Bromley & Ors v Forestry Commission of New South Wales

[2005] HCATrans 40

[2005] HCATrans 040

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S535 of 2003

B e t w e e n -

JAMES EDWARD BROMLEY

First Applicant

CHRISTINE MARY POLLITT

Second Applicant

PATRICIA RUTH BROMLEY

Third Applicant

and

FORESTRY COMMISSION OF NEW SOUTH WALES

Respondent

Application for special leave to appeal

GLEESON CJ
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 11 FEBRUARY 2005, AT 11.13 AM

Copyright in the High Court of Australia

__________________

MR A.S. MARTIN, SC:  If the Court pleases, I appear for the applicants.  (instructed by Deacons)

MR G.C. LINDSAY, SC:   May it please the Court, I appear for the respondent.  (instructed by Crown Solicitor (New South Wales))

GLEESON CJ:   You have an application in relation to parties, I think.

MR MARTIN:   Yes, I do, your Honour.

GLEESON CJ:   Is that opposed, Mr Lindsay?

MR LINDSAY:   It is not.

GLEESON CJ:   We make the order you seek, Mr Martin.

MR MARTIN:   If the Court pleases.  Your Honours, this is case where it is submitted the course of justice has gone awry to an extent meriting the attention of this Court.  I need to take a few moments to get to the heart of the matter, but at the end of the day, we say that the applicants had a very simple case, which was not adequately dealt with in either court below.

The relevant provision of the Crown lease in question is special condition (n), your Honours, and that can be find conveniently contained at President Mason’s judgment at page 21 of the application book, paragraph 4 of the judgment.  The critical terms, as your Honours will note ‑ ‑ ‑

GLEESON CJ:   By the way, may I interrupt you to say, I see that Justice Heydon sat on an earlier aspect of this matter.  I presume that neither party suggests there is any reason why he should not sit on this.

MR MARTIN:   Not for my part, your Honour.

GLEESON CJ:   Yes.

MR MARTIN:   The critical terms, your Honours will see, of the relevant clause is that:

The lessee shall be allowed compensation . . . to cover any damage done to his interests in the holding by licensed timber operations.

What happened, your Honours, is that timber from approximately three‑quarters of the leasehold itself was logged by licensed timber operators.  That involved the felling of between 39,500 to 46,700 trees on the leasehold.  The trees were felled by the cutting at about 3 feet above ground level of the trunk, the removal of the head of the tree, which was the branches above the first limb of the tree, and the removal of all of the branches of that tree to create the log.  The branches and the head of the tree were then left on the ground and the stump itself remained in situ.  To say the least, after the harvesting on the leasehold there was a scene of devastation as to the positioning of all of the debris and refuse that was on the particular leasehold itself.

The only expert evidence called in the case as to the effect this debris and residue had upon the value of the applicants’ interest on the leasehold was that of the registered valuer, Mr Irwin.  The relevant part of Mr Irwin’s evidence can be found in the judgment of President Mason at the bottom of page 26 of the application book going to the top of page 27, and it is the first sentence, where we submit that the reference to the existence of the residue making “the lease less attractive than a comparable lease” is the cause for concern.  We say this was an opinion being expressed by a registered qualified expert that the existence of the residue made the lease less attractive to a potential buyer than a comparable lease that did not have the residue.

Now, your Honours, this evidence of Mr Irwin was neither challenged in cross‑examination by the respondent nor was it contradicted by any other evidence called by the respondent.  Subsequently, it was found by the trial judge at page 4, paragraph 9 of the application book, and confirmed by the Court of Appeal itself at page 25, paragraph 24 of the application book, the cost of removing this debris, including the stumps, amounted to a sum of over $900,000 whilst the cost of removing the debris without stumps was somewhat less, $600,000.

GLEESON CJ:   On page 28, in paragraph 37, in the last sentence in that paragraph, there is a reference to a finding of fact by Acting Justice Macready.

MR MARTIN:   Yes, your Honour

GLEESON CJ:   How do you deal with that?

MR MARTIN:   Your Honour, we say that that does not affect the primary submission that we made before the trial judge and that was that the existence of the debris itself on the leasehold constituted damage within the meaning of special condition (n).  It was an alternative case that we ran, that if that argument was not accepted, then we said the existence of the debris inhibited the economic earning capacity of the land or affected the grazing ability of the land.  That was the alternative submission that we made, and that was found against us, and we do not wish to argue a contrary position.

