Chief Executive Department Main Roads v Sorrento Medical Services Pty Ltd

[2007] HCATrans 474

[2007] HCATrans 474

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B18 of 2007

B e t w e e n -

CHIEF EXECUTIVE DEPARTMENT OF MAIN ROADS

Applicant

and

SORRENTO MEDICAL SERVICES PTY LTD

Respondent

Application for special leave to appeal

KIRBY J
HAYNE J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

FROM CANBERRA BY VIDEO LINK TO BRISBANE

ON FRIDAY, 31 AUGUST 2007, AT 11.07 AM

Copyright in the High Court of Australia

MR W. SOFRONOFF, QC, Solicitor‑General for the State of Queensland:   May it please the Court, I appear with my learned friend, MR D.A. QUAYLE, for the applicant.  (instructed by Crown Solicitor for the State of Queensland)

MR J.A. GRIFFIN, QC:   May I please the Court, I appear with my learned friend, MR C.J. CARRIGAN for the respondent.  (instructed by Short Punch & Greatorix)

KIRBY J:   Yes, Mr Solicitor.

MR SOFRONOFF:   Your Honours, the question in this case is whether a contractual licence to enter land, in this case to park cars, constitutes an interest in land within the meaning of the Acquisition of Land Act (Qld). If your Honours were to go to the application book, page 43, paragraphs [39] and [40] set out the relevant statutory definitions. The Acquisition of Land Act itself defined land to mean “land, or any estate or interest in land” and that required recourse to section 36 of the Acts Interpretation Act which defined “interest, in relation to land” in the way that your Honours can see in the two subparagraphs. 

A similar provision to that which appears in our section 36 appears as part of the acquisition of land statutes of New South Wales, the Commonwealth, Victoria, South Australia, Northern Territory and the ACT.  The ACT joins us in having a definition like that in its Acts Interpretation Act.  We have looked for the statutory origin of the phrases that you can see in section 36 of the Acts Interpretation Act and this morning we found it.  It is in section 1 of the United Kingdom Law of Property Act 1925 which, as your Honours would be aware, was a seminal statute which changed the law of real property in England.  I apologise that your Honours do not have it.  May I tell your Honours what is in it.  Section 1(1) provides:

The only estates in land which are capable of subsisting or of being conveyed or created at law are –

(a) An estate in fee simple absolute in possession

(b) A term of years absolute.

Subsection (2), which is directly relevant, provides:

The only interests or charges in or over land which are capable of subsisting or of being conveyed or created at law are –

(a) An easement right or privilege in or over land for an interest equivalent to an estate in fee simple absolute in possession or a term of years absolute –

The subsection goes on to list rentcharges, charges, land taxes, tithes, “rights of entry exercisable over or in respect of a legal term”, that is, a right of entry under a lease, for example, or a rentcharge. 

KIRBY J:   I think you are leading us into some fallacy here.  The 1925 Act, as you have acknowledged, was a general Act on the law of property.  We are talking about a statute which is a special statute designed to ensure that people who have interests in land get compensation from government if government takes that interest away.  So why should one apply to a statute with that purpose a provision that might have had some historical origin in a statute of another country long ago which had a completely different purpose, a general law on the law of property?

CRENNAN J:   I thought you were explaining the provenance of section 36.

MR SOFRONOFF:   I am, your Honour.  The expression “right, power or privilege over land” also finds voice in section 9, I think it is, of our Property Law Act in another connection.  So it is an expression that is used in a variety of places and, as I have said, is used in the ACT Acts Interpretation Act to define interest in land generally.  As your Honour Justice Kirby puts to me, we are dealing with the Acquisition of Land Act, but the Acts Interpretation Act applies generally to statutes in Queensland which refer to an interest in land including, for example, the provision of our Property Law Act which requires contracts for the sale or disposition of interests in land.

KIRBY J:   Yes, but the Acts Interpretation Act is a general Act to help them facilitate interpretation, it is not one to impede the process.  The duty is to interpret the words as they appear in a statute whose overall purpose is to give compensation to people who have their interests taken away by government.  Is that not the overall purpose?

MR SOFRONOFF:   That is, your Honour.

KIRBY J:   These respondents had an interest of a general kind – leave aside whether it fits into the statute – and they are losing that by reason of the acquisition.  So it does not do any offence to the purpose of the Act for the respondents to recover compensation in that circumstance.

