection of the adoption of rigid rules of statutory construction, it should not be accepted that purposive construction may never allow the reading of a provision as if it contained additional words (or omitted words) with the effect of expanding its field of operation. 1. Although in dissent, Gageler and Kean JJ also said, at [66]: Context more often reveals statutory text to be capable of a range of potential meanings, some of which may be less immediately obvious or more awkward than others but none of which is wholly ungrammatical or unnatural. The choice between alternative meanings then turns less on the linguistic fit than on evaluation of the relevant coherence of the alternatives with identified statutory objects or policies. 1. This more recent decision permits the notional incorporation of additional words if they are necessary for a proper and coherent understanding of the statutory provision under consideration. There is no such necessity here arising. The relevant statutory provision, s 68(2)(a), is clear and unambiguous. There is no warrant to import into it any expansionary or qualifying words. The process it establishes as is here relevant is mandatory and permits of no discretionary intervention. 2. I am satisfied that I do not have the power to decline to make the orders now sought on behalf of each of the Azizi interests. Given that the written submissions now disclose agreement about computational matters, it is appropriate that I make the orders sought on behalf of each of the Azizi interests. Discretion Introduction 1. Although I have concluded that I have no power to refuse the orders sought by the Azizi interests, I now consider whether, as a matter of discretion, if I had the power, would I have declined to make the orders sought and thus maintain the regime established by the Council pending determination of the two substantive appeals. 2. I am satisfied that, as the orders which I propose to make require the Council to make the payments to each of the Azizi interests within 14 days, it is desirable that I should do so in order to permit the Council and the Azizi interests to be fully informed of my conclusions on all matters which were in contest on these motions. 3. For the balancing purpose which I would need to undertake on the question of whether to exercise discretion in the fashion proposed by the Council, there are two matters which need to be considered. 4. The first matter is what conclusion I should draw as to the merit case which the Council proposes to advance in the substantive proceedings. This requires me to consider, at an appropriate level of generality, the town planning matters which will then arise for determination. 5. The second matter is the proposition advanced by the Council that I could not be satisfied, on the evidence available, that each of the Azizi interests would be able to make any repayment which might be ordered pursuant to s 48(6) of the Land Acquisition Act, if the amount of compensation ordered in each of the substantive proceedings was less than that which would have been received if the advance payments sought in these Notices of Motion were to be made. Town planning issues 1. The town planning issues in contest in the substantive proceedings can be summarised in comparatively short compass. The contest is as to what would have been the likely future zoning under the LEP (and hence development potential) of the land owned by the Azizi interests had the change in zoning to effect the expansion of Blenheim Park not occurred (thus triggering the compulsory acquisition process of the land from the Azizi interests). As earlier noted, the acquired parcels, at the time of acquisition, were zoned R2 Low Density Residential pursuant to the LEP. 2. In the compensation determination process undertaken by the Valuer General, the Valuer General sought expert town planning advice upon which to base a conclusion as to any up-zoning prospect and, hence, if it existed, the appropriate valuation to be derived from that. The advice given to the Valuer General (which was accepted) was that the likely future zoning was R3 Medium Density Residential. The compensation determination for each of the Azizi interests' land was therefore determined on that basis. 3. The expert town planning advice to the Azizi interests was that the likely up‑zoning would be to R4 High Density Residential rather than the R3 Medium Density Residential accepted by the Valuer General as the appropriate basis upon which compensation should be assessed. 4. At the substantive hearing, the Azizi interests will be contending that the appropriate basis for the determination of compensation was that which would be derived from the acceptance of their expert town planning evidence. 5. On the other hand, the Council contends that there is no proper basis upon which to conclude that the existing R2 Low Density Residential zoning had any appropriate probability of being disturbed. 