Bertram Trading Co Pty Ltd v Landsburys (Aust) Pty Ltd

[1999] NSWCA 260

CITATION:	BERTRAM TRADING CO PTY LTD v LANDSBURYS (AUST) PTY LTD & ANOR [1999] NSWCA 260
FILE NUMBER(S):	CA 40141/98
HEARING DATE(S):	21 June 1999, 28 June 1999
JUDGMENT DATE:	3 August 1999
PARTIES :	Bertram Trading Co Pty Ltd - Appellant Landsburys (Aust) Pty Ltd and Robert J Rowlands - Respondents
JUDGMENT OF:	Mason P at 1; Sheller JA at 2

LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S) :	2072/95
LOWER COURT JUDICIAL OFFICER:	Herron DCJ

COUNSEL:	M L D Einfield QC/JM Hennessy - Appellant C E Adamson - Respondents
SOLICITORS:	Henry Davis York - Appellant Phillips Fox - Respsondents
CATCHWORDS:	AMENDMENTS TO DISTRICT COURT ACT - retrospective legislation - whether leave to appeal required or appeal as of right
ACTS CITED:	District Court Act 1973 Courts Legislation Further Amendment Act 1995 Courts Legislation Amendment Act 1997 Courts Legislation Further Amendment Act 1997 Interpretation Act 1987 District Court (Amendment) Act 1990 District Court (Amendment) Act 1975 District Court (Amendment) Act 1982
CASES CITED:	Colonial Sugar Refining Company Limited v Irving [1905] AC 369 Zainal bin Hashim v Government of Malaysia [1980] AC 734 Wijesuriya v Amit [1966] AC 372 Boral Windows v Industries Research and Development Board (1998) 83 FCR 215 Bropho v State of Western Australia (1990) 171 CLR 1
DECISION:	Appeal struck out; Appellant to pay Respondents' costs of the application; Application for leave to appeal dismissed with costs.

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40141/98
DC 2072/95

MASON P
SHELLER JA

BERTRAM TRADING CO PTY LIMITED v LANDSBURYS (AUST) PTY LIMITED & ANOR

The appellant appealed from a decision of Herron DCJ in the District Court arising out of proceedings commenced on 29 March 1995. The respondents applied to have the notice of appeal struck out as incompetent on the ground that the appeal lay only by leave of the Supreme Court, pursuant to s127(2)(c) of the District Court Act 1973, which the appellant had not obtained.

Section 127 was amended by the Courts Legislation Amendment Act 1997 which came into force on 1 September 1997. This section was amended further by the Courts Legislation Further Amendment Act 1997 which came into force on 2 February 1998. The respondents contended that these amendments applied to the judgment and orders of Herron DCJ and consequently the appeal could not proceed without leave.

The appellant denied that leave to appeal was required, arguing that the substantive right of appeal to this Court, which it was accepted it acquired when it began proceedings in 1995, could only be retrospectively taken away by express enactment or necessary intendment. It was submitted that no such words or intent were contained in the amendments. As a fall back, the appellant applied for leave to appeal.
Held:
By Sheller JA, Mason P agreeing:
(1) Section 183B(2) extends what would otherwise be the application of section 127, having regard to the Interpretation Act 1987, to apply retrospectively to judgments and orders given or made before the commencement of the Courts Legislation Amendment Act 1997. Sections 183B(2) and 127(2) thereby affect the right of appeal of parties such as the present appellant.
(2) Section 127(2) as amended applies to judgments and orders given or made before the commencement of the Courts Legislation Amendment Act 1997. The only way the section could sensibly apply to such judgments or orders was by removing any right of appeal from such judgments and orders where the appellant sought to vary the amount of such a judgment or order by less than $100,000. To read the section in this way gives effect to the language the legislature has used and the legislative purpose to which that language points. Accordingly, the appellant required leave to appeal.
(3) The appellant’s appeal had little chance of success, and, accordingly, leave to appeal would not be granted.
Statutes:

