Cumerlong Holdings Pty Ltd v Dalcross Properties Pty Ltd & Ors [2011] HCATrans 56

[2011] HCATrans 56

[2011] HCATrans 056

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S227 of 2010

B e t w e e n -

CUMERLONG HOLDINGS PTY LTD ACN 008 484 875

Applicant

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

Application for special leave to appeal

FRENCH CJ
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 11 MARCH 2011, AT 11.47 AM

Copyright in the High Court of Australia

MR P.J. McEWEN, SC:   May it please your Honours, I appear with my learned junior, MR S.B. NASH, for the applicant.  (instructed by Allsop Glover)

MR A.E. GALASSO, SC:   May it please the Court, I appear with my junior, MS G.B. NEWPORT, for the third respondent.  (instructed by Robert Napoli & Co Solicitors)

FRENCH CJ:   Thank you.  There is submitting appearances for the first and second respondents.

MR GALASSO:   Yes, your Honour, on the basis that the subject land has been sold between the decision at first instance and the Court of Appeal’s decision.

FRENCH CJ:   Yes, thank you.  Yes, Mr McEwen.

MR McEWEN:   Your Honours, the two succinct competing arguments that were in the Court of Appeal, in a nutshell, which Mr Justice Tobias and Justice Handley recognised, a question of form over substance or substance over form, arises from the manner of the drafting of LEP 194.  On one particular construction of the drafting, section 28(3) is engaged, on the other it allegedly does not and, as Justice Handley observed, that fact, that the manner of drafting has those different results, or can have, as his Honour said, it invites closes scrutiny, that is, if the LEP stated what the effect in operation would be, then section 28(3) would be engaged and the Governor’s approval would be required for it.

KIEFEL J:   Your basic position is to adopt the reasons for judgment of Justice Handley?

MR McEWEN: Correct, your Honour. Justice Tobias’ judgment, agreed with by Justice McColl, was to the effect that as LEP 194 did not specifically identify or state what was provided by way of effect, that is, that the regulatory instrument in question, here LEP 194, shall not apply, being the covenant in question, then section 28 was not engaged, although he acknowledges the practical effect of LEP 194 when combined with clause 68 of the PSO. The practical effect of reading them together was to suspend the covenant absent any words to that effect.

KIEFEL J:   Could you remind me, is the local environment plan made by the Minister?

MR McEWEN:   An LEP now is, yes, your Honour.

KIEFEL J:   At the relevant time it was?

MR McEWEN:   It was a PSO originally.  The instrument which was governing the zoning of this land was a PSO.  It was not an LEP.  It became a deemed local environmental plan under the transitional provisions when the Environmental Planning and Assessment Act 1979 came into being.

KIEFEL J:   But LEP 194 was made by the Minister?

MR McEWEN:   Made by the Minister, yes, your Honour.

KIEFEL J:   What is the source of power for the making of an LEP?

MR McEWEN:   I am sorry, your Honour, I did not come armed with that.  The Minister has power under the 1979 Act to make the LEP.

KIEFEL J:   Is section 28 a source of power?

MR McEWEN:   Section 28 says if an instrument is to be made which suspends a covenant, then there are steps set out as to what has to happen, that is, the Minister has to indicate prior to the Governor granting consent.  A copy of section 28 in full is found at application book 17.  The operative provision is 28(2), that is, an “instrument may provide that ‑ ‑ ‑

FRENCH CJ:   This was a successor to the old 324G, I think was it?

MR McEWEN:   Yes, your Honour, G(4).

FRENCH CJ:   Yes, section 342G, I am sorry.

MR McEWEN:   Yes, your Honour.  But then in 28(3):

(3)A provision referred to in subsection (2) –

that is, an instrument providing that a regulatory instrument, being a covenant here, shall not apply –

shall have effect according to its tenor, but only if the Governor has, before the making of the environmental planning instrument, approved of the provision.

(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.

FRENCH CJ:   A lot of it hangs on the word “provide”.

MR McEWEN:   The whole thing turns, your Honour, on the word “provide”.  As your Honours have seen, Justice Handley says you do not go just to the words, you go to see how it operates in fact.

KIEFEL J:   It is a very short point.  It is whether or not, as Justice Handley said, it means has the result or the effect.

MR McEWEN:   Yes, your Honour, a very short point.

FRENCH CJ:   Is it a special leave point or is it a problem of a local statute?

MR McEWEN:   Your Honour, it is a local statute, but your Honour will have seen in Justice Smart’s decision that the Minister sought leave to appear as amicus and was granted that position and his Honour Justice Smart at appeal book ‑ ‑ ‑

KIEFEL J:   You say it is a public interest point.

