WARREN HALLORAN AND THE COMPANIES IN THE SCHEDULE OF OWNERSHIP v. MINISTER ADMINISTERING THE NATIONAL PARKS AND WILDLIFE ACT 1974 [1998] NSWLEC 291 (20 November 1998)

Land and Environment Court of New South Wales

Record of hearing

Judge Pearlman J

Number 30282 of 1998

Parties Applicants Warren Halloran and the Companies in the Schedule of Ownership

Respondent Minister Administering the National Parks and Wildlife

Act 1974

Key issues
* Compensation for compulsory acquisition - payment of 90% of amount offered - jurisdiction - discretion

Statutes
* Land Acquisition (Just Terms Compensation) Act 1991 ss 67, 68

* Land and Environment Court Act 1979 ss 19(e), 22, 24, 25

Hearing date 11 November 1998

Judgment Reserved

Date of judgment 20 November 1998

Appearances Applicants Mr M J Astill, Solicitor

Respondent Mr J A Ayling, Barrister

Solicitors Applicants Blake Dawson Waldron

Respondent Crown Solicitor's Office

Number of pages 15

Contents Page

Introduction 1

The statutory context 2

The jurisdiction issue 4

Should the Court grant relief? 8

The facts 8

The exercise of discretion 12

Orders 15

IN    THE    LAND     AND 						30282 of 1998	

ENVIRONMENT COURT 						Pearlman J 

OF NEW SOUTH WALES						20 November 1998

WARREN HALLORAN AND THE COMPANIES IN THE SCHEDULE OF OWNERSHIP

Applicants

v

MINISTER ADMINISTERING THE NATIONAL PARKS AND WILDLIFE ACT 1974

Respondent

JUDGMENT

Introduction

By notice of motion, the applicants seek an order that the respondent pay 90% of the amount of compensation offered to certain claimants in compensation notices issued by the respondent.

The respondent resists such an order upon two grounds:

(1) that the Court has no jurisdiction to make such an order;

(2) in the alternative, that the Court should not exercise its discretion to make such an order in the circumstances of this case.

The statutory context

The Land Acquisition (Just Terms Compensation) Act 1991 ("Just Terms Act") provides a statutory regime for the acquisition of land on just terms by State authorities. So far as concerns the issues presently raised for determination, the relevant statutory context is as follows:

* Section 11 requires the State authority to give to the owners of the land notice of its intention to acquire the land by compulsory process. Such a notice is referred to in the Just Terms Act as a "proposed acquisition notice". The Valuer-General must be notified of a proposed acquisition notice (s 18);

* An "owner" of land is defined in s 4(1) as meaning "any person who has an interest in the land". "Interest" is defined by the same section to mean a legal or equitable estate or interest in the land, or an easement, right, charge, power or privilege over, or in connection with, the land;

* Section 19 provides for compulsory acquisition, by enabling the State authority to acquire the land by compulsory process by notice (defined in s 4(1) as an "acquisition notice") published in the Government Gazette;

* Part 3 deals with compensation for the acquisition of land. Division 1 of pt 3 provides for entitlement to compensation, and in particular section 37 is in the following terms:

"An owner of an interest in land which is divested, extinguished or diminished by an acquisition notice is entitled to be paid compensation in accordance with this Part by the authority of the State which acquired the land";

* Division 2 of pt 3 deals with claims for compensation. Under s 39, a person who wishes to claim compensation must lodge a claim in the prescribed form with the State authority, which is required, under s 41, to give a copy of the claim to the Valuer-General.

* Division 3 of pt 3 deals with post-acquisition procedures. Section 42(1) provides that a State authority which has compulsorily acquired land must give to the former owners of the land written notice "... of the compulsory acquisition, their entitlement to compensation and the amount of compensation offered (as determined by the Valuer-General)". Such notice is defined in s 4(1) as a "compensation notice".

