Carlewie Pty Ltd v Roads and Maritime Services

1. [1]

   BASTEN JA: On 3 July 2015 a State Government authority, the WestConnex Delivery Authority (later replaced by the respondent), compulsorily acquired three adjoining properties owned by the appellant (Carlewie Pty Ltd) on the corner of Campbell Street and Burrows Road, St Peters. The public purpose of the acquisition was the construction of the St Peters interchange component of the WestConnex motorway project.

2. [2]

   Upon the parties failing to agree an amount by way of compensation for the acquired land, proceedings were commenced by the appellant in the Land and Environment Court. The Court was constituted by Sheahan J, assisted by Acting Commissioner Maston. On 30 June 2017 the Court awarded compensation in an amount of $23 million. [1]

3. [3]

   The valuation proceedings were brought in the Class 3 jurisdiction of the Land and Environment Court. [2] An appeal lies to this Court “against an order or decision … of the [Land and Environment] Court on a question of law.” [3] On 29 September 2017 the appellant filed a notice of appeal containing 10 grounds, although ground 1 itself contained 11 sub-grounds. The grounds included a degree of repetition and, in many cases, raised issues which did not obviously involve questions of law.

4. [4]

   The orange appeal book, filed on 16 May 2018, contained, in addition to the written submissions and chronologies, an amended notice of appeal containing a new ground 1A, in the following terms:

5. [5]

   The document had a footer on each page bearing the date 29 January 2018. However, no amended notice of appeal has been filed. Nonetheless, both parties dealt with ground 1A in written submissions and, as the appellant noted in its submissions in reply, the respondent indicated no opposition to the raising of ground 1A. That remained true at the hearing of the appeal. Accordingly, although the record should be rectified by the filing of the amended notice of appeal, the ground was fully argued and must be addressed.

6. [6]

   Further, it should be addressed first. If the adjudication undertaken in the Land and Environment Court did not conform with the legislation constituting the Court, it would seem that there has been no valid adjudication and the appellant’s application is yet to be validly determined. If ground 1A were to be rejected, it will be necessary to address the other grounds, including by determining which involve questions of law and are thus permissible grounds of appeal. If ground 1A is upheld, there is a large issue as to whether the Court should address any other ground in circumstances where the matter will have to be redetermined.

7. [7]

   For the reasons set out below, ground 1A should be upheld; the matter must be redetermined according to law and, in the circumstances, it is not appropriate to address the other grounds of appeal. Given that the matter has already involved an eight day hearing, it is also necessary to consider whether this Court should impose any constraints on the manner in which, and the constitution of the court by which, the redetermination is undertaken.

Role of Commissioners

1. [8]

   Briefly put, the appellant’s claim was that the language of the judgment revealed that the Acting Commissioner had participated in the determination of the dispute in a manner which contravened the limits of his function under the statute. This submission raised two discrete issues. First, it is necessary to identify the scope of the function conferred on a Commissioner engaged under s 37 of the Land and Environment Court Act and, secondly, it is necessary to make a finding, based on the reasons of the Court, as to what precise function the Commissioner undertook. The submissions of both parties focused primarily on the way in which the Court should address the latter question. Nevertheless, it is necessary to commence by considering the jurisdictional structure by which the proper function of the Commissioner was identified.

2. [9]

   As noted above, the Court was exercising its Class 3 jurisdiction. Division 4 of Pt 4 of the Act is headed “Special provisions respecting Class 1, 2 or 3 proceedings”. The critical provision for present purposes is s 37, which, since May 2015 (a date prior to the filing of the present application) has read: [4]

3. [10]

   Three aspects of this section are significant for present purposes. First, both subs (1) and (3) refer to the Commissioner assisting the Court; in subs (3) that language is expanded to include assistance and advice. The function of the Commissioner is thus differentiated from the function of the Court. Secondly, subs (3) imposes a constraint on the function of assisting and advising by declaring that it shall not include adjudicating on any matter before the Court. Thirdly, it may be inferred from subs (4)(b) that a Commissioner is not intended to give assistance or advice on questions of law, although there is no express exclusion of that role and it is by no means clear that such an inference would be correct. (The point is not presently relevant.)

