Aversa v Roads & Maritime Services

Before the Court is an amended notice of motion filed on 9 April 2021 by the first defendant (Roads & Maritime Services, “RMS”, by its statutory successor, Transport for NSW, “TfNSW”) seeking to set aside, in part, a “Notice to Produce to Court” (governed by Part 34 of the Uniform Civil Procedure Rules 2005 NSW) served on the first defendant on 8 March 2021 by the plaintiffs (owners of land acquired by the first defendant).

In proceedings commenced by a Summons (filed on 9 October 2019) and continued on pleadings, the plaintiffs claim relief in the nature of an award of damages or an account of profits for (to use a neutral expression) the “appropriation” of two underground levels of their residential land (held under the “Torrens Title” provisions of the Real Property Act 1900 NSW) at Haberfield by the first defendant for the purpose of the construction and operation of a tunnel to service a tollway known as “WestConnex”.

The parties to the proceedings are: (a) the plaintiff landowners; (b) the first defendant, a State Government agency; and (c) as the second defendant, the Registrar General.

For administrative convenience, these proceedings have retained identification of the first defendant in the name of the case as Roads & Maritime Services. The contentious acquisition of land of the plaintiffs was effected in the name of RMS. However, the proceedings are, in law, conducted by the plaintiffs against, and defended by, “Transport for NSW” as the statutory successor of RMS. On 1 December 2019, by operation of the Transport Administration Amendment (RMS Dissolution) Act 2019 NSW, RMS was dissolved, and its assets, rights and liabilities were transferred to Transport for NSW. For the purpose of the current judgment, nothing turns on the distinction between RMS and Transport for NSW. For ease of reference, the generic expression “the first defendant” is used.

The Registrar General is not a party to the first defendant’s motion. It appeared on the hearing of the motion for the limited purpose of addressing some technical questions about the operation of the Conveyancing Act 1919 NSW. In advancing its submissions about the proper construction and operation of legislation governing functions of the Registrar General, the first defendant disclaimed any intention, or authority, to speak for the Registrar General. Where, in this judgment, reference is made to “the parties” that expression is to be taken as a reference to the plaintiffs and the first defendant alone unless a contrary intention appears.

On the application of the first defendant, the Registrar General registered “Deposited Plans” which (to use a neutral expression) provided for subdivision of the plaintiffs’ land (into three layers, one representing the surface area upon which residential premises stand erected and two levels underground) as a preliminary to the first defendant’s acquisition of the two underground layers.

The Registrar General says that those Deposited Plans were registered (that is, recorded) in the “Register of Plans” as defined in clause 3(1) of the Conveyancing (General) Regulation 2018 NSW (made under the Conveyancing Act), governed by Part 3 of the Regulation, not the Torrens Title register kept under the Real Property Act 1900 NSW.

On 13 March 2020 the Court made orders by consent dismissing an application by the first defendant (by a notice of motion filed on 25 November 2019) for an order that the plaintiffs’ claims be summarily dismissed. The consent orders provided both for the plaintiffs to pay the first defendant’s costs of the motion and for the proceedings to continue, with an amended summons, on pleadings.

This procedural history is noted because submissions of the first defendant on the current motion have come close to a contention that, because of the statutory scheme ostensibly relied upon by the first defendant to acquire the plaintiffs’ land, the plaintiffs’ claims must fail. Despite this, the first defendant has refrained from the challenge of a renewed application for summary dismissal of the plaintiffs’ claims for relief.

Nor has the first defendant renewed an application, earlier made, for the plaintiffs’ pleadings to be struck out. Despite manifest infelicities in the plaintiffs’ current form of Summons and Statement of Claim, the parties have endeavoured to define the questions in dispute in inter partes correspondence and submissions to the Court.

I apprehend that it is likely to be necessary for the pleadings to be amended before the proceedings are listed for a final hearing so as ensure that the formal record duly records each party’s case; but, for the present purposes, I focus attention on the parties’ respective cases as outlined in submissions to the Court.

The first defendant does not contend that the plaintiffs’ notice to produce should be set aside because their claims for relief (in aid of which the notice to produce was served) constitute an abuse of the processes of the Court for want of a reasonable course of action. What is primarily said is that: (a) the notice to produce serves no legitimate forensic purpose; and (b) the scope of documentation sought by the notice to produce is in some respects oppressively large.

Debate about “legitimate forensic purpose” on behalf of the first defendant has embraced ancillary arguments to the effect that: (a) the plaintiffs are really simply engaged on a “fishing expedition” (to paraphrase Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 575) in the hope that something might turn up to establish a case for them; and (b) having regard to the constraints of Practice Note SC Eq No 11 and the present absence of any evidence filed in support of the plaintiffs’ claims in the principal proceedings, deployment of any process of “discovery” against the first defendants is premature.

On notice to the parties, I have also considered whether the plaintiffs’ Notice to Produce to Court should be considered premature because, it might reasonably be said, the process of “discovery” it seeks to engage should be deferred until the parties file amended pleadings.

I have come to the view that the course best calculated (in the terms of section 56 of the Civil Procedure Act 2005 NSW) “to facilitate the just, quick and cheap resolution of the real issues in the proceedings” is to allow the parties to deal with the substance of their dispute about the Notice to Produce without insisting on pleading amendments at this stage of the proceedings.

All parties to the proceedings (that is, the plaintiffs and both defendants) have declined an invitation from the Court to prepare for a final hearing of the proceedings with the benefit of an order, under rule 28.2 of the Uniform Civil Procedure Rules 2005 NSW, to the effect that questions of liability be decided before, and separately from, questions relating to the nature and quantum of any relief available in the event of a finding of liability.