MR SOFRONOFF:   Your Honour, as a matter of policy one could easily imagine that the legislature might have determined that not only are real property interests which are defeated by an acquisition to be compensated, but any rights, to put it loosely, appurtenant – I mean that colloquially – connected with the land also be compensated.  The question for the Court is whether the legislature gave effect to some such purpose as our opponents would advocate or whether this is a statute which deals with real property interests and only real property interests.

The reason we submit that it only deals with real property interests is twofold.  The first is that informed by the statutory origin of the language that is sought to be used to interpret the Acquisition of Land Act one is directed to concepts of real property, not to personalty.  The second is the text of the statute itself.  Could I take your Honours to that and, in particular, to section 12. 

KIRBY J:   This is tab 2 of your compilation?

MR SOFRONOFF:   Yes it is, your Honour.

KIRBY J:   Yes, we have that.

MR SOFRONOFF:   If you go to section 12, and bearing in mind that what is said against us is that a contractual permission to park cars on land is land, the question is whether the provisions of section 12 which speak of land being taken and the land vesting in the Crown or the instructing authority is apposite to a contractual right to enter land which is not itself a piece of real property.

HAYNE J:   The vesting is done by 12(5), is it?

MR SOFRONOFF:   It is done by section 12(1)(a) and then there are other instances, depending upon the kind of acquisition, in the succeeding subsections, but I did want to take your Honours to 12(5).

HAYNE J:   And 12(5) frees the land from, among other things, contracts?

MR SOFRONOFF:   Quite, as distinct from, in the same line, “estates, or interest” and distinguishes that from which it frees the land from, a little below, “the estate and interest of every person entitled to the whole or any part of the land”.  May I make two submissions about this provision.  The first is as Justice Holmes, who was in the minority, observed, there is a distinction between that which is extinguished from which the land is freed and discharged, which includes contracts, and that which is taken and vested in the Crown or the constructing authority, namely, the estate and interest of every person entitled.

Secondly, when one speaks about a contractual right to enter land which is affected by an acquisition of the land to which it relates, one would not ordinarily in legal parlance speak of that contractual interest vesting in the Crown, one would speak of it as being frustrated.  The party who owned the land can no longer honour the obligation and either there is a breach of contract or the contract has been frustrated, but in no sense could it be said that that interest has been taken by the Crown or that it has vested in the Crown.  The language is just inapposite to mere contractual rights that are not rights of real property.

Megarry and Wade, in referring to the expression in subsection (2)(a) of the Law of Property Act that I read to your Honours, the original author and the current editor both describe it as a list in traditional terms of rights of real property taken from traditional notions of real property.  Your Honours, we might be wrong about this and if your Honours were to grant leave to appeal, our submissions would be rejected.  But if one looks through cases like Hornsby in which Justice Meagher spoke some dicta that would assist us, and this particular case ‑ ‑ ‑

KIRBY J:   Hornsby is a case about the acquisition of a reserve, though, was it not?

MR SOFRONOFF:   That is right, your Honour.  I am speaking about the dicta where his Honour said to the effect ‑ ‑ ‑

KIRBY J:   Quite a different case, though.  I think you suggest somewhere that there was a refusal to follow Hornsby, but the Court was dealing with quite a different issue in New South Wales.

MR SOFRONOFF:   That is right, your Honour.  The submission I wish to make is this.  If one looks through the cases, whether for or against us, and they fall on both sides of the line, one finds no reasoning which, at a fundamental level, justifies textually or by reference to concepts of real property law, the result.  If one looks at Justice Chesterman’s reasons he concluded, as did the President, that the natural meaning of the words, that is, the plain English meaning of the words, is apt to cover a right to enter land and it therefore applies, their Honours seeing no reason why it ought not apply.

KIRBY J:   Yes, but you are digging into real property law.  I come back to the point I raised with you at the beginning.  The question is, what is the interpretation of the word “interest” in a statute whose purpose is to provide for compensation in the event that, for public purposes, government acquires land which includes that interest?  It is a little bit like the case of Chang that came down yesterday, Chang v Laidley Shire Council.  If Parliament is going to suggest a different nuance of meaning, why should that not be done clearly so that you have introduced the real property concepts in a very clear way and deprive people of what otherwise is compensation for taking away something which to them is a valuable thing, “interest”?

MR SOFRONOFF:   Your Honour, I could not define the special leave question better than as your Honour put to me.  The question has puzzled courts and I cited Hornsby as an example which fell our way but, if one looks at the reasoning beyond the reductio ad absurdum argument, one cannot find the fundamental substance, the legal substance, why the court went that way.  If one looks at this particular case, neither does one find the legal substance as to why the court found the opposite way.

