Land and Environment Court New South Wales Medium Neutral Citation: Hayward v Sydney Water Corporation [2019] NSWLEC 87 Hearing dates: 18 June 2019 Date of orders: 18 June 2019 Decision date: 19 June 2019 Jurisdiction: Class 3 Before: Pepper J Decision: See orders at [57]. Catchwords: NOTICE OF MOTION – whether hearing dates in Class 3 proceedings should be vacated due to late identification of further contention – motion dismissed with costs. Legislation Cited: Civil Procedure Act 2005, ss 56, 57, 58, 59 and 66(1) Conveyancing Act 1919, Sch 8, Pt 12 Land Acquisition (Just Terms Compensation) Act 1991, ss 55(a) and (d) and 66 Land and Environment Court Act 1979, s 34 Cases Cited: Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 Burwood Council v Iglesia Ni Cristo [2019] NSWLEC 75 Kenoss Pty Ltd v Palerang Council [2013] NSWCA 174 Category: Procedural and other rulings Parties: Brian Daniel Hayward (First Applicant) Rochelle DeMarco (Second Applicant) Sydney Water Corporation (Respondent) Representation: Counsel: A Perkins (Solicitor) (First and Second Applicant) J McKelvey (Respondent) Solicitors: Project Lawyers (First and Second Applicant) Bartier Perry (Respondent) File Number(s): 2018/168127 Judgment The Applicants in Class 3 Compulsory Acquisition Proceedings Seek to Vacate Hearing Dates 1. By notice of motion filed 13 June 2019, the applicants, Ms Rochelle DeMarco and Mr Brian Hayward, moved the Court to vacate the final hearing of Class 3 compulsory acquisition proceedings listed on 25 and 26 June 2019. 2. The motion was supported by an affidavit of Mr Anthony Perkins sworn on 13 June 2019. Mr Perkins is the applicants' legal representative. 3. This was the second time that the applicants had sought the vacation of final hearing dates. At the first vacation application the applicants were successful due to the illness of their town planner. 4. The respondent, Sydney Water Corporation ("SWC"), opposed the application. 5. The notice of motion was dismissed after oral argument. In order to avoid the cost of the parties returning for the delivery of an ex tempore judgment, the Court stated that it would publish its reasons at a later date. These are those reasons. The Acquisition Giving Rise to the Class 3 Proceedings 1. The facts giving rise to the application to vacate were not in dispute and were contained in statement of agreed facts put before the Court. 2. On 12 January 2018, SWC acquired an "easement for water supply purposes 5 wide, 6 wide and variable denoted 'A' on the plan of proposed easement within Lot 10 DP1190560 registered as DP1211075". 3. The applicants are the registered proprietors of Lot 10 DP1190560 ("Lot 10"). The easement area is located along the front boundary where Lot 10 adjoins Richmond Road, Marsden Park and Lot 21 DP1190560, which is a small triangular area owned by Roads and Maritime Services ("RMS"). Lot 10 has a total area of 915.6 m2. The area of Lot 10 affected by the easement is 170 m2 (or 18% of Lot 10). 4. The terms of the easement are those as set out in cls 1 and 2 of Sch 8, Pt 12 of the Conveyancing Act 1919: Part 12 Easement for water supply 1 The owner of the lot benefited may: (a) run water in pipes through each lot burdened, but only within the site of this easement, and (b) do anything reasonably necessary for that purpose including: • entering the lot burdened, and • taking anything on to the lot burdened, and • carrying out work, such as constructing, placing, repairing or maintaining pipes and equipment. 2 In exercising those powers, the owner of the lot benefited must: (a) ensure all work is done properly, and (b) cause as little inconvenience as is practicable to the owner and any occupier of the lot burdened, and (c) cause as little damage as is practicable to the lot burdened and any improvement on it, and (d) restore the lot burdened as nearly as is practicable to its former condition, and (e) make good any collateral damage. History of the Proceedings 1. On 27 April 2018, the Valuer-General ("VG") determined compensation in the sum of $84,800, comprising $65,000 in compensation under s 55(a) of the Land Acquisition (Just Terms Compensation) Act 1991 ("Just Terms Act") and $19,800 in compensation under s 55(d) of the Act. 2. On 29 May 2018, the applicants commenced Class 3 proceedings objecting to the VG's assessment of compensation under s 66 of the Just Terms Act. 3. On 15 August 2018, the parties participated in a conciliation conference pursuant to s 34 of the Land and Environment Court Act 1979. The conciliation conference was terminated on 16 August 2018. Since then attempts have been made to settle the matter, but to no avail. 4. On 24 August 2018, directions were made in the proceedings for the filing of evidence and hearing dates were set down on 7 and 8 February 2019. 