Golden Pardise Corp v Kogarah Municipal Council

[2006] HCATrans 18

[2006] HCATrans 018

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S370 of 2005

B e t w e e n -

GOLDEN PARADISE CORPORATION

Applicant

and

KOGARAH MUNICIPAL COUNCIL

First Respondent

BLAKEHURST PROPERTIES PTY LIMITED

Second Respondent

Application for special leave to appeal

GUMMOW J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 3 FEBRUARY 2006, AT 11.24 AM

Copyright in the High Court of Australia

MR M.J. NEIL, QC:   May it please the Court, I appear with my learned friend, MR G.E. UNDERWOOD, for the applicant.  (instructed by Forshaws Neill)

MR J.A. AYLING, SC:   If the Court pleases, I appear with my learned friend, MR A.M. PICKLES, for the first respondent.  (instructed by Abbott Tout)

MR M. ORLOV:   May it please the Court, I appear for the second respondent.  (instructed by Gray & Perkins)

GUMMOW J:   Yes, Mr Neil.

MR NEIL:   Your Honours, the question of whether the Local Government Act in these circumstances takes precedence over section 42 of the Real Property Act is an important matter and we submit this is an appropriate vehicle for this question to be determined.

GUMMOW J:   Why is it an appropriate vehicle?

MR NEIL:   Because, your Honour, in this case the Council ‑ ‑ ‑

GUMMOW J:   Who is going to retransfer what land to whom?

MR NEIL:   The Council has transferred the land pursuant to a deed that was unknown to the applicant in circumstances in which they have, for present purposes it may be taken, to have breached their own Act.  If, for example, this were a case where we had known about this, it would be very similar, if not identical to Bathurst Case in this Court and an injunction could have been sought.  In the Court of Appeal the court considered that part of the judgment of this Court in Hillpalm, which said that where a particular person had not breached the Act there was no power in the Land and Environment Court to grant relief, the Court of Appeal held that that passage, in effect, prevented the applicant in this case from seeking relief.

So that the problem that arises is, if you find out about something that is going to happen, you can seek an injunction and, we would say, in this case, have very good prospects of succeeding.  If you do not find out about it then you cannot do anything about it, it is said against us, because the second respondent has not been actually in breach.  The Hillpalm decision on which the Court of Appeal ‑ ‑ ‑

GUMMOW J:   Who is the present registered proprietor?

MR NEIL:   The present registered proprietor is Blakehurst, your Honour.

GUMMOW J:   Yes.  What relief do you seek?

MR NEIL:   We seek an order that the second respondent transfer the land back to the Council on the basis that section ‑ ‑ ‑

GUMMOW J:   Even though the Council does not want it?

MR NEIL:   Yes, because, your Honour – and I should make one thing clear.  As we read the submissions of the respondents, they rely upon saying that the deed was done pursuant to a resolution of the Council to change their policy.  The deed was dated 15 February 2002 and the transfer took place on 16 May 2002.  The resolution on which they rely is dated 9 December 2002 and, as the primary judge found ‑ ‑ ‑

GUMMOW J:   Just forget about the Land and Environment Act for a minute.  If this were a question governed purely by the Real Property Act, you would not be here, would you?

MR NEIL:   That is so, your Honour, that is the issue.

GUMMOW J:   You would be intermeddling in someone else’s business.

MR NEIL:   That is so, your Honour.  The Court of Appeal in Hillpalm, in a very clear passage, made plain ‑ ‑ ‑

GUMMOW J:   The question then is, how and to what extent is that fundamental principle of property law disrupted by this environment legislation and that was considered in Hillpalm?

MR NEIL:   Your Honour, Hillpalm in this Court did not say that there could not be certain cases where the Land and Environment Court Act could be used.  We ask this Court to consider that Hillpalm was a completely different fact situation between two private persons, one seeking to enforce a condition of a development application 20 years later.  The Council was not a defendant.  There was no question, as there is in this case, of the Council actually being in breach of the law in the transfer.  The problem that arises is the Council’s point is we can do this.  If we do it without you finding out, you cannot seek an injunction and once we have done it, no one can do anything about it. 

Now, it leaves it open, unless we are right, to invoke the Local Government Act, through the Land and Environment Court, it leaves it open to councils to simply transfer land – in this case they say they believed it was operational land – but it leaves it open to councils to transfer public land, community land, and once they have done it, it is said nothing can be done about it.  Now, in our submission, the Court of Appeal in Hillpalm made plain that something could be done about it.  The Court of Appeal, in this case relying on the High Court in Hillpalm, said you cannot do it where the recipient is not in breach.  In our submission, it…..an extremely important point.

HAYNE J:   Then why is it not decided by Hillpalm in this Court?

MR NEIL:   Because, your Honour, that was ‑ ‑ ‑

HAYNE J:   Do you not have to undo Hillpalm in this Court to succeed?

MR NEIL:   As in our written submissions we ask the Court to do, to revisit Hillpalm in this circumstance.

GUMMOW J:   Why would we do that?

MR NEIL:   Because, your Honours, Hillpalm in this Court was not dealing with a case of a breach of a public law by a council charged with the trust of its own public law.  What will happen is, if the actual decision in Hillpalm in this Court, which was on entirely different facts, is not readdressed in terms of these facts, then there is no remedy in law at all to deal with illegal activity, such as an illegal transfer by a council.