District Court Act 1973
District Court (Amendment) Act 1975
District Court (Amendment) Act 1982
District Court (Amendment) Act 1990
Courts Legislation Further Amendment Act 1995
Courts Legislation Amendment Act 1997
Courts Legislation Further Amendment Act 1997
Interpretation Act 1987

Cases:

Boral Windows v Industries Research and Development Board (1998) 83 FCR 215
Bropho v State of Western Australia (1990) 171 CLR 1
Colonial Sugar Refining Company Limited v Irving [1905] AC 369
Wijesuriya v Amit [1966] AC 372
Zainal bin Hashim v Government of Malaysia [1980] AC 734

ORDERS

1. The appellant’s appeal filed on 19 June 1998 struck out;
2. The appellant to pay the respondents’ costs of the application;
3. The appellant’s application for leave to appeal dismissed with costs.
******

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40141/98
DC 2072/95

MASON P
SHELLER JA

Tuesday, 3 August 1999

BERTRAM TRADING CO PTY LIMITED v LANDSBURYS (AUST) PTY LIMITED & ANOR

JUDGMENT

1    MASON P: I agree with Sheller JA.

2    SHELLER JA: On 19 June 1998 Bertram Trading Co Pty Limited (the appellant) appealed from a decision of His Honour Judge Herron in the District Court. The substantive part of the decision was contained in his Honour’s reasons for judgment of 26 February 1998. Costs were dealt with on 1 April 1998. The appellant had begun the proceedings by a statement of claim filed in the District Court on 29 March 1995. The defendants were Landsburys (Aust) Pty Limited and Robert J Rowlands who were the respondents to the appeal. His Honour found a verdict on all counts for the respondents.

3 On 3 May 1999 the respondents applied to have the notice of appeal struck out as incompetent on the ground that the appeal lay only by leave of the Supreme Court which the appellant had not obtained; s127 (2) (c) of the District Court Act 1973 (the District Court Act). “Judge” is defined to mean “a Judge of the District Court”. Section 127 as amended by the Courts Legislation Further Amendment Act 1997 (the second 1997 Amendment Act) Sch 1.5 (6), which came into force on 2 February 1998, provides:

“(1) A party who is dissatisfied with a Judge’s judgment or order in an action may appeal to the Supreme Court.
(2) The following appeals lie only by leave of the Supreme Court:
(a) an appeal from an interlocutory judgment or order,
(b) an appeal from a judgment or order as to costs only,
(c) an appeal from a final judgment or order, other than an appeal:
(i) that involves a matter at issue amounting to or of the value of $100,000 or more, or
(ii) that involves (directly or indirectly) any claim, demand or question to or respecting any property or civil right amounting to or of the value of $100,000 or more,
(d) an appeal from a judgment or order on an application for summary judgment under the rules.
(3) In any other case, an appeal lies as of right.”

4    Judge Herron’s judgment and orders were made after the section in this amended form came into force. The appellant accepted that if s127, as amended, applies to the judgment or orders of Judge Herron the appeal could not proceed without leave.

5    Relying on the well established principle stated by the Privy Council in Colonial Sugar Refining Company Limited v Irving [1905] AC 369 at 372 the appellant submitted however that the substantive right of appeal to this Court which it acquired when it began the proceedings in 1995 could only be retrospectively taken away by express enactment or by necessary intendment. In the statutory context the appellant relied upon s30 (1) of the Interpretation Act 1987 which provides that the amendment or repeal of an Act does not affect any right or privilege accrued under that Act. The Interpretation Act applies to the District Court Act unless and except in so far as the contrary intention appears in the Act; s5 (2) of the Interpretation Act.

6 The respondents did not suggest that the appellant did not have a substantive right to appeal under the District Court Act once it had begun the proceedings in 1995. Under s130 of the Act as amended by the District Court (Amendment) Act 1990 (the 1990 Amendment Act) as in force when the proceedings began, an appeal lay from a decision of a judge of the District Court when the appeal involved directly or indirectly any claim respecting any property or any civil right amounting to or of the value of $10,000 or upwards. The question was whether the 1997 legislation, in accordance with principle, could be read as depriving the appellant of this right.

