Land and Environment Court New South Wales Medium Neutral Citation: El Boustani v Minister Administering the Environmental Planning and Assessment Act 1979 [2011] NSWLEC 214 Hearing dates: 16 November 2011 and 17 November 2011 Decision date: 17 November 2011 Jurisdiction: Class 3 Before: Pepper J Decision: The orders of the Court are as follows: (1) the respondent is granted leave to file its further amended points of defence dated 11 November 2011; (2) the town planners are to meet, confer and prepare any further joint report as a consequence of the amendment by no later than 4.00pm 22 November 2011 in relation to: (a) the likely hood of consent been granted for the carrying out of intensive plant agriculture on the land after 16 June 2012 (being the date of the lapse of the 2007 consent); and (b) the likely hood of the land being able to be used for intensive plant agriculture after 16 June 2012 without the benefit of development consent; (3) the applicants are to inform the Court and respondent in writing of what additional evidence they seek to rely upon, in addition to the evidence referred to above in order 2 to meet the further amended points of defence, by 10.00am 22 November 2011; and (4) the costs of today's application are reserved. Catchwords: PRACTICE AND PROCEDURE: late application to amend points of defence in compulsory acquisition proceedings - respondent believed issue of causation of disturbance costs joined notwithstanding bare denial - applicant claimed prejudice by reason of late amendment - prejudice found but amendment permitted Legislation Cited: Civil Procedure Act 2005 ss 56, 57, 60, 64, 66 Environmental Planning and Assessment Act 1979 s 109 Land Acquisition (Just Terms Compensation") Act 1991 s 55 Uniform Civil Procedure Rules 2005 r 14.14 Cases Cited: Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 Category: Procedural and other rulings Parties: Mr Elias El Boustani (First Applicant) Mrs Guita El Boustani (Second Applicant) The Minister Administering the Environmental Planning and Assessment Act 1979 (Respondent) Representation: Mr J E Lazarus (First and Second Applicants) Mr I J Hemmings (Respondent) HWL Ebsworth Lawyers (First and Second Applicants) Hunt & Hunt Lawyers (Respondent) File Number(s): 30818 of 2010 Ex Tempore Judgment The Minister Seeks to Amend its Points of Defence 1By notice of motion filed 17 November 2011, the Minister Administering the Environmental Planning and Assessment Act 1979 ("the Minister") sought leave to amend its points of defence by claiming that development consent DA 288/2007 ("the 2007 consent") granted on 16 June 2007 to the applicants will lapse on 16 June 2012, and that therefore, the applicants are not entitled to reinstatement of their business, and as a consequence, the amounts claimed by way of disturbance costs are not financial costs that might be reasonably incurred as a direct and natural consequence of the compulsory acquisition of the applicants' land by the Minister. 2The applicants, Mr Elias El Boustani and Mrs Guita El Boustani ("the El Boustanis"), object to the amendment principally on the ground that because of the imminent commencement of the hearing date on 21 November 2011, the prejudice they will suffer if the amendment is permitted will not be able to be cured in time. 3The amendment was notified by the Minister to the El Boustanis when the further amended points of defence were filed on 11 November 2011, pursuant to leave of the Court. Prior to this date, the Minister's points of defence had, since January 2010, contained no more than a bare denial in respect of the claim for disturbance costs. It was not until correspondence passed between the parties commencing on 26 October 2011, wherein the El Boustanis sought further particulars of the denial, that the deficiency in the Minister's pleading was brought to his attention. Although leave had earlier been given to the Minister to amend his defence, at the time the leave was granted the amendment in question was neither foreshadowed nor anticipated. 4The Minister has properly conceded that it ought to have properly particularised the denial earlier and that there was nothing preventing it from doing so. But, the Minister submits, it was his view that the issue was joined having regard to the evidence filed in the proceedings, particularly the El Boustanis' expert planning evidence. The Minister Compulsory Acquires the El Boustanis' Land 5The proceedings relate to a claim for compensation arising out of the compulsory acquisition of land owned by the El Boustanis located at 242 Byron Road, Leppington ("the acquired land"), pursuant to the Land Acquisition (Just Terms Compensation) Act 1991 ("the Just Terms Act"). 