On the hearing of the motion, counsel for the first defendant announced that, should the Court decline to set aside the plaintiffs’ notice to produce, the first defendant (as foreshadowed in its motion) and the NSW Treasury propose to assert a claim for public interest immunity upon an objection to the production of documents and to the plaintiffs having access to documentation produced in answer to the notice to produce.

An affidavit sworn in support of the motion foreshadows the possibility of documents also being the subject of an objection to production on the ground of legal professional privilege.

At the hearing of the motion on 11 June 2021, M4-M5 Link PT Pty Ltd, M4-M5 Link AT Pty Ltd and WCX State Works Contractor Pty Ltd (self-described as “the WCX Entities”) appeared by Mr Shipway of counsel (instructed by Allens) for the limited purpose of reserving such rights as they may have to object to the plaintiffs having access to documents (produced in answer to the notice to produce) that are commercially sensitive to them. They invited the Court to proceed on the basis that they should be given notice of any future hearing where terms of access to produce documents are to be dealt with.

Subject to any orders that might be made by the Chief Judge in management of the principal proceedings, I propose that the State of NSW (in whatever guise it chooses to appear) and the WCX Entities be allowed an opportunity to be heard before any documents are produced to the Court in answer to the plaintiffs’ notice to produce or any order for access is made in favour of the plaintiffs.

The plaintiffs’ notice to produce is expressed to require the first defendant to produce the following “documents or things” to the Court:

The current pleadings in the principal proceedings comprise the plaintiffs’ Amended Statement of Claim filed on 5 June 2020, claiming relief set out in their Amended Summons filed on 31 May 2020; the first defendant’s Defence filed on 19 June 2020; the second defendant’s Defence filed on 18 June 2020; and the plaintiffs’ Reply (to the first defendant’s Defence) filed on 19 August 2020.

In terms, the amended summons claims declarations as to entitlements for which the plaintiffs contend without formally claiming compensation or an accounting for profits as consequential relief. Any formal deficiency in the amended summons or the amended statement of claim in this regard is not, of itself, a reason for setting aside the plaintiffs’ notice to produce or for refusing to take notice of their articulation of their claims for relief. The parties to the current motion have addressed the substance of their dispute about the enforceability of the plaintiffs’ notice to produce. In the absence of an application that the plaintiffs’ pleadings be struck out, I do likewise.

The parties to the motion are at issue in the principal proceedings about, inter alia, the proper construction and operation of legislation governing: (a) the subdivision of land; (b) the compulsory acquisition of land for road purposes; (c) the assessment of compensation for substratum land the subject of an acquisition for road purposes; and (d) the availability of compensation for a loss of title to Torrens Title land.

Implicit in the parties’ pleadings as presently drafted is recognition that the focus of disputation is upon whether the first defendant has statutory authority for its purported acquisition land of the plaintiffs, and for what would otherwise be a trespass, and a continuing trespass, on the plaintiffs’ land.

It is not necessary to form a concluded view, at this stage of the proceedings, about the precise nature of any relief to which the plaintiffs might be entitled; but, subject to the operation of section 42 of the Real Property Act, an order for compensation (at law or in equity, including orders under section 67 and 68 of the Supreme Court Act 1970 NSW) or an account of profits might reasonably be thought to be open if the first defendant is found to have acted without statutory authority. If upon registration of the first defendant as proprietor of the plaintiffs’ substratum land the first defendant obtained an indefeasible title, the plaintiffs look to sections 120 and 129 of the Real Property Act for comparable compensation. Those sections are, perhaps, the main focus of their claims for relief. They are, as it happens, the main focus of their articulation of their forensic purpose in service of the notice to produce under present consideration.

Ultimately, upon an assumption that the plaintiffs have a reasonable cause of action entitling them to relief, what underlies the motion is a dispute (not to be determined on the motion) about whether the value of the substratum land of the plaintiffs acquired by the first defendant for the purpose of the WestConnex Project can be determined by reference to the asset value, or income stream, of WestConnex.

The first defendant’s negative answer to that question depends in large measure upon its contention that any remedy to which the plaintiffs may be entitled is limited to a claim for compensation (to be determined by the Valuer General) under the Land Acquisition (Just Terms Compensation) Act 1991 NSW (“the Land Acquisition Act”).

The plaintiffs’ contrary contention is that their entitlements are not limited to a claim for compensation under that Act, but include claims for compensation under the Real Property Act 1900, a claim for damages at law and a claim to an account of profits in equity, arising from a central allegation that the first defendant procured registration of a subdivision of their land (as a necessary precondition for acquisition of part only of their registered Lots) by fraudulent misrepresentations as to the purpose of the subdivisions.

Key provisions relied upon by the first defendant (in support of a contention that no compensation is payable to the plaintiffs, under section 37 of the Land Acquisition Act, for its acquisition of their substratum land) are sections 56(1) and 62 of the Act.

Section 56(1)(a) defines the concept of “market value”, for the purpose of determination of an amount of compensation payable under the Act, in the following terms:

Sections 62(1) and (2) are in the following terms:

The plaintiffs’ attempts to circumvent constraints of the Land Acquisition Act include reliance upon sections 120 and 129 of the Real Property Act, pursuant to which they make claims for compensation.

Their amended summons implicitly also claims damages at common law for trespass, but that claim is not elaborated in their amended statement of claim. It depends upon a contention that the first defendant’s acquisition of their land was effected without power and was therefore invalid, depriving the first defendant of any legal justification for entry upon their land. It needs to accommodate: (a) the fact that, as a registered proprietor of acquired, substratum land, the first defendant would be entitled to possession of the land; and (b) the possibility that the first defendant’s title to the land is indefeasible.

