Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Council of the City of Ryde v Azizi [2021] NSWCA 120 Hearing dates: 31 May 2021 Date of orders: 31 May 2021 Decision date: 02 June 2021 Before: Payne JA Decision: 1. That orders 1, 2, 3 of the Land and Environment Court, made on 30 April 2021, in each of proceedings 168439 of 2020 and 168457 of 2020, be stayed until determination of the application for leave to appeal and publication of reasons in relation to any resulting appeal. 2. The respondents to file and serve any notice of contention, any evidence and written submissions by 5pm on Monday 21 June 2021. 3. The applicant to file and serve written submissions in reply and any evidence in reply by 5pm on 5 July 2021. 4. Fix the matter for concurrent hearing with an estimate of 1 day on Thursday 29 July 2021. 5. Grant liberty to the parties to relist the matter before Payne JA on 24 hours' notice by email to his Honour's associate. 6. No order as to costs. Catchwords: APPEALS – procedure – stay pending appeal Legislation Cited: Land Acquisition (Just Terms Compensation) Act 1991 (NSW), ss 42, 68 Cases Cited: Blacktown City Council v Concato [2018] NSWSC 1039 Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148; [1986] HCA 58 Council of the City of Ryde v Azizi [2019] NSWSC 1605 Category: Procedural rulings Parties: Council of the City of Ryde (Applicant) Raymond Boutros Azizi (First Respondent) Alnox Pty Ltd (Second Respondent) Representation: Counsel: M Hall SC (Applicant) I Hemmings SC with T Poisel (First and Second Respondents) Solicitors: Bartier Perry (Applicant) Madison Marcus (First and Second Respondents) File Number(s): 2021/136736 Publication restriction: Nil. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Judgment 1. This matter has a long and unhappy history. On 24 August 2018, the applicant, the Council of the City of Ryde ("the Council"), compulsorily acquired three contiguous parcels of land adjacent to Blenheim Park at North Ryde. The acquisition was for a public purpose, namely the provision of public open space through the expansion of Blenheim Park. The first and second respondents are the former owners of the acquired land. One lot was owned by Mr Raymond Boutros Azizi and two lots were owned by Alnox Pty Ltd ("Alnox"), a property development company owned and operated by Mr Raymond Boutros Azizi's two sons. Mr Raymond Azizi (one of Mr Raymond Boutros Azizi's sons) is Alnox's sole shareholder and Mr Patrick Azizi, another son, is Alnox's sole director. 2. The Valuer General prepared a valuation of the land. Section 42 of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) required that a compensation notice be given by the Council to the respondents. In the Common Law Division a "stay" of the operation of the statute, pending a public law challenge to the decision of the Valuer General, was ordered. The order made in the Common Law Division was: "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." 1. Several million dollars (reflecting the minimum payments which were due to the respondents based on the evidence of the Council's expert) was paid to the respondents. $5,000,000 was paid into the Council's solicitors' trust account as a condition of the "stay". When the matter came before me in 2019 sitting in the Common Law Division to determine the public law challenge, Council of the City of Ryde v Azizi [2019] NSWSC 1605, I set aside the Valuer General's decision on a limited basis and remitted the matter to him for determination in accordance with my reasons. Although the "stay" was dissolved I said this about it: "[170] I am persuaded that Mr Kirk SC [who appeared for the Council before me] 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. Upon remittal to the Valuer General, I was informed that a materially similar valuation outcome was achieved. A compensation notice based on that valuation was served by the Council on the respondents pursuant to s 42 of the Land Acquisition (Just Terms Compensation) Act. 2. The respondents are dissatisfied with the Valuer General's valuation and have commenced proceedings in the Land and Environment Court seeking a greater amount of compensation. The Council is contending in those proceedings that a materially smaller amount of compensation than that fixed by the Valuer General should be paid. The matter is listed to be heard shortly, although all of the evidence is not yet filed. 3. The present case raises the following preliminary issue. Section 68 of the Land Acquisition (Just Terms Compensation) Act provides: 68 Payment of compensation arising from court proceedings (1) Payment of compensation in respect of matters before the Land and Environment Court is to be made in accordance with any agreement reached during the proceedings or, if no such agreement is reached, in accordance with the decision of the Court. (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) if the authority of the State did not give the owner concerned a compensation notice—the authority may (but is not required to) make an advance payment under this Part or pay an amount into the trust account kept under this Part. 1. It is common ground that the present respondents have been given a compensation notice by the Council and that the Council was required to pay 90 per cent of the amount of compensation offered in the compensation