7    Craies on Statute Law, 7th ed (1971) at 389 - 90, states “……… perhaps no rule of construction is more firmly established than this - that a retrospective operation is not to be given to a statute so as to impair an existing right or obligation otherwise than as regards matter of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment.” In Zainal bin Hashim v Government of Malaysia [1980] AC 734 at 741, Viscount Dilhorne, giving the judgment of the Privy Council, quoted Craies and Lord Wilberforce’s judgment in Wijesuriya v Amit [1966] AC 372 at 378 where his Lordship, in construing a retrospective ordinance, said:

“It must be shown that the enacting words clearly cover the case to which it is sought to apply them. The Court will no doubt prefer an interpretation which gives effect to the amending ordinance, rather than one which denies it any efficacy, but it will not strain the language used, nor will it re-write or adapt it to cover cases other than those to which it clearly applies.”

8    Viscount Dilhorne observed that in Wijesuriya v Amit, which concerned an attempted retroactive enactment of a fiscal law, the Privy Council was only able to escape the clear retroactive language by the fact that retroactive effect could not be reconciled with “the pre-existing fiscal machinery”. As Hill J observed in Boral Windows v Industries Research and Development Board (1998) 83 FCR 215 at 221:

“The construction contended for in Hashim was only able to be avoided if violence was done to the language of the amending legislation ……… Retrospective legislation is somewhat distasteful. Retrospective legislation which takes away accrued rights is even more so. A construction not retrospective and a construction that does not operate in respect of vested rights will always be preferred if open. But ultimately this Court must give effect to the language which Parliament has used and the legislative purpose to which that language points.”

9    In Bropho v State of Western Australia (1990) 171 CLR 1 at 17-18, which the appellant relied upon, the High Court referred to “rules of construction” which require clear and unambiguous words before a statutory provision will be construed as displaying a legislative intent to achieve a particular result. Their Honours said that examples of such “rules” are those relating to the construction of a statute which would abolish or modify fundamental common law principles or rights and continued at 18:

“The rationale of all such rules lies in an assumption that the legislature would, if it intended to achieve the particular effect, have made its intention in that regard unambiguously clear. Thus, the rationale of the presumption against the modification or abolition of fundamental rights or principles is to be found in the assumption that it is ‘in the last degree improbable that the legislature would overthrow fundamental principles, infringe rights or depart from the general system of law, without expressing its intention with irresistible clearness; and to give any such effect to general words, simply because they have that meaning in their widest, or usual, or natural sense, would be to give them a meaning in which they were not really used’ ( Potter v Minahan (1908) 7 CLR 277 at 304, and see, also Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 93).”

10    We are not here concerned with fundamental common law principles or rights but with amendments the legislature has made from time to time to a statutory scheme which provides and qualifies rights of appeal from the District Court.

11 Counsel have conveniently traced the history of such amendments since the District Court Act established “a District Court of New South Wales”. When the District Court Act came into force on 1 April 1973, ss127 and 128 provided, subject to s130, for applications for a new trial and, subject to ss129 and 130, for appeals to the Supreme Court from the decision of a Judge of the District Court. Section 130 provided that an application under s127 might be made and an appeal under s128 (1) lay:

“(a) where the application or appeal involves directly or indirectly any claim, demand or question to or respecting any property or any civil right amounting to or of the value of $1,000 or upwards - as of right; or
(b) in any case - by leave of the Supreme Court.”

12    The District Court (Amendment) Act 1975 s3 (w) which came into force on 1 April 1975 amended s130 (1) (a) by omitting the words “of $1,000 or upwards - as of right” and inserting instead:

“of -
(i) in the case of an action commenced before the commencement of s3 (w) of the District Court (Amendment) Act 1975 - $1,000 or upwards, or
(ii) in the case of an action commenced after the commencement of s3 (w) of that Act - $3,000 or upwards,
as of right.”

