Deepcliffe PL & Anor v Council of City of Gold Coast & Anor

[2002] HCATrans 258

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B79 of 2001

B e t w e e n -

DEEPCLIFFE PTY LTD as Trustee of the Deepcliffe Unit Trust

First Applicant

CARKAZIS PARAGON INVESTMENTS PTY LTD as Trustee of the Carkazis Family Trust

Second Applicant

and

THE COUNCIL OF THE CITY OF GOLD COAST

First Respondent

KEITH THOMPSON

Second Respondent

Application for special leave to appeal

GAUDRON J
GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON WEDNESDAY, 26 JUNE 2002, AT 9.31 AM

Copyright in the High Court of Australia

__________________

MR N.M. COOKE, QC:   If the Court pleases, I appear with my learned friend, MR B.G. CRONIN, for the applicants.  (instructed by Adamson Bernays Kyle & Jones)

MR G.J. GIBSON, QC:   May it please the Court, I appear for the respondents with my learned friend, MR R.S. LITSTER.  (instructed by Minter Ellison)

GAUDRON J:   Yes, Mr Cooke.

MR COOKE:   Your Honours, this case arises out of problems associated with a restaurant called the Ashmore Steak and Seafood Restaurant which was ‑ ‑ ‑

GUMMOW J:   It is said to be the biggest in the world.

MR COOKE:   Well, so someone said, your Honour.  But the question about this restaurant, it is a popular restaurant which involves turnover at reasonable prices rather than high prices, so turnover is an important aspect of it.  They were located in a local shopping centre in the Gold Coast City Council.  They operated with full town planning approvals and each time there was an expansion of the seating capacity of the restaurant, that was accompanied by the appropriate council approvals and the appropriate off‑street car parking requirements that were met.

Now, your Honours, towards the end of 1993, it became apparent that on Friday and Saturday nights, which were the busy nights, the off‑street car parking was not sufficient to take all the potential customers so some of them started to park in adjacent residential streets and that, naturally enough, led to complaints.  The Council was faced with two alternatives to solve the problem of the amenity in the residential streets:  they could either approve additional off‑street car parking and the applicants bought properties at one time or another on one side and on the other side and made applications to have those included in the shopping centre so that additional car parking spaces could be provided; or the other alternative was that the seating capacity of the restaurant had to be restricted somehow or other.

Now what the Council did, at the instigation of the local councillor who was under pressure from the residents, one might imagine, was to refuse to allow any increase in the off‑street car parking, so that option was out.  The only other option was to try to reduce the seating capacity or the number of people who went to the restaurant.  What they did was that a number of days before a general council election, signs were put up in the streets adjacent to the restaurant restricting the parking to one hour.  Previously it had been a two-hour blanket parking over the whole of the City of Gold Coast with no signs being put up in the immediate vicinity, but it was a two-hour parking without moving your car throughout the whole of the Gold Coast area.  This one restricted it to one hour.  It was initially Monday to Friday but was very quickly changed from Monday to Sunday because it obviously did not cover the busy time on Saturday. 

Now, the signs were put up at the instigation, as the judge found, of the local councillor and it was done by some method of talking to the engineer and the engineer issued a work permit authorising the signs to be put up.  Immediately the signs were put up, the Council enforcement officers were there booking cars and, in fact, they booked cars in the first week on Saturday night.

GUMMOW J:   We know all of that, but we have to get to the circumstances that would attract the grant of special leave.

MR COOKE:   Yes, well, your Honour, I am coming as quickly as I can to that point.  The judge found that the erection of the traffic signs was unlawful.  It was unlawful because the Traffic Act provided that unless the signs were put up by lawful authority, it was a criminal offence, it was an offence under the Traffic Act.  This, the judge found, was not put up by lawful consent because they did it the wrong way.  They did not have a resolution of the Council and they did not have a local law or by-law to authorise the reduction from two hours to one hour, it was simply done by administrative act.