4. [11]

   Taken in isolation, the practical effects of constraining the functions of a Commissioner are less than clear. On one view, the adjudication of a matter before the Court (which is not to be done by the Commissioner) may encompass only the final determination as to the outcome and the making of orders. On the other hand, it may also encompass the evaluation of expert evidence, the determination of questions of credit, the making of findings of fact, and the preparation of reasons. On the assumption that a Commissioner may have particular expertise (including legal expertise) it is clear that the Commissioner is entitled, and indeed obliged, to bring that expertise to bear on questions which would otherwise turn upon the assessment of expert evidence. There is a question as to how that is to be done.

5. [12]

   Under the Land and Environment Court Act, one area of expertise qualifying a person to be a Commissioner is special knowledge and experience in the law and practice of land valuation; [5] however, since April 2009 any person may be appointed as a Commissioner if he or she is an Australian lawyer. [6]

6. [13]

   At least in this jurisdiction, and no doubt elsewhere, where the resolution of a dispute requires specialised knowledge or expertise, it is possible to characterise the mechanisms adopted in four broad groups. These are (a) a judicial officer, who will decide the matter with the assistance of expert evidence proffered by the parties (the adversarial model); (b) a tribunal of experts, often with a judicial officer presiding (the expert tribunal model); (c) a judicial officer sitting with assessors (the assessor model), and (d) referral of issues to an expert for determination (the referee model).

7. [14]

   There are, of course, variations on these major themes. Thus, the adversarial model may encompass expert evidence from a court-appointed expert, rather than, or in addition to, experts called by the parties. The assessor model may rely upon a panel of assessors appointed by the executive government (as with the Commissioners under the Land and Environment Court Act) or may rely upon ad hoc assistance obtained by the judicial officer constituting the court, as was the case with the predecessor to the present legislation, the Land and Valuation Court. [7] In other cases matters may be referred by a judicial officer to a referee, although not necessarily because specialised expertise is required.

8. [15]

   In functional terms, the primary difference between the assessor model and the expert tribunal model is that the assessors are not decision-makers. As will be noted, this point of distinction has a long history. The primary functional difference between the assessor model and the other models is that with assessors the nature of the expertise relied upon may not be transparent, because the assistance and advice will not all be given in open court. There may also be limited transparency with an expert tribunal in that the reasons may not reveal how the expertise was relied upon in reaching a decision. An example may be seen within a system of professional discipline for medical practitioners where the statute created a tribunal consisting of a judicial officer, a lay person and two medical practitioners. [8]

9. [16]

   Judgments in the Land and Environment Court, where an assessor has sat with a judge, commonly commence with the Court acknowledging the assistance received from the Commissioner. Such an acknowledgement was contained in the present judgment at [2]. Conventionally, no further indication is given of the nature of the assistance received. The judgment is usually read as if it were a judgment given in exercise of the adversarial model, by reference to the expert evidence called by the parties. A finding not referable to relevant expert evidence might well be challenged on appeal. Nevertheless, there is nothing in the statute to preclude reasons as to the nature of the assistance provided and how it was relied upon by the judge.

10. [17]

    When established in 1979, the Land and Environment Court took over the jurisdiction of more than one existing court or tribunal. Relevantly for present purposes it took over the jurisdiction of the Land and Valuation Court, which heard claims for compensation resulting from compulsory acquisitions of land. [9] The provisions in that Act already noted allowing for expert assistance were framed in the following terms:

11. [18]

    In the Land and Environment Court Act, as enacted, an assessor was described as a person appointed “as a conciliation and technical assessor of the Court”. [11] This language was abandoned and the language of “Commissioner” adopted only with the commencement of the Courts Legislation Further Amendment Act 1998 (NSW). The extrinsic materials for the bill indicated that this was a name change which was not accompanied by any substantive change of significance in relation to the functions to be exercised. [12]

12. [19]

    Historically, the principal use of assessors in common law jurisdictions has been found in the use of nautical assessors in collision claims in Admiralty. [13] The distinction between giving advice and assistance, on the one hand, and adjudicating, on the other, also has a long history. Sir Joseph Napier, describing the role of assessors in the High Court of Admiralty, stated in The “Magna Charta”: [14]

13. [20]

    Some years later, the same theme was articulated in “The Australia” [15] by Lord Sumner in the following terms:

14. [21]

    The scope of the function, when limited to advice and assistance has been controversial. For example, in The Beryl, [16] Brett MR stated:

15. [22]

    As explained by Anthony Dickey in 1970: [17]

16. [23]

    The highly constrained view of the role of assessors in Admiralty, expressed by Brett MR, may have turned in part upon the scope of their expertise. Under the Land and Environment Court Act, one area of expertise, noted above, is special knowledge and experience in the law and practice of land valuation; however, any person may be appointed as a Commissioner if he or she is an Australian lawyer. Given the nature of the skill and expertise which is thus made available, it is difficult to imply any particular constraint on the nature of the advice and assistance which may be provided in a valuation case.