13    The legislature by this amendment expressly preserved the substantive right of appeal where the appeal involved a claim respecting any property or civil right amounting to or of the value of $1,000 or upwards if the action was begun before the commencement of the amendment. In short, it operated only in respect of actions begun after that date.

14    The District Court (Amendment) Act 1982 Sch 1 (3) which came into force on 1 April 1983 likewise preserved the extent of existing rights of appeal but necessarily added another tier. It inserted the following replacement in s130 (1) (a):

“(i) in the case of an action commenced before 1 April 1975 - $1,000 or upwards;
(ii) in the case of an action commenced on or after 1 April 1975 but before the commencement of Schedule 1 (3) to the District Court (Amendment) Act 1982 - $3,000 or upwards, or
(iii) in the case of an action commenced after the commencement of Schedule 1 (3) to that Act - $5,000 or upwards.”

15 The 1990 Amendment Act Sch 1 (3), which came into force on 1 March 1991, inserted the following replacement for s130 (1) (a) (ii) and (iii):

“(ii) in the case of an action commenced on or after 1 April 1975 but before 1 April 1983 - $3,000 or upwards;
(iii) in the case of an action commenced on or after 1 April 1983 and in respect of which a verdict or judgment has been given before the commencement of Sch 1 (3) to the District Court (Amendment) Act 1990 - $5,000 or upwards; or
(iv) in the case of an action commenced on or after 1 April 1983 and in respect of which a verdict or judgment has not been given before the commencement of Sch 1 (3) to the District Court (Amendment) Act 1990 - $10,000 or upwards,”

16    This amendment produced a further tier and expressly preserved the extent of existing rights of appeal in the case of actions commenced before 1 April 1975 and in the case of actions commenced on or after 1 April 1975 but before 1 April 1983. The extent of existing rights of appeal were also preserved in the case of actions commenced on or after 1 April 1983 in respect of which a verdict or judgment had been given before 1 March 1991, the commencement of Sch 1 (3) to the 1990 Amendment Act. However, in the last case where a verdict or judgment had not been given before 1 March 1991 the extent of the existing right of appeal involving a claim respecting any property or civil right amounting to or of the value of $5,000 or upwards but less than $10,000 was not preserved. In the case of all other actions, that is to say, actions commenced on or after 1 April 1983 in respect of which a verdict or judgment had not been given before 1 March 1991 the limit was increased to $10,000 or upwards. The language of the section, as amended, was clear and I have no doubt effective to achieve the intention of affecting some accrued rights of appeal from the District Court.

17    Accordingly, when the appellant began its proceedings, an appeal lay as of right where it involved directly or indirectly any claim, demand, or question in respect of any property or any civil right amounting to or of the value of $10,000 or upwards.

18    The Courts Legislation Further Amendment Act 1995 (the 1995 Amendment Act) Sch 1.3 (10), (12) and (13), which came into force on 8 March 1996, omitted ss 127, 128 and 130 and substituted new ss 127 and 128. Section 127 provided:

“(1) A party who is dissatisfied with a decision of a Judge may appeal to the Supreme Court.
(2) The following appeals lie only by leave of the Supreme Court:
(a) an appeal from an interlocutory judgment or order,
(b) an appeal from a judgment or order as to costs only,
(c) an appeal from a final judgment or order in respect of any property or any civil right, for an amount less than $10,000.
(3) In any other case, an appeal lies as of right.”

19 No words in the new s127 expressly provided that it would affect appeals in actions begun before 1 April 1983 (compare the previous s130 (1) (a) (ii) and (iii)), or in actions begun on or after 1 April 1983 and in respect of which a verdict or judgment had been given before 1 March 1991. Clearly, s127 alone did not affect the appellant’s right of appeal in proceedings begun in 1995. Despite a change of language the lower limit remained $10,000.

20 However the 1995 Amendment Act also inserted into the District Court Act s183A which was as follows:

“183A Provision Consequent on Enactment of Courts Legislation Further Amendment Act 1995
The substitution of ss127 and 128 by the Courts Legislation Further Amendment Act 1995 does not operate to require leave to appeal against a decision of the Court if, when the decision was made, an appeal lay as of right.”

