New South Wales Supreme Court CITATION : Tanlane v Moorebank Recyclers [2010] NSWSC 802 HEARING DATE(S) : 16/7/10 JURISDICTION : Equity Division JUDGMENT OF : McDougall J at 1 EX TEMPORE JUDGMENT DATE : 16 July 2010 1. On the plaintiff's notice of motion, I reserve the question of directions and reserve liberty to apply in chambers, but order that the notice of motion otherwise be dismissed. DECISION : 2. I order that the defendant's notice of motion be dismissed. 3. I make no order as to the costs of either notice of motion. 4. I order that the exhibits on the notices of motion be handed out. CATCHWORDS : PROCEDURE – where orders made for defendant to file and serve expert evidence and for plaintiff to serve expert evidence in reply – plaintiff applies to vacate orders – whether re-agitation of matters subject to issue estoppels arising from earlier Land and Environment Court decision – whether more appropriate for question of estoppel to be determined at the hearing – whether report relevant to question of compensation – directions to be given on plaintiff's notice of motion, but otherwise dismissed. - PROCEDURE – defendant's notice of motion seeking variation of orders to provide for service of surveyor's report – relevance of surveyor's report – defendant's notice of motion dismissed. LEGISLATION CITED : Conveyancing Act 1919 (NSW) Environmental Planning and Assessment Act 1979 (NSW) CATEGORY : Procedural and other rulings CASES CITED : Blair v Curran (1939) 62 CLR 464 PARTIES : Tanlane Pty Limited (Plaintiff) Moorebank Recyclers Pty Limited (Defendant) FILE NUMBER(S) : SC 2008/277351 COUNSEL : T S Hale SC / J B Maston (Plaintiff) G Inatey SC / D P Wilson (Defendant) SOLICITORS : Minter Ellison (Plaintiff) Mark McDonald & Associates (Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION McDOUGALL J 16 July 2010 (ex tempore – revised 16 July 2010) 2008/277351 TANLANE PTY LIMITED v MOOREBANK RECYCLERS JUDGMENT 1 HIS HONOUR: The plaintiff (Tanlane) and the defendant (Moorebank) are the owners of adjacent parcels of land situated on or near the Georges River in Moorebank. Their respective parcels are known as Lot 7 (Tanlane) and Lot 6 (Moorebank ). Lot 7 has direct access to Newbridge Road. Lot 6 obtains access to Newbridge Road through a "panhandle" forming part of Lot 6. 2 Adjacent to Lots 6 and 7, and lying to the west, is land owned by Boral Bricks Pty Limited (Boral). That land also has access to Newbridge Road, through a "handle" that is wider and shorter than that through which Lot 6 obtains access. 3 Boral's land is zoned for residential development, and as I understand is to be developed accordingly. Access to the development, will come from Newbridge Road via the handle that I have described. The principal road is apparently to be called Brickmakers Drive. 4 Tanlane wishes to obtain access to Newbridge Road via what I will call for convenience Brickmakers Drive. To do so, it will need to build a bridge, or elevated roadway, over the panhandle forming part of Moorebank's Lot 6. If Tanlane obtains that access, the development of its land for commercial and residential purposes will be facilitated. For town planning reasons that do not need consideration, it is apparently undesirable that access to Lot 6 from Newbridge Road should be obtained through its own frontage onto that road. 5 In November 2008, Young CJ in Eq heard claims, as between Tanlane and Moorebank, that Tanlane was entitled to the benefit of an easement over the panhandle of Lot 6, alternatively for variation to that easement, alternatively for the grant of a fresh easement pursuant to s 88K of the Conveyancing Act 1919 (NSW). His Honour has concluded that all claims other than that under s 88K should be dismissed ([2008] NSWSC 1341). Resolution of the claim under s 88K requires consideration of, among other things, the question of compensation. I say "among other things" because, as it appears to me, his Honour did not embark on a consideration of whether, on discretionary grounds other than those dealing with compensation, an easement should be ordered. 6 The question of compensation is yet to be decided. Its decision may have been stalled because Moorebank challenged, in the Land and Environment Court, the validity of a consent given by Liverpool City Council in relation to the proposed bridge. It is clear from what Young CJ in Eq said at [118] of his reasons that, absent an existing consent or substantial equivalent, it might be that no order would be made under s 88K. 7 In any event, the proceedings in the Land and Environment Court (and on appeal therefrom) have been resolved and, subject to the question of lapsing, the position appears to be that the consent is valid. 8 The parties have been lurching towards preparation of the hearing on quantum. On 23 April 2010, Hammerschlag J made orders for the parties to serve evidence dealing with the question of compensation. One of the orders made (order 2) was that Moorebank file and serve expert evidence from a structural engineer by a specified date. Another (order 5) was that Tanlane serve expert evidence in reply by a specified date. Moorebank did serve such evidence, although not strictly speaking in accordance with order 2 (it was served a little late). Tanlane has not served evidence in reply. 9 Moorebank has also served evidence by a surveyor. That was not contemplated by the orders made on 23 April 2010 or by any other orders of the Court. 10 There are before the Court today two notices of motion. One is Tanlane's notice of motion seeking an order that orders 2 and 5 made on 23 April 2010 be vacated, and seeking orders to progress the question of compensation towards resolution. The other notice of motion is Moorebank's, seeking a variation of the orders made on 23 April 2010 to provide for the service of its surveyor's report. 