17. [24]

    The problem in the present case is not so much a question of delegation, rejected in “The Australia”, as a question of co-adjudication. The reasons for judgment (further discussed below) indicate a degree of unanimity, not disagreement, between the judge and the Acting Commissioner. Had the judgment stated, in addition to the acknowledgment of great assistance in [2], words to the effect, “With respect to each material finding identified below my views coincided with the advice given by the Acting Commissioner”, it is doubtful that any objection could have been raised. Nevertheless, that was not the language used and it is necessary to determine where the line is to be drawn between assistance and advice, on the one hand, and adjudication on the other.

18. [25]

    The legislature has from time to time sought to achieve a higher level of transparency in matters involving assessors. Thus, the Navigation (Courts of Marine Inquiry) Regulations made under the Navigation Act 1912 (Cth) provided, in cl 14:

19. [26]

    Part IX of the Navigation Act 1912 included s 359, providing for the court to be assisted by assessors “who shall advise the Court but shall not adjudicate on the matter before the Court.” (Doubt has been expressed as to the validity of the Regulation, although that need not be explored here. [19] )

20. [27]

    The role of assessors in other jurisdictions, particularly in relation to intellectual property, such as patents, was carefully explained by Barker J in the Supreme Court of New Zealand (now the High Court) in Beecham Group Ltd v Bristol-Myers Co, [20] and in a later judgment, explaining how the Court had used an independent scientific advisor to explain basic concepts of stereochemistry. [21]

21. [28]

    The modern case law now contains a number of considered explanations by experienced trial judges as to how they have used scientific advisors in the course of proceedings. [22] Three elements may be noted. First, generally assessors have been encouraged to articulate reactions to particular submissions or evidence in open court, so as to allow such views to be exposed and considered. Secondly, to the extent that alternative views were expressed to the judge in chambers, these too were conveyed to the parties for their comments. Thirdly, in each case the judge appears to have been at pains not merely to reiterate that the issues for determination rested with the judge alone, but also to explain that the expert assessors, who appear to have been appointed on an ad hoc basis in each case, understood their limited role. By these means, the distinction between assistance and adjudication was maintained and, further, a reasonable degree of transparency was achieved for the purposes of what was otherwise an adversarial hearing. Although the statutory schemes for the appointment of Commissioners in the Land and Environment Court differ from the provisions in various Supreme Court Acts or rules, [23] and in s 217 of the Patents Act 1990 (Cth), that approach could be adopted in the Land and Environment Court.

22. [29]

    As already explained, the issues upon which a Commissioner may provide assistance and advice are not expressly constrained by the terms of the Land and Environment Court Act and, at least in the present case, there is no reason to imply a constraint. Nevertheless, the functional distinction between advice and assistance on the one hand, and adjudication on the other, is expressly stated and must be adhered to. Thus, there is no doubt that if the judge deferred to the opinion of the Commissioner without being persuaded that it was correct, the exercise of the jurisdiction would have miscarried. On the other hand, if the judge has formed an independent opinion with respect to each material issue, there can be no complaint that those opinions were shared by the Commissioner.

23. [30]

    The application of these principles in the present case is not without difficulty. Two factors militate against any assumption of error. First, the experience of both the judge and the Acting Commissioner as to the operation of the Land and Environment Court Act would readily allow a conclusion, absent indications to the contrary, that the distinction between assistance and advice on the one hand and adjudication on the other, as set out in s 37(3), was well understood and would have been applied. The adoption of this inference is an application of the presumption of regularity. Further, that assumption finds express support in [2] of the judgment which stated:

24. [31]

    Nevertheless, there are contrary indications. First, with one apparent exception, the judgment is formulated either in terms of the first person plural (“we” or “our”) or by reference to “the Court”. In some passages, [24] “the Court” is used in circumstances in which it might properly be inferred that a distinction was being drawn between the Court constituted by the judge, and the Commissioner. However, there are an equal number of examples in which findings are expressed in the first person plural and, in critical passages, the two expressions are interspersed in a way which suggests that “the Court” was used as a variation on the theme of collaborative decision-making, rather than by way of distinction. Four critical passages should be identified.