* Section 47 provides that the Valuer-General is to determine the amount of compensation to be offered to a person under pt 3;

* Under s 48 a State authority may make an advance payment of compensation;

* Division 4 of pt 3 deals with the determination of the amount of compensation;

* Division 5 of pt 3 deals with objections and appeals to this Court. In particular, s 66(1) provides as follows:

"A person who has claimed compensation under this Part may, within 90 days after receiving a compensation notice, lodge with the Land and Environment Court an objection to the amount of compensation offered by the authority of the State;"

* Section 68 (upon which the applicants base their claim for relief in this present application) provides for payment of compensation arising from court proceedings, including payment of 90% of the amount of compensation offered in a compensation notice.

The jurisdiction issue

The respondent's case is that the Court has no jurisdiction to make the order which the applicants seek. Mr Ayling, for the respondent, submitted that the provisions of the Land and Environment Court Act 1979 ("the Court Act") and the Just Terms Act confer upon the Court jurisdiction only to determine the nature of the claimant's interest and the amount of compensation. By reason of its power to "dispose" of claims for compensation and its inherent power to do all things necessary to act effectively within its jurisdiction, the Court also has power to order the payment of the compensation which it has determined (see Harvey v Burwood Municipal Council Bignold J 30 June 1993 unreported and Hague v Lake Macquarie City Council (1994) 83 LGERA 40). But, so Mr Ayling contended, that is the full extent of the Court's jurisdiction in relation to matters arising under the Just Terms Act. He submitted that a claim for payment under s 68(2) of the Just Terms Act does not fall within the Court's jurisdiction so described. Nor, he submitted, does such a claim fall within the Court's ancillary jurisdiction specified in s 16(1A) of the Court Act.

The task of the Court in this case is to construe the legislative provisions which confer jurisdiction upon this Court, it being a superior court of record with limited statutory jurisdiction. That task involves construing the relevant provision "so that it is consistent with the language and purpose of all of the provisions of the statute ... The process of construction must always begin by examining the context of the provision that is being construed" (Project Blue Sky Inc and Ors v Australian Broadcasting Authority [1998] HCA 28; (1998) 153 ALR 490 at 509 para 69).

The source of the Court's jurisdiction to hear and dispose of claims for compensation where land has been compulsorily acquired is to be found in s 19(e) of the Court Act. Section 19(e) provides that the Court has jurisdiction (in class 3 of its jurisdiction) to hear and dispose of "claims for compensation by reason of the acquisition of land, referred to in Division 2".

Division 2 contains ss 24 and 25. Section 24 relevantly provides as follows:

"24 (1) If -

(a) a claim is made for compensation because of the compulsory acquisition of land in accordance with the Land Acquisition (Just Terms Compensation) Act 1991 ...; and

(b) no agreement is reached between the claimant and the authority required to pay such compensation,

the claim is (subject to any such Act) to be heard and disposed of by the Court and not otherwise.

(2) The Court shall, for the purpose of determining any such claim, give effect to any relevant provisions of any Acts that prescribe a basis for, or matters to be considered in, the assessment of compensation."

Section 25(1) is in the following terms:

"25 (1) In hearing and disposing of any claim referred to in section 24, the Court shall have jurisdiction to determine the nature of the estate or interest of the claimant in the subject land and the amount of compensation (if any) to which the claimant is entitled."

The Court's jurisdiction to hear and dispose of a claim for compensation is enlivened by the operation of either s 66 or 67 of the Just Terms Act. Those sections fall within div 5 of the Just Terms Act, which is headed "Objections and appeals to the Land and Environment Court". Section 66 is the relevant section in this case, because it deals with an objection against the amount of compensation offered by the State authority. (Section 67 deals with an appeal by a person who has not been given a compensation notice and whose claim for compensation is rejected).

The Court's jurisdiction is invoked under s 66 when a person who has claimed compensation and has received a compensation notice lodges with the Court an objection to the amount of compensation offered. Section 66(2) provides that, if any such objection is duly lodged, this Court is to hear and dispose of the person's claim for compensation.

Section 68 also falls within div 5. It is headed "Payment of compensation arising from court proceedings", and it provides as follows:

"68 (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 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."