A claim for damages for trespass is accompanied by a claim that, as the registered proprietor of land acquired from them without power to do so, the first defendant holds the acquired land on trust for them, grounding in them (they imply) an entitlement to an account of profits for its use of their land without their consent. This claim also needs to confront the possibility that, upon registration as proprietor of the plaintiffs’ substratum land, the first defendant acquired an indefeasible title. Neither the amended summons nor the amended statement of claim expressly claims an account of profits, apparently intending that that remedy be treated as: (a) relief claimed consequentially upon a declaration that land acquired by the first defendant is held on trust for them; or (b) subsumed in the plaintiffs’ claims for compensation under the Real Property Act.

Insofar as the first defendant’s registration as proprietor of the plaintiffs’ substratum land operates as an impediment to the plaintiffs’ claims for compensation, or an account of profits, under the general law, the plaintiffs look to sections 120 and 129 of the Real Property Act for comparable relief.

So far as is material to the plaintiffs’ core case, section 120 of the Real Property Act is in the following terms:

Section 129 of the Real Property Act governs the circumstances in which a person who suffers loss or damage as a result of the operation of the Act may have a claim to compensation from the Torrens Assurance Fund. Those circumstances include depravation of an interest in land as a consequence of fraud.

The plaintiffs allege that the first defendant acquired their land in a manner that was fraudulent because “plans of subdivision” (as they describe plans of the first defendant), registration of which as Deposited Plans by the second defendant on the application of the first defendant enabled acquisition of their substratum land, each contained a formal “statement of intention” to dedicate subdivided land for the purpose of a “freeway” under the Roads Act 1993 NSW despite a publicly expressed intention of the first defendant that the land was to be used as a “tollway” (as defined by that Act) for the commercial benefit of the State.

On the plaintiffs’ case, what was represented to be a subdivision for a “public road” within the meaning of the Roads Act 1993 (more particularly, a “freeway” within the meaning of section 48 of the Act) was in truth intended by the first defendant to be a subdivision for a “private” road within the meaning of the Act (more particularly, a “tollway” within the meaning of section 52) for commercial gain, the intent of the first defendant being concealed from view by the false representation.

On the plaintiffs’ case, the first defendant’s misstatements of intent were calculated to prepare the ground for acquisition of the plaintiffs’ substratum land for a private road, for commercial gain, without compensation to them as landowners, under cover of a declared public purpose.

There is no evidence presently before the Court as to why, in fact, the first defendant stated in its plans that the plaintiffs’ substratum land was “required for freeway under section 48 of the Roads Act 1993”, not for the purpose of a tollway. The first defendant admits an “error” but has as yet offered no explanation of why the error occurred.

Nor is there evidence as to whether the Registrar General did, or did not, in fact, have regard to the first defendant’s statements of intention in deciding to register the first defendant’s plans which, by their registration, identified (as the first defendant contends) or created (as the plaintiffs contend) substratum lots capable of acquisition independently of the residue of the plaintiffs’ land.

The plaintiffs contend (and the first defendant denies) that the first defendant had no power to effect a subdivision of land, and to acquire part of the subdivided land, for the purpose of a tollway, a private (not a public) road.

This focuses attention sections 9, 71, 177 and 178(1) of the Roads Act 1993 and the definitions of the expressions “road work” and “carry out road work” in the Dictionary at the end of the Act, incorporated by section 4.

The primary sections provide as follows:

The Dictionary defines “road work” and “carry out road work” in the following terms:

On the plaintiffs’ case, the general power conferred on the first defendant under section 177 to acquire land “for any of the purposes” of the Act is qualified (in the case of land requiring subdivision before acquisition) by section 9 of the Act, which provides for a public road to be “opened” by the registration by a plan of subdivision “that bears a statement of intention to dedicate specified land as a public road” to be registered in the office of the Registrar General.

This is disputed by the first defendant, which contends that the plans it lodged with the Registrar General were “plans of acquisition” (a non-defined term said to describe plans of the type referred to in paragraph (d) of the definition of “registered plan” in section 7(1) of the Conveyancing Act, to which an allusion may possibly be found in clause 25(1) of the Conveyancing (General) Regulation 2018), not “plans of subdivision”; that section 177 is not confined by section 9, the operation of which is directed to the opening of a public road rather than the acquisition of land; and that it had a general power to apply for, and to obtain, registration of a plan of subdivision (if that be the correct characterisation of Deposited Plans purportedly registered by the Registrar General) as an incident of the acquisition power conferred by section 177 and the carrying out of road work pursuant to section 71.

A problem for the first defendant in its reliance upon section 71 may be that a tollway is not a “public road” within the meaning of the Roads Act (as recognised in section 52(2) of the Act) and the land of the plaintiffs cannot readily be said to have been “under its control”.

The first defendant contends that, in any event, no significance attaches to the distinction between a “freeway” and a “tollway” in the present context because the Registrar General had power (under section 195A of the Conveyancing Act 1919 NSW) to register the first defendant’s plans without regard to any “statements of intention” they contained, and the Registrar General cannot be said to be have relied upon any misstatement of the first defendant in his decision to register the plans.

An impediment to this contention may be that, prima facie, the Registrar General must be concerned to ensure that a plan submitted for registration under Division 3 of Part 23 of the Conveyancing Act is in registrable form, a concern which requires that attention be given to a statement of intention mandated by section 195C(1)(d) of the Act: sections 195F-195G.