MR McEWEN:   He, in fact, identifies that it deals with the suspension of covenant provisions which most local environmental plans in New South Wales now contain and, secondly, he identified what he said were matters of public importance so far as that construction is concerned, that is, firstly, the ambulatory effect of the older instrument, the PSO, coupled with an inquiry into the parliamentary intent in 194 which, in the way it has been drafted, has this incidental and indirect impact on the suspension of covenants, notwithstanding what section 28 later said had to be followed if it was to have that effect.

FRENCH CJ:   I think we understand the point.  I think we might be aided by hearing from the respondent at this point.

MR McEWEN:   If your Honour pleases.

MR GALASSO:   Your Honours are well aware of the factual background self‑evidently to the appeal, but may I state ‑ ‑ ‑

KIEFEL J:   Do you suggest that this is not a matter of public importance?

MR GALASSO: Yes, your Honour, for a number of reasons. One is the particular circumstances of this case are not ones that necessarily lend themselves to a matter of public interest in the sense of universal application for this reason. There is undoubtedly the power in section 28 to create a clause such as the clause that manifests itself in clause 68. This appeal is not about that power as contained in section 28. The complication in this case is that the pre‑existing provision, that is, clause 68, was a provision made under the older planning scheme ordinance under the Local Government Act. It had continued effect and what it was that changed the circumstances was not so much a change in that clause, but a change in the zoning of the land which is the basis upon which the clause operated for the purposes of either putting land into or out of the exception to the operation of clause 68. In the circumstances of this case ‑ ‑ ‑

KIEFEL J:   But that raises the question whether or not an instrument can, by the process of rezoning, achieve the result but yet avoid the operation of section 28.

MR GALASSO:   On the way that Justice Handley raised it at the end of his judgment rather than as part of his ratio, if I may describe it in that way, yes, your Honour, but in the circumstances of this case, the applicant’s whole case relies upon not so much a claimed invalidity of local environmental plan 194, but that the effect of the combination of it together with what pre‑existed was that what pre‑existed did not operate according to its tenor and the only source for that statutory proscription ‑ ‑ ‑

KIEFEL J:   It took it out of the ambit of clause 68(2), did it not?

MR GALASSO:   Yes, but the only source for ‑ ‑ ‑

KIEFEL J:   But the question is whether it can without complying with section 28.  You do not get away from that point.

MR GALASSO:   No, you do not, your Honour.  May I say, even in the decision of the majority of the Court of Appeal, which was essentially Justice Tobias’ decision, it was accepted that the effect of the combination of the two was that the applicant’s land was excluded, or certainly to the extent that he had benefited from a covenant, was excluded from that operation.

KIEFEL J:   Yes.  You would agree then that the point is quite a narrow one.

MR GALASSO:   It is a very narrow one, but, your Honour, if we may say, that in order for the applicant’s approach to be accepted, they need to point to what part of the local environmental plan it is that is said to be providing for the suspension of the covenant, and that is our point.  It is being described in short ‑ ‑ ‑

KIEFEL J:   That is the issue on the appeal.

MR GALASSO:   Yes.

KIEFEL J:   What you are pointing to is the approach of Justice Tobias.

MR GALASSO:   Yes.

KIEFEL J:   The applicant for special leave relies upon the dissenting judgment.  The question is whether or not we should consider whether the Court should hear an appeal about it.

MR GALASSO: For the reasons we advance in the written summary, your Honour, when it is acknowledged that it is reliance upon the statutory proscription that is a part of the applicant’s case, the only part within, if we look at either of the instruments or the instruments combined where the language of section 28(2), leaving aside whether “provide in” subsection (2) is used in the verb sense or as an other manifestation of the noun, the only place in which you find the language of direction or suspension in either of the instruments or in the combined instrument is in clause 68 and that was the pre‑existing provision. It is for that reason, as we have said, that the decision of the majority constituted by Justice Tobias’ decision was correct when it is recognised that that is what section 28(3) is directing attention to. It is, to ask it in shorthand, what is it or where is the provision that the Governor needs to have approved before it has effect according to its tenor?

If we merge all of the documents together, the answer, as I have repeated, whether individually or in a combined sense, can only ever be clause 68. The other provisions, as has been acknowledged in other parts of the judgment, may well set out what has been described as the factual circumstance, but the provision providing or the clause that does the work in terms of suspension of the covenant rests in clause 68. If we can express it the converse, but for clause 68 the later instrument cannot be said to have provided for the suspension of the covenant and that is why we say that the matter is not visited upon by sufficient doubt.

FRENCH CJ:   We will not need to trouble you.  There will be a grant of special leave.  I presume this will done within in about half a day?

MR McEWEN:   Less than half a day, your Honour.

FRENCH CJ:   We will hold you to that.

KIEFEL J:   It would be a rare event.  Yes.

MR McEWEN:   If your Honours would like to do it on the papers?

FRENCH CJ:   Yes.  We will adjourn again to reconstitute.

AT 11.58 AM THE MATTER WAS CONCLUDED