6. For the purposes of these Notices of Motion, as earlier noted, the Council tendered elements of its expert town planning evidence proposed to be relied upon in the substantive proceedings. The purposes for which this material was put in evidence was to demonstrate that the Council had at least an arguable case in the substantive proceedings in support of its proposition that an R2 Low Density Residential zoning was an appropriate basis upon which compensation for the compulsory acquisition of the Azizi interests' properties should be determined. 7. I have carefully read the material contained in Exhibit 5. In doing so, obviously, I am solely undertaking an assessment of whether or not this evidence discloses an arguable basis upon which the decision‑maker in the substantive proceedings might conclude that the zoning basis for valuation advanced by the Council might be supported. My reading of the material in the elements of Mr Mead's expert report in Exhibit 5 leads me to conclude that it does establish that the Council has such a sufficiently arguable case for the purposes of my consideration of discretionary matters arising out of the Azizi interests Notices of Motion. 8. This, self-evidently, does not involve any comparative consideration with respect to this evidence when weighed against such evidence as will be advanced on behalf of the Azizi interests in the substantive hearings. The Azizi interests' ability to repay if required Introduction 1. As can be seen from the terms of s 48(6) of the Land Acquisition Act earlier set out, if the final quantum of compensation to each of the Azizi interests as determined in the substantive proceedings and the total advance payments (if the orders here sought are to be made) exceeds the determined compensation, an obligation would fall on the Azizi interests to repay the excess amount. If such repayment was required, that repayment can be ordered by this Court (Haig v Minister Administering the National Parks & Wildlife Act (No 3) (1996) 90 LGERA 408 and Brock v Roads and Traffic Authority of New South Wales (No.2) [2012] NSWLEC 114) as an outcome of the substantive proceedings. The relevant correspondence between the legal representatives 1. The material in Exhibit A includes an extensive selection of correspondence between the legal representatives of the Azizi interests and those of the Council, the correspondence being between early March 2019 and October 2020. Three elements of that correspondence warrant being noted. The first of them is a letter from the Council's legal representatives, dated 29 March 2019 setting out details of payments made on that date pursuant to the Supreme Court Consent Orders. It will be necessary, a little later, to set out the relevant financial results of those payments. 2. The correspondence between that date and the next relevant document (dated 1 October 2020) comprises, effectively, negotiations concerning calculations of what would be the appropriate quantum of the necessary top-up amount, for each of the Azizi interests, to bring the advance payments to 90% of the compensation amounts determined by the Valuer General. It is not necessary to traverse that correspondence in any detail. However, on 1 October 2020, the legal representatives of the Azizi interests sent a letter of demand to the Council's legal representatives (with this letter including, as paragraph 7): 7 Please confirm that your client can make those payments, without delay, and in any event with seven days. We require confirmation of that undertaking by 5pm Wednesday 7 October 2020. Account details can be provided on request. 1. It is unnecessary to traverse the remainder of the matters dealt with in that letter. The letter itself is in evidence at Exhibit A, Tab 24. 2. On 12 October 2020, the Council's legal representatives responded to the 1 October 2020 letter on behalf of the Azizi interests. This response is in evidence at Exhibit A, Tab 25. The operative paragraphs of that letter are in the following terms: 1. Council declines to provide the undertakings requested in paragraph 7 of that letter. 2. As you know, the Council maintains that the amount of compensation determined by the Valuer-General in each of these acquisitions is affected by a fundamental error as to the development potential of the land. The result is a determination more than twice the highest value that would apply but for that error. 3. Alnox Pty Ltd is a company with a share capital of $2. In its 9 February 2018 submission in support of its application under section 23(1) of the Land Acquisition (Just Terms Compensation) Act 1991 (Act), it described itself as having been incorporated with the sole purpose of acquiring and developing 12A and 14 Epping Road, North Ryde and as having no other business or assets. It described itself as unable to pay its debts, as being supported by personal funds of Mr Patrick Azizi, and as "no longer viable". 