The plaintiffs’ response to the first defendant’s contention that no significance attaches to the distinction between a “freeway” and a “tollway” is that any decision by the Registrar General to register the plans of the first defendant affecting their land was necessarily tainted by the first defendant’s “fraud” (whether or not the Registrar General relied upon the first defendant’s misstatements) and “fraud unravels everything”: Lazarus Estates Pty Ltd v Beasley [1956] 1 QB 702 at 712-713; SZFDE v Minister for Immigration and Citizenship (2007) 232 CLR 189 at 194 et seq.

The plaintiffs contend that the principle that “fraud unravels everything” overcomes the stipulation in section 195J of the Conveyancing Act that the validity of a registered plan cannot be called into question in court proceedings. They assert that the first defendant’s administration of a legislative scheme designed to protect the public, and landowners with land liable to be acquired for public purposes, miscarried and must be remedied.

It is not necessary, at this stage of the proceedings, to form a concluded view about the legal effect or significance, if any, of the Registrar General’s registration of Deposited Plans in the “Register of Plans” kept under the Conveyancing (General) Regulation in anticipation of acquisition of land of the plaintiffs under the Roads Act and the Land Acquisition Act. Whether they fell within subparagraph (a) or (d) of the definition of “registered plan” in section 7(1) of the Conveyancing Act, they can be taken to have been “registered plans” within the meaning of that definition and, by operation of sections 7A(1) and 7A(2) of the Act, not to have formed part of a “current plan” until such time as the plaintiffs’ land was acquired.

Nor is it presently necessary to consider the significance for the parties of characterisation of the Deposited Plans as “current plans” in the context of sections 23F(1), 23F(2) and 23G(l) of the Conveyancing Act.

On any view, the Registrar General’s registration of the Deposited Plans was administratively closely connected to acquisition of the plaintiffs’ land by publication in the Gazette of a declaration which described the acquired land by reference to Lots in the Deposited Plans registered by the Registrar General.

The Deposited Plans, as registered, were accompanied by a “Deposited Plan Administration Sheet” (required by section 195C of the Conveyancing Act and clause 22(1) of the Conveyancing (General) Regulation) which included (as contemplated by section 195C(1)(d)(i) of the Act) a statement of intention (accepted by the first defendant to have been incorrect) that land of the plaintiffs was required for a freeway. The first defendant’s misstatements of intention were made in Deposited Plans by reference to which the plaintiffs’ land was purportedly acquired.

On the plaintiffs’ case, insofar as the first defendant acquired title to their substratum land, defined by reference to knowingly false Deposited Plans, it acquired title by fraud.

Evidence adduced on the hearing of the motion presently before the Court does not include a full set of the documentation governing the WestConnex Project or, indeed, much of it at all. It is clear enough that the first defendant is the NSW Government agency responsible for the acquisition of land, commissioning of works and supervising implementation of the Project; but acquisition of the plaintiffs’ substratum land, by a two-step process involving registration of a plan as a preliminary step, invites a particular focus.

In broad terms, the commercial structure of the WestConnex Project, as intended by the NSW Government, appears in its application to the plaintiffs’ land to be (as counsel for the first defendant confirmed) as follows (with statutory references added):

The first defendant referred to the judgment of the Court of Appeal in Cappello v Roads and Maritime Services as an authoritative statement of the nature and scope of its power under section 177 of the Roads Act to “acquire land for any of the purposes of” the Act. However, it concedes that the Court of Appeal’s judgment does not address the plaintiffs’ contention that it had no power to effect a subdivision of the plaintiffs’ substratum land for the purpose of acquisition of that land for use as a private road.

The Court of Appeal appears not to have been invited to consider the relationship, if any, between sections 9 and 177 of the Roads Act.

Section 177(1) provides, inter alia, that the first defendant may acquire land for any of the purposes of the Roads Act. Section 178 of the Roads Act provides that “[land] that is authorised to be acquired [by the first defendant] may be acquired by agreement or by compulsory process in accordance with the Land Acquisition (Just Terms Compensation) Act 1991”. Section 7 of the Land Acquisition Act provides that that Act “does not empower an authority of the State to acquire land if it does not have the power (apart from this Act) to acquire the land”. That provision invites enquiry as to whether (and, if so, by reference to what provisions) the Roads Act conferred on the first defendant the power to acquire the plaintiff’s land via a subdivision. The plaintiffs contend, in effect, that the first defendant’s acquisition power under section 177 of the Roads Act is subject to section 9 of the Act in a case in which a subdivision is required for the purposes of an acquisition of land.

No attention appears to have been given, in inter partes correspondence or submissions, to section 179 of the Roads Act, which provides as follows:

I do not exclude the possibility that section 179 influenced the commercial structure of the WestConnex Project insofar as it involves a chain of leases, and a sale of shares in a company, rather than a sale of real estate.

In short, the plaintiffs contend that their substratum land vested in the first defendant (by virtue of section 20 of the Land Acquisition Act) was acquired by the first defendant upon the basis of false statements made by the first defendant in “Deposit Plan Administration Sheets” forming an integral part of the Deposited Plans by reference to Lots in which the land was purportedly acquired. They contend that those false statements vitiated registration of the Deposited Plans and the first defendant’s acquisition of their land or, at least, rendered both registration of the Plans and the first defendant’s registration as proprietor of their land liable to be set aside or rectified.

The plaintiffs contend that the first defendant had no power, without their consent, to subdivide land, and to acquire part only of the land, for the purpose of the construction and operation of a private road.

An impediment to their contention that their consent was required may be the exception in section 195D(1) of the Conveyancing Act if the first defendant’s plans are properly characterised as falling within paragraph (d) of the definition of “registered plan” in section 7(1).

