Heaven's Door Pty Limited v Hillpalm Pty Limited

[2003] NSWLEC 113

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Reported Decision: (2003) 126 LGERA 319

Land and Environment Court

of New South Wales

CITATION:

Heaven's Door Pty Limited v Hillpalm Pty Limited [2003] NSWLEC 113

PARTIES:

APPLICANT
Heaven's Door Pty Limited

RESPONDENT
Hillpalm Pty Limited

FILE NUMBER(S):

401161 of 2000

CORAM:

Cowdroy J

KEY ISSUES:

Practice and Procedure :- Stay of proceedings - whether a stay should be granted pending determination of application for special leave to appeal to the High Court of Australia - no prejudice if stay refused

LEGISLATION CITED:

Commonwealth of Australia Constitution Act s 73
Environmental Planning and Assessment Act 1979
Land and Environment Court Rules 1996, Pt 6 r 1
Supreme Court Rules 1970, Pt 44 r 5

CASES CITED:

Alexander & Ors v Cambridge Credit Corporation Ltd (Receivers appointed) & Anor (1985) 2 NSWLR 685;
Bryant v Commonwealth Bank of Australia (1996) 70 ALJR 306;
Carlton Football Club Ltd v Australian Football League (1997) 71 ALJR 1546;
Dow Jones & Company Inc v Gutnick M99/2001 (14 November 2001);
Gold v Properties - Units Plan No 52 (1997) 72 ALJR 142;
Heavens Door Pty Ltd v Hillpalm Pty Ltd (2001) 116 LGERA 138;
Hillpalm Pty Ltd v Heaven's Door Pty Ltd (2002) 55 NSWLR 446;
Hillpalm v Heaven's Door [2001] NSWCA 242;
Jennings Construction Limited v Burgundy Royale Investments Proprietary Limited (1986) 161 CLR 681;
Minister for Local Government and Anor v South Sydney City Council (No 3) [2002] NSWCA 327;
Patrick Stevedores Operations No. 2 Pty Ltd and Others v Maritime Union of Australia and Others [No 1] (1998) 72 ALJR 868;
Patrick Stevedores Operations No. 2 Pty Ltd v Maritime Union of Australia [No 2] (1998) 72 ALJR 869

DATES OF HEARING:

05/05/2003
06/05/2003

DATE OF JUDGMENT:

06/16/2003

LEGAL REPRESENTATIVES:

APPLICANT
Mr T. Robertson SC

SOLICITORS
Woolf Associates

RESPONDENT
Mr D. Officer QC
Ms V. Culkoff (Barrister)

SOLICITORS
Bolster & Co

JUDGMENT:

IN THE LAND AND

ENVIRONMENT COURT

OF NEW SOUTH WALES

40161 of 2000

Cowdroy J

16 June 2003

Heaven’s Door Pty Limited

Applicant
v

Hillpalm Pty Limited

Respondent

Judgment

Facts

1 The applicant (“Heaven’s Door”) and the respondent (“Hillpalm”) have each filed notices of motion (“the motions”). The motions relate to the judgment delivered in the applicant’s favour by Sheahan J on 7 July 2001 in Heavens Door Pty Ltd v Hillpalm Pty Ltd (2001) 116 LGERA 138.

2 The proceedings before Sheahan J concerned the enforcement of development consent for subdivision of land. Heaven’s Door is the current owner of lot 1 in deposited plan 106049 known as Emerald Mountain. Hillpalm is the registered proprietor of land which was the remaining lot in the subdivision then known as lot 2 in such plan. Hillpalm’s land is now known as lot 529 in deposited plan 1003396 and called Tanglewood.

3 The issue before Sheahan J related to Heaven’s Door’s reliance upon a letter from Tweed Shire Council (“the council”) to John P Marendy & Associated dated 22 December 1977 as the relevant subdivision consent (“letter of 22 December 1977”). Heaven’s Door sought to enforce conditions that were contained in the letter of 22 December 1977. The conditions stipulated by the council included the provision of a right of carriageway from Clothiers Creek Road across Hillpalm’s land to Emerald Mountain which had no road frontage (“the right of carriageway”). Hillpalm contended that the subdivision consent was contained in a letter from the council dated 6 November 1978.