Subsection (1) of s 68 is predicated upon the institution of proceedings in this Court because it provides for payment of compensation "in respect of matters before" this Court.

The operation of subs (2) of s 68 is also predicated upon the institution of proceedings in this Court. That follows from the language of para (a), which refers to payment within 28 days after the State authority is given notice of the institution of proceedings. It also follows from the context and structure of the Just Terms Act. Division 3 of pt 3 deals with "post-acquisition procedures relating to compensation". It provides, in s 42, for the giving of a compensation notice. There is, however, no mention in div 3 of any obligation to pay 90% of the amount offered when a compensation notice is given. Rather, s 48 confers a discretion upon the State authority to make an advance payment of compensation. But when proceedings have been instituted, the position is different. Depending upon whether a compensation notice has been given, the State authority has either an obligation to pay 90% of the amount of compensation offered (para (a)) or a discretion to make an advance payment (para (b)). In that context, the obligation arising under s 68(2)(a) can be seen to be an integral part of Court proceedings instituted as a consequence of an objection under s 66 or an appeal under s 67. In other words, s 68(2)(a) is an integral part of a claim for compensation, and the institution of proceedings in this Court is a condition precedent to its operation.

It would be an absurd and inconvenient result, which the legislature cannot have intended, that another court should have jurisdiction in respect of a claim under s 68(2) when a condition precedent to the operation of that section is the institution of proceedings in this Court.

Furthermore, the court's jurisdiction under ss 19(e), 24 and 25 of the Court Act to hear and dispose of claims for compensation must be read in conjunction with s 22 of the Court Act. Section 22 provides as follows:

"22 The Court shall, in every matter before the Court, grant either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by that party in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters may be avoided."

Section 22 does not extend the jurisdiction of the Court, but it confers upon the Court the power and duty to decide all questions of fact or law that need to be decided in resolving a claim that is properly within its jurisdiction (National Parks and Wildlife Service and Anor v Stables Perisher Pty Ltd (1990) 20 NSWLR 573 at 582). The applicants' claims for compensation are properly within this Court's jurisdiction, and the claim for payment under s 68(2) is a matter of controversy that needs to be decided in resolving the applicants' claims.

Accordingly, this Court has jurisdiction to grant relief in respect of s 68(2) of the Just Terms Act.

Should the Court grant relief?

The facts

On 19 June 1998, the respondent compulsorily acquired certain land at Jervis Bay by an acquisition notice published in the Gazette. The land so acquired was described in the schedule to the acquisition notice.

In a letter dated 29 June 1998 addressed to Ms J Pearce, a senior legal officer with the respondent, the solicitors for the applicants acknowledged receipt of copies of the acquisition notice, and stated that their clients intended to lodge a formal claim in relation to the resumption. They continued as follows:

"The purpose of this letter is to advise that the beneficial ownership of much of the land changed on 13 May 1998. Enclosed are two documents namely:

1. 45 page Schedule of Ownership indicating the lands where ownership has been transferred and the identity of the new owners; and

2. 2 pages indicating the land where the ownership did not change."

That particular schedule of ownership was not formally tendered in these proceedings, but the Court was informed that the schedule was not materially different to the schedule attached to the class 3 application (to which further reference will be made).

On 2 July 1998, the solicitors for the applicants wrote to the Valuer-General, enclosing a "revised schedule of ownership." In that letter, the solicitors explained the transfer process that had been undertaken, and they made the following statements:

"The purchaser is now the full beneficial owner of the property ... However ... the vendor will continue to be the registered proprietor of the property ... the vendor holds the land as bare trustee for the purchaser.

Under the structure set out above the entire beneficial ownership of each of the properties is in the company listed in the schedule. This is so notwithstanding that the registered proprietor is still the original owner. However, the registered proprietor holds as bare trustee of the land and although technically it would be an owner within the meaning of the Land Acquisition (Just Terms Compensation) Act, its ownership would be simply as bare trustee."