4. Mr Raymond Boutros Azizi described himself as "a pensioner of limited income", and detailed various expenses which he was facing. He was then 80 years old. 5. If Council pays to your clients 90% of the Valuer General's determinations of compensation, and is successful in establishing that on a correct understanding of the development controls applicable to the land the amount of compensation due is less than the advance payment, then your clients will be obliged to repay the difference by analogy to section 48(4) and (6) of the Act. 6. For reasons including those summarised in paragraphs 3 and 4 of this letter, Council is very concerned that one or both of your clients will then be unable to repay the amount of the overpayment. 7. In the Supreme Court proceedings between our clients in 2019, Alnox Pty Ltd and Mr Azizi agreed to a consent regime whereby a part payment was made to them and further sums secured through their payment into a trust account. The amounts already advanced represent 100% of the amount accepted by the Council as the value of the acquired land. 8. Council accepts that since the Consent Orders in March 2019 your clients are likely to have incurred some further items of loss or expense which they will seek to recover as disturbance. For that reason, a further advance payment may now be warranted. 9. If your clients commence the threatened Supreme Court proceedings seeking writs of mandamus, the Council proposes to apply under Part 25 of the Uniform Civil Procedure Rules 2005 for orders establishing an equivalent regime to that agreed in March 2019. 10. We are, therefore, instructed to propose that to avoid the unnecessary cost of such proceedings, the parties agree to the following arrangement: 10.1 You will notify us of additional amounts claimed by your clients as disturbance, arising since March 2019. 10.2 Council will pay to you, on behalf of your clients, 90% of those additional disturbance claims subject to Council's right to call for additional documentation to support any item, and to reject any item which it considers is unsupportable; 10.3 Council will continue to hold the balance of the Valuer General's determinations for compensation, to which your client is prima facie entitled under s 68(2)(a) of the Act, in the existing trust account. Those funds will be paid out in accordance with the final resolution of your clients' compensation claim. 11. Please let us know if that proposal is accepted by your clients. If not, you are invited to commence your Supreme Court claim. I confirm I have instructions to accept service. Council will respond with its application for an interim preservation order so that this issue can be determined by the Court. To save unnecessary filing fees, Council will take no objection to Mr Azizi and Alnox commencing a single proceeding as co­ plaintiffs. 1. As can be seen from paragraphs 3 to 6 of the above letter, the Council canvasses, in this material, the broad issue of whether or not each of the Azizi interests would be able to repay any amount due to the Council, pursuant to s 48(6) of the Land Acquisition Act, should the outcome of the substantive proceedings, in each instance, result in total compensation payable to the relevant one of the Azizi interests as being less than 90% of the quantum of the Valuer General's determination. 2. It will later be necessary to turn to address these concerns further, as they provide the fundamental basis underpinning the submissions to me that, as a matter of discretion, I should maintain the existing regime of money being held in trust by the Council's legal representatives on a contingent account basis for each of the Azizi interests. 3. Although the Azizi interests threatened mandamus proceedings in the Supreme Court to seek to force additional advance payments to each of the Azizi interests, that has not eventuated. Instead, the Notices of Motion here considered have resulted. 4. It is in this context that it is submitted for the Council that I should conclude that each of the Azizi interests would be unable to make such repayment if it was required. In this context, the Council seeks to preserve the monies held in trust without being required to disburse them so that, if (as is the Council's case) the compensation to which each of the Azizi interests is entitled is less than 90% of the Valuer General's compensation determination for each of the Azizi interests, there will be no need for recovery proceedings as no advance overpayment would have been made. Hardship evidence 1. First, it is to be observed, that the Council relies on the hardship application material provided by each of the Azizi interests when they invoked the hardship provisions of the Land Acquisition Act in order to have the Council compulsorily acquire their land. 2. The Council's position is founded on the hardship application material on behalf of each of the Azizi interests as appearing behind Tab 1 of Exhibit 1. The hardship submissions for the Company were at folios 6 and 7 and those for Mr Azizi at folio 13. Additional documents (unnecessary to be described in detail) were provided in support of each of the submissions. The hardship material submitted on behalf of the Azizi interests was, as earlier noted, dated February 2018. 