4 A plan of subdivision of the land was certified by the council on 8 November 1978 and later registered as deposited plan 601049. The right of carriageway was not created upon registration of such plan despite the fact that it shows the position of a “proposed right of way 10’10 wide” over Tanglewood leading from Clothiers Creek to the north-western corner of Emerald Mountain. As a result of the further subdivision of lot 2 in deposited plan 601049, the proposed right of carriageway would traverse lot 529 in deposited plan 1003396.

5 Sheahan J held at par 85 that “the public consent document, which operates in rem regarding the subject lands, is the Council’s letter of 22 December 1997, inclusive of conditions.” The Court made a declaration that Hillpalm had breached the conditions of development consent in the letter of 22 December 1977 by failing to create the right of carriageway. Accordingly the Court ordered Hillpalm to create the 10 metre right of carriageway within one month, and “to construct, within three months, a track at least 2.5 metres wide” within the right of carriageway.

6 Hillpalm appealed to the Court of Appeal of New South Wales. On 3 October 2002 the Court of Appeal unanimously dismissed the appeal: see Hillpalm Pty Ltd v Heaven’s Door Pty Ltd (2002) 55 NSWLR 446. Hillpalm has subsequently filed an application for special leave to appeal in the High Court of Australia (“the special leave application”).

The motions

7 Heaven’s Door filed its notice of motion dated 8 April 2003 seeking an order which would implement the creation of the right of carriageway. Such motion seeks an order that Hillpalm produce the certificate of title for lot 529 in deposited plan 1003396 to the Registry of the Land and Environment Court and that the Registrar of the Land and Environment Court be appointed to sign all instruments and to take all necessary steps to create the easement for a 10 metre wide right of carriageway as shown on deposited plan 601049.

8 Hillpalm opposes such orders. By its motion dated 16 April 2003 Hillpalm seeks a stay of Sheahan J’s orders made on 7 June 2001 pending the determination of the special leave application to the High Court and, if special leave is granted, pending determination of the appeal to the High Court (“the appeal”).

9 Each of the parties have given undertakings. Heaven’s Door has provided an undertaking to the Court that if special leave is granted and the appeal is upheld it will, at its expense, reverse the procedures for the creation of the right of carriageway and request that it be removed from the certificate of title of Hillpalm’s land. Hillpalm has provided an undertaking as to damages in the event the High Court does not grant special leave or, if it does, if the appeal is ultimately unsuccessful. The damages are intended to indemnify Heaven’s Door in respect of any loss or damage it might suffer by virtue of it being unable to sell lots in its proposed subdivision because of the delay of the creation of the right of carriageway

Submissions of Heaven’s Door

10 Heaven’s Door submits that a stay is not necessary to preserve the subject matter of the litigation. Hillpalm’s appeal to the High Court is an appeal in the strict sense: see Commonwealth of Australia Constitution Act s 73. In support of its submission Heaven’s Door relies on Dow Jones & Company Inc v Gutnick M99/2001 (14 November 2001) where McHugh J said in relation to an application for a stay:-

As Justice Dixon pointed out in Victoria Stevedoring & Meakes v Dignan (1931) 46 CLR 73 at 109-111, an appeal to this Court under s 73 of the Constitution is an appeal in the strict sense. The question for this Court in an appeal is whether the judgment complained of was right when it was given.

Heaven’s Door submits that if Hillpalm succeeds in its appeal the High Court could direct that the right of carriageway, if created in the interim, be removed from the Register.

11 No construction work is proposed pursuant to Sheahan J’s orders which would alter the physical landscape. Only legal procedures are sought to be invoked, consistent with Sheahan J’s orders requiring the right of carriageway to be recorded on the Register. Heaven’s Door is anxious to enter into conditional contracts with prospective purchases for the sale of its land, completion of which will be dependent upon the creation of the right of carriageway. It submits that it will be hindered in the marketing of the five lots into which its land is now being subdivided if it cannot lawfully take prospective purchasers onto its land by using a road suitable for motor cars. Vehicular access already exists on the site of the proposed carriageway but it has been obstructed by Hillpalm. Hillpalm’s suggested alternate access route is impractical and has not changed since its rejection by Sheahan J: see His Honour’s judgment at par 76-77.