Now, your Honours, there are a number of causes of action.  First of all, there is a nuisance claim and the nuisance claim was that because of putting that up they had sent people away, the potential customers had been prevented from parking and coming to the restaurant.  The trial judge in the Court of Appeal held on the basis of the Victoria Racing Case that there was no actionable nuisance for that on the basis that there was no physical obstruction to the ingress and egress to the premises.  Your Honours, in our submission, the point arises in respect of that claim that the court was under a misapprehension about Victoria Racing because the Victoria Racing Case depended on a right of privacy which the court found there was no right of privacy, but what happened there was they overlooked the cause and there was no nuisance caused by that because ‑ ‑ ‑

GAUDRON J:   What do you say the nuisance was in this case?

MR COOKE:   The nuisance in this case, your Honour, is putting up those signs which ‑ ‑ ‑

GAUDRON J:   But that is not on your client’s land.

MR COOKE:   No, but it is causing people not coming to our premises.

GAUDRON J:   Yes, but nuisance consists of something more than causing people not to come into your premises, does it not?

MR COOKE:   Well, your Honour, on the analogy of those queuing cases, if you do something which makes it more difficult for people to get to your premises, that is an actionable nuisance.  You are not obliged to elbow your way through the crowd to get to the shop or to go a longer way around to get to the shop and we say on analogy with this that by putting up those signs, you are really warning off potential customers before they even get to the place and the judge found that those signs did have an effect on potential customers or repeat customers in sending them away.

GAUDRON J:   What do you say is the rationale of the queuing cases?

MR COOKE:   Your Honour, the obstruction to stop people from getting into the shop ‑ ‑ ‑

GAUDRON J:   Were they public nuisance cases?

MR COOKE:   Probably a public nuisance, yes.

GAUDRON J:   Yes, that is a somewhat different issue from a cause of action claiming damages for a private nuisance, is it not?

MR COOKE:   Yes, but in this case it may be a public nuisance as well.

GAUDRON J:   But, no, no, I do not think you sued for a public nuisance.  I do not think you sued to restrain or abate a public nuisance, you sued in damages for nuisance. 

MR COOKE:   Yes.

GAUDRON J:   Which is a cause of action based in private nuisance, is it not?

MR COOKE:   Yes.  Your Honour, can I move on then to the next point, the unlawful interference with business.  Your Honours, in the Court of Appeal and in the trial judge below they were not prepared to find that that tort existed in the common law of Australia because of the tentative decisions of the High Court in Mengel’s Case and in Sanders v Snell and despite the fact that there are a number of State Supreme Courts that found that the tort did exist in the common law of Australia which are listed in our outline.  There was no pronouncement by a State court subsequent to the decision of the High Court in Sanders v Snell, so their Honours felt that they should not embark on that.  But, your Honours ‑ ‑ ‑

GUMMOW J:   But you run into questions of intention, do you not, to cause harm?

MR COOKE:   Well, your Honour, in this particular case we submit that because the logical consequences of what they did was to cause customers not to come to the restaurant, as the judge found, and because they knew of the alternatives, that these acts were, in all probable consequences, directed towards it because although the judge found that one of the reasons why they put it in was to protect the residential amenity of the area, that cannot be unscrambled from the intention of getting the car parking from the restaurant off the street because that was what was causing the loss of amenity.  So the two go together. 

GAUDRON J:   But that really does just suggest that if there is an intention, it must be the sole or dominant intention.

MR COOKE:   Yes.  Now, your Honours, we submit that that should not be the case that in cases of unlawful interference in England the case that we refer to, Lonrho and so forth there, indicate that it only has to be one intention.  It does not have to be the sole or dominant intention.

GAUDRON J:   Yes, but is that a case concerning public authorities who have responsibility for the general administration of the area where one person’s gain is necessarily another person’s loss, except ‑ ‑ ‑

MR COOKE:   Your Honour, it was not a case of a public authority, but in our submission, there is no basis of principle why a local authority should not be subjected to the same laws of tort ‑ ‑ ‑

GAUDRON J:   Their basis in principle is that a local authority could never protect the amenity of an area.

MR COOKE:   Your Honour, it could, it could.

GAUDRON J:   It could?