This was followed by the following explanatory note:

“The proposed amendments simplify the provisions of the District Act 1973 relating to appeals against decisions of the District Court. The appeals will be to the Supreme Court. Section 48 of the Supreme Court Act 1970 assigns such an appeal to the Court of Appeal. As a result of the amendments, most appeals will lie as of right while some will require the leave of the Supreme Court. In addition a person will no longer be able to make an application to the Supreme Court for a new trial.”

21 The unexpressed assumption which led to the enactment of s183A must have been that the substitution of ss 127 and 128 by the 1995 Amendment Act might operate to require leave to appeal against a decision of the Court even though, when the decision was made, an appeal lay as of right. This could only be so if s127 had this result. But s127 expressed no such intention which could override s30 (1) of the Interpretation Act. Section 183A begged the question it presumably was designed to resolve. Thus, assuming proceedings begun before 1 April 1983 under the legislation in place before the 1995 Amendment Act came into force. The plaintiff had a right of appeal if the amount in issue was $3,000 or upwards. Assuming the decision in the proceedings appealed from was given after the 1995 Amendment Act came into force. That right of appeal was preserved by s30 (1) of the Interpretation Act unless the contrary intention appeared in the 1995 Amendment Act.

22 The amended s127 expressed no such intention. Nor does s183A. A fortiori the right of appeal would have been preserved had the decision been given before the 1995 Amendment Act came into force. Section 183A does no more than confirm that position. It is a reading down section expressed in negative language of a sort used to guard, out of more abundant caution, against an unintended consequence. The substitution of the new s127 did not operate to require leave to appeal against those decisions. It follows that the 1995 amendment must be read as only applying to appeals in actions begun after 8 March 1996, when the 1995 Amendment Act came into force. Accordingly, it did not apply to the appellant’s appeal. But this was of no consequence because the minimum amount for an appeal as of right remained at $10,000 whenever the decision appealed from was given.

23    The Courts Legislation Amendment Act 1997 (the first 1997 Amendment Act) Sch 3 (2), which came into force on 1 September 1997, omitted s127 (2) (c) and inserted a new para (c) which, relevantly, made subs (2) read:

“The following appeals lie only by leave of the Supreme Court:
……..
(c) an appeal from a final judgment or order, being a judgment or order for the payment of a sum of money, where the appeal seeks a variation of that sum and the amount by which that sum is sought to be varied is less than $100,000 or, if some other amount is prescribed by the regulations, that other amount.”

24 Schedule 3 (3) of the first 1997 Amendment Act, which came into force on 1 August 1997, inserted a new s183B headed “Provisions consequent on enactment of Courts Legislation Amendment Act 1997”, subs (2) of which provided:

“Section 127, as amended by the Courts Legislation Amendment Act 1997 , applies to judgments and orders given or made before the commencement of Schedule 3 (2) to that Act in the same way as it applies to judgments and orders given or made after that commencement.”

25 While s183A is expressed negatively so as to read down ss 127 and 128 of the District Court Act as amended by the 1995 Amendment Act, s183B (2) positively purports to extend what would otherwise be the application of s 127, having regard to s30 (1) of the Interpretation Act, to apply to judgments and orders given or made before the commencement of the first 1997 Amendment Act. This represented a new and dramatic departure. The section operated retrospectively in that it applied to judgments and orders given or made before the commencement of the legislation and thereby affected or purported to affect the right of appeal of parties such as the present appellant. While the legislative intention might have been that no longer would an appellant have the right to appeal if the judgment or order was in respect of any property or civil right of a value over $10,000 but the appeal sought a variation of the sum ordered to be paid of less than $100,000, the section went on to provide that s127 applied to such judgments or orders “in the same way” as it applied to judgments and orders given or made after the commencement of the legislation.