The plaintiffs contend that, if the first defendant had no power to subdivide and acquire part of their land for a private road without their consent, it would have been obliged to acquire the whole of their land or negotiate an outcome with them.

On the plaintiffs’ case the WestConnex Project went off the rails at the outset in relation to their land. Unless their land could be subdivided, any acquisition of it would have to have been an acquisition of the whole land (that is, all three levels of land created by registration of the first defendant’s plans) and at the cost of acquisition of the whole land.

On the plaintiffs’ case, the first defendant addressed this problem by a subdivision of the plaintiffs’ land without their consent. Registration of its plans was an essential first step in a planned acquisition of land without acceptance of a liability to pay compensation.

On the plaintiffs’ case, by procuring registration of its plans through statements of intention it knew to be untrue, the first defendant committed a fraud which tainted the whole process of land acquisition.

In advancing their claims for compensation under the Real Property Act (and, semble, at common law for trespass), the plaintiffs seek damages calculated on the basis of a valuation of:

So far as they are contentious, the documents sought by the plaintiffs in their notice to produce fall into three categories. The first relates to documents bearing upon calculation of the sale price of the NSW Government’s interests in WestConnex (notice to produce, paragraphs 2, 9 and 11). The second relates to documents concerned with implementation of the WestConnex Project (notice to produce, paragraphs 3-5 and 7-8). The third relates to reports and documents which provide financial information, including information about actual and projected financial returns, which may inform determination of the Government’s sale price (notice to produce, paragraphs 6 and 11).

The first defendant has produced some documentation to the plaintiffs in response to the notice to produce. However, it has done so by producing documentation in a publicly available, redacted form, redacted to keep financial information confidential to the NSW Government and its commercial partners. In pressing the notice to produce, the plaintiffs seek the production of documents without redaction of financial information.

The basic legal structure of arrangements for the construction and operation of WestConnex (and the economic scale of the WesctConnex project) may have been disclosed to the public, and to the plaintiffs in these proceedings; but, if so, in the form of redacted documentation.

In essence, what the plaintiffs seek by their notice to produce to obtain, and the first defendant by its notice of motion seeks to deny them, is:

Upon a review of correspondence between the parties adduced in evidence by the first defendant, and the parties’ submissions, it appears that the plaintiffs seek, in particular, to obtain documents that evidence:

In broad terms, in the absence of any negotiations with the first defendant for acquisition of their land, and without any agreement about compensation payable to them for their loss of acquired land, the plaintiffs contend that they need access to WestConnex project documents at a global (or “macro”) level in order to inform quantification of their claims for compensation, or an accounting for profits, referrable to the first defendant’s appropriation of their particular land (by comparison, a “micro” level).

The first defendant contends that the plaintiffs are entitled to no more than documentation bearing upon a valuation of their particular land, “the micro level” of documentation, very little (if anything) of which exists. It has adduced evidence to the effect that: (a) substratum levels of thousands of parcels of land have been acquired for the WestConnex Project; (b) administration of the Project has proceeded by reference to global considerations; and (c) interrogation of the first defendant’s electronic document management and record keeping system, “Objective”, is unlikely to disclose documents which specifically reference the plaintiffs’ land, or their substratum lots, because any information available from the vast materials available on the system is likely to be “high level” information or to relate to WestConnex as a whole, rather than being focused on the M4-M5 Link Main Tunnel.

At a high level of abstraction, the battle lines between the parties are stark.

The first defendant contends that it was entitled to acquire substratum land for the WestConnex Project without compensation; it acquired the plaintiffs’ substratum land, without special regard to its identity or value, focusing on larger concerns; the plaintiffs have no grounds for seeking documentation, or information, about the WestConnex Project as it affects land other their own; and the State (of which it is an agency) is entitled to resist any demand for production of documents that might disclose its internal costings, projections and financial modelling.

The plaintiffs contend that the first defendant subdivided and acquired their substratum land without power to do so, or in abuse of any power it may have had to do so, and in a manner that was fraudulent, as a result of which they have an entitlement to compensation, or an account of profits, unconstrained by sections 56 and 62 of the Land Acquisition Act, core provisions relied upon by the first defendant to deny them any entitlement to compensation. In aid of the remedies to which they are entitled (under the Real Property Act, at law or in equity), they have a legitimate forensic purpose in seeking documents, and information, about the WestConnex Project, of which the land (they say, improperly) acquired from them is an integral part. In order to present their case for compensation or an account of profits, and to quantify the entitlements they claim, they need documents that evidence the State’s internal costings, projections and financial modelling.

The first defendant contends that the plaintiffs have no proper basis for obtaining such documentation and, in the conduct of their case, they should be left to documentation about the WestConnex Project which the State has made available to the public in a form redacted to keep confidential to the State and its commercial partners any detailed financial information.

WestConnex is a major road infrastructure construction program of works that commenced construction in early 2015. It involves the construction of several interconnected road links in inner west and western Sydney. The concept for WestConnex was first proposed in late 2012 and a business case was completed in 2013. Stages 1 and 2 of WestConnex are complete and the associated roads have been opened to the public. Stages 3A and 3B remain under construction. They are scheduled for completion in late 2023.

The substratum lots acquired from the plaintiffs, the subject of these proceedings, were acquired for the purpose of Stage 3A of WestConnex, being the mainline tunnel component of a new roadway currently known as the M4-M5 Link.

The first defendant is the NSW Government agency commissioning WestConnex and is responsible for property acquisition for WestConnex on behalf of the NSW Government and management of the toll concession arrangements on behalf of the NSW Government, as well as being the proponent for planning approvals and project development work for WestConnex.

