Cudgegong Australia Pty Limited v Sydney Metro

1. [1]

   MEAGHER JA: I agree with Sackville AJA.

2. [2]

   LEEMING JA: I agree with Sackville AJA.

3. [3]

   SACKVILLE AJA: By a notice published in the Government Gazette on 21 September 2012, pursuant to s 19(1) of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (Land Acquisition Act), Transport for New South Wales (Transport NSW), the predecessor of the present respondent (Sydney Metro), acquired certain land at Rouse Hill (Land). The purpose of the acquisition was the construction of the North West Rail Link.

The proceedings

1. [4]

   The present applicant (Cudgegong) commenced proceedings in the Common Law Division on 23 February 2017, seeking declarations to the effect that the acquisition of the Land was invalid. In addition to declaratory relief Cudgegong seeks orders that the Acquisition Notice published in the Gazette on 21 September 2012 (Acquisition Notice) be quashed and that Sydney Metro take all necessary steps to transfer to Cudgegong the Land or that part of the Land on which Sydney Metro does not propose to construct the North West Rail Link. In the alternative Cudgegong seeks damages. Cudgegong’s claim is founded on the contention that part of the Land was acquired for purposes unrelated to the construction of the North West Rail Link.

2. [5]

   By a notice of motion filed on 13 October 2017, Transport NSW sought an order pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 13.4(1)(b) dismissing the proceedings. Rule 13.4(1) relevantly provides as follows:

3. [6]

   The primary Judge recorded that Transport NSW asserted that Cudgegong’s claim disclosed no reasonable cause of action for two reasons: [1]

4. [7]

   His Honour accepted that if Transport NSW could establish that Cudgegong was estopped from claiming that the Acquisition Notice was invalid, the estoppel would mean that Cudgegong’s cause of action, even if otherwise reasonable, would no longer be reasonable. If the Court was satisfied that the estoppel defence was bound to succeed, an order for summary dismissal of the proceedings would be appropriate. [2]

5. [8]

   The primary Judge upheld Transport NSW’s estoppel argument. His Honour summarised his reasons as follows: [3]

6. [9]

   His Honour held that the estoppel was “a complete answer and defence … in the proceedings”. Cudgegong’s claim was “hopeless … and … doomed to fail”. Accordingly, its claim disclosed no reasonable cause of action and had to be summarily dismissed pursuant to UCPR r 13.4(1)(b). [4]

7. [10]

   It was not necessary for the primary Judge to address Transport NSW’s alternative argument founded on UCPR r 59.10, but his Honour did so. [5] He held that r 59.10, which commenced on 15 March 2013, did not apply to proceedings challenging a decision made prior to the commencement of the rule. [6] However, if it did apply, the existence of a discretionary power to extend time required a factual inquiry involving the matters identified in r 59.10(3). These would ordinarily have to be considered at a final hearing. [7]

8. [11]

   Cudgegong filed a notice of appeal on 12 July 2018, purportedly as of right. Transport NSW filed a notice of motion on 2 August 2018 seeking, among other relief, an order dismissing the notice of appeal as incompetent. Transport NSW’s position was that the primary Judge’s decision was interlocutory and therefore Cudgegong required leave to appeal. [8]

9. [12]

   Presumably in response to the notice of motion, Cudgegong included in the appeal books a summons seeking leave to appeal from the decision of the primary Judge. At the commencement of the hearing in this Court Mr Tomasetti SC, who appeared with Mr Fozzard for Cudgegong, accepted that leave to appeal was required. Mr Tomasetti was granted leave to file the summons seeking leave to appeal. The application for leave to appeal was heard concurrently with the appeal.

10. [13]

    Transport NSW filed a notice of contention seeking to uphold the order for summary dismissal of the proceedings on the ground that the proceedings were “time-barred by reason of [UCPR r 59.10]”.

Parties

1. [14]

   On 8 August 2018, the Registrar made an order on the application of Transport NSW changing the identity of the respondent from Transport NSW to Sydney Metro. The application was made by reason of the Transport Administration Amendment (Sydney Metro) Act 2018 (NSW) (2018 Act), which came into force on 1 July 2018. The 2018 Act amended the Transport Administration Act 1988 (NSW) to constitute a statutory corporation with the name of Sydney Metro. [9] An order has been made under s 94 of the Transport Administration Act 1988 (NSW) for the transfer to Sydney Metro of the assets, rights and liabilities of Transport NSW the subject of or arising under or in connection with the North West Rail Project. The transfer includes all assets, rights and liabilities of Transport NSW the subject of, or arising under or in connection with the current proceedings between Cudgegong and Transport NSW.

2. [15]

   Despite the substitution of Sydney Metro for Transport NSW, it is convenient to refer to the respondent as Transport NSW.

Leave to appeal

1. [16]

   It is appropriate to dismiss Cudgegong’s notice of appeal as incompetent. However, as will appear, I consider that the primary Judge should not have summarily dismissed the proceedings. Since the effect of his Honour’s orders, if they stand, is to terminate the proceedings, Cudgegong should be granted leave to appeal and directed to file a fresh notice of appeal.