6Prior to the acquisition, the El Boustanis carried out the business of growing vegetables, especially tomatoes and cucumbers, which involved the use of large greenhouses known as "igloos" and required an extensive water supply that was provided by a large dam that impounded surface drainage. 7As at the acquisition date the land was zoned R1(b) under the Camden Local Environmental Plan No 48 in which intensive agriculture was prohibited. The El Boustanis were, however, operating pursuant to a consent that recognised their existing use rights to conduct intensive agricultural activities. 8Under the draft Camden Local Environmental Plan 2010 ("the 2010 LEP"), which was certain and imminent at the acquisition date, the acquired land was to be zoned RU4 Rural Holdings, in which intensive agriculture was to be permissible with consent. 9The El Boustanis allege that as a result of the acquisition it is no longer feasible for them to conduct their business on the residual land. They state that since the acquisition they have made efforts to purchase suitable land elsewhere, but without success. The El Boustanis assert that not only has the resumption destroyed their ability to continue their business on the land, it has also had the consequence that they are not able to purchase suitable land elsewhere because, due to the downturn in their business as a result of the acquisition, they are unable to secure finance. 10The El Boustanis have, therefore, claimed disturbance costs in the amount of $1,030,000. The Planning Framework 11The parties respective town planning experts, Mr Paul Grech (for the El Boustanis) and Mr Garry Shiels (for the Minister), agree that as of the acquisition date: (a) Camden Council ("the council") had issued two development consents and a modification in respect of the acquired land: (1) DA 949/2001 ("the 2001 consent") granted on 23 August 2001 for the construction of four new igloos; (2) a modification to the 2001 consent to reconfigure the arrangements of the approved igloos; and relevantly for present purposes; (3) the 2007 development consent for New Agriculture Igloos/Greenhouses, which included condition 2 that stated that: the use shall cease after a period of 5 years from the date of consent. A further application must be lodged no less than six (6) months before the expiration of the consent for Council's consideration and determination (b) the draft 2010 LEP had been exhibited and provided that; (1) the acquired land and residual land was to be zoned RU4 Rural Holdings; and (2) the zone permitted the operation of the existing greenhouse and horticultural operations of the El Boustanis with consent. 12The El Boustanis state that the planning issues required to be determined by the Court in the compulsory acquisition proceedings are confined in their scope. This is because the market value contended for by the El Boustanis does not depend upon any uplift in value by reason of the development potential of the land, and therefore, issues concerning the development potential of the land beyond its use at the acquisition date do not arise for consideration. 13The El Boustanis accept, however, that there is one planning issue that is likely to be contentious, namely, whether or not the council would have granted an extension of the 2007 consent to enable the El Boustanis to continue their intensive agricultural enterprise. The El Boustanis claim that a prudent hypothetical purchaser would have believed that the council would have granted the extension given that the land had been newly re-zoned to permit their activities, such activities being common throughout the neighbourhood. But this issue, they assert, is only relevant to the assessment of the market value of the land and not to their claims under s 55(d) and (f) of the Just Terms Act. The El Boustanis Object to the Amendment on the Grounds of Prejudice 14In support of their opposition to the amendment the El Boustanis relied on an affidavit of Ms Emma Whitney, sworn 16 November 2011. Ms Whitney is the employed solicitor of HWL Ebsworth Lawyers, the solicitors for the El Boustanis. 15Ms Whitney deposed that the amended ground of defence is a significant new issue given that the Minister now contends that there was no casual link between the resumption and the claimed costs of relocation because the consent would have expired on 16 June 2012, and therefore, the El Boustanis would have had to relocate from the land in any event. She states that this issue was not anticipated to arise from the bare denial in the earlier iterations of the points of defence and had the amendment been properly pleaded, the El Boustanis would have sought to adduce "a significant amount of further evidence". This evidence was required to meet the issue that the Minister now sought to raise, namely, whether, as a matter of fact, had there been no resumption the El Boustanis would have been entitled to carry on their intensive agricultural business after the expiry of the 2007 consent. 