Sydney Motorway Corporation (“SMC”) was incorporated in 2014. At that time, SMC was owned by the Treasurer and the Minister for Roads, Maritime and Freight as equal shareholders on behalf of the State of NSW.

SMC is the financing, construction and delivery entity for WestConnex. It is responsible for the project management of the delivery of WestConnex, contracting engagement and management of design and construction contractors, funding and financing of WestConnex and management of day to day communication.

On 22 September 2017 the NSW Government (by the Treasurer and the Minister for WestConnex) published a media release in which it called for qualified parties to register their interest in the sale by the Government of 51% of SMC. The media release declared that the State would retain 49% of SMC and its assets.

On 31 August 2018 the NSW Government (by the Treasurer and the Minister for WestConnex) published a media release in which it announced that a 51% stake in SMC had been awarded to “Sydney Transport Partners” (a consortium of Transurban, AustralianSuper, Canada Pension Plan Investment Board and Tawreed Investments) for the amount of $9.26 billion. The same media release confirmed that the Government would retain a 49% residual stake in SMC.

On 6 March 2020 the NSW Government (by the Treasurer) published a media release in which it announced “a scoping study into the future ownership of the State’s 49% stake in WestConnex”.

The media release included the following observations:

The first defendant concedes that it holds documents which contain commercial-in-confidence information relating to “the commercial viability of constructing, operating and maintaining the relevant tollways which informed the [Government’s] sale of the 51 per cent stake in SMC and the anticipated sale of the State’s remaining 49 precent stake in WestConnex.” The production of documents containing that information would disclose “the State’s internal costings, projections and financial modelling”: affidavit of Jimmy Taing affirmed 27 November 2020, paragraph [47](d). The first defendant is concerned that disclosure of that information could prejudice the State’s ability to maximise the sale price it might achieve on a sale of its remaining 51% stake in SMC.

An assessment of the propriety of the plaintiffs’ forensic purpose requires consideration of the competing cases of the plaintiffs and the first defendant, and an appreciation of what divides them in formulation of the questions in dispute.

A forensic purpose in engagement of a process for a compulsory production of documents in civil proceedings must be assessed by reference to the questions in dispute in the proceedings. That may be particularly so when (as in these proceedings) the documents sought to be produced go principally to questions relating to the nature of relief available (relevantly, compensation or an account of profits) rather than to questions relating to liability.

I have to assess the plaintiffs’ forensic purpose upon the basis that all questions in dispute in these proceedings are to be determined on a single hearing. All parties have declined an invitation to apply for an order under rule 28.2 of the Uniform Civil Procedure Rules 2005 NSW that questions of liability be determined separately from, and before, any other questions in the proceedings.

In the absence of such an order, the plaintiffs are obliged to prepare for a final hearing by the preparation of evidence bearing upon an assessment of any entitlement they may have to compensation or an account of profits. A judge conducting the final hearing, or case managing the proceedings in the meantime, might determine the order in which questions are to be determined at the final hearing; but, in the absence of an order of the Court to the contrary, the plaintiffs are obliged to prepare all their evidence in anticipation of a final hearing on all questions.

At a high level of abstraction, there appear to be only 2 questions for determination at a final hearing of the proceedings; namely:

The parties’ differences manifest themselves in the context of the following (undisputed) facts:

Upon a review of the pleadings and submissions on the current motion, questions which (with some overlapping) present themselves for closer attention in definition of questions of dispute (as between the plaintiffs and the first defendant) include the following, if not others:

A convenient articulation of the plaintiffs’ forensic purpose in support of their notice to produce is found in paragraphs 1-6 and 9-30 of their written submissions filed on 9 June 2021, which are here set out (with minor editorial adaptation, omitting footnotes):

Paragraph 1. The first defendant has responded to paragraph 1 of the notice to produce by declaring that it has nothing to produce. The plaintiffs have not challenged that declaration.

Paragraphs 2 and 11. By these paragraphs, the plaintiffs seek documents that: (a) evidence the calculation of the price of the NSW Government’s sale of a 51% interest in WestConnex or its proposed sale of its remaining 49% interest; and (b) evidence the actual or projected financial returns of the WestConnex tunnel relied upon in setting the sale price for the government’s interests in the WestConnex. They contend that the Government’s sale price and financial returns on the WestConnex project are directly relevant to calculation of their damages and their claim for an account of profits.

In their written submissions the plaintiffs indicate a preparedness (to which they should be held) to limit their demand for documents under paragraphs 2 and 11 of the notice to produce to documents of the following descriptions:

Paragraphs 3 and 4. Evidence adduced by the first defendant explains that the deeds (more accurately, the deed polls) sought by the plaintiffs are WestConnex project documents. They established an “Asset Trust” and a “Project Trust”. They deal with the composition, management and powers of the trustees managing the trusts, and commercial information relating to the form, timing and method of distributions made to unit holders.

The plaintiffs seek information regarding “distributions” which, they contend, necessarily reflect the value of the asset (namely, the M4-M5 link tunnel or the proceeds of its sale or leasing) which gives rise to the distributions.

Paragraph 5. These documents are said to be relevant to the calculation of any entitlement the plaintiffs may have to damages because they speak to the rental value, and usage, of land acquired by the first defendant from the plaintiffs.

The first defendant has identified the WestConnex M4-M5 Link Project Deed as responsive (and the only document responsive) to paragraph 5: the Deed (entered by the first defendant, the Asset Trustee and the Project Trustee) “contains in its terms an agreement to lease the land on (and in) which the motorway will be built”. However, it has provided the plaintiffs only with a redacted copy of the deed, unaccompanied by leases and subleases contemplated by the deed.