The submission we make is simply this, your Honours, that the enormous amount of debris left on the ground after the harvesting of such a vast number of trees constituted damage to the applicants’ interest within the meaning of special condition (n).  This was by reason of the fact, firstly, that the debris itself brought about a physical change or alteration to the leasehold, and secondly, that that alteration, physical alteration or change, impaired the value of the applicants’ interest in the leasehold as established by the unchallenged and uncontradicted evidence of Mr Irwin, the only valuation evidence called in the case.

Now, your Honours, the trial judge failed to consider the applicants’ primary submission that the presence on the ground of the debris constituted damage within special condition (n).  The approach taken by the trial judge is that set out in page 4.

GLEESON CJ:   I just want to understand that a little better than I do - you mean the presence of the debris constituted damage even if the finding that the value of the land was enhanced by the removal of the trees stood, is that right?

MR MARTIN:   With respect, your Honour, there was not a finding that the value of the land was enhanced.  It was indicated that the grazing ability of the land was enhanced by reason of the debris being there.

GLEESON CJ:   Let me put it another way.  Was your argument that the very existence of the stumps and debris meant that there was some damage within the provision even if, as found, the timber‑felling operations enhanced the grazing capacity of the subject land?

MR MARTIN:   Yes, your Honour, and that was based on the evidence, the only valuation evidence that was called in the case, of Mr Irwin.

GLEESON CJ:   I do not have any difficulty understanding that the stumps and debris produced the result that there was, if that is all there was to it, some damage, but the finding was that is not all there was to it.  There was an enhancement of the grazing capacity of the subject land, and the reasoning appears to be, bearing that in mind, it has not been established that there was damage.

MR MARTIN:   Yes, your Honour.  Well, we say the first step, that is, what your Honour has articulated that the existence of the debris and residue and stumps on the land caused damage to the leasehold, that first step was not a finding made either by the trial judge ‑ ‑ ‑

GLEESON CJ:   I added if that is all there was to it, if that was all there was to it.

MR MARTIN:   Yes.  If that is all there was to it we submit that we fall within the meaning of “damage” in special condition (n), but ‑ ‑ ‑

GLEESON CJ:   But the trial judge said in the Court of Appeal - he agreed there was more to it than that.

MR MARTIN:   The trial judge, with respect, your Honour - and if I could take your Honours to page 4, paragraph 7 - never considered the primary submission, and that is contained at paragraph 7.  The trial judge approached it on the basis that the claim in respect of the land was that the land was no longer useful for grazing, and then he set out the reasons why it was no longer useful for grazing, either presence on the ground or the damage to the internal fences, and that analysis was then carried forward – if your Honours could go over the page - page 7, paragraph 22, at the end, the last sentence, his Honour said:

I am satisfied that the actual debris resulting from the logging operations has not inhibited the use of the property for grazing purposes.

And then his Honour moves on and considers the question of damage to fences, which we need not be concerned about, but there is nowhere in his judgment when he considers the primary submission that we made, that the presence of the debris and the stumps by itself was damage, that there was no need to consider whether in fact it had any impact upon its economic earning capacity, and that is the complaint we make.  Now, in the Court of Appeal, the judgment written by President Mason, acknowledged ‑ ‑ ‑

GLEESON CJ:   Were there pleadings in this matter?

MR MARTIN:   Yes, there were, your Honour.

GLEESON CJ:   Where do we find them?

MR MARTIN:   Not in the application book itself.

GLEESON CJ:   Well, if your argument is that the primary judge simply failed to deal with one of the bases on which your claim was put, do you not need to show us how your claim was put?

MR MARTIN:   Yes, your Honour.  It is dealt with later on in the Court of Appeal’s decision where it is said that ‑ ‑ ‑

GLEESON CJ:   What page?

MR MARTIN:   Page 25, paragraph 21.

GLEESON CJ:   Well, there is an assertion of fact about the way the case was fought below.  Is that assertion untrue?

MR MARTIN:   Your Honour, we do not accept that assertion.

GLEESON CJ:   Well, what are we supposed to do about it?  I mean, the primary judge and the Court of Appeal say the case was fought on a particular basis.  You say, no, it was not, but we cannot see the pleadings.

