Reported Decision : (2001) 113 LGERA 422 Land and Environment Court of New South Wales CITATION : Gorczynski v Leichhardt Municipal Council & Ors [2001] NSWLEC 76 revised - 13/06/2001 APPLICANT Gorczynski PARTIES : RESPONDENT Leichhardt Municipal Council & Ors FILE NUMBER(S) : 40120 of 2000; 40012 of 2000; 30079 of of 2000 CORAM: Cowdroy J KEY ISSUES: Practice & Procedure :- Reference of technical issues to referee pursuant to Pt 72 of the Supreme Court Rules 1970 - motion for adoption of referee's report - objections to adoption upon grounds of alleged lack of procedural fairness and lack of utility - no basis to refuse adoption LEGISLATION CITED: Land and Environment Court Rules 1996 Pt 6 r 1 Supreme Court Rules 1970 Pt 72 r 8, r 11, r 13 Beveridge v Dontan Pty Limited (1991) 23 NSWLR 13; Chloride Batteries Australia Ltd v Glendale Chemical Products Pty Ltd (1988) 17 NSWLR 60; Kioa v West (1985) 159 CLR 550; Leda Constructions Pty Limited v SJP Formwork (Aust) Pty Limited (1992-1993) 29 NSWLR 549; Minister for Aboriginal Affairs v Peko-Wallsend Limited (1985-1986) 162 CLR 24; CASES CITED: Najjar v Haines (1991) 25 NSWLR 224 ; Parsons v Bunge (1941) 64 CLR 421 ; Sacon Constructions Pty Limited v Kezarne (Rolfe J, NSWSC, 10 October 1997, unreported); Skinner & Edwards (Builders) Pty Limited v Australian Telecommunications Corporation (1992) 27 NSWLR 567 ; SJP Formwork (Aust) Pty Limited v Leda Constructions Pty Ltd (Giles J, NSWSC, 19 May 1992, unreported); Twist v Randwick Muncipal Council (1976) 136 CLR 106; White Constructions (NT) Pty Limited v Commonwealth of Australia (1990) 7 BCL 193 DATES OF HEARING: 2/4/01 DATE OF JUDGMENT: 04/27/2001 APPLICANT Mr D Miller (Barrister) SOLICITORS Uther Webster & Evans FIRST RESPONDENT Mr P Jackson (Solicitor) LEGAL REPRESENTATIVES: SOLICITORS Pike Pike & Fenwick SECOND & THIRD RESPONDENT Mr P Clay (Barrister) SOLICITORS Mallesons Stephen Jaques JUDGMENT: IN THE LAND AND MATTER No. 40012 of 2000; 40120 of 2000; 30079 of 2000 ENVIRONMENT COURT CORAM: Cowdroy J OF NEW SOUTH WALES DECISION DATE: 27/4/01 Peter Francis Gorczynski Applicant v Leichhardt Municipal Council First Respondent Ravini Neluka Perera Second Respondent Rebecca Patricia Dee Third Respondent JUDGMENT 1. By notice of motion filed 30 October 2000 the applicant seeks an order that the report of Gleeson Consulting Pty Ltd dated 11 October 2000 relating to premises known as 80 Booth Street Annandale ("the report") be adopted. The adoption of the report is challenged by the second and third respondents ("the opponents"). The report had been prepared pursuant to a direction by the Court made on 15 September 2000 directing the appointment of a referee to inquire and report upon the disputed construction and engineering issues at the above premises. It was the intention of the Court, as understood by all relevant parties with the exception of the opponents, that the appointment of the referee be made pursuant to Pt 72 of the Supreme Court Rules 1970 ("the SC Rules") as adopted by Pt 6 r 1 of the Land and Environment Court Rules 1996 ("the LEC Rules"). 2. All parties agreed to the nomination of Mr Geoffrey Gleeson ("the referee") to undertake the inquiry and report, and to the list of questions to be submitted to the referee for his determination. Such list was formulated by all parties following prolonged consultation between them. Alleged denial of procedural fairness 3. The objections to the adoption of the report fall in two categories. The opponents submit that there has been a denial of natural justice as a consequence of their misinterpretation of the nature of the appointment of the referee. The opponents also submit that because of the referee's failure to require the parties to provide 'a brief statement of the findings of fact and law for which the party contends' pursuant to Pt 72 r 8(5) of the SC Rules they have been denied procedural fairness. a) Appointment of referee 4. The first objection is based upon an apparent misunderstanding of the opponents that the referee was appointed as an expert pursuant to Pt 39 of the SC Rules and not a referee pursuant to Pt 72 of the SC Rules. The opponents claim that in consequence of the confusion they have been denied the opportunity to cross-examine the referee as would have been their right had the appointment been made pursuant to Pt 39. 5. As a result of the apparent confusion on 30 January 2001 the Court confirmed that the referee's appointment resulted from an order made pursuant to Pt 72 of the SC Rules. Accordingly any doubt which may have existed concerning the basis of the referee's appointment was clarified. However no attempt was made after 30 January 2001 by the opponents to set aside the Pt 72 procedure as irregular, or otherwise to seek vacation or revision of the order of 15 September 2000 appointing the referee. 