Paragraph 6. The first defendant says that searches of its records for valuations of the plaintiffs’ substrata land have returned “nil” results. It contends that valuations relating to other land are irrelevant to the plaintiffs’ claims. This, the plaintiffs dispute.

The plaintiffs contend that the value of the land acquired from them cannot be considered, in a vacuum, as an acquisition independent of the acquisition of the totality of the land required for the WestConnex project. They submit that the value of the substratum of one lot is referrable to its value as part of the entirety of the land required for the project, in a manner analogous to the increased value of a number of adjoining parcels of land to a developer who requires them for a development on a totality of the land. Accordingly, they contend that the value of other parcels of land acquired by the first defendant for the same purpose as their land was acquired is relevant to a calculation of the value of their land.

Paragraphs 7 and 8. The first defendant has produced as responsive to these two paragraphs a single, undated State Works Deed (between it and WCX State Works Contractor Pty Ltd), redacted so as to maintain confidentiality of costs incurred in, and payments relevant to, the WestConnex works. The plaintiffs contend that knowledge of those costs is relevant to an assessment of the net commercial benefit arising from the WestConnex project because calculation of a notional licence fee for use of their acquired land (upon an assessment of damages) would have to allow for the costs of the project.

Paragraph 9. Implicit in the plaintiffs’ demand for “the scoping study” for the sale of the NSW Government’s remaining 49% interest in WestConnex is an assumption that there is a single document bearing that description. The Treasurer’s media release of 6 March 2020 provides an inadequate foundation for such an assumption, but it does demonstrate an acknowledgement on the part of the NSW Government that its sale of a 51% stake in SMC (the entity building WestConnex) was commercially valuable for the State of NSW, giving rise to a reasonable expectation that a study by the NSW Treasury of the State’s stake in WestConnex might contain information relevant to an assessment of the value of land acquired for the project.

Paragraph 10. The plaintiffs, in correspondence, limited their demand for authorities or delegations given by the first defendant to execute Proposed Acquisition Notices on its behalf to “the PAN’s issued in respect of the plaintiffs’ land”. The first defendant accepted that limitation and produced documentation accordingly. The plaintiffs have not called the first defendant’s production into question.

The Court of Appeal (constituted by Bell P and Brereton and McCallum JJA) recently reviewed the concept of “legitimate forensic purpose” in the context of a subpoena for the production of documents in civil proceedings: Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145.

Their Honours’ reasoning is equally applicable to a Notice to Produce to Court served in civil proceedings such as the present. A Notice to Produce to Court addressed by one party to another has substantially the same effect as a subpoena for the production of documents.

In the course of his judgment, Brereton JA (at [92]), with the support of Bell P (at [81]) and McCallum JA (at [100]), expressed himself as in favour of a test of “proper forensic purpose” in the following terms:

Judged by that test, in my opinion, the plaintiffs have demonstrated a proper forensic purpose for each category of documentation sought in their notice to produce. The claims for relief they advance are not, in terms, constrained by sections 56 and 62 of the Land Acquisition Act. Although the relief they seek must ultimately be tied to their loss, or the first defendant’s use, of the substratum levels of their particular land, there is, in my opinion, a reasonable basis beyond speculation for a finding that the documentation they seek relating to the acquisition and use of their land, in the context of the project for which the first defendant appropriated their land, is likely to assist materially an assessment of such, if any, entitlements they may have to compensation or an account of profits.

They are entitled to contend that any entitlement to compensation they may have should be assessed by reference to a notional licence fee for the first defendant’s use of the acquired land or the commercial benefit obtained by the State by reason of its “misappropriation” of their land. The documentation they seek is calculated to assist their presentation of a case framed in those terms. The same documentation may reasonably be expected to inform their claim for an accounting for profits.

Whether the plaintiffs are entitled to relief in the terms claimed, or whether any entitlement they may have is limited as the first defendant contends, is a question for determination at a later time. In the meantime, subject to the determination of any claims of privilege or public interest immunity, they are not to be denied the means to advance the case they seek to make.

In my opinion, in the context of the current proceedings Practice Note SC Eq 11 does not stand in the way of the plaintiffs’ service of their notice to produce or a determination of the Court to enforce it.

True it is that the plaintiffs have yet to file or serve their evidence in the principal proceedings. That is not an impediment to the service, or enforcement, of their notice to produce because: (a) there is no real factual dispute about the steps taken by the defendants in appropriation of the plaintiffs’ land and in development of the tollway for which it was appropriated; (b) the plaintiffs have articulated their claims for relief, and the facts upon which those claims are based, in pleadings, correspondence and submissions to the Court; and (c) the likelihood is that any potentially contentious evidence to be adduced by the plaintiffs in support of their claims will be evidence as to the value of their land based, inter alia, upon information (sought by the notice to produce) peculiarly within the knowledge of the first defendant and parties associated with it.

Upon an assumption (commonly made in practice) that Practice Note SC Eq 11 applies equally to the plaintiffs’ notice to produce as to “an order for disclosure of documents” (to quote the Practice Note), and bearing in mind that a notice to produce may require an order of the Court for its enforcement, in my opinion there are “exceptional circumstances necessitating disclosure” and a necessity for disclosure “for the resolution of the real issues in dispute” in these proceedings.

At the final hearing of the principal proceedings the primary focus of the Court is likely to be upon: (a) legal characterisation of undisputed primary facts; and (b) a contest about the principles to be applied, and their application, in the assessment of such, if any, compensation or profits to which the plaintiffs might be entitled.