On 18 September 1998, the respondent issued compensation notices to the undernamed companies and persons:

Irrayadda Pty Ltd

A.G., J, A, W & L Halloran

Wollong Pty Ltd

The Estate of the late H F Halloran

Mr W. Halloran

Sealark Pty Ltd (two separate compensation notices)

Each compensation notice referred to a proposed acquisition notice, a subsequent acquisition notice, and the effect of the acquisition notice. Each contained a paragraph as follows:

"The Valuer General has determined the amount of compensation to be offered to you for your interest in the acquired land at (specifying a particular amount). A copy of the determination is attached."

Each compensation notice then went on to advise the recipient about acceptance of the offer, or the lodgment of an objection with this Court. Each contained a final paragraph as follows:

"If you lodge an objection with the Land and Environment Court you will be paid 90% of the (specified amount) within 28 days after notice of institution of proceedings is given to the National Parks and Wildlife Service and the matter of compensation will be determined by the Land and Environment Court."

Each compensation notice contained a schedule listing certain land by lot numbers, and each had annexed a document under the hand of an officer of the Valuer General and headed "Determination of Compensation".

On 18 September 1998 (being the same date as the date of the compensation notices), proceedings in class 3 of the Court's jurisdiction were commenced. The applicants were stated as "Warren Halloran and the companies in the schedule of ownership attached". The respondent was named as "National Parks and Wildlife Service". On 10 November 1998 an amended class 3 application was lodged, naming the respondent as "The Minister administering the National Parks and Wildlife Act 1974". (Where I have referred to the "respondent" in reciting the facts of this case, I intend to refer to the National Parks and Wildlife Service or the Minister, as the context requires).

Attached to the amended class 3 application is a document comprising 31 pages and two separate sheets, which is headed "Schedule of Ownership". Each page contains eight columns, headed respectively "Owner of Property", "ACN", "Vendor", "Date Acquired", "Properties Acquired" (three columns) and "$A Value of Consideration". The two separate sheets comprise various tables setting out lot numbers, deposited plan numbers and other title details under the respective headings of "Warren Halloran", "Irrayadda Pty Limited", "Sealark Pty Limited", "Estate of H F Halloran" and "Wollong Pty Limited" and "A. G., J., A., W & L Halloran".

On 23 October 1998, claims for compensation were given to the respondent respectively by Warren Halloran, Irrayadda Pty Limited, Wollong Pty Limited, Sealark Pty Limited, and AG, J, A, W and L Halloran. It is to be observed that these persons and companies are the same as those to whom compensation notices were given, except that, whilst the Estate of the late H F Halloran received a compensation notice, it did not give a claim for compensation to the respondent. In the course of the hearing, Mr Astill, for the applicants, conceded that the claim for a 90% payment as set out in the notice of motion was confined to the following persons and companies:

Irrayadda Pty Ltd

Warren Halloran

Wollong Pty Ltd

Sealark Pty Ltd

AG, J, A, W and L Halloran

I will refer to these entities as "the five named applicants".

Returning to the claims for compensation, it is to be observed that they were not identical in terms, but the Court was asked to take the compensation claim of Warren Halloran as an example. That compensation claim contains the following relevant parts:

* Under the heading "Description of Land", it refers to the address of the land as "Jervis Bay National Park".

* Under the heading "title particulars", it contains a statement that "The Land in which an interest is claimed includes the land compulsorily acquired by the NSW National Parks and Wildlife Service on 19 June 1998 and 28 September 1998 as set out below".

* There follows two paragraphs, numbered (a) and (b). Paragraph (a) specifies 40 parcels of land mainly by reference to their lot and DP numbers. Paragraph (b) specifies "The land listed in the attached Schedule of Ownership for which Warren Halloran is indicated as `the Vendor'".

* In reference to a question in the claim form inquiring as to whether the claimant is aware of any other persons or corporations which may have an interest in the land, the following statement appears:

"Yes. The land listed in the attached Schedule of Ownership for which Warren Halloran is indicated as the Vendor, is beneficially owned by the party indicated as the `Owner of the Property' for that land."