MR COOKE:   In this case it could because it could have rezoned additional off‑street car parking spaces, but it chose not to do that.  What it did was to embark on some act which was unlawful, an administrative act putting the sign up which was unlawful.

GAUDRON J:   Unlawful in the sense of unauthorised?

MR COOKE:   No, forbidden by law because the Traffic Act says it is an offence.  So those are the questions, in our submission, which ‑ ‑ ‑

GUMMOW J:   What about misfeasance in public office?

MR COOKE:   Misfeasance in public office, the unlawful act may be different because with misfeasance under public office, it would be enough if the Act were ultra vires or the power of the public official, provided he knew it was ultra vires or it could be because he directed it specifically with some bad faith or malice towards the particular ‑ ‑ ‑

GUMMOW J:   Yes.

MR COOKE:   So he could exercise the power which he had but do it improperly or he could exercise a power which he did not have, provided he knew it was beyond his power.

GAUDRON J:   No, whose misfeasance was it in this case, Mr Cooke?

MR COOKE:   The misfeasance, your Honour, here was that they ‑ ‑ ‑

GAUDRON J:   No, whose misfeasance was it?

MR COOKE:   The misfeasance, your Honour, was using this method for an improper purpose.

GAUDRON J:   Who used it?

MR COOKE:   Both of the defendants, but particularly the second defendant.

GAUDRON J:   I wonder about that.  You see, it seems to have been the engineer who engaged in acts that were ultra vires.

MR COOKE:   Yes, at the instigation of the second defendant.

GAUDRON J:   It does not seem to me to matter at this stage at whose instigation for the moment, but it was the act of the engineer?

MR COOKE:   He authorised the putting up of the sign, yes.

GUMMOW J:   Yes.

GAUDRON J:   It would be his misfeasance that was in issue if this matter were to proceed, would it not?

MR COOKE:   Except, your Honour, that he is the employee of the Council.

GAUDRON J:   That is the next question.  What is there that makes a public authority vicariously liable for the misfeasance of an officer who must do something either knowing that it is beyond his authority or with the intention ‑ ‑ ‑

MR COOKE:   Of injuring the plaintiff.

GAUDRON J:    ‑ ‑ ‑ the intention of injuring the plaintiff?  I just wonder how you can sheet home liability to the Council for such a cause of action.

MR COOKE:   Well, your Honour, because he is in a position of authority with the Council and he has the ostensible authority.

GAUDRON J:   Ostensible authority is one thing but if you know it is ultra vires or you know you are acting for an improper purpose, if they are the criteria of liability, it does not seem to me it necessarily follows that ostensible authority has anything to do with the matter or that you can sheet liability home to a public authority employer.

MR COOKE:   Your Honour, in this case there is no evidence that he knew that it was not outside his power, so ‑ ‑ ‑

GAUDRON J:   So any knowledge that he acted in bad faith or, rather ‑ ‑ ‑

GUMMOW J:   There is a finding that he did not, is there not?

MR COOKE:   Your Honour, that is a subject of inference on the facts and ‑ ‑ ‑

GAUDRON J:   Is there any finding?

MR COOKE:   Well, your Honour, there are contradictory findings.  The judge found that the business was affected because of the act and he found that it was probably right to say that one of the reasons for doing it was to get the restaurant traffic off the street, that was one of the intentions in putting the signs up.  We then come back to the question as to whether you have to have only the one intention or a dominant intention or whether you can have a mixed intention, one of which is bad and one of which is good and in this case we submit that because they are so scrambled up, you cannot distinguish one from the other.  You cannot really have the one intention without intending the other because the loss of amenity is caused by the overflow parking from the restaurant and if you attack that problem, then you are attacking the restaurant business and if you ‑ ‑ ‑

GUMMOW J:   Paragraph [41] of the President’s judgment, after going through all of the evidence, she concluded that the findings of the trial judge, excluding the mental element of malice or bad faith, should not be disturbed.  So you would have to overcome that, I think?