16There are a number of ways, according to Ms Whitney, in which this continuation of use might have been possible, including the following: (a) by obtaining the consent of the council to a modification of the 2007 consent to remove the five year time limitation contained in condition 2; (b) by applying to the council for a new consent to carry out the business; (c) by relying upon the modified 2001 consent, which did not contain a time limitation; or (d) by relying on s 109 of the Environmental Planning and Assessment Act 1979 in order to demonstrate they had continuing use rights as of the date of the commencement of the 2010 LEP, and hence, the necessity to obtain consent to carry out their intensive agricultural business would not exist. 17Thus, she deposed, the El Boustanis would need to adduce evidence directed to the following matters: (a) the status of the 2001 consent; (b) the existence and nature of the El Boustanis' continuing use rights; and (c) whether as a matter of fact the council would have approved an extension to the 2007 consent in June 2012. 18This evidence would be sought from Mr Grech, Mr Sheils (by way of a joint planning report) and from council officers. 19Ms Whitney stated that in light of the imminent commencement of the hearing there was insufficient time to enable the requisite enquiries to be conducted and the evidence to be prepared in order for the El Boustanis to properly present their case. There was, therefore, real prejudice likely to be suffered by the El Boustanis if the amendment was permitted. 20In addition, the El Boustanis relied on affidavit material from Mrs El Boustani sworn 10 August 2011, that deposed to the emotional stress that the ongoing proceedings were causing them in addition to the financial burden imposed upon them by the compulsory acquisition. Can the Amended Ground of Defence be Met on the Existing Evidence? 21The Minister relied on the affidavit evidence of Ms Hasti Kalarostaghi affirmed 17 November 2011. Ms Kalarostaghi is a solicitor employed by Hunt & Hunt Lawyers, the solicitors engaged on behalf of the Minister. The affidavit did no more than set out the procedural history giving rise to the amendment the subject of this application. 22It is the Minister's submission that no prejudice arises by reason of the amendment because it has always been necessary for the El Boustanis to prove that the intensive agricultural use of the land could continue after the lapsing of the 2007 consent in June 2012. This is because: (a) first, the s 55(a) market value claim relies upon the continued use of the land for intensive agriculture; (b) second, the s 55(f) claim arises only if the intensive agricultural use can no longer be carried out; and (c) third, the s 55(d) disturbance claim is made pursuant to either s 59(c) or (f) of the Just Terms Act and again predicated on the 2007 consent being extended. 23The Minister submits that the ability to continue the intensive agricultural use of the land has, moreover, been specifically considered by Mr Grech, by both town planners in their joint report and by Mr Kent Wood, the valuer engaged by the El Boustanis. The Minister took the Court to this evidence in detail during the course of argument. 24There was, in my view, considerable force in the Minister's submissions. Response of the El Boustanis 25The El Boustanis conceded that in relation to the determination of the market value of the land consideration was given to, as part of the hypothetical assessment as at the acquisition date, what would the hypothetical purchaser have believed the council would do in June 2012 with respect to an extension of the 2007 consent. The El Boustanis submitted that the evidence of Mr Grech, the evidence of the joint planners, and the evidence of Mr Wood did no more than address this specific issue. The evidence did not, critically, address the reality that the consent may have lapsed for the purpose of determining their disturbance claim or for the purpose of determining their claim under s 55(f) of the Just Terms Act. The distinction, albeit fine, was significant and was currently not addressed in the evidence by either party. 26The El Boustanis stated that they did not turn their mind to this factual matter because, until it was expressly pleaded, they believed that causation was not an issue for the purposes of determining their entitlement to disturbance costs. This issue of fact had not, therefore, been addressed in the evidence. 