Background

1. [17]

   There is a long history of litigation arising out of the acquisition of the Land. The primary Judge summarised the history as follows: [10]

The issue before the primary Judge

1. [18]

   It is critical to the outcome of Cudgegong’s appeal to identify the nature of the estoppel relied on by Transport NSW. The primary Judge, after recounting the background to the litigation, recorded that: [15]

2. [19]

   The principles governing estoppel in pais were stated by Dixon J in Grundt v Great Boulder Proprietary Gold Mines Ltd (Grundt): [16]

3. [20]

   Dixon J repeated in Grundt [17] his analysis in Thompson v Palmer [18] of the “recognised grounds of preclusion”:

4. [21]

   The ground upon which the primary Judge upheld the estoppel defence was that Cudgegon’s actions in relation to its claims for compensation constituted a “clear and unambiguous” representation that the acquisition of the Land was valid and that Transport NSW acted to its detriment in the three respects identified by Transport NSW in its submissions. [19]

5. [22]

   Mr Lancaster SC, who appeared with Ms Bathurst for Sydney Metro on the appeal, contended that Transport NSW’s estoppel case before the primary Judge was not confined to estoppel by representation. He submitted that Transport NSW also relied on estoppel by convention founded on the mutual assumption by the parties in the Land and Environment Court litigation that the acquisition of the Land was valid. [20]

6. [23]

   Transport NSW filed a “Response to Summons” in the Common Law proceedings. The Response identified eight matters which were said to show that Cudgegong:

7. [24]

   The matters identified in the Response included Cudgegong’s conduct in submitting a claim for compensation pursuant to the Land Acquisition Act, commencing on appeal in the Land and Environment Court against Transport NSW’s initial rejection of the claim for compensation, continuing to claim that it was entitled to an advance payment of compensation pursuant to s 68(2)(b) of the Land Acquisition Act and accepting the advance payment in the sum of $765,468.59. The Response did not expressly allege that Cudgegong, by its conduct, represented to Transport NSW that the Acquisition was valid. Nor did the Response allege that Transport NSW understood that such a representation had been made and acted to its detriment in reliance on the representations.

8. [25]

   In the absence of formal pleadings, the ambiguous and incomplete Response may have left it open to Transport NSW to rely on conventional estoppel in the sense explained by Dixon J in Thompson v Palmer, [21] as a basis for its summary judgment application. However, Transport NSW put its case to the primary Judge squarely on the basis of estoppel by representation.

9. [26]

   Transport NSW’s written submissions in support of the summary dismissal motion expressly relied on estoppel in pais and, in particular on the principle that:

10. [27]

    The submissions identified eleven matters that were said to constitute conduct giving rise to a representation by Cudgegong that it accepted that the Land was validly acquired by Transport NSW. These overlapped with the matters referred to in Transport NSW’s Response to Summons. The submissions also contended that Transport NSW had “altered its position in reliance on [the] representation”. (Emphasis in original.) No mention was made of any other form of estoppel.

11. [28]

    Transport NSW’s written submissions in reply restated its reliance on estoppel by representation. This Court was not taken to anything in the transcript of argument before the primary Judge that suggests that Transport NSW was relying on any other form of estoppel. On the contrary, its oral argument closely followed the written submissions.

12. [29]

    It is true that the primary Judge referred to authorities dealing with forms of estoppel other than estoppel by representation. But Transport NSW referred his Honour to these authorities [23] for the purpose of meeting Cudgegong’s contention that estoppel is not an answer to a claim that a public authority has exceeded its statutory powers. [24] The primary Judge rejected that contention. [25]

13. [30]

    Thus the only estoppel upon which Transport NSW relied before the primary Judge was estoppel by representation. Transport NSW did not rely on conventional estoppel or any other form of estoppel. The primary Judge correctly recorded the nature of the estoppel on which Transport NSW relied. [26]

Should summary judgment have been granted?

1. [31]

   The primary Judge correctly recognised that UCPR r 13.4(1)(b) cannot be invoked to dismiss proceedings summarily unless there is a high degree of certainty about the ultimate outcome should the proceeding go to trial in the ordinary way. [27] The matters that must be established in order to make out a defence of estoppel by representation [28] are fact specific. While there may be summary dismissal applications in which the defence can be made out to the requisite degree of certainty, such cases are unlikely to be common, at least in the absence of agreed facts.

2. [32]

   In the present case Transport NSW’s submissions to the primary Judge relied on a series of matters that collectively were said to constitute a representation that the Acquisition was not for an unauthorised purpose and was therefore valid. The submissions did not explain why Cudgegong’s conduct should be understood as conveying the representation. This led Mr Tomasetti to submit that Transport NSW’s failure to explain precisely how the conduct conveyed the representation to Transport NSW meant that the conduct was insufficiently clear and unambiguous to found an estoppel by representation.