25. [32]

    First, there is an outline of the judgment at [6] in the following terms:

26. [33]

    Secondly, in dealing with a major issue as to the existence and significance of certain underground storage tanks (UST’s) which provided a potential source of contamination and therefore remediation costs, the judgment concluded in the following terms:

27. [34]

    Thirdly, in addressing the valuation of two specific areas of land, the judgment expressed the findings in the following terms:

28. [35]

    Fourthly, in dealing with a claim for disturbance, the reasons concluded:

29. [36]

    Finally at [239], the reasons concluded:

30. [37]

    The question raised by the use of this language may be identified as follows: in circumstances where it is clear that the judge did “adjudicate” the issues before the Court, does it matter that the Commissioner appears also to have formed opinions which, if they had legal force, would have constituted an adjudication?

31. [38]

    Whilst the answer to the question is by no means beyond doubt, the better view is that it does matter. The prohibition in s 37(3) is not merely upon a delegation of authority to the Commissioner; it is a prohibition on participation by the Commissioner in the adjudication process, beyond the giving of assistance and advice. It is possible that, content in the knowledge that his tentative views were those of the Commissioner, the judge did not form an independent view involving the acceptance of full responsibility for the decision. It is clear from the historical use of the prohibition on adjudication that the purpose underlying the prohibition is to ensure that a clear demarcation of function is maintained. Whilst there is a good chance that the judge did form an independent view, the language in which this judgment was expressed prevents an affirmative satisfaction that the appropriate demarcation was maintained. It follows that ground 1A should be upheld.

Consequence of error

1. [39]

   On the basis that the Commissioner, in contravention of the terms of s 37(3), played an adjudicatory role in the proceeding, the next question is whether that contravention rendered the judgment of the Court invalid.

2. [40]

   A similar issue arose in an analogous statutory context in Attorney General of New South Wales v World Best Holdings Ltd. [25] That case concerned a decision of the Retail Leases Division of the Administrative Decisions Tribunal. The legislation provided that the Tribunal was to be constituted by a Division member, who was to be assisted by two other members “in an advisory capacity only”; the relevant provision also stated that “[a] member assisting the Tribunal under this clause is not to adjudicate on any matter before the Tribunal.” [26]

3. [41]

   Based on an assessment of the reasons of the Tribunal, which were written in the first person plural and included unequivocal statements such as “as commercial people, we consider…” and “based on our respective experience of commercial dealings”, [27] Spigelman CJ concluded:

4. [42]

   In defence of the validity of the decision, despite the factual finding, the Attorney General relied upon two statutory provisions. The first, s 52(1)(e) of the Interpretation Act 1987 (NSW) should be referred to, although it was not relied upon by the respondent in the present matter. That provision states:

5. [43]

   In World Best, the Chief Justice held that adjudication contrary to the statutory terms of the Administrative Decisions Tribunal Act was not “participation at a meeting” of the Tribunal, because the proceeding was not a “meeting”, “but the formal exercise of a statutory power by a person not entitled to exercise the power.” [28]

6. [44]

   The second provision relied upon in World Best was s 81(3) of the Administrative Decisions Tribunal Act. That provision stated:

7. [45]

   An equivalent provision, albeit in slightly different language, is found in s 68(2) of the Land and Environment Court Act. However, as provided in s 68(4), the section does not apply to proceedings in Class 1, 2, 3 or 4 of the Court’s jurisdiction. That appears to be because s 63 of the Civil Procedure Act 2005 (NSW), to similar effect, applies. [29] Section 63 was not relied on in this case, perhaps because it only catches failures to comply with the Civil Procedure Act itself and rules of court. It would not cover a contravention of s 37(3).

8. [46]

   So far as the exclusion applies with respect to class 1, 2 and 3 proceedings, s 38 nevertheless operates:

9. [47]

   Section 38 does not assist the respondent in this matter. It identifies proceedings before “the Court”, and addresses the manner of exercise of the Court’s powers. In the present matter, the Court was constituted by the judge alone. Thus, s 37(1) envisaged that “the Court may, in hearing the proceedings, … be assisted by one or more Commissioners”; subs (3) refers to a Commissioner “assisting the Court”, and subs (4) envisages the judge proceeding without the assistance of Commissioners. This was not a case in which a Commissioner was exercising the jurisdiction of the court pursuant to s 36 by direction of the Chief Judge. There is no reason to read s 38 as directed to some relaxation of provisions regarding the constitution of the Court.

