Council of the City of Ryde v Azizi

This matter has a long and unhappy history. On 24 August 2018, the applicant, the Council of the City of Ryde (“the Council”), compulsorily acquired three contiguous parcels of land adjacent to Blenheim Park at North Ryde. The acquisition was for a public purpose, namely the provision of public open space through the expansion of Blenheim Park. The first and second respondents are the former owners of the acquired land. One lot was owned by Mr Raymond Boutros Azizi and two lots were owned by Alnox Pty Ltd (“Alnox”), a property development company owned and operated by Mr Raymond Boutros Azizi’s two sons. Mr Raymond Azizi (one of Mr Raymond Boutros Azizi’s sons) is Alnox’s sole shareholder and Mr Patrick Azizi, another son, is Alnox’s sole director.

The Valuer General prepared a valuation of the land. Section 42 of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) required that a compensation notice be given by the Council to the respondents. In the Common Law Division a “stay” of the operation of the statute, pending a public law challenge to the decision of the Valuer General, was ordered. The order made in the Common Law Division was:

Several million dollars (reflecting the minimum payments which were due to the respondents based on the evidence of the Council’s expert) was paid to the respondents. $5,000,000 was paid into the Council’s solicitors’ trust account as a condition of the “stay”. When the matter came before me in 2019 sitting in the Common Law Division to determine the public law challenge, Council of the City of Ryde v Azizi [2019] NSWSC 1605, I set aside the Valuer General’s decision on a limited basis and remitted the matter to him for determination in accordance with my reasons. Although the “stay” was dissolved I said this about it:

Upon remittal to the Valuer General, I was informed that a materially similar valuation outcome was achieved. A compensation notice based on that valuation was served by the Council on the respondents pursuant to s 42 of the Land Acquisition (Just Terms Compensation) Act.

The respondents are dissatisfied with the Valuer General’s valuation and have commenced proceedings in the Land and Environment Court seeking a greater amount of compensation. The Council is contending in those proceedings that a materially smaller amount of compensation than that fixed by the Valuer General should be paid. The matter is listed to be heard shortly, although all of the evidence is not yet filed.

The present case raises the following preliminary issue. Section 68 of the Land Acquisition (Just Terms Compensation) Act provides:

It is common ground that the present respondents have been given a compensation notice by the Council and that the Council was required to pay 90 per cent of the amount of compensation offered in the compensation notice (as an advance payment) to the respondents within 28 days.

In purported compliance with s 68, the Council paid $5,000,000 (forming part of the 90 per cent of the amount of compensation offered in the compensation notice) into its solicitors’ trust account. It will be submitted by the Council in this Court that this payment was a “payment” made to the respondents as required by s 68 as it provided security to the respondents. The Council submitted before the primary judge, and submitted again before me, that the scheme of the Land Acquisition (Just Terms Compensation) Act permitted the payment made to the Council’s solicitors’ trust account so as to protect the Council from the risk of the respondents becoming insolvent. As the acquisition of the respondents’ property in 2018 was on the basis of proven hardship, it was submitted that the risk of insolvency was self-evident, despite the fact that some millions of dollars have since been paid to the respondents as advance payments (see [3] above). The terms upon which the Council’s solicitors are keeping the $5,000,000 amount were set out in an affidavit of Dennis Andy Loether sworn 28 May 2021 which was read before me:

The Council submitted that if the respondents sought payment of the $5,000,000 amount to actually be made to them they were obliged to seek mandamus in this Court, as the Land and Environment Court did not have the power to make the order made by Moore J.

The respondents submitted to the primary judge that s 68 of the Land Acquisition (Just Terms Compensation) Act required payment of 90 per cent of the amount of compensation offered in the compensation notice (as an advance payment) to the respondents within 28 days. Section 68 did not permit that payment to be made to the Council’s solicitors’ trust account, particularly on the terms on Mr Loether’s affidavit. If the Council genuinely feared insolvency, their choice was to seek an injunction in the nature of a freezing order: Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148; [1986] HCA 58. [1] Whatever the precise form of injunction sought by the Council, if one had been sought, each of the matters usually addressed in making such an order, including the balance of convenience, as well as an undertaking as to damages, would necessarily have been addressed.

I have considerable sympathy for the respondents, whose land was acquired in August 2018 (almost three years ago) and who, through no fault of their own, have yet to be paid compensation beyond the minimum amount calculated by the Council’s expert, which is far below 90% of the Valuer General’s valuation the subject of s 68. Nevertheless, I accept that the critical remarks I addressed in the 2019 judgment to the “stay” granted earlier in those proceedings involved non-compliance by the Council with s 42 of the Land Acquisition (Just Terms Compensation) Act, and not s 68. The applicant should be given an opportunity to persuade this Court that there is a relevant difference between those provisions and that the course it has adopted is permitted by s 68 and the scheme of the Land Acquisition (Just Terms Compensation) Act. This conclusion is underlined by the fact that in the 2019 decision I was sitting in the Common Law Division and was in no position to overrule the case which had commenced the relevant “stay” jurisprudence: Blacktown City Council v Concato [2018] NSWSC 1039. To achieve certainty in this area it is desirable that the Court of Appeal be given the opportunity to consider the issue. It would be wrong in those circumstances for me to in effect decide the question by refusing a stay. The matter should, however, be determined quickly and is fixed for a concurrent hearing on 29 July 2021. The parties will need to address the question of leave and should not assume that a grant of leave is a foregone conclusion. For these reasons, at the conclusion of the hearing on 31 May 2021 I made the following orders:

The case has been fixed for an urgent hearing. I encourage the parties to exercise the liberty to apply if further case management orders need to be made.