12 Heaven’s Door also submits that the prospects of success of the special leave application and ultimately of any appeal are not great in view of the unanimous dismissal of Hillpalm’s appeal to the Court of Appeal.

13 Lastly Heaven’s Door submits that Hillpalm has produced no evidence of any prejudice if the right of carriageway is now created. In view of Heaven Door’s undertaking to reverse the creation of the right of carriageway if any appeal is successful, it is submitted that no prejudice could be suffered by Hillpalm if it were ultimately successful in the High Court.

Submissions of Hillpalm

14 Hillpalm submits that a stay is warranted. It relies upon the observations of Handley JA contained in Hillpalm v Heaven’s Door [2001] NSWCA 242 delivered on 23 July 2001 which concerned an application for a stay of Sheahan J’s orders. In granting the stay pending an appeal to the Court of Appeal, Handley JA at par 9 referred to the fact that if the appeal were to succeed Hillpalm “should not be embarrassed by having to seek to have to have a registered easement removed from its title…”. His Honour was also of the opinion that the Court of Appeal would not order the removal of barriers to the right of carriageway to permit vehicular access while such appeal was pending. Hillpalm submits that the same considerations still pertain and that there is a Crown road which would allow Heaven’s Door to gain access to its lands without the need to use the right of carriageway.

15 Additionally Hillpalm says that no financial loss is being suffered by Heaven’s Door as it cannot enter into any unconditional contracts for the sale of lots in the subdivision until the special leave application and any appeal has been determined. It submits that nothing is gained by entry into conditional contracts because they could not be completed prior to the final disposition of the special leave application or of the appeal.

16 Hillpalm has referred the Court to its summary of argument which has been prepared for the special leave application. It claims that a serious question is raised for determination by the High Court, namely the conflict between the principle of indefeasibility of title compared to the provisions of the Environmental Planning and Assessment Act 1979 which provides for the creation, in a planning consent, of a right of carriageway which could adversely impact upon such a indefeasibility.

Principles concerning grant of a stay

17 Part 6 r 1 of the Land and Environment Court Rules 1996 adopts inter alia, Pt 44 of the Supreme Court Rules 1970 (“the Supreme Court Rules”). Part 44 r 5 of the Supreme Court Rules provides:-

The Court may, on terms, stay execution of a judgment or order.

Accordingly this Court possesses the requisite power to grant a stay.

18 It is in each case a matter for the Court to determine whether a stay is warranted: see Hayne J in Patrick Stevedores Operations No. 2 Pty Ltd v Maritime Union of Australia [No 2] (1998) 72 ALJR 869 at p 871 to 872.

19 Principles governing the grant of a stay were considered by the High Court in Jennings Construction Limited v Burgundy Royale Investments Proprietary Limited (1986) 161 CLR 681 by Brennan J (as he then was). At p 685 His Honour said that when determining such an application the court should consider:-

… first, whether there is a substantial prospect that special leave to appeal will be granted; secondly, whether the applicant has failed to take whatever steps are necessary to seek a stay from the court in which the matter is pending; thirdly, whether the grant of a stay will cause loss to the respondent; and fourthly, where the balance of convenience lies.

20 Spigelman CJ in Minister for Local Government and Anor v South Sydney City Council (No 3) [2002] NSWCA 327 summarised the considerations adopted in the relevant authorities concerning the effect of a stay upon the rights and interests of the opposing party. A critical factor is to determine whether the appellant’s rights would be rendered futile if a stay is not granted, and thereby undermine the authority of the High Court: see Patrick Stevedores Operations No. 2 Pty Ltd and Others v Maritime Union of Australia and Others [No 1] (1998) 72 ALJR 868 at p 868.

21 In Carlton Football Club Ltd v Australian Football League (1997) 71 ALJR 1546 Dawson J said at p 1546:-

It is important to recognise that the application before me is not an application for a stay of further proceedings in this matter pending an application for special leave to appeal against the decision of the Court of Appeal. It is an application for a stay of the judgment of the Court of Appeal and of the orders made by it. That is to say, it amounts to an application to set aside the judgment of the Court of Appeal pending an application for special leave. Such an application has been described by Mason J in Re Marks and FIA (1981) 34 ALR 208 at 211 as having a unique quality and requiring exceptional circumstances to justify its success.
Even assuming that the points which the applicant seeks to raise are likely to attract special leave, I do not consider that that circumstance is exceptional so as to support this application.