10. [48]

    In the course of oral submissions, counsel for the respondent relied upon the fact that this matter might have been determined by a Commissioner pursuant to s 36 as demonstrating that, if the Commissioner played an adjudicatory role, it should not be treated as a vitiating error. [30] That point was relied upon to distinguish the statutory scheme considered in World Best, where Parliament had made clear that the jurisdiction to determine unconscionability claims in relation to retail leases was deliberately vested solely in a presiding member having substantial judicial experience or qualifications.

11. [49]

    While the point of distinction from World Best may be accepted, it provides little support for the conclusion that the constitution of the Court would not invalidate its decision because the Commissioner might have been given, but was not given, an adjudicatory role. While it is true that Commissioners may be directed to hear and dispose of class 3 proceedings, it is also true that whenever the Court is constituted by a judge and a Commissioner the Commissioner is limited to advice and assistance. [31] The latter consideration demonstrates a coherent scheme; the fact that Commissioners may sit alone is of little consequence.

12. [50]

    In World Best it was held that, were the statutory defences not made out, a decision of the tribunal not constituted in accordance with the statute would be invalid. [32] The present legislation contains a similar emphatic rejection of an adjudicatory role for the Commissioner. Where the Commissioner exceeds the legal limits of his or her powers in a material respect, the judgment is attended by legal error. Arguably, applying Stead v State Government Insurance Commission, [33] unless this Court is satisfied that the excess of jurisdiction could not have affected the outcome, the appeal must be upheld and the judgment set aside. But that case involved an appeal by way of rehearing where the error at trial involved a denial of procedural fairness, with respect to a particular issue. That is not this case.

13. [51]

    The better approach in this case is to proceed by analogy with criminal appeals, where, error being established, the appeal will be upheld, unless it can be said there has been no substantial miscarriage of justice. [34] Thus, in Wilde v The Queen [35] Brennan, Dawson and Toohey JJ stated:

14. [52]

    In civil proceedings a similar distinction is drawn between “irregularities so fundamental as to create an unconditional right … to have the judgment set aside, and non-fundamental irregularities as to which the court has a discretion.” [36] The Land and Environment Court is a superior court of record, but it is a court of limited jurisdiction. The subject-matter of the proceeding lay within the jurisdiction of the Court, but the proceedings were not, on the factual finding made above, determined in accordance with the statutory requirements for the exercise of its jurisdiction set out in Part 4 of the Land and Environment Court Act. The requirement that the Commissioner not participate in the adjudication of the matter was an essential precondition to a valid exercise of the Court’s powers. The rights of the parties have not been determined by a correct process. The judgment is therefore procedurally flawed and must be set aside.

15. [53]

    It follows that, as ground 1A is upheld, the judgment of the Land and Environment Court must be set aside. There then remains an unresolved dispute as to the compensation payable for the acquisition of the appellant’s land. That matter must be resolved by the Land and Environment Court, appropriately constituted, without reliance upon the findings made at the earlier hearing.

16. [54]

    How the matter should proceed at a rehearing is for the Land and Environment Court and the parties to determine. One aspect of the dispute at the first hearing involved a complaint by the respondent that the applicant had departed from its pleaded case. It is clear that there may be further procedural rulings required. It is also to be hoped that, in circumstances where the witnesses and particularly the experts had committed themselves to particular propositions and had been extensively cross-examined, a further hearing may be significantly shorter than the first hearing. However, that is a matter for the parties and the Court and there is no call for this Court to give directions as to how the matter should proceed at any rehearing.

Orders

1. [55]

   The Court should make the following orders:

   1. (1)

      Direct that the appellant file and serve within 7 days the amended notice of appeal, in the form contained in the orange appeal book.

   2. (2)

      Allow the appeal and set aside the judgment and orders made on 30 June 2017 in the Land and Environment Court.

   3. (3)

      Order that the respondent pay the appellant’s costs of the appeal.

   4. (4)

      Direct that the costs of the first trial be determined by the Land and Environment Court at the determination of the proceedings before it.

2. [56]

   PAYNE JA: I agree with Basten JA.

3. [57]

   WHITE JA: I agree with Basten JA.