Australian National Car Parks v State Rail Authority

[2004] NSWSC 96

CITATION:	Australian National Car Parks v State Rail Authority [2004] NSWSC 96
HEARING DATE(S):	11 February 2004
JUDGMENT DATE:	26 February 2004
JURISDICTION:	Common Law Division
JUDGMENT OF:	Master Malpass
DECISION:	That part of the decision which rejects the defence of illegality is set aside. The matter is remitted to the Local Court for determination according to law. The defendant is to pay the costs of the Summons. The Exhibits may be returned. If so entitled, the defendant is to have a certificate under the Suitors' Fund Act 1951.
CATCHWORDS:	Lease for car parking purposes - proposed user as public car park - existing user rights - illegality.
LEGISLATION CITED:	Suitors' Fund Act 1951. Trade Practices Act 1974, s 52.(C'wealth)
CASES CITED:	Best v Glenville (1960) 3 All ER 478. Fitzgerald v F J Leonhardt Pty Ltd (1997) 189 CLR 215. Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410.
PARTIES :	Australian National Car Parks Pty Limited (Plaintiff) v State Rail Authority of New South Wales (Defendant)
FILE NUMBER(S):	SC 12145 of 2003
COUNSEL:	V Culkoff (Plaintiff) A V Gruzman (Defendant)
SOLICITORS:	Steven Klinger (Plaintiff) Emil Ford & Co (Defendant)

LOWER COURTJURISDICTION:	Local Court
LOWER COURT FILE NUMBER(S):	8570 of 2002 Local Court (Civil Claims) Sydney
LOWER COURT JUDICIAL OFFICER :	B.A.Lulham LCM

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Master Malpass

Thursday 26 February 2004

12145 of 2003 Australian National Car Parks Pty Limited v State Rail Authority of New South Wales

JUDGMENT

1 MASTER: The plaintiff is a national operator of public car parks. The defendant is the owner of Lots 1, 3 and 5 Cumberland Street, The Rocks (the premises).

2 The defendant sought tenders from various car park operators including the plaintiff, to lease the premises. At all material times, the premises were zoned as residential. Under the relevant legislative regime (save inter alia for questions of existing user rights) the use of them as a public car park was expressly prohibited.

3 After, inter alia negotiations and the making of inquiries, the parties entered into a tenancy agreement (the agreement) on 10 November 1999. Pursuant to the terms of the agreement the premises could not be used otherwise than for car parking purposes.

4 Prior to the tenancy, and for many years, the premises had been used for car parking by tenants (and not as a public car park). The object of the tenancy from the plaintiff’s point of view was to use the premises as a public car park. It was intended to look to the existing user of the premises to enable this to be done.

5 The plaintiff proceeded to occupy the premises and took steps to enable it to be operated as a public car park. It was used as a public car park until 24 December 2001. On 2 December 1999, an order was made by the Sydney City Council requiring the cessation of these activities. No application for development consent was made prior to the Council order. An appeal brought against the order was withdrawn on legal advice. The premises were vacated on or about 24 December 2001. The lease was terminated on that date.

6 It now seems to be common ground that there were no relevant existing user rights and that the premises could not be used for public car parking purposes on that basis.

7 The defendant began proceedings in the Local Court for the purposes of recovering unpaid rent and car park levy. The proceedings were defended. The Notice of Grounds of Defence contains inter alia the following:-

“1. The Tenancy Agreement allegedly entered into between the Plaintiff and the Defendant on 10 November 1999 is tainted with illegality and is accordingly void and/or unenforceable as against the Defendant.
2. The Plaintiff entered into the said Tenancy Agreement in full knowledge of its illegality.
………………………………………….”

8 The plaintiff also brought a Cross-Claim founded on s 52 of the Trade Practices Act 1974. It was alleged that misleading and deceptive representations were made.

9 A contested hearing took place before Mr Lulham LCM. At the conclusion of the evidence, but limited oral submissions took place. The parties were allowed to make written submissions. Application to make further oral submissions was rejected. On 23 July 2003, judgment was delivered. The learned Magistrate inter alia decided that the defence based on illegality must fail.

10 The plaintiff now appeals to this Court against that part of the decision. The appeal was heard on 11 February 2004. Placed before the Court were the pleadings, the agreement and the judgment.