notice (as an advance payment) to the respondents within 28 days. 2. In purported compliance with s 68, the Council paid $5,000,000 (forming part of the 90 per cent of the amount of compensation offered in the compensation notice) into its solicitors' trust account. It will be submitted by the Council in this Court that this payment was a "payment" made to the respondents as required by s 68 as it provided security to the respondents. The Council submitted before the primary judge, and submitted again before me, that the scheme of the Land Acquisition (Just Terms Compensation) Act permitted the payment made to the Council's solicitors' trust account so as to protect the Council from the risk of the respondents becoming insolvent. As the acquisition of the respondents' property in 2018 was on the basis of proven hardship, it was submitted that the risk of insolvency was self-evident, despite the fact that some millions of dollars have since been paid to the respondents as advance payments (see [3] above). The terms upon which the Council's solicitors are keeping the $5,000,000 amount were set out in an affidavit of Dennis Andy Loether sworn 28 May 2021 which was read before me: "I am instructed to maintain the existing trust account balance and to disburse it only with the consent of the Applicant, or, in accordance with a final determination of compensation made in the LEC proceedings." 1. The Council submitted that if the respondents sought payment of the $5,000,000 amount to actually be made to them they were obliged to seek mandamus in this Court, as the Land and Environment Court did not have the power to make the order made by Moore J. 2. The respondents submitted to the primary judge that s 68 of the Land Acquisition (Just Terms Compensation) Act required payment of 90 per cent of the amount of compensation offered in the compensation notice (as an advance payment) to the respondents within 28 days. Section 68 did not permit that payment to be made to the Council's solicitors' trust account, particularly on the terms on Mr Loether's affidavit. If the Council genuinely feared insolvency, their choice was to seek an injunction in the nature of a freezing order: Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148; [1986] HCA 58. [1] Whatever the precise form of injunction sought by the Council, if one had been sought, each of the matters usually addressed in making such an order, including the balance of convenience, as well as an undertaking as to damages, would necessarily have been addressed. 3. I have considerable sympathy for the respondents, whose land was acquired in August 2018 (almost three years ago) and who, through no fault of their own, have yet to be paid compensation beyond the minimum amount calculated by the Council's expert, which is far below 90% of the Valuer General's valuation the subject of s 68. Nevertheless, I accept that the critical remarks I addressed in the 2019 judgment to the "stay" granted earlier in those proceedings involved non-compliance by the Council with s 42 of the Land Acquisition (Just Terms Compensation) Act, and not s 68. The applicant should be given an opportunity to persuade this Court that there is a relevant difference between those provisions and that the course it has adopted is permitted by s 68 and the scheme of the Land Acquisition (Just Terms Compensation) Act. This conclusion is underlined by the fact that in the 2019 decision I was sitting in the Common Law Division and was in no position to overrule the case which had commenced the relevant "stay" jurisprudence: Blacktown City Council v Concato [2018] NSWSC 1039. To achieve certainty in this area it is desirable that the Court of Appeal be given the opportunity to consider the issue. It would be wrong in those circumstances for me to in effect decide the question by refusing a stay. The matter should, however, be determined quickly and is fixed for a concurrent hearing on 29 July 2021. The parties will need to address the question of leave and should not assume that a grant of leave is a foregone conclusion. For these reasons, at the conclusion of the hearing on 31 May 2021 I made the following orders: "The Court orders: 1. That orders 1, 2, 3 of the Land and Environment Court, made on 30 April 2021, in each of proceedings 168439 of 2020 and 168457 of 2020, be stayed until determination of the application for leave to appeal and publication of reasons in relation to any resulting appeal. 2. The respondents to file and serve any notice of contention, any evidence and written submissions by 5pm on Monday 21 June 2021. 3. The applicant to file and serve written submissions in reply and any evidence in reply by 5pm on 5 July 2021. 4. Fix the matter for concurrent hearing with an estimate of 1 day on Thursday 29 July 2021. 5. Grant liberty to the parties to relist the matter before Payne JA on 24 hours' notice by email to his Honour's associate. 6. No order as to costs." 1. The case has been fixed for an urgent hearing. I encourage the parties to exercise the liberty to apply if further case management orders need to be made. ********** Endnote 1. The Council retorted that a freezing order was not available in the Land and Environment Court. It is unnecessary to address that issue further for present purposes. 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: 02 June 2021