27The El Boustanis further stated that in formulating their disturbance claim they had assumed, again premised on the defence filed by the Minister, that the 2007 consent would not lapse and that the Minister's bare denial was directed only to the quantum of the disturbance costs. Thus, no part of their disturbance claim comprehended any consideration of the possibility that they would have to leave the land because the 2007 consent was no longer extant. Consideration 28As astonishing as these statements are by the El Boustanis there is no basis for the Court to go behind them given their unchallenged nature. Bearing in mind that these are proceedings brought about by the Minister's compulsory acquisition of the El Boustanis' land and having regard to the deleterious effect the acquisition has had on their business, I am prepared, on balance, to give the El Boustanis the benefit of the doubt and accept that they did not consider as contentious any causation issue with respect to disturbance arising out of the initial points of defence filed by the Minister. The evidence of Mr Grech relied upon by the Minister is somewhat equivocal in parts in this regard and much of the planning evidence can be viewed as being consistent with the view held by the El Boustanis. 29Not having turned their mind to the fact that the consent would lapse in June 2012 or the impact that this would have on their ability to claim relocation costs, I accept that additional evidence is necessary to meet this factual issue, and moreover, that if the El Boustanis are not given the opportunity to adduce this additional evidence, their claim will be prejudiced. 30Had the defence been properly pleaded, rather than the mere denial that, until recently, existed, there would have been no necessity for the application to amend. As r 14.14(2)(a) of the Uniform Civil Procedure Rules 2005 states: 14.14 General rule as to matters to be pleaded specifically (2) In a defence or subsequent pleading, a party must plead specifically any matter: (a) that, if not pleaded specifically, may take the opposite party by surprise ... 31But having found that prejudice will be caused to the El Boustanis by the late amendment, I nevertheless accept that the Minister not unreasonably considered that the issue of the causation of the disturbance costs had been joined. Further, in my opinion, the lateness of the amendment is not fatal and the Minister should be entitled to challenge the basis of the disturbance claim, as it now seeks to do. That it took the El Boustanis until late October 2011 for a request for particulars of the denial to be made, such denial having been alive in the pleadings since January 2010, cannot be ignored. 32Having regard to the principles determining whether or not an amendment ought to be permitted articulated in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175, and having regard to the overriding purpose to facilitate the just, quick and cheap resolution of the real issues in dispute in the proceedings contained in s 56 of the Civil Procedure Act 2005, as governed by ss 57, 60, 64 and 66 of that Act, I am of the opinion that it is appropriate to permit the amendment. To do otherwise would be to run the very real risk that all of the issues necessary for the final determination of the proceedings are not before the Court, an outcome that would be neither just nor cheap for either party. 33In arriving at this conclusion the continuing hardship that the proceedings are causing the El Boustanis has been considered, and as a consequence, the Court is willing to entertain a maximum degree of flexibility in order to ensure that the hearing of the proceedings is not overly delayed by the amendment. Orders 34The orders of the Court are therefore as follows: (1) the respondent is granted leave to file his further amended points of defence dated 11 November 2011; (2) the town planners are to meet, confer and prepare any further joint report as a consequence of the amendment by no later than 4.00pm 22 November 2011 in relation to: (a) the likelihood of consent been granted for the carrying out of intensive plant agriculture on the land after 16 June 2012 (being the date of the lapse of the 2007 consent); and (b) the likelihood of the land being able to be used for intensive plant agriculture after 16 June 2012 without the benefit of development consent; (3) the applicants are to inform the Court and respondent in writing of what additional evidence they seek to rely upon, in addition to the evidence referred to above in order 2, to meet the further amended points of defence by 10.00am 22 November 2011; and (4) the costs of today's application are reserved. ********** 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: 21 November 2011