6. The Court subsequently made directions requiring any party who sought to oppose the adoption of the report to file any such material before this hearing. However, no evidence was led by the opponents pursuant to such direction to challenge the adoption of the report. At the hearing of this motion the opponents were also afforded the opportunity of providing evidence of any prejudice resulting from their alleged misunderstanding. Despite such opportunity, the opponents did not identify any prejudice, but maintained their claim that no opportunity existed to cross examine the referee although the subject matter of cross examination was not identified. 7. The correct approach of the Court in relation to an application for the adoption of the referee's report made under Pt 72 of the SC Rules has been stated by Giles J (as he then was) in SJP Formwork (Aust) Pty Limited v Leda Constructions Pty Ltd (NSWSC, 19 May 1992, unreported). His Honour concluded that the Court is not to embark upon a reconsideration of disputed questions of fact where there is factual material sufficient to entitle the referee to arrive at his conclusions 'particularly where the disputed questions are in a technical area where the referee enjoys an appropriate expertise'. In short, the Court will not permit findings of fact to be re-agitated when the Court 'has a comfortable feeling of satisfaction that the factual issues have been properly explored and considered' (see Cole J in White Constructions (NT) Pty Limited v Commonwealth of Australia (1990) 7 BCL 193). Such test has been subsequently adopted by the New South Wales Court of Appeal (see Super Pty Limited (formerly known as Leda Constructions Pty Limited) v SJP Formwork (Aust) Pty Limited (1992-1993) 29 NSWLR 549. In Super v SJP Formwork at 563-564 Gleeson CJ made the following observations on the considerations affecting the adoption of a referee's report:- The nature of the complaints made about the report, the type of litigation involved, and the length and complexity of the proceedings, may all be relevant considerations. The purpose of Pt 72 is to provide, where the interests of justice so dictate, a form of partial resolution of disputes alternative to orthodox litigation, and it would frustrate that purpose to allow the reference to treated as some kind of warm-up for the real contest. On the other hand, if the referee's report reveals some error of principle, some absence or excess of jurisdiction, or some patent misunderstanding of the evidence, that would ordinarily be a reason for rejecting it: cf Jordan v McKenzie (1987) 26 CPC (2d) 193. So also would perversity or manifest unreasonableness in fact-finding. 8. No error in principle nor in the referee's reasoning, factual findings or conclusions were identified by the opponents nor any matter which could lead to the inference that different conclusions should have been drawn by the referee. In the circumstances the Court adopts the approach of Rolfe J in Sacon Constructions Pty Limited v Kezarne (Rolfe J, NSWSC, 10 October 1997, unreported). In that decision, Rolfe J observed that opposition by a party to the adoption of a report carried no weight when events demonstrated inertia by the party and absence of justified grounds of objection. Accordingly the Court considers that there is no valid reason to reject the report on this ground. b) Procedural fairness 9. As a second, but related issue, the respondents submit that the procedural requirements of Pt 72 r 11 of the SC Rules have not been satisfied by the referee in the making of his report. Pt 72 r 11 provides:- 11 The referee shall, unless the Court otherwise orders, make a report to the Court, in writing, on the matter referred to the referee annexing the statements given under rule 8(5) and stating - (a) the referee's opinion on the matter; and (b) the reasons for the opinion The respondents submit that the referee did not annex ' the statement given under r 8(5) ' in his report to the Court and that a denial of procedural fairness has resulted. Pt 72 r 8(5) provides:- (5) Each party shall, within a time fixed by the referee but in any event before the conclusion of evidence on the inquiry, give to the referee and each other party a brief statement of the findings of fact and law for which the party contends. 10. Had the referee prepared his report without prior consultation with the parties, the opponent's submissions would raise a matter of serious concern. However the facts relating to the preparation of the report must be considered. 11. In preparing for the reference each party consulted experts. The opponents retained Mr Chris Morris of Wallis and Moore Pty Limited who prepared a report in August 2000. Mr Morris had the benefit of considering the written opinions of the applicant's experts namely that of Mahaffey Associates Pty Limited Clarke Engineering Consultants Pty Ltd prior to the preparation of his report. An examination of Mr Morris's report shows that it records the facts in contention between the parties, contains a detailed analysis of the issues and contains his conclusions and recommendations. In summary, it is a comprehensive statement concerning the opponent's contentions. 12. The expert reports of all parties were provided to the referee who thereafter convened an on-site meeting on 6 October 2000 in the presence of the engineers retained by the applicant and the opponents. All persons present were afforded the opportunity to address the referee. The referee prepared his report thereafter. 