3. [33]

   Whatever the merits of this argument, Transport NSW’s submissions to the primary Judge seem to have assumed that the representation induced it to believe that the Acquisition was valid and that it acted to its detriment in the faith of that belief. The difficulty with that assumption is that although Transport NSW filed affidavits from responsible officers, those affidavits were not read. Consequently, Transport NSW did not adduce evidence to address several critical matters, including the following:

4. [34]

   It may be accepted that, as the primary Judge found, Transport NSW acted to its detriment in the course of the proceedings in the Land and Environment Court. [29] But that fact, of itself, does not establish that Transport NSW was induced to act to its detriment in consequence of a representation by Cudgegong that the Acquisition Notice was valid. In the absence of evidence from officers of Transport NSW, the material before the primary Judge left open a plausible argument that Transport NSW incurred expense and otherwise acted to its detriment for reasons unconnected with any belief formed on the basis of any representation made by Cudgegong.

5. [35]

   The evidence before the primary Judge is consistent with Transport NSW having formed the view that the Acquisition Notice was valid on the basis of its own advice, quite independently of any compensation claim made by Cudgegong. The evidence is also consistent with Transport NSW making the advance payment because it was obliged by statute to do so, and not because of any representation by Cudgegong as to the validity of the Acquisition Notice. [30] There are other issues that might have been the subject of evidence. The connection between the costs incurred by Transport NSW in defending Cudgegong’s claim for an additional $13 million or so in compensation and any representations by Cudgegong as to the validity of the Acquisition Notice is not self-evident. Similarly, Transport NSW’s decision to develop the Land may have had nothing to do with any representation made by Cudgegong.

6. [36]

   For these reasons it cannot be said with a high degree of certainty that Transport NSW’s defence based on estoppel by representation will be successful at a final hearing.

Issue estoppel

1. [37]

   During the hearing in this Court members of the Court pointed out that Transport NSW may have had an argument available to it based on issue estoppel. Cudgegong commenced proceedings against Transport NSW in April 2013 in the Land and Environment Court seeking an order that the compensation payable in respect of its interest in the “acquired land” be determined at $16.7 million plus disturbance costs. In Cudgegong 3 Pain J held that as between Cudgegong and Golden Mile (the latter having become a party to the proceedings), Cudgegong had the relevant compensable interest in the Land for the purposes of the Land Acquisition Act. Her Honour also directed that Transport NSW make the advance payment to Cudgegong. [31]

2. [38]

   On one view, it was an essential element in Cudgegong’s compensation claim that the Acquisition Notice was valid. Since Transport NSW was a party to the proceedings in which Cudgegong’s entitlement to compensation was upheld, it might have been argued that the issue of validity of the Acquisition Notice was determined in those proceedings and thus Cudgegong was bound by an issue estoppel. [32]

3. [39]

   Transport NSW did not raise this argument before the primary Judge, include it in the notice of contention or refer to it in its written submissions in this Court. When the question was raised Mr Lancaster sought to rely on it but frankly admitted that he was “picking it up on the run”. Mr Lancaster subsequently sought leave to file an amended notice of contention raising the point. Leave was refused.

4. [40]

   The Court took this course because a plea of issue estoppel would seek to uphold an order for summary dismissal of proceedings which was not put to the primary Judge and which would require the matter to be adjourned so that the parties could prepare and make submissions (whether in writing or orally). As Mr Tomasetti pointed out, the question of whether Transport NSW can rely on issue estoppel in the circumstances of this case is by no means straightforward. Moreover Mr Tomasetti accepted that if the matter proceeds to trial it will be open to Transport NSW to rely on the contention at that stage of the proceedings.

5. [41]

   It was for these reasons, including Mr Tomasetti’s concession, that the Court declined to permit Transport NSW to file an amended notice of contention.

Conventional estoppel

1. [42]

   As has been pointed out, Transport NSW’s case before the primary Judge was based on estoppel by representation, not estoppel by convention. [33] No argument was put to his Honour that the parties had mutually adopted the validity of the Acquisition Notice as a conventional basis for their relationship.

2. [43]

   Transport NSW did not file a notice of contention seeking to rely on estoppel by convention as an alternative ground for upholding the primary Judge’s decision. Transport NSW’s written submissions in this Court did not rely on estoppel by convention.

3. [44]

   Mr Lancaster submitted in the course of oral argument that, notwithstanding that the argument had not previously been advanced, Transport NSW should be permitted to rely on it. For much the same reasons that have been given for rejecting the attempt to raise the issue estoppel argument, Transport NSW should not be permitted at this very late stage to rely on estoppel by convention. Furthermore, a defence of estoppel by convention may give rise to factual questions, such as whether the dealings between Cudgegong and Transport NSW were consistent with Cudgegong reserving its right to challenge the validity of the Acquisition Notice.

Notice of contention

1. [45]

   It is unnecessary to decide whether UCPR r 59.10 applies to the Common Law proceedings. Even if it does, the Court has power to extend time. It cannot be said that an application to extend time pursuant to r 59.10(2) is bound to fail.

Orders

1. [46]

   The following orders should be made: