Cumerlong Holdings Pty Ltd v Dalcross Properties Pty Ltd

[2011] HCATrans 143

[2011] HCATrans 143

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S120 of 2011

B e t w e e n -

CUMERLONG HOLDINGS PTY LTD ACN 008 484 875

Appellant

and

DALCROSS PROPERTIES PTY LTD ACN 083 792 054

First Respondent

DALCROSS HOLDINGS PTY LTD ACN 083 791 931

Second Respondent

AUSTRALASIAN CONFERENCE ASSOCIATION LIMITED ACN 000 003 930

Third Respondent

GUMMOW ACJ
HAYNE J
HEYDON J
CRENNAN J
BELL J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 1 JUNE 2011, AT 12.01 PM

Copyright in the High Court of Australia

MR P.J. McEWEN, SC:   May it please your Honours, I appear with my learned juniors, MR S.B. NASH and MR N.M. EASTMAN, for the appellant.  (instructed by Allsop Glover)

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friend, MR P. KULEVSKI, for the third respondent.  (instructed by Robert Napoli & Co Solicitors)

GUMMOW ACJ:   There is a submitting appearance from the first and second respondents.  You have an application, I think, Mr Griffiths.

MR J.E. GRIFFITHS, SC:   If the Court pleases, I appear with my learned friend, MS C.C. SPRUCE, for the Minister for Planning and Infrastructure seeking leave to be heard as amicus curiae.  (instructed by the Department for Planning)

GUMMOW ACJ:   Very well.  We have your written submissions.  Well, first I should ask, is that application opposed?

MR McEWEN:   Not on our part, your Honour.

MR WALKER:   No, your Honour.

GUMMOW ACJ:   Very well.  We have your written submissions and, if need be, we may call on you for supplementation by oral submissions immediately before Mr McEwen’s reply.

MR GRIFFITHS:   If the Court pleases.

GUMMOW ACJ:   Yes, Mr McEwen.

MR McEWEN:   Your Honours, before I commence, might I make some corrections to our annotated written submissions just briefly?

GUMMOW ACJ:   That is always a good starting point.

MR McEWEN:   It gets me on my feet, your Honour.  We have corrected in paragraph 4 reference to the two lots we said the defendant owned to leave only lot 103.

HEYDON J:   What are we supposed to do with that?  That is paragraph 4.

MR McEWEN:   In paragraph 4, third line, your Honour, “over the Defendant’s lands (lots 102 and 103)”.  The 102 we have struck out.  That was an erroneous reference.  It was sourced back in Justice Smart’s original judgments.

GUMMOW ACJ:   What do we now put?

MR McEWEN:   Just 103.

HEYDON J:   We already have that.

MR McEWEN: Yes, I just wanted to – just because we have been criticised about that and we made an error and we have rectified it. If your Honours would go to paragraph 8 on page 3, the excerpt of clause 68 that we have reproduced at about line 35 omits reference to some of the other zoned residential lands which should have been included. If your Honours have handy volume 1 of the appeal books, the entire clause is reproduced at page 395 and at about point 6 of the page your Honours will see in the second line reference to the four residential zones 2(a) through to 2(d) that we have reproduced.

GUMMOW ACJ:   It should have (e) and (f), should it?

MR McEWEN:   It should (e), (f) and (g).

GUMMOW ACJ:   Or (g).

MR McEWEN:   Or (g), sorry.  Thank you, your Honour.  We have said in our chronology that, in fact, when the KPSO was first promulgated in 1971 there was no (g) or (h) and in 1991 that was changed, but it has no bearing on the matter before the Court.  Then, your Honours, on paragraph 16, page 5 of our submissions, might we have leave to insert in the second line “the suspension of covenants thereafter” should be inserted for abundant clarity.

GUMMOW ACJ:   So it reads, “the suspension of covenants thereafter was intended”?

MR McEWEN: Yes, your Honour. They are the alterations, the typographical matters I wish to attend to. Your Honours, in our outline we identify the question for the Court as whether or not, in the absence of express words in the amending EPI, being LEP 194, then section 28 was not engaged, absent express words, or whether it is engaged if the practical effect provided by it is to suspend covenants? The ultimate issue, we submit, is not whether clause 68(2) suspends the operation of the covenants, rather whether 194 together with 68(2) provides an outcome or result such that the LEP was required to comply with section 28.

GUMMOW ACJ:   I think it would be useful if you first took us through this legislative figure.

MR McEWEN:   If the Court pleases.  Your Honours, the question arises in the context of the covenant which my client’s land enjoys.  Does your Honour wish me to go back to the source of the dispute?

GUMMOW ACJ:   Yes.

MR McEWEN:   The covenant in appeal book, volume 1, is found on pages 40 and 41.  On page 40, the plan from the deposited plan is reproduced and my client’s land is lot 1 in DP – if your Honour can read the numbers – 302603 or 05 – I am not sure which it is.  It is immediately to the left of the lot marked A.  I can hold my copy up.  It is marked in orange. 

GUMMOW ACJ:   It is lot 1, is it?

MR McEWEN:   Lot 1. 

GUMMOW ACJ:  DP 219788?

MR McEWEN:   Yes, your Honour.  No, to the right of that.

GUMMOW ACJ:   DP 302605.

MR McEWEN:   Yes, your Honour.  Staying on that page, to the right‑hand side, the legend at the bottom indicates what is created and they are numbered 1 to 4 and the item 4 “restriction on the use of land”.  Do your Honours see that?  Then if you come to the next page, page 41, where the item 4 again is reproduced on the right‑hand side of that double page and the restriction as to burden and benefit, your Honours will “Lots burdened 102 and 103”, “Lots or Authority benefited” our client’s land “Lot 1, DP 302605”.  The terms of that restriction are found at about point 7 of the page under the heading “Terms of restriction fourthly referred to in abovementioned plan”.  Your Honours will see at the top, the end of the first line “hospital”, et cetera, are proscribed.  If I could just go back to page 40 again.

GUMMOW ACJ:   What is the date of the creation of the covenant, is that apparent?

MR McEWEN:   I will just check the chronology, your Honour.

BELL J:   The DP appears to have been registered on 10 November 1993.

MR McEWEN:   Yes, your Honour, 10 December 1993.

BELL J:   November, I think, is it not?

GUMMOW ACJ:   Where do we see that?

BELL J:   It is on the bottom of appeal book 41.  There is a stamp showing the date of registration of the DP.

MR McEWEN:   Thank you, your Honour, I am indebted.  If I could just go across to the other page, page 40 ‑ ‑ ‑

GUMMOW ACJ:   The lots burdened are 102 and 103?

MR McEWEN:   Yes, your Honour.

GUMMOW ACJ:   Yes, I see.  Lot 102, is that partly contiguous?

MR McEWEN:   It is, but there is no argument concerning 102.

GUMMOW ACJ:   The argument concerns 103?

MR McEWEN:   Lot 103.  Just to understand what the consent did, could I invite your Honours to go to page 114.

GUMMOW ACJ:   Just a minute.  Lot 103 faces Stanhope Road?

MR McEWEN:   It does.

GUMMOW ACJ:   What is the access to lot 1, the lot benefited?

MR McEWEN:   It goes off Werona, which runs along the railway line.

GUMMOW ACJ:   But that street is not marked, is it?

MR McEWEN:   Not there it is not, but if your Honour goes to 114, we have reproduced the plans for which consent was granted.  On 101 has existed for many years, the Dalcross Hospital, a day surgery of longstanding.

GUMMOW ACJ:   Yes, that indicates Werona Street.

MR McEWEN:   It does, your Honour, thank you, and it also indicates the corner block and the one next to it, 103, which is burdened with the covenant, contiguous with 101, which is the long block where the existing hospital is located.  What the consent sought permission for ‑ ‑ ‑

GUMMOW ACJ:   But the existing hospital is on lot 101, is that right?

MR McEWEN:   It is on 101, and on 114 your Honour can see it is hatched where it says “Existing Hospital Wing”.

GUMMOW ACJ:   Yes.

MR McEWEN:   They sought to extend that building to the south and to the west by way of this consent across lot 103.

GUMMOW ACJ:   Yes, thank you.

MR McEWEN: Your Honours, prior to LEP 194, clause 68(2) of the planning scheme ordinance, which is reproduced ‑ ‑ ‑

GUMMOW ACJ:   Where do we see that?

MR McEWEN:   Page 241.

GUMMOW ACJ:   Where does it start?

MR McEWEN:   Well, I guess we have to take your Honours to 241 to 68(2).

GUMMOW ACJ:   I know.  That is on page 114 of this document.

HAYNE J:   Does it begin at 128?

MR McEWEN:   Page 127 it begins at actually, your Honour.

HAYNE J:   Page 127?

MR McEWEN:   Yes.

GUMMOW ACJ:   Yes.  Thank you.

MR McEWEN:   At the time KPSO was first published in 1971, the enabling power for a planning instrument to suspend covenants was found in the then Part XII provision of the Local Government Act in section 342G(4).

GUMMOW ACJ:   Do we have that?

MR McEWEN:   Yes, you do, at page 329, your Honour.

GUMMOW ACJ:   Page 329.  Yes, thank you.

MR McEWEN: At the top of the page. It is important in our submissions because subsequently I would seek to take the Court to a comparison of the wording of this provision and the wording in section 28 of the EP&A Act which gives a similar power but in a more constrained way. Section 342G(4) provides:

A scheme may suspend either generally or in any particular case or class of cases the operation of any . . . [relevantly] covenant . . . to the extent to which that provision is inconsistent with any of the provisions of the scheme.

If I could then take your Honours back to 241, clause 68(2) of the KPSO, that power was implemented by suspending covenants throughout the municipality other than the residential zones 2(a) through to 2(g) or (h). Our land and the defendant’s land was then zoned 2(b ).

GUMMOW ACJ:   Where do we see the text of 2(b)?

MR McEWEN:   You will see it, your Honour, in 68(2), 241.

GUMMOW ACJ:   Yes, I know that, but where is the ‑ ‑ ‑

MR McEWEN:   Sorry, I was not understanding your Honour’s question.  One finds it, your Honour, back in zoning, if I can just find them.  If your Honour goes to page 161, bottom left‑hand side, “Residential “B”, “Light scarlet”, et cetera, “lettered 2(b)”.  Importantly, hospital or medical type use was not a prohibited use, meaning in column 3 it was a use permissible with consent.

GUMMOW ACJ:   Just explain that again, looking at page 161.

MR McEWEN:   Page 161, yes, your Honour.  Your Honour will see the columns.  Column 1 simply identifies the land that they are dealing with.  Development without consent, and they identify what they called exempt development.  We are not concerned with that.  Column 3, “Development that may be carried out only with development consent.”  It says, effectively, anything that is not otherwise prohibited in column 4.  One then goes to column 4 to see what is prohibited, and hospitals are not there.