5. On 14 December 2018, a new timetable was made for the filing of evidence. The hearing dates of 7 and 8 February 2019 were maintained. 6. On 25 January 2019, the applicants moved the Court to vacate the hearing on 7 and 8 February 2019 because of the personal circumstances of their expert town planner. 7. On 31 January 2019, the parties were allocated new hearing dates on 25 and 26 June 2019. 8. On 12 June 2019, the parties attended a pre-trial mention before Pain J at which time further directions were made for the preparation of the matter for hearing. 9. At that directions hearing, the applicants foreshadowed filing a motion to vacate the hearing on 25 and 26 June 2019. Her Honour indicated that she would be unable to hear the motion before the hearing so it was listed before the duty judge on 17 June 2019. 10. Directions were made the next day by the Registrar for the filing and serving of brief written submissions and an agreed statement of facts by no later than 4 pm on 14 June 2019. 11. Despite these directions being notified to the parties by eCourt communication, neither party complied with the orders and the hearing of the motion was adjourned by the duty judge to 18 June 2019. Further directions were made for the filing and serving of brief written submissions and a statement of agreed facts by 4 pm on 17 June 2019. 12. SWC complied with the order, however, the applicants did not. It was only after the Court communicated with Mr Perkins shortly after 4 pm to indicate that if the applicants' submissions were not received by 5 pm the Court would consider dismissing the motion for want of prosecution, that written submissions were then received from the applicants at approximately 4.45 pm. 13. Plainly the conduct of the parties in the preparation for the hearing of this notice of motion has been less that satisfactory and in the case of the applicants, wholly unacceptable. Compliance with court orders is not optional (even if opposing parties to the proceedings purport to 'consent' to slippages in the timetables). Failure to comply with consent orders may constitute contempt and may cause other sanctions to be imposed. 14. The Court neither makes procedural orders for its own edification nor to cause the parties to unnecessary expense. Rather, they are made to facilitate the most expeditious determination of the issues raised in the proceedings (factual and legal) and the prompt delivery of reasons. Affidavit of Mr Perkins 1. The affidavit of Mr Perkins stated that the town planners engaged by the parties considered three development scenarios for the potential re-development of Lot 10. 2. It was not in dispute that the development scenarios identified and considered in the joint town planning expert report were: 1. to rebuild the single level heritage building for use as a café with at grade parking ("scenario 1"); 2. a site amalgamation with eastern/southern adjoining site ("scenario 2"); and 3. the construction of multi-level shop top housing on Lot 10 only ("scenario 3"). 1. The valuers (Mr Peter Phippen for the applicants and Mr David Lunney for SWC), have completed their joint expert report which addresses and values each of the three development scenarios identified and considered by the town planners. 2. Mr Perkins deposed that the applicants now want to rely on a further development scenario, namely, development of the property in isolation for commercial use ("scenario 4"). This will necessitate additional expert town planning and valuation evidence being prepared. 3. He additionally indicated that while the further evidence would not result in the existing evidence being rendered obsolete, the experts would need time to consider this new development scenario and this cannot be completed in time to maintain the current hearing dates. 4. Mr Perkins articulated the prejudice that would be suffered by the applicants if the hearing was not vacated, namely that scenario 4 would not otherwise be before the Court and this could have a detrimental impact on the amount of compensation awarded to the applicants. 5. Significantly, Mr Perkins does not provide reasons why this additional development scenario was not considered earlier by the applicants nor does he in any way explain the delay in identifying this issue. Legal Principles to be Applied to the Vacation of Hearing Dates and the Relevant Statutory Framework 1. The principles applicable to motions to vacate or adjourn hearings were succinctly put by Ward JA in Kenoss Pty Ltd v Palerang Council [2013] NSWCA 174 (at [13]): 13. The power to adjourn proceedings or vacate hearings in s 66 of the Civil Procedure Act 2005 (NSW) confers a discretion that must be exercised in accordance with the overriding purpose described in s 56(1) of the Civil Procedure Act and in accordance with the dictates of justice as described in s 58 of that Act. The considerations that must be taken into account include: the prejudice to the respondent by such an adjournment; the prejudice to the applicant if such an adjournment is refused; the circumstances in which the application is brought; and considerations relating to the administration and management of matters in this Court. 