26 Section 127 (2) as amended in 1997 did not itself state what judgments or orders it applied to. It did not state whether it applied to judgments and orders whenever the proceedings were begun or, alternatively, only to judgments or orders in proceedings begun after the first 1997 Amendment Act came into force. Absent the contrary intention appearing in the District Court Act, s30 (1) of the Interpretation Act requires the second interpretation of s127 (2). The appellant relied upon the principle restated in Bropho at 18 that it is in the last degree improbable that the legislature would overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness. Accordingly the appellant argued that s127 (2) should be read as not applying to judgments in actions begun before the first 1997 Amendment Act came into force.

27 However, while the language of s183B (2) and strict logic invite this approach, the effect of so construing it means that s183B (2), although expressed in positive language as extending the operation of s127, fails in this object and has no effect at all beyond the sterile one of confirming the law. I think in construing the section one must assume that the legislature assumed and intended, as the form and presence of s183B (2) indicates, that s127 (2) apply to judgments and orders given or made after the commencement of the first 1997 Amendment Act regardless of when the proceedings were begun. This construction does not collide with the language of s127 (2) itself. I think that the legislature further intended that s127 (2) should also apply to judgments and orders given or made before the commencement of the first 1997 Amendment Act. The only way the section could sensibly apply to such judgments or orders was by removing any right of appeal from such judgments and orders where the appellant sought to vary the amount of such a judgment or order by less than $100,000. I am persuaded that so to read the section gives effect to the language the legislature has used and the legislative purpose to which that language points.

28 I do not think it correct to read s183B (2) as doing no more than confirming that, in the same way that s127 (2) did not apply to judgments or orders where the proceedings were begun before the first 1997 Amendment Act came into force, so it did not apply to such judgments and orders given or made before that date. Whoever drafted the amendment had before them the history of the legislation and repeated precedents such as the old s130 (1) (iv) where the intention to give retrospective operation was made plain. Even so, s183B (2) must be read as extending the application of s127 (2). This it can only do by extending its application from judgments and orders made after the commencement of the first 1997 Amendment Act, whenever the action was begun, to judgments and orders made before the commencement of the first 1997 Amendment Act.

29    The second 1997 Amendment Act Sch 1.5 (6) which came into force on 2 February 1998 inserted a new s127 (2) (c) in the form which I have already set out and which is currently in force.
30    Schedule 1.5 (7) inserted a new s183C:

“183C Provisions consequent on enactment of Courts Legislation Further Amendment Act 1997
Section 127, as amended by the Courts Legislation Further Amendment Act 1997, applies to judgments and orders given or made before the commencement of Schedule 1.5 (6) to that Act in the same way as it applies to judgments and orders given or made after the commencement.”

31 Mutatis mutandis this section in its context has no different effect than s183B (2) had. If follows, in my opinion, that the appeal should be struck out. As a fall back the appellant has applied for leave to appeal from Judge Herron’s decision.

Application for Leave to Appeal

32    The appellant brought these proceedings to recover damages from the defendants in negligence. The second defendant, Mr Rowlands, for whom the first defendant was said to be vicariously responsible as employer, made a rent determination for certain premises known as Bay No 3, Cumberland Street, Sydney which were the subject of a sub-lease and licence from the appellant to the Geological and Mining Museum Trust. The appellant itself was lessee of part of these premises from the Commissioner of Main Roads and part from the State Rail Authority.

33    Clause 1 (iii) of the sub-lease under which the determination was made provided that in the events which have happened “the current market rent shall be determined by a qualified valuer to be nominated at the request of either the Lessor or the Lessee by the President or other principal officer for the time being of the New South Wales Division of the Australian Institute of Valuers”. The valuer was to act as an expert and not as an arbitrator. The decision was to be final and binding both upon the lessor and the lessee “provided always that such valuer shall have regard to all relevant matters including the fact that the lessee is obliged to pay to the lessor the outgoings pursuant to Article 3 hereof”. Article 3 contained a list of outgoings ranging from local government rates to payments of outgoings in relation to the car park and included “all rental rates, taxes, assessments, outgoings payable by the lessor to the head lessor” pursuant to the head lease.