GUMMOW ACJ:   No.  Thank you.

MR McEWEN:   That was changed by LEP 194 which commences, your Honours, at page 288.

BELL J:   When did you say the KPSO was first proclaimed?

MR McEWEN:   Your Honour, 1 October 1971.  Your Honours have 289, paragraph numbered 3:

3         Land to which plan applies

This plan applies to the land in the vicinity of the Railway/Pacific Highway corridor and the St Ives Centre . . . 

4         Relationship to other environmental planning instruments

This plan amends:

(a)the Ku‑ring‑gai Planning Scheme Ordinance as set out in Schedule 1, and

(b)State Environmental Planning Policy No 53 –

which we do not have to go to.  Could I invite your Honours to turn to the page to 291.  What the LEP 194 does, as it says in paragraphs 1 and 2, is insert firstly the zoning map and then insert, in clause 2, in relation to the 2(c) zone, a residential C1 zone.  Over the page at 293 we insert after the 2(d) zone, which what I call our zone, my client’s and my learned friend’s lands were zone 2(d), insert residential D3.  Finally, over the page in relation to St Ives, which does not concern us, insert after clause 25 about the St Ives shopping centre. 

So it amends the KPSO by inserting fresh zones, C1, C2 and D3 in relation to the 2(c) and 2(d) zoned lands.  It left all the other residential lands unaffected.  You can see the effect of that.   If I could invite the Court to go to pages 311 and 312, the maps that accompany this LEP identify the areas at St Ives and along the railway which are rezoned for this purpose.  Contrasting that, your Honours, with the overall map for the entire municipality, which is found at page 280, one of the matters we touch upon is the fact that other lands zoned residential in the municipality, of course, are left unaffected and remain with their former residential zoning attachment.  It is only those along the railway and at St Ives that are impacted. 

Unfortunately, the map at 280 is reproduced in a fashion that does not make it clearly legible, but your Honours will see on the legend on the left‑hand side the pink boxes which designate the 2(a) through to 2(g) and 2(h), (f), (g) and (h), throughout the municipality all being residential. The effect of 194 when it amends clause 68 of the KPSO is to leave this land out of the suspension. If I could go back to 68(2) at page 241:

In respect of any land which is comprised within any zone, other than within –

identifying the residential zones –

any covenant . . . is hereby suspended –

Our land is being rezoned as they are under the LEP.  We now do not have the benefit of being left out.  The suspension works in relation to the fresh zoning for our lands.  In a nutshell, we submit that the way that was done required the Governor’s approval after the Minister’s indication.  Could I take your Honours to section 28, reproduced at 406.  In 28(1) we have a definition of what a regulatory instrument is.  It includes a covenant.  Section 28(2):

For the purpose of enabling development to be carried out in accordance with an environmental planning instrument –

and I truncate this –

may provide that, to the extent necessary to serve that purpose, a regulatory instrument specified in that environmental planning instrument shall not apply to any such development –

That is the power.  Section 28(3), which has concerned the judges below:

A provision referred to in subsection (2) shall have effect according to its tenor, but only if the Governor has, before the making of the environmental planning instrument, approved the provision.

Section 28(4):

Where a Minister is responsible for the administration of a regulatory instrument referred to in subsection (2), the approval of the Governor for the purposes of subsection (3) shall not be recommended except with the prior concurrence in writing of that Minister.

In short, comparing those steps, that is, the need for a Governor to approve ‑ ‑ ‑

GUMMOW ACJ:   Is there something in the interpretation legislation of New South Wales that explains the Governor means Governor‑in‑Council?

MR McEWEN:   I cannot answer that, I am sorry, your Honour.  Can I take some ‑ ‑ ‑

GUMMOW ACJ:   Yes.

MR McEWEN:   The submission we have made is that those steps, though, the approval of the Governor prior to the making of the instrument and that approval not proceeding except with the prior concurrence of the Minister are steps you simply do not find in 342G(4), the old power which is abolished with the introduction of the 1979 EP&A Act, abolition of the old Part XII.

GUMMOW ACJ:   You are saying the old 342G did not contain this break, as it were, requiring ‑ ‑ ‑

MR McEWEN: Not in the same fashion, even though under the old regime it was the Governor who made EPIs but not with that same mechanics. Yes, I am indebted to my learned junior, Mr Eastman. Section 14 of the Interpretation Act, to answer your Honour Justice Gummow:

Governor

In any Act or instrument, a reference to the Governor is a reference to the Governor with the advice of the Executive Council, and includes a reference to any person for the time being lawfully administering the Government.

Could I go back to the brief outline of oral submissions, your Honours. We have identified what we would submit are four reasons why the approach we contend for, that is, recognising practical result or effective construction should be preferred. Firstly, as I have noted, the effect of LEP is not in dispute, that is, it works in tandem with section 68(2). As a part of the KPSO it is read with clause 68(2) providing a fresh suspension of covenants and we submit that is a provision, as Justice Handley said, within section 28. Justice Handley has dealt with that at paragraph 80 of his judgment to be found at page 524. I just might briefly refer to what his Honour said:

In my opinion LEP 194 did “provide” for the suspension of covenants in zone 2(d3) so that they “shall not apply” to development permissible with consent. By creating zone 2(d3) . . . and leaving cl 68(2) unchanged the Minister “provided” for the suspension of restrictive covenants within the new zone. The LEP did so “provide” because that was the result, and a necessary and intended result, of the making of that LEP. It provided for that result.

Your Honours, if LEP 194 had stated in words what its effect was in operation, then there would be no argument; section 28 would be engaged.  We say to confine that interpretation to the need for exact words simply ignores that effect and the reality of what was happening.  The other aspect of 194 is that it was in fact a ‑ ‑ ‑

GUMMOW ACJ:   Did Justice Handley, or indeed the majority, refer to any proposition of construction reflecting the notion of destruction of property rights?

MR McEWEN:   I do not think Justice Tobias touches on that, but Justice Handley ‑ ‑ ‑

GUMMOW ACJ:   Is not lightly inferred?

MR McEWEN:   Justice Handley goes, to answer your Honour.  At appeal book 521 Justice Handley at paragraph 64:

Parliament inserted s 28(2) . . . to provide, some protection –

in relation to what he called “an important and valuable proprietary right.”

GUMMOW ACJ:   The protection being the necessary engagement of the formalities involved in going to the Governor‑in‑Council.

MR McEWEN:   No, with respect, that is where the protection springs from, but the proprietary right of course is to enjoy the benefit of the covenant.

GUMMOW ACJ:   What is the content of “some protection”?  It is the procedural steps added.

MR McEWEN:   It is the procedural - the mechanics, yes, your Honour.  But I was going to just, in relation to ‑ ‑ ‑

HAYNE J:   Well, it maybe perhaps captured as the specificity of aversion to the problem that (3) and (4) require specifically adverting to the fact that what is being done affects property.

MR McEWEN:   And requires a specific consideration which 342 did not, and I will take your Honours to - we have provided your Honours’ associates with a copy of what we call an umbrella suspension clause.  Clauses in EPIs since 1979 under the EP&A Act, which refer specifically to zone‑based exclusions or protections are the exception, not the rule.  The rule is, and it makes good sense, that when an LEP is now being drafted, if the local council wishes to avail itself of a section 28 power, it puts in what we term an umbrella power which gives a broad suspension of all covenants irrespective of zoning.  It was an excerpt from the South Sydney LEP 1998.  It is a common type of clause found throughout LEPs in New South Wales.

HAYNE J:   There is recitation in the clause of satisfaction of 28(1) and (2).

MR McEWEN:   The reason for that is, your Honour, 28(5) provides that if it is recited, it is prima facie evidence of the Governor’s approval, et cetera.  That is at appeal book 407.  But, your Honours, we say it is not unimportant that 194 was made effectively for a 28 purpose.  The lands that were rezoned were to achieve a higher density along the rail corridor and at St Ives shopping centre.  To achieve that purpose and facilitate multi‑unit high densities, the purpose is being achieved by suspending covenants that otherwise would interfere with that objective being achieved, a perfectly proper planning ‑ ‑ ‑

GUMMOW ACJ:   This word “suspend”, where does that come from?

MR McEWEN:   By virtue of 68(2), suspending all covenants other than those in the ‑ ‑ ‑

GUMMOW ACJ:   Does it use the word “suspend”?

MR McEWEN:   Yes, your Honour.  At 241 again, your Honour:

In respect of any land which is comprised within any zone, other than –

the residential zones –

the operation of any covenant –

et cetera, four lines down –

is hereby suspended ‑ ‑ ‑

GUMMOW ACJ:   What does the word “suspend” mean?

MR McEWEN:   Fourth line, your Honour.

GUMMOW ACJ:   I know that.  What is the notion of suspension, as distinct from destruction?

HAYNE J:   LEPs come and LEPs go, I suppose.

GUMMOW ACJ:   Is it?  Is that the idea?

MR McEWEN:   Yes, your Honour, and we have provided also your Honour’s associates with an excerpt from Peter Butt’s most recent book where he opines based on a number of cases that they are suspended whilst the prohibition or the consent is in place, but they can be revived.  They remain on title and they are inoperative whilst the suspension works.  But thereafter, they can spring back to life.

GUMMOW ACJ: Sounds like section 109 of the Constitution.

MR McEWEN:   I was putting the submission, your Honours, that 194 being made for the purpose of the multi-unit high density also is for the purpose of suspending covenants to achieve that, another reason that we submit that 28 should be complied with.  We are going to identify two aspects of context.  Firstly, 194 amends the KPSO, which everybody accepts has to be read as a whole with the provisions of 194 inserted into it, which in fact they refer to – the assertions are referred to, and I took your Honours to, in the LEP itself.

GUMMOW ACJ:   Just before you go on, is there any provision in this legislation requiring a notation in the Torrens title to the effect that there is this so‑called suspension?

MR McEWEN:   No, your Honour.  It only works as a planning ‑ ‑ ‑

GUMMOW ACJ:   Well, it works to mislead people dealing with the register.

MR McEWEN:   It does, and one would need to make an inquiry as to whether or not there are consents in place pursuant to a section 28 power, because there are still LEPs that do not adopt the 28 power, but to answer your Honour’s question, no, and it would be, in that sense, misleading.  Your Honours, I had taken your Honours to the words in LEP 194 about inserting and could I also, your Honours, go back to page 127 where the commencement of the complete ordinance is set out.  Your Honours will see at the bottom of 127:

This document represents a compilation of planning instruments.

On 128, down the bottom again:

A COMPILATION OF PLANNING INSTRUMENTS, REFERENCE SHOULD BE MADE TO THE SPECIFIC GOVERNMENT GAZETTES AS REFERENCED IN THIS DOCUMENT -

Could I then take your Honours to 133, at the bottom of page 6 of that document, 133 in the appeal book, under the last heading:

Can the content of the Ordinance be varied or amended?

Yes, it is possible . . .  However, this is a lengthy process that must be carried out in accordance with the requirements of the Environmental Planning & Assessment Act –

and we pause there and we say we take comfort from that because the document itself is saying if you are going to do this, the zoning, et cetera, then follow the EP&A Act, in particular, we say, section 28.  Then could I invite your Honours to go to 164 where for our land we have the provision in LEP 194 inserted into this document on page 164, “Residential ‘D3’” replacing the 2(d) – 2(b).  Under column 3:

Development that may be carried out only with development consent.

About halfway down your Honours will see “hospitals”.  Now, hospitals were permissible before this LEP, but before this LEP we had the protection of being in a residential zone where the suspension of covenants did not apply.  With the change of our zoning from 2(b) to 2(d3) that protection is lost ‑ ‑ ‑

GUMMOW ACJ:   Well, you have to enforce the covenant.

MR McEWEN:   That is what we are seeking to do and we cannot do that.

GUMMOW ACJ:   I know, but until this change came about as a matter of private right you have to enforce the covenant.

MR McEWEN:   With respect, yes, your Honour.

GUMMOW ACJ:   There is no public law overcoming that.

MR McEWEN:   No, your Honour.  Just in relation to that amendment, there is a reference to your Honour Justice Gummow’s judgment in Commissioner of Telegraphs, which is referred to by Justice Handley at page 526 of the small appeal book, paragraph 93.  After dealing with the majority judgment your Honour Justice McHugh expressed:

“... the better view is that under modern practice it is the intention of the legislature when effecting textual amendment of an Act to produce a revised text which thereafter and as to subsequent events is to be construed as a whole.”

Now, so much is accepted, but when this is construed as a whole it is our submission that the words in section 28 which our opponents seek to guillotine us with in 28(3) found at 407, that is a provision which suspends covenants, “shall have effect according to its tenor”, and there was much debate in the court below about the word “tenor”. 

It is our submission that if we give the words in 194 “effect according to their tenor” they are inserted in the KPSO and they lift the protection we otherwise had. In doing that those words worked that effect. They do not say that, as Justice Handley’s inquiry below, how does it work? You look at the words in combination with the map. That is how you achieve it, achieve the zoning, but no, there are no words, but our submission is that according to its tenor, reading 194 into clause 68(2) conforms with the need required in 28(3) as words working that effect.

GUMMOW ACJ:   Does the dispute, to a degree, turn upon the meaning of “provide” in section 28(2)?

MR McEWEN:   It does, your Honour.  That is the dichotomy between Justice Tobias on the one hand says “provide” requires express words.  There are no express words.  Justice Handley says no.  You look at what it does and what it does is provide an effect.  That effect and outcome in relation to section 28 on our list of authorities is a reference to the Court’s decision in Alcan to which the third respondents make reference in their outline of submissions but they do not, in fact, cite the whole of the paragraph that they make reference to.  If your Honours have Alcan handy ‑ ‑ ‑

GUMMOW ACJ: It is 239 CLR 27.

MR McEWEN:   It is 239.  I wish to take the Court to the joint judgment at paragraph 47:

many occasions that the task of statutory construction must begin with a consideration of the text itself.  Historical considerations . . . The language which has actually been employed in the text of legislation is the surest guide to legislative intention. 

The bit we seek to emphasise, the next bit:

The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.

It is our submission that ‑ ‑ ‑

GUMMOW ACJ:   The mischief here is the existence of these private rights of property.

MR McEWEN:   We would submit, your Honour, that was identified by the legislature.

GUMMOW ACJ:   Just a minute.  That itself engages a whole lot of other ideas about statutory construction which it was not necessary to enter upon in Alcan.

MR McEWEN:   With respect, no, your Honour.  Here the introduction of section 28 provides further steps, we submit, the Parliament thereby recognising the need to provide some further protection for private covenants in a broader way than you find in 342G(4).  Doing it the way the Minister has, as Justice Handley identified, simply avoids the further scrutiny that 28 provides.

Then mentioned finally the purposive approach and I do not wish to take your Honours to Cooper Brookes or CIC to actually read the portions.  In Cooper Brookes, it is found at pages 305 and 321 and CIC at 408.  A purposive construction here, we submit, of the more stringent hurdle that is applied would prefer, of course, substance over form.  There are on our list of authorities reference to three planning decisions, albeit on different topics concerning standards and prohibitions in environmental instruments but in each of those members of the Court of Appeal have identified the approach to be preferred is that of preferring substance over form.

GUMMOW ACJ:   What is the substance of Justice Tobias’ reasons?  Where is that captured most clearly?

MR McEWEN:   Page 515 in paragraph 34, where he concludes – sorry, I have taken your Honours to the wrong paragraph.

CRENNAN J:   Paragraph 38 perhaps?

MR McEWEN:   Yes, it is, with respect, your Honour.  At the end of 38, your Honours:

No regulatory instrument is specified in that LEP which then provides that that instrument shall not apply –

Also over the page in paragraph 44 –

Absent a provision in LEP 194 which provided that a regulatory instrument specified therein was not to apply to any development permissible under that LEP, it must follow that s 28(3) was not engaged ‑ ‑ ‑

GUMMOW ACJ:   Is that a convenient time?

MR McEWEN:   I had not noticed the time, I am sorry, yes.

GUMMOW ACJ:   We will adjourn until 2.15 pm.

AT 12.44 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.17 PM:

GUMMOW ACJ:   Yes, Mr McEwen.

MR McEWEN: Your Honours, might I then go to a brief reply to the submissions of the third defendant and the Minister, having covered some of the matters this morning in the outline that I provided to the Court crier shortly before your Honours came on the Bench. If your Honours have that document, the outline on the first page, the submissions on behalf of the third respondent. We have dealt with [14], [19] and [24]. In [25] and [29], the third respondent supports the ambulatory operation of clause 68 and in 29 puts the submission that:

The KPSO was not frozen as at 1971 –

We would submit that 68(2), to have the power always to speak, was sourced from 342G(4). Once that provision was replaced with section 28, we submit, any alteration to the operation of clause 68(2), which would otherwise suspend the operation of covenants, necessarily required compliance with the provision of section 28. Clause 68(2) did continue its ambulatory operation after 1 September 1980, when the Environmental Planning and Assessment Act section 28 came in. However, after that date, it is our submission that where an amendment to clause 68(2) was sought which suspended or interfered with the operation of covenants, then that purpose or outcome, we submit, triggered the need to comply with section 28.

In our outline, we have dealt with paragraphs 31 and 35 on behalf of my learned friends for the third respondent.  Paragraph 38 is an attack made on the observation by Justice Handley about the door being wide open for evasion, and my learned friends submit it is not clear how the door is wide open for evasion.  I thought his Honour actually set that out.  If your Honours have Justice Handley’s judgment, second volume at 521, paragraph 65, his Honour said:

An argument that the protection of s 28(3) would be engaged if the suspension of covenants was achieved by an LEP drafted one way, but the same result can be achieved without engaging s 28(3) if the LEP is drafted another way invites the closest scrutiny.

Then over at paragraph 79 on 524, his Honour said:

A construction which focuses on the text to the exclusion of its result elevates form over substance, and, in the words of Lord Reid quoted above [29], would “simply open the door wide for evasion”.  By giving appropriate drafting instructions the Minister could determine for herself whether her instrument required the Governor’s approval or not.

In short, drafted one way, et cetera.  One of the objectives, your Honours, we submit of the EP&A Act found in section 5 of that Act is the promotion and co‑ordination of the orderly and economic use and development of land - 5(a)(ii).  It is our submission that section 28 requires additional steps beyond those previously in 342G(4) and that they do require additional steps, we submit, is an acknowledgement and recognition, if not protection, of individual proprietary rights otherwise contained in those covenants. 

The next paragraph from the third respondent we wish to reply to is that observation in paragraph 40 which suggests an assumption be made that the KPSO was made under the 1979 Environmental Planning and Protection Act. There is a simple answer to that. Irrespective of clause 68 having received the Governor’s approval as it did under the regime then, Part XII, a further change had sought to suspend the operation of covenants after 1 September 1980, the date the EP&A Act became operative and, in our submission, had to comply with section 28.

Paragraph 40 of my learned friend’s submission – there is a submission that it serves no relevant purpose to this effect.  It serves no relevant purpose where the Governor, who has approved of a provision, suspending a restrictive covenant according to certain zoning categories:

that where a Minister determines that with time certain areas are now to be re-zoned, that the Governor should have to give further approval.

Well, we simply say rhetorically, well so what?  That is what the Governor has to do if the provision contains a fresh suspension of covenants and we submit on the face of the explicit requirements in section 28 that would have to be complied with if that KPSO was made under the EP&A Act. 

Also in paragraph 40 reference is made to the standard instrument.  The standard instrument, your Honours, on its face does not contain a clause 28 or section 28 provision.  It is open to councils to adopt it and to augment it with a section 28 power.  If it did and if section 28 was availed of to provide the suspension of covenants in particular zones, or otherwise, then that provision would, itself, require approval by the Governor under section 28 and by the Minister.  It is only if an umbrella power has been brought in – à la the South Sydney example which we handed to your Honours – that you would not need a further approval by the Governor if further alterations were brought in which somehow curtailed that operation. 

Also in paragraph 41, a somewhat similar point is made about the standard instrument – about the Minister deciding to draft a fresh map.  This, with respect, in our submission, is a furphy and obfuscates the inquiry that is at hand - the standard instrument absent a section 28 clause – particular zones or otherwise – that any further alterations still require a section 28 compliance.

In my learned friend’s submissions, by the way, there are two 41s - there is 41(1) on page 9 of their submissions and what we call 41(2) on page 10. Still staying with their 41(1), the submission is put that if the suspension provisions such as in clause 68(2) are no longer in force, then:

Every suspended covenant –

will spring back into operation.  The point in answer to that is what Mr Peter Butt says in that brief excerpt from his case.  It really is of no moment, with respect, in our submission.  In the second 41 submission they put the submission that:

A Minister can never consolidate existing [zoning] maps without approval by the Governor.

That, with respect, is not right.  That only applies where whatever the Minister is doing creates a fresh suspension of covenants.  If he does that, section 28, in our submission, has to be complied with.  Could I turn to the submissions on behalf of the Minister?

GUMMOW ACJ:   Just a minute.  The second 41, at what line is this particular point?

MR McEWEN:   Sorry, your Honour?

GUMMOW ACJ:   Which line on page 10 is this particular ‑ ‑ ‑

MR McEWEN:   Lines 29 and 30.  Your Honours see:

A Minister can never consolidate existing maps without approval by the Governor.

With respect, that is too broad a statement.  What he can never do without the approval of the Governor is bring in a provision which has the effect of suspending covenants afresh.  I was going to turn, your Honours, to the submissions on behalf of the Minister.

GUMMOW ACJ:   Just before you do that, what is the correct date for the text of the EPA Act that we have to consider?

MR McEWEN:   1 September 1980 is when it came into operation.  It is called the 1979 Act, but it did not ‑ ‑ ‑

HEYDON J:   But I think the Acting Chief Justice wants to know what the current one is that we should be looking at.

GUMMOW ACJ:   It has been amended from time to time.  When does the bell ring, so ‑ ‑ ‑

MR McEWEN:   You mean, most recently, your Honour?

GUMMOW ACJ:   For this case.  At the moment I have reprint No 13 which is in force in 2010.  That strikes me as too late.

MR McEWEN:   The date that LEP 194 was made, which was 28 May 2004.

GUMMOW ACJ:   Yes, that is step five in your chronology.

MR McEWEN:   Yes, your Honour.

GUMMOW ACJ:   Yes, we have a reprint as of 24 June 2003.  That might be the closest one.  We have bits and pieces of the reprint…..that date, as usual.  Does anything turn for our understanding of this case on an examination of Division 1 of Part 3 as a whole?

MR McEWEN:   No, your Honour.

GUMMOW ACJ:   Section 28(2) is plucked out of it and all sorts of things are said about it.  Do we need fully to better understand the place of 28(2) in the scheme of Part 3?

MR McEWEN:   No, your Honour. 

GUMMOW ACJ:   I have no idea, but I am just suspicious of what counsel regularly do which is latch upon one section in a corpus and ‑ ‑ ‑

MR McEWEN:   Sorry, your Honour.  Might I inquire, your Honour, is your Honour referring to Part 3 of the Act, the EP&A Act?

GUMMOW ACJ:   Yes.  We are being invited to construe 28(2).

MR McEWEN:   Yes, your Honour.  I am sorry, I misunderstood your Honour’s question.

GUMMOW ACJ:   Section 28(2) appears in Part 3, Division 1.

MR McEWEN:   Yes, your Honour.  It is just part of the scenario as to general provisions that are made under Division 1 of Part 3 of the Act.  The making of instruments and the contents of instruments, as 26 says, reservation of land.

GUMMOW ACJ:   The Governor‑in‑Council has immediate powers under sections 37 and 38.  Anyhow, we will puzzle over this for ourselves, I suppose.

MR McEWEN:   It has not played any role when consideration has been given to it up to this point.  That does not mean it should not be looked at if it is of relevance.

GUMMOW ACJ:   Of course not.

MR McEWEN:   In our submission, one is limited because of the specific words of 28 in relation to that type of provision.  That is a regulatory instrument not applying in 28(2) in whatever instrument that is otherwise made.  Might I turn then, your Honours, to the Minister’s submissions?

GUMMOW ACJ:   Yes.

MR McEWEN: The first on our summary as to paragraph 12, that can be struck out. In paragraph 17 we are criticised, suggested that it is incorrect with the repeal of 342G(4), the source of power was intended to be section 28. The fact is that 342G(4) was repealed and the question then becomes, is section 28 engaged by what is then promulgated in the LEP? As we have submitted, after 1 October the source of power and thereafter and the suspension of covenants is only to be found in section 28. This submission by my learned friend, Dr Griffiths, on behalf of the Minister, in fact, highlights the argument before the Court. Clause 68(2) continues in force and is relied upon by the third respondent, the Minister, to use the change of zoning to empower the suspension of covenants. It is that Act and that purpose and that objective which we contend after that date needs compliance with section 28. In paragraphs 24 to 29 the Minister addresses the question of the ambulatory operation and contrary intention.

Your Honours, when the 1979 Act was introduced it was a complete planning framework as a code or scheme.  Existing PSOs, like the Ku‑ring‑gai PSO, continued as a deemed instrument under that Act.  Until the commencement of the Act, 342G remained available.  It is not put on behalf of the applicant that 68(2) only spoke to the past.  That has been suggested in one of the submissions but rather, we submit, the ambulatory nature of its operation was confined upon the introduction of section 28 such that changes thereafter which suspended covenants had to comply with that latter provision.  As we have indicated earlier, we take comfort from the fact that the manner of achieving that suspension changed significantly.  In paragraph 30, the Minister points to what is termed to be:

practical inconvenience, in that it would not be possible to ascertain the effect of that subclause . . . without resort to the zoning –

The fact is that in practice inquiries of that nature are commonplace within the regime to find out how the provisions operate.  Paragraphs 33 to 37 and 40 deal with an absence of express provisions, express words, and a submission in paragraph 40 that the practical effect of 194 is insufficient to engage 28(2), they need express words.  I think I have probably dealt with those matters previously.  In 39, the Minister submits that:

Parliament could not have intended that the Governor’s approval would be required every time an amendment to an EPI has the incidental effect of changing the operation of a suspension of covenant –

We submit to the contrary.  The construction that we argue for gives effect to the legislative intention because, as an indication, it required a more demanding procedure to achieve the suspension of covenants in granting consent or otherwise.  Since 1 October 1980, as the Minister points out, this has operated, the section 28(2) power where it has been sought to be relied upon, in all those environmental planning instruments thereafter which contained it.  Paragraph 41 we have dealt with about the alleged inaccurate reference. 

In 42 the Minister submits that our argument that the Governor’s approval is required for any change of zoning is not correct.  With respect, the Minister’s submission is not correct in relation to any change of zoning.  It is only required where the change, if it be zoning or otherwise, but a change which would suspend the operation of covenants.  That, we submit, does not work a practical inconvenience.  An inquiry is required, yes, as to the effect of the proposed LEP to change zoning, if it has that effect.  This depends of course on the form the LEP takes, and the six examples given by the Minister on paragraph 12 earlier in the Minister’s submissions are zone‑based.

GUMMOW ACJ:   Just a moment, paragraph 12?

MR McEWEN:   Paragraph 12.  Your Honour will see at the end of paragraph 12, at the top of page 3 and the bottom of page 2, it gives examples of zone‑based suspensions, a series of old PSOs and then a series of new LEPs.  I think there is half a dozen there, but those half a dozen there, your Honours, is unlike the majority of those which now adopt an umbrella type power, so they do not have to worry with circumscribing the operation of the suspension to particular zones. 

In paragraph 45 of the Minister’s submissions, it is put on behalf of the Minister that LEP 194 was not an attempt to achieve indirectly that which could not be achieved – sorry – directly/indirectly.  One asks rhetorically if that was so, why section 28 was not adhered to, which obviously it could have been, and this was acknowledged by the Minister, as is referred to by Justice Handley in paragraph 63 of his judgment, page 521.  Justice Handley said:

The respondent and the Minister acknowledged that the suspension of restrictive covenants over land in the zone could have been achieved by provisions that would have required the Governor’s approval pursuant to s 28(3).

Justice Tobias accepts that.  Over to paragraph 79 of his Honour’s judgment at 524, that is a paragraph I have read previously:

A construction which focuses on the text to the exclusion of its result elevates form over substance –

The drafting approach which was adopted here avoids the need, on my learned friend’s submissions, to comply with section 28 which is what Justice Handley said invites the closest scrutiny.  In conclusion, I will not reread the two paragraphs at the end of our outline.  If your Honours please, that is the material we wish to rely upon.

GUMMOW ACJ:   Thank you, Mr McEwen.  Yes, Mr Walker.

MR WALKER: If it please your Honours, the power which was engaged when clause 68(2) came into effect – and it came into effect only once – was, as your Honours have seen, subsection 342G(4) of the now repealed Local Government Act.  The particular provision is found in volume 1 of the appeal book at 329 and set out in paragraph 20 of our written submission.  It is to be observed that it did not require that zoning be used to identify either a “particular case or class of cases”, to use the expression in the provision, by which this suspension of operation may occur.  That is the first thing.  Identification of a particular case or class of cases could be done by any means calculated to achieve just that.

HAYNE J:   How was it done in this case?

MR WALKER:   It was done by zoning in this case.

HAYNE J:   No, it was not.  It was done by zoning and a map, was it not?

MR WALKER:   I am so sorry.  Zoning is a composite operation.

HAYNE J:   Just so.

MR WALKER:   It requires the creation or characterisation of zones which also includes the substantive set of permitted without consent, permitted with consent and prohibited land use regulations.  Zoning is a land use regulation tool.  Second, it requires the identification by location of those pieces of land in the area in question which are zoned in one way or another, and that has always been done either exclusively or in combination with cadastral or title or address details by maps.  So it is a composite exercise.

HAYNE J:   So if we go to page 241 and we discard as distracting the specification negatively, we read 68(2), do we not, as effecting a result in respect of land which you can identify on a map?

MR WALKER:   Yes.

HAYNE J:   There is hereby suspended.

MR WALKER:   Yes.

HAYNE J:   That was of fixed and definite content when that was made?

MR WALKER:   Yes, indeed.

HAYNE J:   That was the specification that 28 required?

MR WALKER:   No, 28 was not engaged at this point.  If this had been made ‑ ‑ ‑

HAYNE J:   If it had been made at the time, that was the specification that 28 required?

MR WALKER:   Your Honour, that is, with respect, at the heart of the argument, yes.  Could I start, however, with before section 28 is engaged because there is no difference between my friend and me about what would happen to a provision which promulgated a new zone or new way of describing land in which the operation of the relevant, I will call them simply rights or obligations at the moment because I want to go that class of matter, was added.  So a new class added.  There is no difference between us that if that is done after the repeal of the Local Government Act and the operation of the Environmental Planning and Assessment Act with its section 28 that there has to be compliance with the so‑called protection of the specific Governor’s approval to that provision.  That is agreed.

That is another way of coming to the heart of the case. Question: is that in fact what has happened by the way in which the zoning and the map has changed? Could I, however, as I say, take it through in terms of the sequence of events and also the content of clause 68 when it was first made before section 28 required specific Governor’s approval. When it was first made, as it happened by the Governor, it said of all zones except specified zones that there was to be this suspension as may be achieved by reason of section 342G(4) of the Act that then governed.

My learned friend told you about the changes - 2(a), (b), (c), (d) and then (e), (f), (g) and (h). As it happens, in the book you will have, at page 285, that which is noted in this collated print of the ordinance at 241, namely the LEP No 74 under which 2(h) was added, you will see that at about line 40 on that page. That is of no moment to the, what I will call the merits of this case, but it illustrates what had happened after the EP&A Act had come into operation by way of the extension of the exclusion, which of course is the very opposite of providing that there shall be a suspension of operation. It is entrenching upon clause 68.

It illustrated that zoning can change both as to the character, that is creation of zones, the elimination of old zones and, most importantly, without any alteration of zones as a class the maps can alter what particular parcels of land are within pre‑existing zones. Clause 68(2), as the statute permitted, is by no means confined to restrictive covenants. It selects a subclass of those things that may be suspended by such a provision.

The complete class actually illustrates that the power in question is not simply a power to affect private rights. Under section 342G(4) those things that may be suspended include any provision of the Local Government Act, any provision of any other statute:

any rule, regulation, by-law, ordinance, proclamation -

Pausing the list at that point we are there talking about elements of public law where, of course, there is no question of, as a matter of interpretation, concern about interference with private rights that might press upon the understanding of the ‑ ‑ ‑

GUMMOW ACJ:   Where do we find the text of 342G?

MR WALKER:   At 329, your Honour, top of the page.  The first part of the list are matters of public law including legislation itself.  The second part contains private matters certainly – agreement, covenant and instrument is probably perhaps both public and private – and agreement and covenant means that in relation to private rights some will be proprietary and some will not be.  There will be those matters which are proprietary by reason of Tulk v Moxhay and its reflection in the statutory registered title open to the public as Justice Gummow was referring to in terms of potentially misleading effects.  But agreements need not be registered, need not be known to the public but may simply be between, as it were, neighbours without any question of running with the land, for example.  So that there was a comprehensive effect possible under this suspending operation and it included both public and private rights and obligations.

GUMMOW ACJ:   Section 342G was added in 1945, was it not?

MR WALKER:   I think so, yes, your Honour.  By then, of course, there had already been experiences.  Certainly the law reports in New South Wales bear witness of so-called common building schemes, private subdivisions, imposing common regimes by a network of restricted covenants and the Conveyancing Act section 89, of course, provided for possibilities of extinguish or modification, not a matter which provided for in globo or comprehensive planning to proceed.

GUMMOW ACJ:   Or it required curial intervention.

MR WALKER:   It required curial intervention and it certainly did not proceed according to what I will call the executive view of overall planning.  At page 241, to take your Honours back to 68(2), so when it was made it did not touch the public law matters, there was no suspension of public law intended but it is - subject to what “instrument” may mean.  But it is significant that by referring both to covenant and agreement, it was certainly intended that matters would be suspended even if they were essentially private sounding in contract only and certainly not appearing on registered title.  The word “agreement” must include that.

The significance, in our submission, is that while the wording of 68(2) nor the empowering words of 342G(4) have been identified as to any aspect by the argument against us in this Court as requiring to be read in any particular fashion, particularly in a way not in accordance with an ordinary English contextual understanding of the language by reason of the effect contemplated upon private property.

Of course there is an effect contemplated upon private property.  It is also an effect contemplated upon private contractual arrangements, not proprietary in nature, as well as the possibility of effecting a completely general public regulation.  It is not surprising therefore that none of this wording yields an alternative or competing interpretation, one of which ought to be chosen because of the possibility of private property being affected.  The intention that private property may be affected is palpable.  That is indeed the very nature of such planning legislation including provisions of this kind.

HAYNE J:   But that is a proposition that simply does not grapple with the question of which private property is being affected, and that is at the core, surely.

MR WALKER:   No, the private property which is affected in this case, that is the case of these appellants, that obviously is their restrictive covenant.  There is a class that needs to be considered because this is a case where 68(2) was done by reference to a class, not to a particular case:

any land which is comprised within any zone –

There is the class.  So it presupposes zoning, which is a matter for the authorities to keep as a fact, and then simply it is any land.  That class remains ‑ ‑ ‑

HAYNE J:   Well, there is the slide in the argument, is there not, Mr Walker.  It is a slide which is betokened by your reference back to zoning rather than land.  The question is what is meant by “any land which is comprised within any zone” and is that any land now comprised, any land from time to time comprised within a zone?

MR WALKER:   The latter.  That is the significance of the “always speaks” provision which is inescapable in this case, that is, 68(2) contains, and none of its context, contains any suggestion to the contrary of the Interpretation Act requirement for it to always speak and the present tense in it is a classic example of something which will operate according to the state of affairs ‑ ‑ ‑

GUMMOW ACJ:   Does the Interpretation Act say anything as to this sort of delegated legislation?

MR WALKER:   Your Honour’s question is related to?

GUMMOW ACJ:   You mentioned the Interpretation Act is applicable to 68(2).

MR WALKER:   Yes, your Honour.

GUMMOW ACJ:   This is a piece of delegated legislation.

MR WALKER:   Your Honours have, I think, I hope, we have cited, the Interpretation Act 1987 (NSW).

GUMMOW ACJ:   Section 3(1) is it?  This is an instrument, is that the idea?

MR WALKER:   Yes, your Honours, and there is also – we have drawn to attention section 68.

GUMMOW ACJ:   Yes, thank you.

MR WALKER: So my point in answer to Justice Hayne is that the expression “any land which is comprised within any zone” speaks from time to time of the zoning from time to time. It does not freeze the situation as at the first promulgation of those words so as not to pick up land which was either not comprised within any zone, unzoned if there was such land, or so as not to pick up changes from time to time in zoning. So the expression “which is comprised within any zone” is apt to mean that the status of particular parcels of land, as they are shifted on the maps, or by reference to the designation of zones which may be created or modified from time to time, as you have seen occurred in this case, that will change from time to time what is the constant meaning of clause 68(2) with therefore altered effect as the state of affairs changes.

As we have put in our written submissions, the factum upon which the unchanged terms of 68(2) operate is the zoning of particular land from time to time and yes, we depend upon the wording of 68(2).  My learned friend refers to the current vogue of so‑called “umbrella clause” whereby for all land, all such instruments, et cetera, are suspended in operation.  That means that as people make agreements or enter into covenants and from time to time they are all suspended.  So the state of affairs may change as people make agreements, but there is a constant meaning of a clause like 68(2) upon that state of affairs.

In this case, we have again the constant meaning of any land which is comprised within any zone.  That continues to have the same meaning now as it did when first promulgated and from time to time particular parcels of land will fall within that general class, depending upon whether or not they belong to the exemption.  If they do not belong to the exemption which at the time in question is 2(a), (b), (c), (d), (e), (f), (g) and (h) – if they do not belong to that they are within the constantly unchanged meaning of “any land which is comprised within any zone”.

If the state of affairs alters by the line of a zoning colour on a map being shifted one street to the west, for example, to reflect views of the changed amenity or importance of a vicinity in the area, then without any alteration to 68(2), the factum upon which its terms operate will have been changed, naturally, so as to produce a changed application and, as my learned friend took you through it this morning, the processing question in this case was to change in a way which is utterly familiar - zonings may change.  It is of their nature that they change, because planning reflects both political, social and supposedly technical reassessments from time to time of what ought to be permitted, prohibited, or what might require consent on particular pieces of land in an area.

It is for those reasons that when, in order to enhance the prospect of higher density development in a particular vicinity, a new zoning was devised and, by dint of the map, the appellant’s land fell within it, the factum or state of affairs upon which the unaltered terms of 68(2) came to operate obviously produced an opposite effect from what had previously been the case.  They had been within exemption, now they were not within the exemption, because at all times any land comprised within any zone other than the exempted zones had the operation of covenants suspended.

GUMMOW ACJ:   Do we have the text anywhere of LEP No 74?

MR WALKER:   Yes, we do.  No 74 is the one I referred to earlier at page 285.  Your Honours will see that the editorial note about that, that is the one that inserts 2(h).  By inserting 2(h) into an exemption, of course, the effect of 68(2) was diminished.  Fewer cases were contained within that suspending effect.

GUMMOW ACJ:   That was done pursuant to section 70 of the EP&A Act?

MR WALKER:   Yes, as then numbered.  Yes, your Honour.  All the numbers have change, I am afraid, in the EP&A Act, but, yes, that is right.  That is a provision in Part 3 concerning the making of EP&A Act, the Minister makes LEPs.

GUMMOW ACJ:   There is no repeal which does not help much.

MR WALKER:   That, of course, did not answer the description in section 28 because that was not a provision by which there was a suspension of reparation.  It was provision by which the opposite occurred.  A suspended operation was removed for that zone 2(h).  It was merely illustrative of the possibilities after the change of statutes.  I now come, in terms of sequence, to the change of statutes because insufficient attention, in our submission, has been given in the analysis thus far to the force and effect of the transitional provisions upon the move from the Local Government Act to the Environmental Planning and Assessment Act. 

One finds in the appeal book at page 456 that which we have set out in paragraph 22 of our written submission, which is the transitional provision which affected the Ku‑ring‑gai Planning Scheme Ordinance.  It was a former planning instrument in the language of the Miscellaneous Acts (Planning) Repeal and Amendment Act 1979 and it was certainly in force immediately before the appointed day by subclause (1) of clause 2 of Schedule 3. It was, therefore, to be dealt with as is follows. It was to “have full force and effect according to its tenor” and then, as a transitional provision does, it acquired a new status or jargon title. It was now “deemed to be a deemed environment environmental planning instrument”.

That means, of course, that 68(2) continued, as we have put in our written submissions, in full force and effect according to its tenor, upon which we have put argument in our written submission.  I do not need to elaborate.  In short, unaltered by the enactment of the EP&A Act, a true transitional provision.  It is unaltered, it is not unaffected by the operation of the EP&A Act thereafter because as a deemed EPI it would thereafter, in matters concerning it, be subject to the regime that the EP&A Act had erected.

GUMMOW ACJ:   In particular part 3.

MR WALKER:   Yes.

GUMMOW ACJ:   Including section 28(2).

MR WALKER: Exactly. We are common ground with our friends on that. Thereafter, if there was something that answered the description of section 28 by way, say, of amendment to clause 68, then if it answered that description in section 28, it would need to satisfy the so‑called protection provisions of section 28. As I think Justice Hayne raised with both my friend and me, in a way that is the issue in this case. That is really the only issue in this case.

We do not say, contrary to some of the suggestions that your Honours may have heard this afternoon, that clause 68 had some protective aura or some immunity from the section 28 provisions after section 28 came into effect. The only question is what was done in this case within the ambit of section 28. From its first promulgation, as I say, section 68 was in terms which were apt to produce from time to time as zoning changed, either by the creation of new zoning or the shifting of parcels of land by redrawn maps, was apt to produce different effects for the same, say, restrictive covenants from time to time. If you were within an exempted zoning, then there would be a suspension of operation.

If you ceased, not by alteration of clause 68, but by rezoning, if you ceased to be within an exempted zone, then it followed by the unaltered terms and meaning of the words of clause 68 that being “any land . . . within any zone, other than” the exempted zones, your restrictive covenant would now be suspended. It is for those reason, in our submission, that attention has to be placed on whether the rezoning, to use a general expression, change of zone might be more specific, of the appellant’s land itself answers the description that enlivens the obligations under section 28 as to the manner in which something is to be done. Could I draw to your Honours’ attention ‑ ‑ ‑

CRENNAN J:   Whether the rezoning provides for a suspension of a restrictive covenant, why is that not the question, which is I think the way Justice Handley approached it.

MR WALKER:   Your Honour, the question is whether that which rezones, which is the amendment to the LEP, provides for suspension of a covenant, yes, that is the section 28 question, yes.  Could I take your Honours to the close of our learned friend’s written submission “Orders sought”.  The declaration sought is that:

the change of zoning of the subject land vide LEP 194 could not work to suspend the operation –

et cetera.  Perhaps a comparison is the way Justice Handley puts it in volume 2 of the appeal book page 521, second sentence, line 38:

The case concerns the validity of the relevant provisions of LEP 194 which were not approved by the Governor and if this was necessary they are ultra vires and void.

It is clearer, with respect, in Justice Handley’s formulation of the matter, but it may also emerge from what I think is a form of pro‑tanto invalidation referred to in the orders sought by my learned friends, that it is said that the rezoning itself is invalid and the rezoning or change of zoning is to be understood as including two concepts, the devising or creation of a new zone, and that new zone, of course, if it is not added to the exempted class, will have the effect by dint of the continued operation from time to time of the unaltered words with which clause 68 commences of suspending the covenant.

So in this case it would appear that the argument comes down to what I will call an abstract possibility regardless of the position of whether there are any agreements or restrictive covenants in question.  It is simply the fact that there is some new zone being created and there is the shifting of land which used to be in another zone into that new zone without any inquiry as to whether there is a restrictive covenant or agreement whose operation may be suspended, which will, without more, invalidate the rezoning.  The rezoning is not being done in order to suspend the operation of covenants.  It is being done knowingly and intentionally with that as a consequence or effect.

GUMMOW ACJ:   It is for the purpose of the neighbouring development, is it not?

MR WALKER:   Quite so.

GUMMOW ACJ:   Within the opening words of 28(2).

MR WALKER:   Exactly.  Part of that, as section 28 contemplates, is to remove as a blocking, leaving available as an evidentiary or discretionary matter but to remove as a legal block, in this case, private agreement or private covenant.

HAYNE J:   In respect of particular land which is to be the subject of the development enabled, is that right?

MR WALKER:   Any land in that zone.

HAYNE J:   Just so, because 28(2) has a number of features which indicate its very specific target, does it not?  We begin with:

For the purpose of enabling development to be carried out -

We then find at line 4 of 28(2):

provide that, to the extent necessary to serve that purpose, a regulatory instrument specified in that environmental planning instrument -

So we are back to a particular instrument -

shall not apply to any such development -

same development that we are talking about, are we not?

MR WALKER:   Quite so.  In this case, the development in question is development which is either permitted without consent or with consent in the jargon, column 1, column 2 in the zoning tables.

GUMMOW ACJ:   Do not the words “may provide” in subsection (2) permit something which would otherwise not be permitted?

MR WALKER:   No, it is not a permit or not otherwise permit, it is ‑ ‑ ‑

GUMMOW ACJ:   What is the force of the words “may provide”?

MR WALKER:   It means that you have to look at the EPI, the environmental planning instrument in question.  In this case it is LEP 194 that alters by creating new zones and shifting zoning boundaries relevantly, that is all it does.

GUMMOW ACJ:   Where did you see the text of that again?

MR WALKER:   You find 194 at 289 and the changes need to be traced this way.  At 289, clause 4(a) it is said that “This plan”, that is the environmental planning instrument within the meaning of section 28, “amends” the ordinance “as set out in Schedule 1”.  At page 291, item [1] of Schedule 1 adds the LEP 194 zoning map.  That is the thing that does the damage – zoning map to the end of the definition of “scheme map” in clause 4(1).  That is important because the definition of “scheme map” picks up what happens in the ordinance pursuant to clause – “scheme map” by the way is found at 145 of the book but it does its work by reason of what you find at 159, clause 23.

It is the rather mild words on that page that do all the damage.  It reads as follows:

the following table describes in Column 1 how land within a particular zone is –

I think that is a typographical error for “as” –

shown on the scheme map and opposite thereto in Columns 2, 3 and 4 specifies for land –

et cetera, et cetera.  So there is the scheme map in the operative provision which carries out the zoning, and then that has the land use regulation stipulations.  Going back to 291, your Honours should then go over to item 3 on page 293.

GUMMOW ACJ:   Yes, we were taken to that.

MR WALKER:   You have been taken to that.  That is one of the zones which was to be found on the new scheme map that was added to the definition of “scheme map” for the ordinance.

GUMMOW ACJ:   Now the Minister, if one looks at 288, said she was acting under the EPA Act ‑ ‑ ‑

MR WALKER:   There is no question about that.

GUMMOW ACJ:   What provision was she acting under, you say?

MR WALKER:   That is Part 3, section 70 found at page 442 of the book.

HAYNE J:   Page 442 of the book?

MR WALKER:   Page 442.  Alas, this is not plain statutory text, but all of Part 3 is found in this passage of the book.  So the Minister is the official who makes local environmental plans following a process that involves expert and community input being considered by the Minister, and the significance obviously ‑ ‑ ‑

GUMMOW ACJ:   And a local environmental plan under section 70 answers the description of an environmental planning instrument under 28(2)?

MR WALKER:   Yes, it does.  Environmental planning instruments include more than simply LEPs.  It includes the former ‑ ‑ ‑

GUMMOW ACJ:   Is the definition of that somewhere.  I just could not find it.

MR WALKER:   Yes, I do not think it is before the Court.

GUMMOW ACJ:   No.

MR WALKER:   We can supply it, but I can assure your Honours that EPI is a genus that includes the species of LEP, REP, State environment – I am sorry, your Honours, I know too much.

GUMMOW ACJ:   Yes, well, that is my understanding, but ‑ ‑ ‑

MR WALKER:   ‑ ‑ ‑ and former instruments as well under the Local Government Act.

GUMMOW ACJ:   That is right.

MR WALKER:   It is the statutory label for those things that might be called local planning law at different units of the State.  Some are State wide, some are region wide, some are so‑called local.  Section 4, which is the definitions section of the Act, we have not supplied to your Honours.  We will do that.  It has a definition that accomplishes what I have just put.  So that what section 28 requires is that there be found in the Local Environmental Plan provision that –

a regulatory instrument specified in that environmental planning instrument –

and that must mean a reference, even if implicit –

shall not apply to any such development or shall apply subject to the modifications –

So suspended, to use the old language, or cut back.  So “shall not apply” or “shall apply subject to”.

GUMMOW ACJ:   Sorry, what are you reading from, Mr Walker?

MR WALKER:   That is section 28(2).

GUMMOW ACJ:   Yes.

MR WALKER:   The environmental planning instrument in question has to be LEP 194.  I hope I have now taken you to all its provisions.  It does not actually contain, we submit, any words or, for that matter, pictures, that is the map, which specifies a regulatory instrument.  In this case it would restrictive covenants.  It could be done generically.  It does not have to be done specifically for the appellant’s land, of course.  It does not specify that and it does not say that it shall not apply to the development of the kind enabled to be carried out by reason of LEP 194 being promulgated. 

It is unavoidable, it has to be accepted, that the effect of the factum upon which clause 68 operates being altered by the rezoning or change of zoning accomplished by LEP 194, of course, produces, by the unaltered meaning of clause 68, an opposite outcome for the appellant’s land because it is no longer land within the exempted class and it falls within the class that is of any land within any zone except the exempted zones to which clause 68 speaks from time to time.

HAYNE J:   Does LEP 194 have at least the effect that development, et cetera, occurs regardless of the covenant?

MR WALKER:   Yes.  That is what I intended by my last statement.  Yes.  I cannot avoid that.  It is plain.  It is because, there are a number of words that were used perhaps against our position, but it needs to be recognised, it is because LEP 194 was made that what was a former suspension for the appellant’s land is no longer so.

HAYNE J:   Why does LEP 194 not provide, the statutory expression 28(2), that, et cetera?

MR WALKER:   No.  Its promulgation has the effect that the former and, for that matter, continuing current ‑ ‑ ‑

GUMMOW ACJ:   It may have more than one effect, you see.

MR WALKER:   Quite so.  It has the effect that the provision of clause ‑ ‑ ‑

GUMMOW ACJ:   It may have several effects and one effect maligned to you may be enough.

MR WALKER:    I accept that, only have to lose one way, yes.

HAYNE J:   Because 28(3) presents a slight hurdle.

MR WALKER:   Your Honours, as you will have seen from the exchange of written submissions, we do not cavil at the logic of the outcome of the case once this central problem is solved.  There is no doubt about it, there was no Governor’s approval.  We, and I presume the Minister, would also be concerned at the idea of all rezoning accomplished by LEP 194 for lots that have no restrictive covenants are burdening them, for example, have all been invalidated by reason of the appellant’s argument, but that is a consequential matter and it may be solved by what the appellant seeks in this Court which seems to be a pro tanto invalidation only.

But as to the logic of the matter, there was no 28(3) approval, therefore, and there is no question about it, that it cannot have effect, see the words “but only if”, we are not contending against what my friend has put in that regard, if they are correct that it fitted within 28(2).  That is what the case is about.  We say that to observe, as is inescapably true, that it is the existence and contents, that is, the coming into effect and terms of LEP 194, to observe that that is what removed the appellant’s land from the exempted class of zoning in 68(2), to observe that is not tantamount to finding, simply because the words are intractable, that the phrase in 28(2) is satisfied by LEP 194.

This not a matter of evasion and nor is a matter of device. It is a matter of observing faithfully the words of 28(2). It has to be seen, it has to be the statutory – the application of the words of 28(2) to the facts that have happened, which is LEP 194, to which one asks the question, has it provided that restrictive covenants specified in it shall not apply to any such development. You certainly do not find those words. You do not find any other message in 194 to that effect and that is because, simply, clause 68 pre‑existing that EPI and unamended by that EPI had that effect. In short, there was and had been a specification of a regulatory instrument, to use the EP&A language, but that it had been done by clause 68 and previously, and it continued to be, and it was unaltered.

There was the hint of an argument today that it is the nature of an amendment of the ordinance such as was carried out by LEP 194 that provides the means to fit without excessive distortion what has happened within the words of 28(2) and though I may be starting at shadows, it would appear the argument goes along these lines.  Because the amending instrument and the instrument amended are to be read together as a whole, a matter that is of course common ground, they may be taken, as it were, as having come into effect as a whole, perhaps one might say as a new whole, at the time the amendment is promulgated.

So the argument may run, if that be so, then, lo and behold, clause 68 is within the ambit of the environmental planning instrument that may provide within the meaning of 28(2) and, in our submission, that simply cannot be right. An amendment remains an amendment, though upon being made it has to be read with what pre‑existed it as a new whole. Clause 68(2) does not come into effect afresh every time the setting in which it sits is amended, for example, by a simple rezoning map which alters boundaries of unaltered zones. Clause 68(2) does not come newly into effect whenever there is the creation of a new zone which, because it is not within the exempting language of 68(2), naturally falls within the residual class of any land comprised within any zone.

One cannot say, in any meaningful sense, that clause 68 came into effect at any other time than when it was first promulgated under the Local Government Act. It is for those reasons, in our submission, that one would reject the notion that it is by the amendment and the new hole thus created. But you can work 68 itself into subsection 28(2). If that be correct, in our submission, then the words of 28(2) simply cannot be engaged without doing violence to them by the process of amending the zoning which means that the operation of unaltered provisions of clause 68 produce an opposite effect for the appellant’s land.

It does come down to this, that one cannot as a matter of language, perceive that LEP 194 has provided that restrictive covenants specified in it shall not apply when there are no words to that effect and all that can be seen is that it has provided a new factum producing an opposite result from the application of pre‑existing and unaltered provisions in this case of clause 68.

The provision, in short – the operative provision – was always and still is clause 68. That is what provides that instruments specified “shall not apply”, to use the new language under the EP&A Act, new language which is adaptable to the different language to similar effect of 342G(4) of the Local Government Act. 

I am reminded as we have drawn to attention in our written submissions and as has been supplied in the list of authorities to your Honours – I do not need to take you to it – it is in paragraph 23 of our written submissions – that there is another transitional provision because the first transitional provisions were repealed.  It is all set out in paragraph 23.  You will not find that in the appeal book but you will find it in our list of authorities.  It does not alter the nature of the argument we have put.

GUMMOW ACJ:   Part 3 of the Act contains Division 4 which was local and environment plans and that included section 70.

MR WALKER:   Yes.

GUMMOW ACJ:   And that founded LEP 194.

MR WALKER:   Yes.

GUMMOW ACJ:   Division 1, though, applies generally to environmental planning instruments.

MR WALKER:   Yes.  There is a ‑ ‑ ‑

GUMMOW ACJ:   Which is an umbrella term which includes LEPs by reason of the definition in section 4.

MR WALKER:   EPI is a genus.  LEP is a species of that genus.

GUMMOW ACJ:   So, 28, as it were, is applying generally.

MR WALKER:   Yes, 28 is intended as a protection so‑called ‑ ‑ ‑

GUMMOW ACJ:   Across the whole range of environmental planning.

MR WALKER:   For any kind of EPI – State environmental planning policy, a regional environmental policy, a local environmental policy.  So, any means by which – I will call it by delegated legislation – there is this ‑ ‑ ‑

GUMMOW ACJ:   Suggests that it does occupy some superior position in the structure.

MR WALKER:   No question about it.  That is why it is found in Division 1.  I hope that we have not put any argument.  I am sure the Minister will not put any argument deprecating the importance of section 28 if it applies.  Its omission to be observed is fatal.  No question about it.  Equally, whatever one may say in accordance with Justice Handley’s restrained language, whatever one may say about the substance of the protection is not a matter for the Court to be concerned with.  It is something that has to be done.  We are not putting any point about it does not matter.  It does matter.  It is a question of lawful authority.

Your Honours, could I conclude by going to just a few matters in Justice Handley’s reasons, page 520, paragraph 59. There, his Honour correctly says in a way that, in our submission, does not sit with his later reasoning, that there is no retrospective operation of section 28 so as to acquire approval for clause 68, and as I stress, it was clause 68 that does the providing in this case concerning that restrictive covenants should be suspended. At page 524, the nub of the reasoning is found at the foot of paragraph 80 – I think your Honours have potentially been drawn to this earlier:

The LEP did so “provide” because that was the result, and a necessary and intended result, of the making of that LEP.  It provided for that result –

and as to that sentence, which perhaps compresses the whole of the controversy into two short sentences we say yes, it was the result, and it is certainly because of the making of LEP and its terms that that result came about.  There is nothing unintended, collateral or anything like that.  It is direct.  But that, in our submission, is not the same – that is to say, that it provided for that result, as his Honour concludes, is not to observe the wording of subsection 28(2).  In particular, the expression specified in that EPI found in subsection 28(2) is not observed at all by the reasoning that one finds culminating in paragraph 80.

Page 526, paragraph 89, in our submission, that is a sentence which more accurately describes the state of affairs. It was clause 68’s, as I have been putting it, unchanged meaning that operated, not by dint of it being amended by 194, but because the state of affairs to which it continued to speak in the same terms happened on the ground for the appellant’s land to be different. Then on page 527, paragraph 96, his Honour puts it slightly differently in a way that we accept as accurate, but as not fitting 28(2), where his Honour uses the word “because”.

To pick up 68(2) as part of a combined instrument, however, is a notion from which we do respectfully differ and urge your Honours should reject.  That seems to contain this idea that 68(2) is being remade every time there is a change of zoning of one kind or another, albeit without any change to 68(2) itself, and that change to zoning obviously produces a different state of affairs for 68(2) to speak to.  In our submission, it is not correct to say that 68(2) is being remade.  That is not the EPI which is subject to 28(2), for the reasons his Honour pointed out.  There is nothing retrospective, nor is it remade every time the ordinance is amended.

Paragraph 97, in our submission, goes too far. It might be sensible, with respect, to say that LEP 194 be read into the ordinance, it is an amendment. But to say that the ordinance is to be read into the LEP is, with respect, a reversal that, though neat, is not informative. It is not LEP 194 that provides the comprehensive planning scheme for Ku‑ring‑gai; it is the ordinance as amended from time to time including in small respects, more than important respects, by 194. Again, what his Honour calls the combined instrument is not, however, an instrument which shows clause 68 being made after the commencement of section 28.

If clause 68 had been altered in such a way as to remove the exemption from the appellant’s land by some amendment that followed section 28 coming into effect, then for the reasons my friend has put, and with which we agree, section 28 needed to be complied with, but that is not what has happened in this case.

Finally, in paragraph 98, his Honour uses the language of, it provided “because it brought about that result”.  If the language were in more general terms in subsection 28(2) then that would be, with great respect, a perfectly good contextual reading of what it means to provide something, but the language in 28(2) does not permit of that, particularly by the expression of “provides that”, and “specify”.

BELL J:   What about his Honour’s reasoning at paragraph 65, appeal book 521, as a reason for looking to a different interpretation of 28?

MR WALKER:   That is for the Parliament, your Honour.  The whole of my argument is that 28(2) might be thought to have in mind that effects upon the application of public law or private rights depending upon the selection made by the maker of the LEP, should go through a special solemn and explicit, that is the real key, explicit process in order to be effective.  The way they have done that does not free, in our submission, the court to make it apply when there is not an environmental planning instrument that provides that specified instruments not apply.  If those words do not apply, then these requirements of subsection (3) are not engaged.  If one is to be talking about something being drafted another way, I suppose the short answer to your Honour’s question is that section 28(2) may have been drafted another way, and that is my response to Justice Handley’s point.

GUMMOW ACJ:   Looking at paragraph 62, you say the words “had the effect” is the vital, even though it did not have the effect because of express provision – lacked an express provision to ‑ ‑ ‑

MR WALKER:   No, it is not the word “express”.  I have eschewed the word “express”.  There is just no provision at all in LEP 194 answering the description in 28(2).  I accept that it might be implicit.  Unless one does the ‑ ‑ ‑

HAYNE J:   If you look at 194 with very close confines, looking only at that and you cannot find the words spoken of in 28(2), is that not the argument, Mr Walker?

MR WALKER:   No.  Your Honour can hardly expect me to answer yes to that.

HAYNE J:   I did not expect it.

MR WALKER:   No, but 28(2), and 28(3) for that matter, is about the making of instruments ultimately in the Governor’s study or the Minister’s office.  So it is about something that is on paper.  There will be an Executive Council minute about it.  It is not 68(2) pre‑existing and in the air as a deemed EPI.  It is not the planning ordinance that comes up for approval every time there is a rezoning.  No one says that.  We are talking about it must be on paper, it must be, in this case, under section 70, it has to answer the descriptions of an LEP which is something which is textual and graphic.  It has to have been displayed and been through the mill of consultation.

GUMMOW ACJ:   Graphic means in writing, does it not?

MR WALKER:   It can have plans.  In fact, they really mean maps.  For those reasons, I am not asking any blinkers to be put on, I am simply saying, look at the EPI in question to which 28(2) speaks of it all.  If it does not do what 28(2) requires in order that 28(3) be engaged, then there is an end of it.  There is a purposive or beneficial reason why that ought to be so.  Everybody in the vicinity may be taken to know, or their conveyances to know, that unless they are within specified zonings, the benefit of restrictive covenants that they enjoy burdening other land, unless that other land is within one of the exempted zones, then they will not be able to wield that restrictive covenant to prevent permitted development as it may be permitted from time to time by changes to LEPs, et cetera, which do not need to go through 28(3) processes, that means, for example, on the merits, let me assume, which is not this case, let me assume that hospitals were once prohibited. 

If you were not within an exempted class, then that can be altered, that is the big effect that has been complained of here; once I could stop a hospital, now I cannot, a more general zoning effect so that more people are affected, that there may be a hospital in their whole vicinity.  That is done without any 28(3) protection and that is because that is the nature of this planning legislation, as the Ligon decision we cite in our written submissions makes clear.

GUMMOW ACJ:   You say there is no implicit negative in 28(2)?

MR WALKER:   No.  It must answer that positive description and that word “that” and that word “specified” ‑ ‑ ‑

GUMMOW ACJ:   What is the whole purpose of 28(2) of this protection?  Is it a protection that was not there before?

MR WALKER:   The purpose is that where there is a part of a document which, going through the official section 70 process will become, as it were, local law, that where there is part of it that does something by, so says Parliament, providing that in relation to specified rights, and the word “that” and “specified” is absolutely critical to that operation, that is the means by which they have said that will require a special process.

It may well be, and argument may well have thrown up the fact that it could be that section 28(2) has been drawn in a way which is not apt to cover every case where somebody previously enjoying a restrictive covenant ceases to do so by reason of the promulgation of an LEP, but that is, with respect, an entirely different question. It is to be remembered, of course, that clause 68, which was itself made by the Governor of the time, continued, in effect, unaltered and that ‑ ‑ ‑

GUMMOW ACJ:   It only had life because of the 1970 Act.

MR WALKER:   It only had life because ‑ ‑ ‑

GUMMOW ACJ:   You cannot say it continued.

MR WALKER:   It only had life because of the transitionals, but the transitionals gave it life which in no way detracted from the full force and effect of its tenor as it was first promulgated.

GUMMOW ACJ:   Well, that is the question.

MR WALKER:   There has been no dispute about that.

GUMMOW ACJ:   It came to life by reason of the 1979 Act with all that that entails.

MR WALKER:   No, it retained life because of that.

GUMMOW ACJ:   Well, that is the question.  We have had that a couple of weeks ago in another contract.

MR WALKER: Your Honour, as you will have seen from our written submissions, far from disputing the importance of the transitional provisions, we actually put them at the heart of our argument. There is no question that they are critical and they provide a source of effect, that they give an effect to something which was not itself modified, amended or touched by LEP 194 and it is for those reasons that when one looks at clause 68 and sees that there are the provisions which would answer a section 28(2) description and one sees that that is in no way the subject matter of LEP 194. It is entirely unaltered. It is for those reasons that 28(2) is not engaged. May it please the Court.

GUMMOW ACJ:   Mr Griffiths, will you explain to us shortly how it is your client supports this narrow construction of 28(2)?  I mean, the construction that is put by Mr Walker to deal with the position of his

particular client does depend upon accidents of drafting, which is what agitated Justice Handley and one can see why.

MR GRIFFITHS:   Yes, your Honour.

GUMMOW ACJ:   This is a beneficial provision, 28(2).

MR GRIFFITHS:   It is, but, in our respectful submission, the reason why that construction is to be preferred are set out in both our annotated written submissions and also particularly in our outline of oral argument.  We would, in particular, emphasise the terms in subsections 28(2) and (3) themselves which, on their face, suggests that the triggering event is something which is in the nature of text contained in an environmental planning instrument. 

Your Honours have been taken to the significance, as we would put it, of the words “may provide that” in subsection (2) and in subsection (3) the reference to a provision having “effect according to its tenor” and approving of the provision are all words, in our respectful submission, which indicate that what was contemplated was that there was a need for a textual provision in the nature of a clause or a statement in an environmental planning instrument for the provision to be engaged.

HAYNE J:   Thus you reject the notion, do you, that 28(2) and (3) read together have no negative effect?

MR GRIFFITHS:   Well, it depends what you mean by “no negative effect”, your Honour.

HAYNE J:   As you would have it, 28(2) is engaged only if a particular drafting form is adopted and then, and only then, do you go down the 28(3) path, is that not right?

MR GRIFFITHS:   That is not completely right because of the unusual feature of this case that we are dealing with a parent provision which is a provision which has not been made under the Environmental Planning and Assessment Act, but rather was a provision that was made under the now repealed Local Government Act.  The source of the power to suspend, in our respectful submission, and the reasons given by Mr Walker, remains in that parent provision, 68(2), which in its terms contemplates that future factual events could occur, including the possibility of new zones or rezoning and the like.  We agree, with respect, with what the Court has heard, and this is set out in length in our submissions, with what Mr Walker has said on that point.  Your Honours, there are only two other matters that I wish to raise.  The first is a matter which is not raised in either our written submissions or, indeed, in any of the written submissions of the parties and it arises from ‑ ‑ ‑

GUMMOW ACJ:   Is it in your outline?

MR GRIFFITHS:   It is not.  This is a new matter which only ‑ ‑ ‑

GUMMOW ACJ:   Lightning struck 10 minutes ago.

MR GRIFFITHS:   No, your Honour.  It is something, in fact, that was inspired by your Honour’s comments this morning about the question whether or not the Court of Appeal referred to any maxims of statutory construction regarding destruction or acquisition of proprietary rights and it is in that context that I wish to draw your Honours’ ‑ ‑ ‑

GUMMOW ACJ:   Just give us the citation.

MR GRIFFITHS: It is the citation to section 342AC of the Local Government Act.

GUMMOW ACJ:   Do we have that text?

MR GRIFFITHS:   You do not.  I have it here.  I can hand it to you, if your Honour wishes, and at the same time, if I could hand to your Honours a copy of ‑ ‑ ‑

GUMMOW ACJ:   This is the 1919 Act?

MR GRIFFITHS: It is in the 1919 Act. I will say something very briefly about it, and also hand to your Honours a copy of a decision which contains, in our respectful submission, some useful discussion on the principle that your Honour referred to in the specific context of section 28 of the Act. Now, the first matter, as I say, not drawn to the court’s attention below, only we became aware of it this morning, is section 342AC which, if your Honours note subsection (1)(a), it gives rise to a right to compensation.

GUMMOW ACJ:   This was in 1945.

MR GRIFFITHS:   That is correct.

GUMMOW ACJ:   This was highly controversial at the time, I think.

MR GRIFFITHS: Indeed. The point I simply wish to draw to the Court’s attention is that this is a provision that your Honours should bear in mind when you are focusing on section 342G(4), it being an accompanying provision in the now repealed Local Government Act which expressly created a right of compensation which arguably would have been available in circumstances where the effect of the coming into operation of the provision contained in a prescribed scheme injuriously affected an estate or interest in land which could include a restrictive covenant.

HEYDON J: Is there any modern equivalent to section 342AC?

MR GRIFFITHS:   No, there is not, your Honour.  There is no equivalent provision to this statutory right in the Environmental Planning and Assessment Act which replaced those parts of the Local Government Act.

GUMMOW ACJ:   You surprise us, yes.

MR GRIFFITHS:   That is why I wish to draw it to the Court’s attention.  It may, of course, have two edges to it.

HEYDON J:   So when section 28 came in, starting in 1980, there was no accompanying provision for compensation?

MR GRIFFITHS:   Correct.

HEYDON J:   Did not Justices Deane and Gaudron in Mabo say that you approach legislation that expropriates without compensation with a narrow construction and have not other authorities in this Court said that if there is some provision which protects the expropriated person, it is to be construed amply?

MR GRIFFITHS:   Yes, your Honour, that is correct.  Where there is an expropriation, whether a suspension amounts to an expropriation.

GUMMOW ACJ:   Well, come on, Mr Griffiths.

HEYDON J:   Mr Griffiths, it is a destruction for a time.

MR GRIFFITHS:  There is a placement in abeyance which may be infinite or indefinite.

HAYNE J:   Placement in abeyance with how many stories, yes.

MR GRIFFITHS:   I wish to draw the provision to the Court’s attention because it may have some significance.

GUMMOW ACJ:   What is the answer to what Justice Heydon then puts to you?  You then deliver yourself into the sort of approach to construction evidenced by cases like Mabo.

MR GRIFFITHS:   The way I respond is to say that the Parliament in its wisdom in repealing these provisions in the Local Government Act and replacing them with a new regime in the Environmental Planning and Assessment Act determined that it would not provide for a right to compensation.

HEYDON J:   But it did provide section 28 and section 28 must be construed amply.  This controversy reveals that its construction is open to some doubt either way.  Why should it not be construed the appellant’s way?

MR GRIFFITHS:   Section 28 has to be construed according to its terms.

HEYDON J:   It has a certain effect, that is common ground.

MR GRIFFITHS:   Absolutely. 

HEYDON J:   It consists of words which have a certain effect.  Words which have a certain effect must have it because of the way they are construed. 

MR GRIFFITHS:   Indeed, I cannot dispute that.  Your Honour, the issue at the end of the day, though, boils down to how far you go beyond the terms of section 28 and the phrases that I have emphasised which indicate that what is envisaged is a provision in the form of a text or a statement in an environmental planning instrument.

GUMMOW ACJ:   Any provision has a text.  That is what Justice Heydon is putting to you.  If you are going to read the text – anyhow, what do we get out of Justice Pearlman?

MR GRIFFITHS:   I only wanted to draw to the Court’s attention the ‑ ‑ ‑

GUMMOW ACJ:   This is Coles Supermarkets v The Minister?

MR GRIFFITHS:   That is the case, your Honour.

GUMMOW ACJ:   Seventeen, electronic citation.

MR GRIFFITHS:   Yes, I am afraid this is the best that we could get.  I know it is not easy to follow, but if you look at the bottom left‑hand corner of each page, if you could turn to page 8 of 14 you will see a discussion starting there with the final paragraph:

Mr McClellan submitted that, because of the potentially far‑reaching effects of s 28, it should be narrowly construed.

A reference to the – a need therefore narrowly to construe specificity.  Then over on the next page, your Honours, a discussion of other cases, not in this Court of course, except for the Wade Case which is referred to in passing, about the need to view that presumption conservatively in the specific context of planning legislation which by its very nature is intended to invade proprietary rights.

GUMMOW ACJ:   That is circular.  It is a circular proposition. 

MR GRIFFITHS:   Your Honour, there are some various cases where – not just this case – but other cases referred to where the importance of that subject matter is emphasised in assessing the weight to be applied to the application of the presumption.  If the Court pleases.

GUMMOW ACJ:   Thank you, Mr Griffiths.  Mr McEwen, anything in reply?

MR McEWEN:   Just briefly, your Honour.  …..from Mr Walker.  It seems the position taken is, and both by Mr Walker and Dr Griffiths, that unless we have a provision specifying in words the operation that we say falls foul of section 28, we cannot get relief.  I put the submission earlier that LEP 194 as Justice Handley says – and my learned friend, Mr Walker, took the Court to it – paragraph 97 of page 527 about the two instruments being combined by reading 194 in the KPSO, or KPSO into 194, his Honour went on to say:

On either approach the combined instrument contains cl 68(2) which specifies the restrictive covenants which “shall not apply”.

So you have it in operation.  Either way you read it, it does not matter.  The other matter that my learned friend, Mr Walker, referred to was any change of zoning and moving a street, for example, moving one street away.  That example does not meet the proposition that if the change one street away, or even less – even if it is half a block away – if the moving of the zoning thereby suspends the operation of covenants, our submission is consistent with section 28.  It is engaged.  It has to be abided by. 

During discussions with my learned friend, Mr Walker, the Court was taken to an earlier – your Honour Justice Gummow asked about the form of the Act as at the date of LEP 194 on 28 May 2004.  What we have produced in the appeal book in relation to the Act which commences at page 400 is, in fact, the provisions as they existed at 4 June 2004 – about a week and a half later. 

Finally, in relation to my learned friend, Mr Walker, there was one other matter I wished to touch upon – if your Honours could just bear with me for a minute.  Your Honours, I would only be repeating myself.  In relation to the submission put by Dr Griffiths as to the operation of 342AC, if your Honours are minded to give that any weight, we would ask for an opportunity to have a look at it.  Our submission is it is irrelevant, totally irrelevant.

GUMMOW ACJ:   I think we have it well on board, Mr McEwen. 

MR McEWEN:   Thank you, your Honour.  That is all, with respect.  Thank you, your Honours.

GUMMOW ACJ:   We will consider our decision in this matter and we will adjourn until 10.15 am tomorrow.

AT 3.56 PM THE MATTER WAS ADJOURNED