HAYNE J:   In that regard, do you contend that the Acts Interpretation Act definition of “interest” is engaged or not engaged?

MR SOFRONOFF:   Your Honour, our primary submission would be that it is not engaged because the reference to land or estate or any interest in land is perfectly understandable without the necessity to go outside and this being a land acquisition Act, one can understand why that expression has been used.  But if I am wrong about that, one goes to the Acts Interpretation Act, then it is a real question as to whether the expression “right, power or privilege” includes a personal right, exercisable as a matter of contract, or whether “right” is intended to contemplate an easement, which is a right over land, whether a privilege ‑ ‑ ‑

HAYNE J:   I had more in mind, Mr Solicitor, a right in relation to land.

MR SOFRONOFF:   An easement is a right in relation to land ‑ ‑ ‑

HAYNE J:   I understand that, but so too is a contractual licence, is it not?

MR SOFRONOFF:   Arguably, your Honour.  Consequently, in our submission, this being a provision which finds itself in statutes across the country and the reasoning which supports one view or another; and now we have, it could be said, in later cases two conflicting decisions, a majority in Hornsby and a majority in this particular case in Queensland, it is right for the attention of the High Court, in our respectful submission.

KIRBY J:   You say the issue you want to bring up is a matter of general legal significance that applies not only in Queensland but in other States of the Commonwealth?

MR SOFRONOFF:   It is, your Honour, and it is a very expensive matter in the sense that for those bodies across the country which pay for acquisitions, it is of great ‑ ‑ ‑

HAYNE J:   That is right.  I looked and then I looked again and then I looked for a third time at the offer to pay the costs of this litigation, but far from such an offer, your submissions in reply say that this is commercial litigation and the costs should fall where they fall.  I am referring to page 76 of the application book.

MR SOFRONOFF:   Your Honour, this morning I sought and obtained instructions and communicated to our learned friends that, if leave were granted, my client would pay the costs of the appeal in any event and leave undisturbed the costs order made in the Court of Appeal in favour of the current respondent.  So costs, contrary to our written submissions, are not an issue, this being an important matter from the point of view of the State in Queensland and we would ‑ ‑ ‑

HAYNE J:   It is a matter which turns, does it not, immediately upon the construction of the acquisition Act and, if the result arrived at by the Court of Appeal of Queensland is not to State government liking, presumably legislation can be enacted, can it not?

MR SOFRONOFF:   Yes, your Honour.  The ACT of course is one of longstanding.  It has analogues in other States.  If the lawyers, as the Court of Appeal has said it is, one would hesitate to destabilise whatever uniformity there is between the States by enacting something different.

KIRBY J:   The respondent points out that the Act is frequently amended.

MR SOFRONOFF:   Not in this respect, your Honour.  As I have said, that phrase having some kind of historical origin, we would apprehend, that which we have discovered but having some kind of currency, has been employed in similar respects in other States.

KIRBY J:   You have the dissenting opinion of Justice Holmes, you have some dicta of Justice Meagher in the Court of Appeal of New South Wales and you offer the costs and you suggest that this is a matter of general principle and with some difference in the courts of the different States.  I think we understand how you put the case.  We are going to call on the respondent.

MR SOFRONOFF:   Thank you, your Honour.

KIRBY J:   Yes, Mr Griffin.

MR GRIFFIN:   Your Honours, the starting point is the context of the words whose interpretation is in question and that has been referred to and that brings into play the statement by Justice Gaudron in the Marshall Case, which appears at page 45 in the application book, and similar statements by Justice Heydon.  By reason of that line of authority it is not correct to say, as our learned friends do, at least in their outline, that this decision is inconsistent with decisions of this Court, that is, the High Court, because the cases in the High Court that deal with the meaning of words of this kind are all in other contexts, such as mining legislation.  Bearing in mind what was said by Justice Gaudron in Marshall, one goes to the Acts Interpretation Act provision and we see that:

interest, in relation to land or other property” means –

(a)a legal or equitable estate in the land or other property; or

(b)a right, power or privilege over, or in relation to, the land or other property.

It is immediately evident that paragraph (b) is in much the same terms as paragraph (b) in the definition of “interest” in the New South Wales Act and some of the other Acts.  But whatever the history of the use of words like those might be, the simple fact is that a right to use land for car parking falls within the natural meaning of the words and such a right is plainly a right in relation to land.  Justice Chesterman said that it could also be classified as a power or privilege in relation to land.