1. Her Honour's approach was adopted and applied recently by Robson J in Burwood Council v Iglesia Ni Cristo [2019] NSWLEC 75 (at [20]-[23]). I respectfully do the same. 2. With respect to the latter factor identified by Ward JA, namely, "considerations relating to the administration and management of matters in" the Court, in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175, French CJ made the following observations (at [24] and [27], footnotes omitted): 24. The Judicature Acts and associated Rules of Court are reflected in rr 501 and 502 of the ACT Rules. The ACT Rules, like their precursors, confer the discretion to give leave to amend and impose the duty to make amendments for the purpose of deciding the real issues in, and avoiding multiplicity of, proceedings. The discretion is exercised in the context of the common law adversarial system as qualified by changing practice. But that is not a system which today permits disregard of undue delay. Undue delay can undermine confidence in the rule of law. To that extent its avoidance, based upon a proper regard for the interests of the parties, transcends those interests. Another factor which relates to the interests of the parties but transcends them is the waste of public resources and the inefficiency occasioned by the need to revisit interlocutory processes, vacate trial dates, or adjourn trials either because of non-compliance with court timetables or, as in this case, because of a late and deliberate tactical change by one party in the direction of its conduct of the litigation. These are matters which, even under the Australian versions of the Judicature Act system, unaffected by the sequelae of the civil procedure reforms of 1998 in the United Kingdom, are to be regarded as both relevant and mandatory considerations in the exercise of the discretion conferred by rules such as r 502. … 27. The observations made in the two joint judgments in Sali were linked to the particular knowledge that a judge or court, called upon to exercise a discretion to adjourn, would have of the state of that court's lists. However, the mischief engendered by unwarranted adjournments and consequent delays in the resolution of civil proceedings goes beyond their particular effects on the court in which those delays occur. In that connection, there have been a number of cases after Sali in which it has been accepted, in the context of Judicature Act Rules, that the public interest in the efficient use of court resources is a relevant consideration in the exercise of discretions to amend or adjourn. 1. The vacation of hearing dates at short notice means that the Court is unable to fill the vacancy in its diary with other matters. This is an inefficient use of the Courts' resources. Moreover, the taking of hearing dates by parties when the matter is not ready to proceed denies other parties in other matters the opportunity of having their proceedings heard and determined earlier. 2. The statutory scheme constituted by the Civil Procedure Act 2005 ("CPA") includes the following provision relating expressly to adjournments contained in s 66(1) of that Act: 66 Adjournment of proceedings (1) Subject to rules of court, the court may at any time and from time to time, by order, adjourn to a specified day any proceedings before it or any aspect of any such proceedings. 1. The power to adjourn proceedings is not, however, unfettered. An express mandatory consideration is referred to in s 58 of the CPA, which relevantly provides that: 58 Court to follow dictates of justice (1) In deciding: (a) whether to make any order or direction for the management of proceedings, including: … (ii) any order granting an adjournment or stay of proceedings, … the court must seek to act in accordance with the dictates of justice. (2) For the purpose of determining what are the dictates of justice in a particular case, the court: (a) must have regard to the provisions of sections 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant: (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56(3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case. 1. Section 56 of the CPA describes the "overriding purpose" of CPA as follows: 56 Overriding purpose (1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule. (3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court. (3A) (Repealed) (4) Each of the following persons must not, by their conduct, cause a party to civil proceedings to be put in breach of a duty identified in subsection (3): (a) any solicitor or barrister representing the party in the proceedings, (b) any person with a relevant interest in the proceedings commenced by the party. (5) The court may take into account any failure to comply with subsection (3) or (4) in exercising a discretion with respect to costs. … 1. The provisions contained in s 57 are matters that are directed to efficient management of the Court's business: 57 Objects of case management (1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects: (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. (2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1). 