MR COOKE:   Yes, but, your Honour, the findings of the trial judge and the findings in the Court of Appeal do not depend on credibility of witnesses because the trial judge did not believe the plaintiff’s evidence in respect of a couple of conversations, but on the question of the intention with which the signs were put up, that was all a matter of inference.  In our submission, the inference can readily be drawn by this Court as it can from any other court from the facts which have been established.

The judge found that the Council was vindictive in respect of the parking regulations on a couple of occasions after the signs had come down and whether that vindictiveness, in view of the long series of on-going struggle from March to December of that year, whether you could infer that that vindictiveness illustrated the attitude of the Council in respect of putting up the signs and enforcing the parking regulations.  His Honour found that they were vindictive on two occasions.  When the one-hour signs came down, they then started to enforce parking regulations in another area which had nothing to do with residential amenity, according to the judge, and they issued a large number of parking offences there over a period of time to restaurant staff and patrons and the judge characterised that as an act of vindictiveness instigated by the local alderman. 

There was also an incident on New Year’s Eve where they went there and that was one of the only places in Surfers’ Paradise where New Year’s Eve car parking restrictions were applied.  His Honour characterised that as an instance of spitefulness on the part of the second respondent who instigated the Council officers to be there on that occasion.  So that these questions of intention, in our submission, are matters of inference to be drawn from the facts. 

GAUDRON J:   But they have not thus far been drawn?

MR COOKE:   No, no.

GAUDRON J:   In fact, in some matters there has been a distinct decision that that inference should not be drawn?

MR COOKE:   Yes, but I must say, your Honour, that, with respect, there are some contradictory findings which the trial judge made.

GAUDRON J:   Yes.

GUMMOW J:   There was a question of extortion, was there not?

MR COOKE:   There was an allegation of extortion, but his Honour dismissed that, but that was not really one of the factors that we advanced to take into account in determining intention.

GUMMOW J:   Now, do you rely on negligence as well?

MR COOKE:   Yes, your Honour, we do, but I see the time.  We rely on our notes there.  Really, what we say is that there is a general duty of care for a local authority to act within the ambit of its powers and if it fails, then it has a duty of care to its ratepayers and these parties are ratepayers and they have stepped outside their powers, and they should be liable in negligence on the usual principles that apply to anybody else.

GAUDRON J:   Before you sit down, what is the content of the duty you are asserting? 

MR COOKE:   Your Honour, a duty to act within the confines of their legislative powers in putting up traffic signs.

GAUDRON J:   Yes, but that is not a duty owed to anyone in particular, is it?  I mean, that is a duty that is owed to the whole community, it is a statutory duty.  What is it that brings them under a special duty?

MR COOKE:   Your Honour, because these people are ratepayers and they have a special interest.

GAUDRON J:   Of course they have a duty to all of their ratepayers in one sense, but a duty enforceable by the law of negligence is another thing.  For example – you see, what you seem to be missing in this negligence notion is that you had public law remedies which you did pursue.

MR COOKE:   Yes.

GAUDRON J:   Now, why, if you have public law remedies, would there be over and above all that a remedy in the law of negligence?  What would bring a special duty into play?

MR COOKE:   Your Honour, the cases have allowed cases of negligence against local authorities, not necessarily saying that you must sue for breach of statutory duty.

GAUDRON J:   Yes, but nothing on the basis that a local government authority is liable to a ratepayer by reason of its failure to act within power, is there?

MR COOKE:   But, your Honour, there is a very close connection between the exercise of this improper power or excessive power and the applicants because they are directly affected by it, so they have some interest over and above the general ratepayer because this affects them particularly.  I do not know that I can advance anything further, your Honours.  Thank you.

GAUDRON J:   Yes, thank you, Mr Cooke.

Given the factual findings at first instance with respect to intention and malice, the proposed appeal with respect to the torts of intentional infliction of harm and misfeasance in public office does not enjoy sufficient prospects of success to justify the grant of special leave to appeal.

On the questions of negligence and nuisance, the reasoning of the Court of Appeal was undoubtedly correct.  Accordingly, the application is refused and it will be refused with costs in the ordinary course.

AT 9.54 AM THE MATTER WAS CONCLUDED