11 Tanlane's notice of motion raised two issues. The first was whether the engineering report served by Moorebank gave (or purported to give) evidence of matters in respect of which issue estoppels arose out of the decision of the Land and Environment Court given in the proceedings in which the validity of the consent was challenged. The other issue was whether, in any event, the report that was served was relevant to the question of compensation. 12 Mr Hale SC who appeared with Mr Maston of counsel for Tanlane, submitted that the opinions expressed by the engineer (a Mr Taylor) traversed findings made by the Land and Environment Court which gave rise to issue estoppels. Accordingly, he submitted, Moorebank was precluded by the existence of those issue estoppels from re-agitating the matters, and Mr Taylor's opinions were irrelevant and inadmissible. 13 I have to say that my initial impression was that if Mr Hale's submissions were correct then it was a matter that could and should be debated at the hearing of the claim for compensation (or, more accurately, the hearing in which compensation would be quantified). That is because it would be in that hearing that the Court would gain a clear understanding of the issues to which Mr Taylor's report was directed, and thus to the extent (if any) to which further consideration of those issues was precluded by issue estoppels arising out of the judgment of the Land and Environment Court. However, Mr Hale pressed his application. He submitted that it would be necessary for it to be dealt with so that his client could determine whether or not to serve its own evidence. I have some difficulty with this, in that it seems to me to be asking the Court in effect to advise Tanlane whether it should serve evidence. 14 When one looks at the application with which the Land and Environment Court was concerned, the fundamental issue was whether the council failed to consider, or to consider in accordance with law, relevant matters including the use or intended use of the road bridge and the adequacy of the proposed bridge to carry traffic, including specifically Moorebank's trucks. That fundamental issue was reiterated in various ways, including that the council failed to give proper, genuine and realistic consideration to the relevant matters, and that it granted consent to the development without having sufficient evidence to understand the impact by reference to those matters (and others). 15 The application in the Land and Environment Court was heard by Lloyd J. His Honour gave judgment on 23 July 2009 ([2009] NSWLEC 100). His Honour identified the relevant issues at [10] in the following terms: "10 Moorebank's specific concerns will become apparent when I address its submissions, which may be summarised as follows: (1) The development consent is invalid because Moorebank's written consent was not given to the making of the development application. (2) The development consent is invalid because the development application was not assessed by the Council in accordance with the Environmental Planning and Assessment Act 1979 ("EP&A Act"). (3) A number of the development consent conditions run foul of the judgment of the Court of Appeal in Mison v Randwick Municipal Council (1991) 23 NSWLR 734." 16 For today's purposes, the relevant issues are (2) and (3). 17 It is important to understand that, as his Honour pointed out, the question before him was whether the council gave proper consideration to the relevant matters, and accordingly whether its consent was or was not vitiated. Thus, in relation to s 79C of the Environmental Planning and Assessment Act 1979 (NSW), his Honour concluded at [79] that the council took into consideration the matters that it was required to consider under that section and that if its conclusions were wrong in fact, its decision was not thereby invalidated. 18 Mr Hale pointed to the findings of fact that Lloyd J made along the way to coming to that conclusion, including at [78] where his Honour said that he was satisfied that the council took into consideration the structural adequacy of the bridge. His Honour said that he was satisfied that the council did so, and thought that its consideration was reflected in a particular condition of the development consent. That condition was condition 45, upon which (among other matters) Mr Taylor was asked to give an opinion. 19 Equally, in relation to the third issue identified by Lloyd J, his Honour came to the view that the conditions did not fall foul of the decision referred to in it. In coming to that conclusion, his Honour took account once again of the conditions of the development consent which were apparently designed, in his Honour's view, to deal with the structural adequacy of the bridge. 20 It is clear that issue estoppels may arise in respect of questions or matters of fact as well as questions or matters of law. In Blair v Curran (1939) 62 CLR 464, Dixon J dealt with issue estoppel from 531. At that page, his Honour pointed out that, "[a] judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies." However, as his Honour said, "[t]he estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion". 21 His Honour followed up this latter point at 532, saying that, in relation to matters of fact, "the issue-estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established". Those facts were, his Honour said later on the same page, facts "fundamental to the decision arrived at". Those facts, together with their "legal quality", "must be taken as finally and conclusively established." His Honour contrasted "matters of law or fact which are subsidiary or collateral". Those matters, his Honour said, "are not covered by the estoppel". Further, findings "which concern only evidentiary facts and not ultimate facts forming the very title to rights give rise to no preclusion." 