KIRBY J:   It is not like you to be difficult, Mr Griffin.  You have an offer of your costs, you have a dissenting opinion in the Court of Appeal and you have a suggestion of conflict between at least dicta.  I think you make a good point that it was not a conflict with the holding of Hornsby Shire Council.  So, if there is a risk of this diversity of opinion in the intermediate courts, why is this not a proper matter for us to bring up?

MR GRIFFIN:   Your Honour, it is also not a proper matter because it really does only entail the idiosyncrasies of the Queensland legislation because the primary question is whether section 36(5) applies and that is a consideration unique to the Queensland legislation because, as your Honours have seen, where paragraph (b) appears in the legislation of other States, it appears in the compulsory acquisition legislation itself.  It is only in Queensland that one has to address the question whether the statutory context excludes the operation of that provision and within part of the Act in New South Wales the extended provision plainly applies.

Justice Holmes, who dissented in the Court of Appeal, considered that paragraph (b) in section 36 of the Acts Interpretation Act did not apply; it was not engaged and that was because the statutory context did not permit it.  By section 32A of the Acts Interpretation Act the definitions in the Act do not apply if the context otherwise requires and Justice Holmes said that that was the position in this case. She relied, in particular, on words in the Queensland provision that do not apply in the other States. That is apparent if your Honours look at the top of page 40 where her Honour referred in particular to the words “entitled to the whole or any part of the land” which appear in section 12(5). She said:

The words “entitled to the whole or any part of the land”, so far as I am able to discover, do not appear in the equivalent pieces of legislation in other states.  They cannot be ignored, and they suggest an interest at a proprietary level in the land, not merely an interest which has some connection with the land.

The difference between the majority and the minority in the Queensland Court of Appeal, therefore, is as to whether or not section 36(5) is engaged, a question which simply does not arise in the other States.  There is also another important provision in the Queensland legislation which does not appear in the other States at section 18(3) of the Act which is conveniently set out in the judgment of President McMurdo at page 36 of the application book.  It refers to claims made by licensees.  The point is that, unless the legislation is to be taken to extend beyond proprietary rights, there seems to be no point whatever in that reference to licensees.  That is a point that is made by both President McMurdo and by Justice Chesterman.

KIRBY J:   I notice that the Court of Appeal of New South Wales in the later case of Tanner, as quoted by Justice Chesterman at [69], cast some doubt on the breadth of the dicta of Justice Meagher.

MR GRIFFIN:   Yes, that is right.

KIRBY J:   That is the reason why Justice Chesterman says that they are often quoted but not with universal acclaim.

MR GRIFFIN:   Yes.  That is the final point and that is that this contention that there is conflict between the decisions of intermediate courts is really elusory when one reads those cases.

KIRBY J:   The point that the Court of Appeal made in Tanner was, of course his Honour’s words ought not to be treated as substitute for restatement of the words of the legislation and they need to be read in their context, which takes us back to the point of reading these words in the context of a statute whose purpose is to provide compensation for compulsory acquisitions of interests.

MR GRIFFIN:   Yes, and there is now a large body of jurisprudence in New South Wales which confirms that paragraph (b) covers rights that are not proprietary rights.  There are the two cases in the Court of

Appeal; Sydney Harbour Foreshore Authority v Walker and one that your Honour has mentioned, Minister for Education and Training v Tanner and then there is a series of cases at first instance that have been referred to in the outlines and in the judgments below.  None of those cases dispute the correctness of the Hornsby case itself.  As your Honours will recall, the Hornsby case was one in which the council had control over a public reserve and the public reserve was acquired and the council sought compensation.

It is significant that the other judgment in Hornsby was that of President Mason and whilst he said at the outset of his judgment that he agreed with the judgment of Justice Meagher, his own analysis was that the council’s function was more correctly described as a responsibility rather than a right and that, accordingly, paragraph (b) was not engaged.  All of these cases in New South Wales have really treated Hornsby as confined to its own facts.  As I said, none of them did not dispute its authority in relation to the facts of that case.

KIRBY J:   You have made all those points in your written submissions.  I think we understand that.

MR GRIFFIN:   Yes, thank you, your Honour.

KIRBY J:   Is there anything else that is new?

MR GRIFFIN:   There is nothing else.

KIRBY J:   You have covered all the bases, as they say?