1. And with respect to delay, s 59 of the CPA provides as follows: 59 Elimination of delay In any proceedings, the practice and procedure of the court should be implemented with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination beyond that reasonably required for the interlocutory activities necessary for the fair and just determination of the issues in dispute between the parties and the preparation of the case for trial. The Applicants' Submissions 1. The applicants contended that the further important development scenario 4 should be considered by the planning experts in relation to the property. According to the applicants, scenario 4 is material to the issue of land valuation and the potential consequential impact on the development potential of the property, including available basement parking. 2. Specifically, the applicants asserted that scenario 4 could potentially result in a development outcome with: 1. significantly reduced building setbacks to that contemplated by scenario 3, having regard to the reduced building separation requirements available to commercial development, resulting in an expanded building footprint; and 2. additional and significant basement parking requirements, requiring at least 2 to 2.5 basement levels of car parking. 1. The applicants argued that the use of the property for a commercial development (as opposed to the mixed use development contemplated by scenario 3) was entirely consistent and compatible with the uses proposed for the Marsden Park Town Centre. 2. Further, the property comprises an area of 915.6 m², which constitutes a relatively small development site. This exacerbates the impact that the easement has, or will have, on the future development of the property. While those impacts have been assessed by the respective town planning experts in relation to scenarios 1, 2 and 3, they have not been assessed in the context of scenario 4. 3. While the applicants did not foreshadow the specific built form outcomes associated with scenario 4, or the extent of any impacts imposed by the easement on a before and after analysis (this being a matter for expert valuation evidence), the fundamentally different constraints and opportunities associated with the exclusive carrying out of commercial development at the property, assuming that this use was deemed by the Court to be the highest and best use of the property, may have material consequences for the valuation exercise, and therefore, the compensation payable to the applicants. 4. According to Mr Perkins's submissions, the applicants would suffer prejudice if they are not afforded the opportunity to properly and fully agitate scenario 4. The applicants' prejudice is one of monetary compensation arising as a consequence of the easement and its impact on the future construction of commercial development. 5. Although the quantum in dispute between the parties is relatively small (it is in the range of $205,780 on the applicants' case and $59,000 on SWC's case), the applicants' prejudice is not the prospect of obtaining a judgment of less than $205,780, or even $59,000, but rather was characterised as "their exposure to incurring significantly greater financial loss in the development potential of the property, which will only crystallise when the property is developed." 6. In addition, the applicants submitted that: 1. SWC is a government authority with any prejudice necessarily measured in costs thrown away; 2. the prior application by the applicants to vacate the hearing dates was predicated on the personal circumstances of the applicant's town planning consultant; 3. consideration of scenario 4 will not result in any work carried out by the respective planning experts or the respective valuation experts to date being rendered obsolete; and 4. were the Court to vacate the hearing dates, the only further evidence that would be required would be a supplementary joint planning report by the town planners (addressing the impacts of scenario 4), followed by a supplementary joint valuation report. 