22 As his Honour noted at 533, the difficulty was not so much the statement of the principles as their application. The problem "is to distinguish the matters fundamental or cardinal to the prior decision or judgment, decree or order or necessarily involved in it as its legal justification or foundation from matters which even though actually raised and decided as being in the circumstances of the case the determining considerations, yet are not in point of law the essential foundation or groundwork of the judgment, decree or order." 23 His Honour's analysis was dealt with at some length in Chapter 8 of Spencer Bower and Handley, Res Judicata (Fourth Edition, 2009) at 103 and following. 24 In the present case, it seems to me to be strongly arguable that when one has regard to the grounds stated in the application with which Lloyd J dealt, and to his Honour's characterisation of the issues, the fundamental question was whether the council considered, in the sense explained by his Honour (or, as the grounds had it, considered according to law, or considered in a proper, genuine and realistic way, or on the basis of sufficient evidence) the relevant matters. The conclusion to which Lloyd J came was, as I have said, that the council did take into consideration the relevant matters, and that if its conclusions following that consideration were factually incorrect, that was not a ground of invalidity. 25 In those circumstances, it seems to me that there is much to be said for the view that the ultimate fact, or matter fundamental or cardinal, decided by the Court was the question of whether the council considered, in the requisite sense, relevant matters. The findings of fact along the way to that, although no doubt the determining considerations leading to the ultimate conclusion, may not be the essential foundation or groundwork of the Court's judgment. 26 In those circumstances, I think the better view may very well be that there is no issue estoppel. However, for the reasons that I indicated earlier, I do not regard this as an appropriate forum in which to consider the issue, because it will be relevant to understand not only the precise ambit of the facts that are the subject of estoppels flowing from the decision of the Lloyd J but also the facts sought to be proved, for the purposes of the compensation issue, through the report of Mr Taylor. It is sufficient to say that, having come to the conclusions that I have expressed, I am not prepared to vacate orders 2 and 5. I should make it plain that I have expressed myself in this way so that the parties are not bound, perhaps inadvertently or in a way that they had not contemplated, by my prima facie expression of opinion as to the existence of any relevant issue estoppel. 27 It follows from that that Tanlane's notice of motion should be dismissed in so far as it seeks a vacation of orders 2 and 5. However, it needs further consideration insofar as it seeks further directions in relation to the preparation of the compensation issue, and I will return to that. 28 I turn now to Moorebank's notice of motion. It seems that the evidence of the surveyor, a Mr Asher, is intended to establish that there has been no substantial commencement, under the development consent granted by council, for the purposes of s 95 of the Environmental Planning and Assessment Act. Mr Inatey SC who appeared with Mr Wilson of counsel for Moorebank, submitted that the question of the existence of the development consent was relevant to the valuation of his client's land, and therefore to the impact of the easement if granted. However, it appears, the valuation reports that his client have served assume that the consent is valid. If this is so then I have a little difficulty in understanding how the question could have the relevance for which Mr Inatey contended. 29 In any event, it seems to me, the assessment of compensation is to be assessed on the basis that there is, or will be, a valid consent. That seems to me to follow in effect from what Young CJ in Eq said at [116] of his reasons. 30 Further, on this issue, if there is to be a real question as to the basis upon which the valuation should be undertaken, then it would be entirely in accordance with usual practice for the valuers to prepare their opinions on alternative bases, and for the Court to make findings on those alternative bases, so that when (if at all) the matter returns to Young CJ in Eq, and his Honour considers the question reserved by [116] of his reasons, he can select the appropriate option. 31 Mr Hale raised other matters in opposition to the notice of motion. Given that I have concluded, for the reasons that I have expressed, that the notice of motion fails, it is not necessary to deal with those. 32 It follows that directions should be given on Tanlane's notice of motion, but that otherwise it should be dismissed; and that Moorebank's notice of motion should be dismissed. Since the substantive issues argued on each of the motions have failed, I would have thought either that there should be no order as to costs or that there should be orders for costs following the substantive event in each case, and that costs be set off. I will hear the parties on that, and on the question of directions. (Counsel addressed.) 33 On the plaintiff's notice of motion, I reserve the question of directions and reserve liberty to apply in chambers, but order that the notice of motion otherwise be dismissed. I order that the defendant's notice of motion be dismissed. I make no order as to the costs of either notice of motion. 34 I order that the exhibits on the notices of motion be handed out. ********** 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.