HAYNE J:   To deal with third parties who have obtained titled, registered - which is a title that is not to be unpicked at least under the Real Property Act provisions, there is no power to deal with those third parties’ property, understand that, yes.

MR NEIL:   Yes, your Honour, the question that is thrown up is whether or not the broad provisions of the Local Government Act override section 42 to enable something to be done.  We say in this case it is a good vehicle because at trial the interests of the second respondent were, in effect, carried by the Council.  At the Court of Appeal level the second respondent appeared.  The second respondent appears here and supports the submissions of the Council so they are heard on the matter.

In our submission, unless there is something – they have obtained for one dollar a transfer to them in circumstances in which the transfer was illegal and in circumstances in which the transfer took place before the resolution on which the respondents rely and the resolution, as his Honour found – and it is on page 14 of the application book – was only passed in order to aid the Council in its litigation that we had brought.  It was done after we started our case – and that appeal is at page 14 of the application book – where his Honour found that the resolution of 9 December – this is line 20:

did not address any of the critical matters prescribed by s 32(2) of the LG Act which are essential for a valid resolution –

His Honour referred to a paragraph in the notes of the Council which says at line 32:

The need to raise this matter with Council now stems from legal proceedings presently being conducted over properties in the precinct and this action would benefit from a clear statement regarding Council’s position –

His Honour found that:

the council’s resolution does not constitute a resolution within s 32(2) of the LG Act.

So the Council has transferred community land, public land, in contravention of the law, we say, and in this case that is not denied, although it is said they did it by mistake.  The issue then is can anything be done about it?  That is the issue that we say is raised by the question can the Land and Environment Court make an order to direct the second respondent to retransfer?

HAYNE J:   Is it putting it too tendentiously to say that your question is whether the Land and Environment Court may make an order against an innocent third party to deal with the wrongdoing of the Council?

MR NEIL:   We have asked the Court to also consider this a doctrine of objective breach, that is, even though an innocent party may have land, it may be the other side of the coin.  It has received it by virtue of breach by the vendor and therefore in law we would say the person is not innocent where we are dealing with public law and public rights, even though the person may have not had any…..in terms of its act in purchasing the property.  Thus, your Honours, the issue was thrown up, otherwise there was absolutely, as we understand it, no remedy that can ever be taken in any court in the land if a local council is able to get away with transfer of land invalidly, in breach of the Local Government Act, and then have the transfer registered, or the new proprietor has the transfer registered. 

Now, this has always been an issue at the first instance and in the Court of Appeal.  We have never denied that the registered proprietor is Blakehurst.  We do not deny it is a difficult matter.  If you put it in terms of should an order be made against an innocent person, it seems somewhat startling.  But it is our submission, aided, we submit, by the Court of Appeal in Hillpalm and by a passage from Justice Kirby in Hillpalm, that that is what the Court can do, assuming proper notice for the relevant person.  In this case it is also alleged against us there is lack of utility, but, in our submission, there is no lack of utility because if we transfer, we would say it goes back to what it was, namely, dedicated for a road. 

The Council is saying there is lack of utility because they are going to somehow still resell it, but that requires them to advertise.  That gives us an opportunity to make submissions, that gives us an opportunity to be heard and the neighbours to be heard and whether or not it would then be returned into operational land and resold to Blakehurst is for another day.  But, your Honours, we submit that although it is unusual, it is startling, this case raises the challenge to the indefeasibility provision in section 42 in this case and raises them squarely.

Now, your Honours, I probably do not need to go through the backgrounds of the matter.  Your Honours have asked me about the fundamental point.  As far as the utility point is concerned, we would say, and as far as discretion is concerned, which was the other point held against us in the Court of Appeal, where public law is concerned – and I have that in our submissions – questions of discretion ought to proceed from the basis that firstly there ought to be a legal and proper playing field restored.  If that were done, the question of discretion, we would submit, would be strongly our way or, more likely, to provide at least a very substantial argument.

What is being said against us is, because there is no power to transfer and because a condition of the upper storey of the building has now lapsed, which was one source of a right to cross, that discretionary matters are held against us.  Our submission is that is irrelevant because if it is back to being community land, the whole community can use it, or there is at least a reasonable argument – no doubt there might be some other litigation – but if it is community land, the customers can have access, we would say.  I cannot say that I can point to an easement, I cannot point to a right as such, but we say community land enables general access.  Thus, the question of discretion was, in my submission, misunderstood or the Court of Appeal miscarried in their view on the matters of discretion.

In any event, we would submit, where there has been a breach of the Local Government Act, and if there is power, if there is power – and we are back to the main issue – then the power should be exercised to restore the valid position and then discretionary considerations may further come into play.  In effect, we say discretion plays very little, if any, part in a case where there has been an illegal transfer and the Court ought to therefore, in our submission, not be concerned about arguments of utility.  We say there is utility.  We say discretion is not a problem for us.  The issue is squarely raised in this Court and it does come back, I accept, to the issue of whether

or not in these circumstances the Local Government Act empowers the Court to make an order against Blakehurst.  If it please the Court.

GUMMOW J:   Thank you.  We do not need to call on you, Mr Ayling or Mr Orlov.

Having regard to the decision of this Court in Hillpalm Pty Ltd v Heaven’s Door Pty Ltd (2004) 211 ALR 588 there are insufficient prospects of success in an appeal to warrant a grant of special leave in this matter. Accordingly, special leave is refused with costs.

AT 11.40 AM THE MATTER WAS CONCLUDED