1. Finally, Mr Perkins in oral submissions conceded, without more, that the issue of scenario 4 had not been brought to the Court's attention "in a timely manner". The Application to Vacate the Hearing is Refused 1. Notwithstanding the submissions made by the applicants, having regard to the legal principles and statutory framework outlined above, in my view, the application to vacate the hearing dates must fail. 2. First, and without in any way determining or prejudging the matter, based on the evidence presently before the Court it would appear that the utility of the development scenario 4 may be limited given the manner in which the parties' valuers have valued the easement in the joint valuation report. The applicants have filed no evidence and given no indication as to whether a scenario involving a commercial development on Lot 10 would result in greater compensation to the applicants than any of the other three scenarios. It is, on its face, difficult to understand how a commercial development scenario would be materially different from the shoptop housing scenario considered by the valuers. The sales relied upon by Mr Lunney are B4 – Mixed Use zoned sales (such as Lot 10) and sales of adjoining sites zoned R3 – Medium Density Residential. The 'sale' (the adjoining triangular parcel of land owned by RMS as the result of a compulsory acquisition) relied upon by Mr Phippen is similarly of adjoining land zoned B4 – Mixed Use. It is therefore at least arguable that any commercial potential of the easement land will be embedded in the value adopted by the valuers to determine the market value of the easement. 3. Second, as SWC correctly submitted, Mr Perkins did not identify any new fact, matter or circumstance which gave rise to the need to consider scenario 4. It was not raised by the applicants' town planning expert, Mr David Haskew, an experienced town planner. Nor does it emanate from the joint town planning experts's report prepared by Mr Haskew and Mr Garth McKenzie on 8 May 2019. 4. Moreover, no explanation whatsoever is provided for the applicants' delay in seeking to rely on scenario 4. More than four weeks passed between the date that the joint town planning report was filed (10 May 2019) and the additional scenario being raised (12 June 2019). No explanation whatsoever is proffered by the applicants for this passage of time. Instead, the issue was raised at a time when the applicants were aware that the valuers were engaged in joint conferencing (their report was delivered to the parties on 14 June and was filed on 17 June 2019). In addition, the issue was raised less than two weeks prior to the hearing, with the matter having been set down since the end of January 2019. 5. Had an application for supplementary town planning evidence dealing with scenario 4 been made in a more "timely" (to use Mr Perkins's language) way, the parties may have been able to address the additional scenario and maintained the hearing dates. Neither party suggested that this was possible at this late stage. 6. Third, although SWC properly conceded that the prejudice to it would be largely that of costs – the costs thrown away occasioned by any vacation of the hearing dates and the costs of any additional supplementary evidence required to meet the scenario 4 – it does not follow that the hearing should not be vacated. In Class 3 compulsory acquisition proceedings it is typically the acquiring authority that pays the dispossessed party's costs, even in circumstances where the dispossessed party is not wholly successful in being awarded the full sum of compensation claimed in the proceedings. Accordingly, it is likely that the additional costs incurred by SWC as a consequence of the hearing being vacated will never be recovered by it. It is noted, in this regard, that the applicants have not offered to pay SWC's costs thrown away occasioned by the vacation of the hearing. 7. In short, because these proceedings have been extant since May 2018, it is entirely reasonable for SWC to expect that, absent good reason, these proceedings should be completed expeditiously. This is consistent with the overriding purpose in s 56 of the CPA of the "just, quick and cheap resolution of the real issues in the proceedings". There being no good reason offered by the applicants, the motion should be dismissed. Costs 1. Having been successful on the motion, SWC sought an order for costs. This was not opposed by the applicants and it is appropriate to make such an order in all the circumstances of the motion. Orders 1. The orders of the Court are therefore as follows: 1. the notice of motion filed by the applicants on 13 June 2019 is dismissed; 2. the applicants are to pay the respondent's costs of the motion; 3. time extended for the applicants to file and serve their points of claim to 4.30 pm on 18 June 2019; 4. time extended for the respondents to file and serve its defence to 4.30 pm on 20 June 2019; and 5. the exhibits are to be 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: 19 June 2019