3. To the extent that there has been any change in the financial position of either of the Azizi interests between February 2018 and now, that information arises from the mutually confirming submissions on behalf of the Azizi interests and on behalf of the Council as to the payments on account of compensation which the Council did make to each of the Azizi interests as advance payments of portion of the compensation determination is made by the Valuer General. These payments arose out of Consent Orders in the Supreme Court proceedings and not from anything arising in these proceedings. 4. The net payments following the Supreme Court orders were made by the Council on 29 March 2019. The details are in evidence via a copy of a letter from the Council's legal representatives of that date (Exhibit A, Tab 5, folio 14). 5. As can be seen from the earlier set out letter from the Council's legal representatives of 12 October 2020, the Azizi interests have been on notice of the Council's view that any further advance payments to either of the Azizi interests exposed the Council to the risk that the Azizi interests would be unable to refund any overpayment if the Council's valuation case was successful. 6. As the Council has not taken any procedural steps to seek production of any contemporary financial information concerning either of the Azizi interests, on one hand, and, on the other, no such information has been put in evidence on behalf of either of the Azizi interests for the purposes of these motions, it is appropriate to turn to consider the financial position of each of the Azizi interests on the basis of such limited evidence as I now have. 7. For each of the Azizi interests, that information is of comparatively short compass. After setting it out, in each instance, it will therefore be possible to consider whether or not, assuming power to address the question of the balance of the advance payment entitlement in the fashion proposed for the Council, I would have adopted that course. The position of Mr Azizi 1. The amount now sought for Mr Azizi represents what would be required to be paid to top-up the advance payment already made to him to 90% of the Valuer General's determination of the compensation appropriate to be paid to him as a result of the compulsory acquisition of his land. 2. There is no dispute that the February 2018 hardship application material in evidence discloses that, as at that date, Mr Azizi can effectively be regarded as impecunious. 3. However, on 29 March 2019, he received a payment from the Council pursuant to the Consent Orders regime agreed to in the Supreme Court proceedings of $2,011,121.08. 4. The amount that is now sought from the Council, pursuant to the Notice of Motion on behalf of Mr Azizi, is $1,981,185 plus statutory interest from 24 August 2018 (this date being that of the compulsory acquisition). 5. The amount which was paid to Mr Azizi in 2019 exceeds the amount now sought on his behalf by ~ $30,000 (disregarding statutory interest). 6. There are two observations to be made with respect to this position. First, as I have earlier observed, I have no contemporary information concerning Mr Azizi's financial position. Second, it is not appropriate that I undertake any independent calculation as to what the statutory interest amount might be in addition to the specified amount sought by the Notice of Motion in Mr Azizi's proceedings. However, I am satisfied that it is reasonable to assume that, whatever might be that statutory interest amount, it is unlikely, in the current interest rate regime generally applicable in Australian society, to exceed, when added to the amount claimed, to any significant amount, the amount already paid by the Council to Mr Azizi. 7. Having regard to this financial evidence, there is no basis upon which I could conclude, with any certainty, that Mr Azizi would be unable to satisfy any order made pursuant to s 48(6) of the Land Acquisition Act if the currently sought payment was ordered and the Council subsequently succeeded in its case in the substantive proceedings. In circumstances where, as a broad proposition, a liberal position should be taken in favour of a dispossessed owner (Sydney Water Corporation v Caruso and Ors (2009) 170 LGERA 298; [2009] NSWCA 391 (Caruso)), there is no rational basis upon which, assuming I have power, I could exercise discretion in favour of the Council and decline to order payment of the now sought amount of $1,981,185 plus statutory interest to Mr Azizi. The position of the Company 1. A similar approach is to be taken with respect to such financial information as I have concerning the financial position of the Company. 