The exercise of discretion

Mr Ayling submitted that the Court should not, in the circumstances of the case, exercise its discretion to make an order in the applicants' favour. The basis for this submission was that the facts and circumstances I have just recited and the documents to which I have referred raise a number of uncertainties. They are as follows:

* There is uncertainty as to precisely which land is the subject of the claims for compensation. Taking the claim of Warren Halloran as an example, it can be seen that it covers 40 specified lots, as well as certain land said to be listed in the schedule of ownership. But the description of the land in both the compensation notice and the Valuer-General's determination of compensation does not appear on its face to correspond with the description of the land in the claim for compensation;

* There is uncertainty as to the nature of the interest of each claimant. Again, taking the claim of Warren Halloran as an example, there is an express disclosure that he does not hold all of the land as beneficial owner, and that there are other persons or corporations which have an interest in the land. That interest is not precisely enunciated in the claim for compensation. Attention is directed by the claimant to the schedule of ownership, but, so the respondent asserts, it is not clear from that schedule of ownership what is the nature of the interests of the numerous companies and persons there specified in relation to various parcels of the land;

* There is uncertainty as to precisely which land is the subject of the respective valuations by the Valuer-General. It was claimed by the respondent that the Valuer-General appears to have ignored the information furnished by the applicants' solicitors on 2 July 1998 as to the transfers of ownership, and that the Valuer-General simply valued together all land held by each registered proprietor.

In Mr Ayling's submission, these uncertainties raise particular concerns about the operation of ss 56(2) of the Just Terms Act, which provides that the sum of the market values of each interest in the land must not exceed the market value of the land at the date of acquisition.

In my opinion, however, these matters do not compel the Court to desist, in the exercise of its discretion, from making an order in the applicants' favour. They are matters which no doubt will be resolved at the trial, because they relate to the nature of the interest of the claimants and the amount of compensation. But the following factors must be taken into account:

* The respondent did not claim that any of the compensation notices were invalid;

* In particular, the respondent did not, at the hearing, raise any question as to the consequence, if any, of the applicants' claims for compensation being lodged with the respondent after (and not before) the institution of the class 3 proceedings. A question of that kind was indicated in correspondence between the Crown Solicitor on behalf of the respondent and the applicants' solicitors, but it was not pursued at the hearing;

* The compensation notices each unequivocally state that, if an objection is lodged with this Court, the claimant will be paid 90% of the specified amount offered as compensation;

* Payment under s 68(2) does not depend upon a determination of the nature of the interest of the claimant, nor upon the amount of compensation. Rather, s 68(2) comes into operation if the circumstances which it specifies have occurred;

* Each of those circumstances has arisen in relation to each of the five named applicants, that is to say:

i. Proceedings in the Court have been instituted by the five named applicants, (amongst others);

ii. Each of the five named applicants has been given a compensation notice;

iii. Although it not precisely clear when the respondent was given notice of the institution of proceedings, the applicants assert that 28 days have elapsed since that time, and the respondent has taken no issue with that assertion.

Accordingly, I find that each of the five named applicants is entitled to the relief which the applicants claim.

Orders

The applicants seek two substantive orders.

The first is a declaration to the effect that the respondent was required by s 68 to pay 90% of the amounts offered in the compensation notices, and the second is an order that the respondent pay such amount of 90% within 48 hours of the date of the order.

It is not appropriate that the Court make a declaration in class 3 proceedings, but, having found that, in the circumstances, the amount of 90% should be paid, it is appropriate to so order.

The total amount of compensation offered to the five named applicants in the respective compensation notices is substantial (it is almost $11 million) and it would accordingly seem unduly onerous to order its payment within 48 hours. I would be prepared to entertain submissions about an appropriate time for payment.

I direct the parties to bring in short minutes within seven days to give effect to the findings I have made and the orders I have foreshadowed.

I HEREBY CERTIFY THAT THIS AND THE PRECEDING 14 PAGES ARE A TRUE AND ACCURATE RECORD OF THE REASONS FOR JUDGMENT HEREIN OF THE HONOURABLE JUSTICE M L PEARLMAN AM.

Associate