On the question of liability, the factual parameters of the case propounded by the plaintiffs have been set by the parties’ pleadings and undisputed primary facts about land acquisition and compensation procedures; on the plaintiffs’ side of the record, no additional lay evidence of any substance has been foreshadowed or might be anticipated on the current pleadings. Whatever evidence remains to be adduced on the plaintiffs’ side of the record appears, in substance, to be evidence demonstrating a compensable loss or accountable profits.

The plaintiffs have a legitimate forensic purpose in seeking the documentation they seek. If the proceedings are to be prepared in an orderly way for a final hearing on all questions (of both liability and remedy, as presently planned), they should be permitted to have, sooner rather than later, documentation bearing upon an assessment of the value of their land and profits derived from the State’s use of it.

No application has been made, or foreshadowed, for an order (under rule 28.2 of the Uniform Civil Procedure Rules 2005 NSW) for the separate decision of preliminary questions of liability before the hearing of disputes about remedy. All parties have disclaimed an intention to apply for such an order. If such an application were to be made, closer attention would have to be given to the nature of any lay evidence to be adduced on either side of the record, and to whether the defendants accept that it is not incumbent upon the plaintiffs to prove an element of damage (or the availability of profits for which an accounting may be had) in order to ground findings of liability, if they are to be made. In the meantime, my determination of the first defendant’s motion must proceed on the basis that preparations are to be made for a final hearing on all questions.

I do not regard the plaintiffs’ notice to produce as open to challenge on the ground that it is, in substance, an exercise of “fishing” for documents (as described in Small’s Case) upon an endeavour “not to obtain evidence to support [their] case, but to discover whether [they have] a case at all”.

The primary facts bearing upon the plaintiffs’ claims for relief in the principal proceedings are not in dispute. With or without legal justification (as may be determined at a final hearing), the first defendant acquired two (substrata) levels of the plaintiffs’ land as part of a profit making venture which has been publicly spoken of by the State Treasurer as financially beneficial to the State. It did so as an agency of the State. On the hearing of the motion before the Court it filed an affidavit that concedes that:

This is the very type of documentation the plaintiffs seek: copies of due diligence materials, feasibility studies, financial modelling, financial reports, plans, transaction documents and records of financial returns relating to the WestConnex project. The probability that such documentation is available is hardly speculative. Government could not responsibly enter into a project as large and as sophisticated as the WestConnex project without documentation of this character.

The relevance of such documentation has been explained by the plaintiffs in sufficient detail to justify their demand, by their notice to produce, that it be produced for the purpose of the principal proceedings, under the management of the Court.

The first defendant’s allegation of “oppression” is directed primarily to paragraphs 2, 9 and 11 of the plaintiffs’ notice to produce.

The first defendant’s contention that the notice to produce ought to be set aside as oppressive is based upon contentions that compliance with the notice requires that it: (a) review a large volume of documentation; and (b) exercise judgement about the amenability of particular documents to production.

The documents sought in paragraphs 2 and 11 of the notice to produce are described with sufficient particularity not to call for a large volume of documentation or to require an onerous exercise of judgment. To use an expression found in presentation of the first defendant’s case on the motion, they are documents that can reasonably be expected to contain “high level” information of a financial character. The documents sought are essentially those which the first defendant concedes it has bearing upon “the State’s internal costings, projections and financial modelling”.

The fact that an interrogation of its electronic document management and record keeping system (“Objective”) might produce a multitude of documents relating to the sale, or a prospective sale, of an interest in WestConnex or financial returns on the Project (as it contends) does not focus sufficiently on the terms of the notice to produce. The notice to produce does not call for a mass of administrative detail. It calls for documents evidencing higher level, financial information.

Paragraph 9 of the notice to produce is predicated upon an assumption that there is documentation (by whatever name known) that answers the description of a “scoping study”, the expression used by the Treasurer in his media release of 6 March 2020. In my opinion, that is how paragraph 9 of the notice to produce should be read. It implicitly seeks the production of a “report (or reports) to government”, not working papers which might underlie such a report, or have been created in anticipation of the future production of such a report. So read, there is nothing oppressive about the plaintiffs’ demand for production.

On the findings here made, the first defendant’s challenge to the plaintiffs’ notice to produce fails. The plaintiffs have demonstrated a legitimate forensic purpose for the documentation they seek. The scope of the documentation sought is not oppressively large. The notice to produce does not bear the character of a “fishing expedition”. Given the nature of the questions in dispute in the principal proceedings, the plaintiffs’ demand for the production of documentation is not premature.

For these reasons, I order that paragraph 1 of the first defendant’s amended notice of motion filed on 9 April 2021 be dismissed.

Prima facie, costs of the motion to date should follow the event; but allowance has to be made for the fact that the notice to produce ultimately contested on the hearing of the motion was an iteration of earlier, abandoned notices and the poor state of the pleadings complicated argument on the first defendant’s motion.

For these reasons, I order that the parties’ costs of the motion be their respective costs in the proceedings.

Against the possibility that a party may seek to contest that costs order, I reserve to any party liberty to apply for an order that it be discharged or varied, any such application to be made by written submissions filed (by delivery to my chambers) and served on all parties no later than 17 September 2021.

In dismissing the first defendant’s challenge to the notice to produce, I note that I proceed on the basis that:

Paragraphs 3-4 of the first defendant’s motion (relating to a foreshadowed claim for public interest immunity) remain to be determined.

As the principal proceedings are presently listed before the Chief Judge for directions on 14 September 2021, I invite her Honour to give consideration to the future course of proceedings on the first defendant’s motion, including arrangements for the consideration of the following business:

I invite the solicitor for the first defendant to provide a copy of these reasons for judgment to the NSW Treasury and the solicitors for the WCX Entities.