34    The appointment of a valuer to make such a determination had the effect that the lessee was not required to pay any increased rent until the determination was made with a provision for the payment of back rent with interest from the review date to the actual date of payment. Mr Rowlands, on his appointment, set about the task and on 28 May 1992 issued a “rental determination”. In a decision given on 19 August 1992 McLelland CJ in Eq, in proceedings brought in the Equity Division by the appellant, held that the document did not constitute a “rental determination” within the meaning of the sub-lease. Accordingly, the appellant alleged in these proceedings that Mr Rowlands failed to determine the current market value on a proper basis. The Chief Judge refused to make a declaration based on the proposition that Mr Rowlands was no longer eligible to make a determination. His Honour said:

“The plaintiff must go to the extent of satisfying the Court that, as a matter of law, Mr Rowlands is disqualified from now doing what he unsuccessfully attempted to do in his earlier determination.
I am not persuaded that he is so disqualified. In my view, the nature of the error which he has been held to have made in that earlier determination is not such as to lead to the conclusion that he is unlikely to fairly and properly approach any reconsideration of the matter based on the principles established by the decision in this litigation. It seems to me in those circumstances that there is nothing, as a matter of law, to prevent the task, which at present remains unperformed, being performed by Mr Rowlands. It may be, of course, that he is no longer willing to perform it, in which case it will be necessary for the relevant person designated by the sub-lease to appoint some other valuer but there is no evidence one way or the other as to whether that would be necessary.”

35    Mr Rowlands was not a party to the proceedings in the Equity Division . The appellant began them without informing him. In his reasons for judgment McLelland CJ in Eq said:

“The valuer is required to determine the market rental for the current market rent having regard to the obligation of the lessee to pay to the lessor the outgoings pursuant to Art 3. This does not mean that the market rental value so determined should include the amount of those outgoings. It means that the market rental must be determined on the basis that the lessee is under a separate obligation to pay those outgoings, ‘separate’ in the sense of independently of its obligation to pay the rental. In other words, the market rental must be determined on the basis that it does not include the amount of the Art 3 outgoings.”

36    McLelland CJ in Eq expressed the view that one permissible way for the valuer to proceed might be to calculate the base rental and then deduct the known or estimated outgoings for the relevant period in order to arrive at the market rental. Judge Herron thought that it was obvious what Mr Rowlands had in mind although he was bound to hold that Mr Rowlands had misconceived the provisions of the lease with regard to the market rental for the current rent. Mr Rowlands said:

“While I concede that the lease in a technical legal sense required me to provide a net figure, it was my judgment at the time that as a valuer and not a solicitor that the most commercially sensible way to address the problem that I was being called upon to determine, a net rent in the absence of important information as to outgoings, was to provide a gross rent which could be adjusted by the parties. At all times I envisaged that the parties would, once actual outgoings were known, make appropriate adjustments.”

37    There was no doubt that Mr Rowlands in fixing the current market value of the premises did not have regard to the amount of the outgoings as provided for by Art 3. The simple reason for this was, as Judge Herron found it, that at that stage he was unable either to determine what those outgoings were, or even to make an estimate of them, and was unable to obtain information to enable him to do so. A matter that Judge Herron regarded as important was Mr Rowlands’ evidence, which his Honour accepted, that he recollected having spoken to representatives of the appellant and the lessee before he gave his determination of 28 May 1992 and told them it was impossible for him to determine the rent in terms of the lease at that stage and that he intended to issue a determination on a gross basis “and you can work out the outgoings later on”. The reason for the difficulty was that he had been informed correctly that the head lessor was about to increase the rent substantially. This of course was a vital factor which would have had to be taken into account in so far as the outgoings were concerned. Judge Herron regarded Mr Rowlands as a most impressive and honest witness.