MR MARTIN:   Your Honours, I do not believe the pleadings would be of assistance.  I do not think the point is ‑ ‑ ‑

GLEESON CJ:   You mean the pleadings would not show that the case was fought on any different basis.

MR MARTIN:   I do not think the pleadings would show, your Honour, precisely this basis that was put as a submission before the primary judge.

GLEESON CJ:   I am really not sure where this is supposed to leave us, Mr Martin.  We have an assertion of fact by the primary judge, and an assertion of fact by the Court of Appeal, and you stand at the Bar table and contradict those assertions.  What are we supposed to do, say you are right and they are wrong?

MR MARTIN:   No, your Honour.  The evidence that was there before the primary judge is there for all intents and purposes, and it simply articulates the proposition that I am putting to your Honour that, in fact, the debris by itself impaired the value of the land because, to use the words of the valuer himself, it made it less attractive.  Our complaint is that that evidence was not properly looked at by the trial judge and, furthermore, it was not properly looked at by the Court of Appeal itself.  President Mason acknowledged at page 28, paragraph 38 of the application book, the first sentence that “it may be possible to say that some ‘damage’ was done” because:

certain activities carried out in the course of licensed timber operations will self‑evidently damage the value of the leasehold.

We submit President Mason did not properly consider the evidence of Mr Irwin, the valuer.

GLEESON CJ:   Mr Martin, the question was, did the clearing operations diminish the value of the land?  Is that right?

MR MARTIN:   The residue and debris, whether it impaired the value.  Yes, your Honour.

GLEESON CJ:   The issue in the case was what harm was done by the clearing operations?  Is that right?

MR MARTIN:   Yes.

GLEESON CJ:   The clearing operations produced two results relevant to the value of the land.  A bad result was that they produced stumps and debris.  A good result, according to the courts below, was that they cleared the land for grazing purposes.  The question would be, would it not, what was the net result?

MR MARTIN:   Yes, your Honour, but that was not the question that was asked either at first instance or the Court of Appeal, and the result of the logging operations was not a clearing of the land, your Honour, there was the residue and debris that was still there.  It was simply found that mustering would not be adversely affected simply because dogs could go in and muster the cattle, rather than horses being used to muster the cattle.  If I can take your Honours back to a complaint about the Court of Appeal, that is simply President Mason’s statement at page 28, paragraph 38 of the application book, about line 45, where his Honour said that Mr Irwin:

could not translate his aesthetic opinion (about the unattractiveness of the residue) into a monetary sum.

Then his Honour goes over at page 30, paragraph 43, at about line 26, the third sentence:

It was at its highest an aesthetic opinion expressed by a valuer moving beyond his area of expertise.

Now, it is our submission, your Honours, that Mr Irwin’s evidence did not amount to a mere expression of opinion about aesthetics of the leasehold.  His evidence was an opinion of an expert valuer stating that the lease with

the residue was less attractive to a potential buyer or purchaser than a comparable lease without such residue.

GLEESON CJ:   Can I draw your attention again to the words following the sentence that you have just read:

In light of the way that the case was fought ‑ ‑ ‑

MR MARTIN:   Yes, your Honour, I accept that, but conversely, there was no expression of opinion as to value as to by how much the leasehold interest had increased in value by reason of the mustering activities not being adversely affected by the residue or stumps that were produced.  It is our submission, your Honours, that in the absence of any cross‑examination of Mr Irwin, the only valuation evidence called, and in the absence of there being any evidence to contradict what Mr Irwin has said, then the trial judge and the Court of Appeal should have, we submit, accepted his evidence and not read it down to read it in such a way that it was merely an expression of aesthetics and should have given it proper weight, that being the expression of an expert valuer as to the effect the residue had upon the value of the leasehold, and that made it less attractive from the point of view of a potential buyer, with the consequence that the debris would have constituted damage within special condition (n).

We say, in conclusion, your Honour, that this is a very simple case where the interests of justice have not been served in either courts below.

GLEESON CJ:   We do not need to hear you, Mr Lindsay.

The decisions of Acting Justice Macready at first instance and the Court of Appeal on appeal turned largely upon their concurrent findings of fact and their appreciation of the way the case was presented and conducted.

The matter does not raise an issue suitable to a grant of special leave to appeal and we are not persuaded that the interests of justice require it.  The application is dismissed with costs.

AT 11.33 AM THE MATTER WAS CONCLUDED