11 The case presented by the plaintiff before the Local Court on the question of illegality threw up a number of issues. The arguments were presented in the written submissions.

12 In addressing the question, the learned Magistrate (in paragraph 68 of his judgment) set forth his understanding of the defence. It overlooked the content of paragraph 1 of the Notice of Grounds of Defence.

13 He then referred to an extract from the New South Wales Conveyancing Law & Practice (which he said he found useful and instructive) and the decision in Best v Glenville (1960) 3 All ER 478 (which he said was also most helpful).

14 He also referred to the submissions from counsel (which were described as being very helpful) and to the authorities referred to therein. He took the view that it was not necessary to discuss those authorities (although he did subsequently observe that the cases relied on by the plaintiff were distinguishable).

15 Under the heading of “Finding” in paragraph 72 of the judgment, he expressed the view that the defence based on allegations of illegality must fail.

16 The expression of reasoning process for this finding largely falls to be deduced from the contents of following paragraphs (73 – 80). In my view, those paragraphs fail to sufficiently disclose that process.

17 He rejected what had been pleaded in paragraph 2 of the Notice of Grounds of Defence. He expressed the view that this matter ignored completely the fact that the defendant reasonably believed that the premises had existing use rights which would enable it to be used as a public car park. He concluded that as a result of its own knowledge and inquiries, the plaintiff believed that it had reasonable prospect of obtaining approval from the Council based on existing use rights. Other findings were expressed in paragraphs 75 – 80. The nexus between the findings and the rejection of the defence is left unclear.

18 What is clear is that his overlooking of paragraph 1 of the Notice of Grounds of Defence and the failure to discuss or fully deal with the authorities and submissions relied on by the plaintiff saw him failing to address all of the issues agitated by the plaintiff on the question of illegality.

19 The Court has been informed (and this seems not to be in dispute) that the plaintiff had propounded arguments founded inter alia on what was said in the High Court decisions of Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410 and Fitzgerald v F J Leonhardt Pty Ltd (1997) 189 CLR 215. The learned Magistrate failed to address these arguments. They threw up questions of construction of both the agreement and statutory provisions. The determination of these questions may require further findings of fact.

20 During the hearing of the appeal, counsel for the defendant sought to advance certain further arguments concerning the potential user of the premises (founded on 48A of the relevant Local Environmental Plan).

21 There was issue between the parties as to whether they had been agitated in the court below. This appeal can be disposed of without addressing them. Accordingly, I put those arguments aside for present purposes.

22 The agreement enabled the premises to be used for car parking purposes. At least in the appeal, the plaintiff was contending that this was an agreement which enabled them to be used for public car parking services only. This contention was hotly disputed by the defendant and there was issue as to whether it had been agitated in the court below.

23 The plaintiff takes the stance that, if Best is consistent with the High Court decisions, it is distinguishable in the present case. Whether or not the learned Magistrate did rely on it, I am far from satisfied that he correctly addressed both the evidence and the relevant questions.

24 Best was a case where it was found that the parties had in contemplation that the tenant would make an application for planning permission. A finding was made that the lessor would not have let the premises if he had known that they were going to be used without permission. Accordingly it was concluded that the lessor had entered into the agreement for a perfectly proper legal purpose (p482)

25 I observe that in respect to the Cross-Claim, the learned Magistrate found that inter alia the following representation had been made:-

“…………………………………………………
2. That the defendant would be likely to receive the benefit of the existing use rights to enable the defendant to use the leased premises as a public car park.
………………………………………………….”

26 The findings made in respect of the Cross-Claim were separately made and dealt with subsequently to those made in respect of the defence of illegality. It might be thought that there was inconsistency in the findings and that inter alia findings made in respect of the former had relevance to the findings to be made in respect of the latter.

27 The plaintiff bears the onus of satisfying the court that there has been error of law which justifies the disturbing of the decision under appeal. In my view, that onus has been discharged.

28 That part of the decision which rejects the defence of illegality is set aside. The matter is remitted to the Local Court for determination according to law. The defendant is to pay the costs of the Summons. The Exhibits may be returned.

29 If so entitled, the defendant is to have a certificate under the Suitors’ Fund Act 1951.

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Last Modified: 03/09/2004