2. The amount now sought for the Company represents what would be required to be paid to top-up the advance payment already made to the Company to 90% of the Valuer General's determination of the compensation appropriate to be paid to the Company as a result of the compulsory acquisition of its land. 3. There is no dispute that the February 2018 hardship application material in evidence discloses that, as at that date, the Company can effectively be regarded as having no other assets than the land which was to be acquired compulsorily by the Council. 4. However, on 29 March 2019, the Company received a net payment from the Council pursuant to the Consent Orders regime agreed to in the Supreme Court proceedings of $1,288,504.89. 5. The amount that is now sought from the Council, pursuant to the Notice of Motion on behalf of the Company, is $2,994,438 plus statutory interest from 24 August 2018 (this date being that of the compulsory acquisition). 6. The amount now sought exceeds the amount which was paid to the Company in 2019 by ~ $1,600,000 (disregarding additional statutory interest). 7. There are two observations to be made with respect to this position. First, as I have earlier observed, I have no contemporary information concerning the Company's financial position. Second, it is not appropriate that I undertake any independent calculation as to what the statutory interest amount might be in addition to the specified amount sought by the Notice of Motion in the Company's proceeding. 8. The resulting position concerning the Company is that there would be a nominal deficit of ~ $1,600,000 if the payment now sought from the Council was required to be repaid. In deriving this nominal deficit, I have assumed (taking the position at its most favourable for the Company consistent with Caruso), there has been no disbursement of the monies paid to the Company on 29 March 2019. I also make no assumption as to the quantum of statutory interest which would be added to the nominal deficit if repayment was to be the outcome in the Company's substantive proceeding. 9. Given the size of the potential shortfall and, in the absence of any further information concerning the Company's ability to repay, it therefore follows that, if I had the power to adopt the regime proposed for the Council, it would be appropriate to do so, as a matter of discretion, in the Company's proceeding. Timing for requiring payment 1. During the course of the hearing, I enquired of Mr Hemmings as to whether the orders should make provision for a fixed period within which payment should be effected if the Azizi interests were successful on the Notices of Motion. His subsequent instructions were that a period of 14 days would be appropriate and acceptable. 2. As sufficient funds are held in the Council's legal representatives' trust account (vide Exhibit 2), I am satisfied that 14 days is a sufficient period within which the Council can either satisfy the orders I make or, should the Council wish to appeal against this decision, for the Council to seek a stay of the orders pending such appeal. Costs 1. Although these proceedings are in Class 3, they are exempt from the "fair and reasonable" costs regime otherwise provided for by r 3.7 of the Land and Environment Court Rules 2007. As a consequence, the presumption in r 42.1 of the Uniform Civil Procedure Rules 2005 that costs follow the event is here applicable. As the Azizi interests have each been successful in the relief sought in the relevant Notice of Motion, the Council is to pay the costs of the relevant one of the Azizi interests for that Notice of Motion. Orders 1. In Matter No 168439 of 2020, the orders the Court are: 1. Pursuant to s 66 of the Land Acquisition (Just Terms Compensation) Act 1991 and ss 16 and 23 of the Land And Environment Court Act 1979, the Respondent is ordered to pay to the Applicant the sum of $1,981,185 (plus interest from 24 August 2018) to the effect that the Applicant will have received 90% of the amount of compensation in the Compensation Notice dated 10 March 2020; 2. The amount due to the Applicant specified in (1) is to be paid within 14 days of the date of these orders; 3. The Respondent is to pay the Applicant's costs of the motion filed on 14 January 2021; and 4. The exhibits on the motion are returned. 1. In Matter No 168457 of 2020, the orders the Court are: 1. Pursuant to s 66 of the Land Acquisition (Just Terms Compensation) Act 1991 and ss 16 and 23 of the Land And Environment Court Act 1979, the Respondent is ordered to pay to the Applicant the sum of $2,994,438 (plus interest from 24 August 2018) to the effect that the Applicant will have received 90% of the amount of compensation in the Compensation Notice dated 10 March 2020; 2. The amount due to the Applicant specified in (1) is to be paid within 14 days of the date of these orders; 3. The Respondent is to pay the Applicant's costs of the motion filed on 14 January 2021; and 4. The exhibits on the motion are returned. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 April 2021