MR GRIFFIN:   Yes, your Honour.

KIRBY J:   Very well.  We will go back to the pleasure of hearing the Solicitor.

MR SOFRONOFF:   I only want to say one further thing, your Honours.  The New South Wales statute speaks of an owner of an interest in land in section 37 and the Northern Territory statute speaks of owner in relation to land means the owner of an estate or interest in the land and the Commonwealth statute speaks about identifying the person entitled to compensation, a person from whom an interest in land is acquired.  So in respect of two States – three States if we include Queensland – the expression “owner” is used in connection with the phrase “interest in land”, which is inapposite with ‑ ‑ ‑

KIRBY J:   If we were to refuse special leave, the state of the law of Australia would be that the decision of the majority of the Court of Appeal of Queensland would effectively state the law.  Hornsby is distinguishable because it is about a reserve, it is not apt for the use of the word “right” and therefore the law would not be unclear, would it?  It would be stated by the Court of Appeal of Queensland.  All you have against it is the dicta of Justice Meagher which the Court of Appeal of New South Wales itself has said need to be reconsidered in the future and need to be reread because of the context.  That is just basic.

MR SOFRONOFF:   Yes.  Your Honour, we would say two things.  We would respectfully submit that the 2:1 decision is wrong and when one looks for the reasons that support the outcome which is going to be authoritative, as your Honour points out, one cannot find very clearly the reasons.  For example, your Honour, if one goes to the President’s reasons at page 38 ‑ ‑ ‑

HAYNE J:   Before you come to page 38, Mr Solicitor, page 36, how do you fit section 18, with its specific reference to “licensee” into the construction which you urge?  Is not 18 demonstrative of error in the construction you urge?

MR SOFRONOFF:   Excuse me, your Honour.  Justice Holmes dealt with that.  I just need to find the passage.  If your Honours go to page 39, paragraph [21], one can have a licence coupled with an interest which would be a species of real property.  It is common ground that this is not a piece of real property and, therefore, what we are contemplating here are rights of compensation awarded to persons who claim eligibility because they have a mere contractual right; a theatre renter, a cricket ground renter.  But the difficulty one faces when one regards this as authority Australia wide is, if one goes to paragraph [14] of the President’s reasons, the first two sentences at page 37:

Despite the attractions of the contrary argument, ultimately I prefer the construction . . . put forward by the appellant.

She gives the words their ordinary meaning, but why is it that real property alone is not contemplated by those words when there are arguments which we would wish to advance as to why that is so.  By that we mean, arguments supported by the text and arguments supported by the history of the provision.  So the decision, we respectfully submit, is wrong and it is unsatisfactory because, when one seeks to discern the basis for it, one cannot find it.  Those are our submissions, your Honour.

KIRBY J:   The basis is said to lie in the natural meaning of the words.  Anyway, I think we understand the submission.  We will not need to go back over it.

MR SOFRONOFF:   Yes.  We would submit there is a legal meaning to the words as well.

KIRBY J:   Yes, thank you.

MR SOFRONOFF:   Thank you, your Honour.

KIRBY J:   What I am going to say now is the view of the majority of the Court, comprised of Justice Hayne and myself.  We would refuse special leave and the reasons of the Court are as follows.

The issue in this application is whether the majority of the Court of Appeal of Queensland erred in law in holding that the words “interest of every person entitled to the whole or any part of the land” appearing in section 12(5) of the Acquisition of Land Act 1967 (Qld) extended to an interest by way of contractual licence to park cars on the acquired land. Although there are arguments both ways, as indicated in the dissenting reasons in the Court of Appeal of Justice Holmes, the Court is not ultimately convinced that the case is one for the grant of leave.

The interest in question literally engages the subsection.  The engagement of that provision is reinforced when regard is had to section 18 of the Act with its reference to compensation of a licensee.  The purpose of the Act is beneficial and protective.  The Act has been amended many times and could be re‑expressed if interests of the type in question were to be excluded by the Queensland Parliament from entitlements to compensation.  There is no doubt that the respondent has suffered a quantifiable loss.  Nor are we persuaded that there is a relevant conflict of authority between State courts.  The decision of the New South Wales Court of Appeal in Hornsby Council v Roads and Traffic Authority of New South Wales (1997) 41 NSWLR 151 is distinguishable.

It follows that the Court does not consider that an appeal would enjoy reasonable prospects of success.  Special leave is therefore refused with costs.

AT 11.41 AM THE MATTER WAS CONCLUDED