38    Judge Herron also found that on the receipt of Mr Rowlands’ determination the appellant, and in particular Mr Bertram who was one of the appellant’s principals, was more concerned as to the actual gross rental which Mr Rowlands had determined, namely $216,500 per annum as opposed to $362,005 which Mr Bertram, or at least the appellant, obviously put to Mr Rowlands as being the proper figure. Judge Herron was satisfied that the appellant wished to have Mr Rowlands’ determination set aside as it was dissatisfied with the total rent figure which he had determined. The appellant had determined to use non-compliance with the provision of the lease conditions as a means to achieve this and in particular to prevent Mr Rowlands from acting further in the matter. Judge Herron said: “To the extent that Mr Bertram denies that this was so I do not accept him and quite frankly in this regard unfortunately I do not think he was being frank with me.”

39    According to the statement of claim the appellant pleaded its cause of action relevantly as follows:

“5. It was an implied term and condition of the agreement [whereunder the appellant retained the defendants] that the First and Second Defendants would exercise reasonable skill and care in determining the current market rent.
6. In breach of that implied term and condition of the agreement the First and Second Defendants failed to exercise reasonable skill and care in determining the current market rent as a result of which the Plaintiff suffered loss and damage.
7. Further or in the alternative, at all material times the First and Second Defendants owed a duty of care to the Plaintiff to exercise reasonable skill and care in determining the current market rent.”

40    These claims Judge Herron rejected. For reasons he gave he did not think that the appellant had established negligence on Mr Rowlands’ part. He added that it was the appellant’s action which had prevented Mr Rowlands from completing his task. This was a reference to a letter dated 9 September 1992 from the appellant’s then solicitors to Mr Rowlands in which the solicitors, after alleging errors in the determination other than that which the Chief Judge dealt with, wrote:

“We trust in the event you persist in carrying out the valuation then such a valuation will proceed on the following basis:
(a) market conditions as at the date of review, October 1991, rather than at present values;
(b) a complete re-determination would take place including attendances on the premises;
(c) the Lessor would be given the opportunity to make submissions as to net market rent;
(d) having regard to the matters raised that you would not render a fee;
(e) the valuation would be undertaken as a matter of urgency.
Our client feels strongly that the previous valuation did not comply with proper standards of valuation and was not made with reasonable expedition.”
Two paragraphs down the solicitors wrote:
“Please be in no doubt should any subsequent valuation not be made properly and expeditiously all available legal remedies for any losses out client may suffer will be pursued.”

41    Judge Herron came to the conclusion that the appellant’s attitude expressed in the letter put the valuer in an impossible position. If he were to accede to the appellant’s demands he would inevitably be acting unfairly so far as the lessee was concerned or at least that was a distinct possibility. His ability to reach an expert opinion was very much compromised. Mr Rowlands sought legal advice and on 30 September 1992 his solicitors wrote indicating that Mr Rowlands refused to act further in the matter.

42    In this context I do not think that the appellant’s attempt to overturn Judge Herron’s findings on negligence has any real prospect of success. Mr Rowlands made clear to the appellant what he proposed to do in making his determination. That was the only thing that it was possible for him to do in the circumstances. Any finding of negligence in that situation would, in my opinion, have bordered on the perverse. The appellant did not press a claim that he was negligent in refusing to continue. On the material before us I entirely agree that the tenor of the appellant’s solicitor’s letter compromised Mr Rowlands to the point that he could not have done so.

43    Faced with this situation the appellant’s counsel submitted that the defendants were in breach of a fundamental term to provide or bring in a rental determination in conformity with the terms of the sub-lease. This the defendants failed to do. I understood the appellant’s counsel to concede that not only was such a claim not pleaded, it was not pressed at the trial. In light of the material to which I have referred, its prospects of success would have been slight. But more importantly, I see no reason why, particularly where the appellant needs leave to appeal, it should now be permitted to run the point.

44    In my opinion the application for leave to appeal should be dismissed with costs.

Orders

1. The appellant’s appeal filed on 19 June 1998 struck out;
2. The appellant to pay the respondents’ costs of the application;
3. The appellant’s application for leave to appeal dismissed with costs.
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