13. No specified form is stipulated by Part 72 r 8(5) by which 'the statement of findings of fact and law for which each party contends' is to be provided. The critical matter for consideration is whether the parties were provided with an opportunity to put forward their contentions to the referee in a manner which would ensure that the rules of natural justice were observed (see Twist v Randwick Municipal Council (1976) 136 CLR 106; Kioa v West (1985) 159 CLR 550; Xuereb v Viola (1989) 18 NSWLR 453; Beveridge v Dontan Pty Limited (1991) 23 NSWLR 13). 14. In Xuereb v Viola at 468 and at 472 Cole J noted that the requirements of natural justice will vary in each reference under Pt 72 of the SC Rules (see also Kioa v West at 584 per Mason J). In this case the requirements of Pt 72 r 8(5) of the SC Rules have been satisfied by virtue of the provision of Mr Morris's report. It constitutes the 'brief statement of the findings of fact' for which the opponents contend. It does not include a statement of law. However since the issues to be considered by the referee were solely technical, a statement of legal issues addressed to the referee would not have been appropriate. Further, there is no reason to construe Pt 72 r 8(5) as binding a referee to consider a statement of legal issues (see Minister for Aboriginal Affairs v Peko-Wallsend Limited (1985 -1986) 162 CLR 24 at 39-40 per Mason J). 15. Part 72 r 8(2)(a) of the SC Rules provides that subject to any direction under sub-rule (1) the referee is entitled to conduct the proceedings under the reference in such manner as he thinks fit. Additionally, the referee is not bound by the rules of evidence and may inform himself or herself in relation to any matter and in such manner as the referee thinks fit (Pt 72 r 8(2)(b) of the SC Rules). 16. Part 72 r 11 requires the report to be made 'annexing the statements given under r 8(5)' and stating the referees opinion and reasons. The referee stated, 'We have been provided with and have relied on the following documents…'. Included in the list of reports is the report of Mr Morris. Accordingly although the report of Mr Morris was not 'annexed' in the report it was clearly incorporated by reference. The obvious purpose of Pt 72 r 11 is to ensure that, by objective means, each of the parties' contentions are made patent. In this case, the incorporation by reference of Mr Morris's report satisfies the requirements of Pt 72 r 11. 17. The report addresses the issues referred to the referee and is one which demonstrates an analytical and thorough approach as well as an understanding of all the issues raised (see Chloride Batteries Australia Ltd v Glendale Chemical Products Pty Ltd (1988) 17 NSWLR 60). As a matter of substance the Court is satisfied that natural justice has been afforded to the parties (see Beveridge v Dontan Pty Limited (1991) 23 NSWLR 13). Alleged lack of utility by adoption of report 18. Since the report was prepared the subject structures have been demolished and the opponents submit that the Court would not order the adoption of the report if there was no utility in so doing. 19. The opponents participated from the outset in the reference which was initiated in September 2000. In January 2001 the opponents sought development approval from the first respondent for the demolition of a garage or workshop which was the subject of the referee's report. On 5 February 2001 the first respondent served on the opponents a Notice of Proposed Order pursuant to s 121B of the Environmental Planning and Assessment Act 1979 requiring demolition of such structure. Demolition followed in March 2001. 20. The reference procedure is a curial process (Najjar v Haines (1991) 25 NSWLR 224 at 235B per Kirby P) which is incomplete without adoption or rejection of the report. The Court does not accept that the adoption of the report will serve no purpose. If the Court has the benefit of actual findings before it, rather than hypothetical findings it would be greatly assisted in its final determination of all issues between the parties especially those relating to costs. The findings of the referee, if adopted, become findings of the Court and may provide a basis for any other relief that may be sought (see Skinner & Edwards (Builders) Pty Limited v Australian Telecommunications Corporation (1992) 27 NSWLR 567 at 575 per Cole J). It is appropriate therefore that the reference should culminate in an order of the Court and accordingly the Court rejects the submission that the adoption would serve no utility. 21. For the above reasons the Court finds that there has been no irregularity in the conduct of the proceedings which has resulted in any denial of procedural fairness and that there has been substantial compliance with Pt 72 of the SC Rules. Orders 22. The Court therefore orders that:- 1. The report of Geoffrey Gleeson dated 11 October 2000 be adopted. 2. The cost of the reference will be costs in the cause. 3. The matter listed for further directions before the registrar of the Court at 9 am on 7 May 2001. 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.