Accordingly Dawson J was of the view that to support such an application “exceptional circumstances” were required to obtain a stay of proceedings in the High Court.

22 The High Court has a different practice to that of the New South Wales Court of Appeal. In Alexander & Ors v Cambridge Credit Corporation Ltd (Receivers appointed) & Anor (1985) 2 NSWLR 685 the Court of Appeal determined that special or exceptional circumstances need not be demonstrated. However the High Court requires special or exceptional circumstances to exist before a stay will be granted: see Gold v Properties – Units Plan No 52 (1997) 72 ALJR 142 at p 144 per Kirby J; Bryant v Commonwealth Bank of Australia (1996) 70 ALJR 306 at p 308 per Kirby J.

Application of Principles

23 The principles adopted by the High Court will be applied because the special leave application is pending before that Court. Since the grant of stay by Handley JA the Court of Appeal has unanimously dismissed Hillpalm’s appeal against Sheahan J’s judgment on 3 October 2002. In Minister for Local Government Spigelman CJ observed at par 12:-

It is always material to look at the prospects of success, relevantly in this case, the prospects of grant of special leave. It is also always material to look at the probability that a successful appeal would not make any practical difference to the rights and interests of the appellant unless a stay or injunction was granted.

Although this Court cannot speculate upon the success of the application for special leave or of any appeal, it has the knowledge that at least one superior court has found that there is no substance in Hillpalm’s appeal. Furthermore the circumstances surrounding the special leave application do not constitute “exceptional circumstances” sufficient to warrant a stay.

24 Additionally, the undertaking provided by Heaven’s Door to reverse the creation of the right of carriageway leads to the conclusion that if the appeal were successful, no prejudice would be suffered by the successful appellant.

25 There is conflicting evidence relating to Hillpalm’s submission that there is an alternative access route by which prospective purchasers may view Heaven’s Door’s allotments. It is clearly not a decisive issue. The Court concludes that even though there might be an alternative method for such persons to inspect the land, this, of itself, is not a reason to delay the implementation of Sheahan J’s orders.

26 Hillpalm has submitted that unless a stay is granted the mortgagee of Heaven’s Door, namely the National Bank of Australia Limited (“the Bank”), could, in the event of default of an existing mortgage, exercise power of sale and offer the land for sale with the benefit of a right of way. In response, Heaven’s Door has submitted a letter from the Bank dated 14 May 2003. Such letter establishes that if the High Court proceedings are successful, the Bank would execute an instrument to extinguish the right of carriageway. In the absence of any evidence of any actual or potential default under the mortgage and in light of the Bank’s position as referred to in its letter, this issue is one of pure speculation.

27 As was observed by Spigelman CJ in Minister for Local Government, the authorities relating to a grant of stay and the grant of injunctive relief raise similar considerations. No inconvenience or detriment has been shown to exist on behalf of Hillpalm which could not be reversed. However Heaven’s Door has produced evidence of difficulties of inspection of the land without the right of carriageway, and more importantly has raised the issue of delay. In this instance the balance of convenience has now moved in favour of Heaven’s Door, as a result of the dismissal of the proceedings by the Court of Appeal.

28 The Court concludes that exceptional circumstances do not exist to justify the grant of a stay. The undertaking of Heaven’s Door will be adequate to protect any interests of Hillpalm. Insuperable difficulty could arise in the quantification of any loss and for this reason the Court is not satisfied that Hillpalm’s undertaking as to damages for loss of profit is viable. Accordingly the Court concludes that a stay should not be granted.

Orders

29 The Court makes the following orders:-

1. The respondent produce to the Registry of the Land and Environment Court the title to the land that comprises Lot 529 in DP 1003396 and known as ‘Tanglewood” within 14 days;

2. The Registrar of the Land and Environment Court be appointed to sign all instruments and do all things necessary to create the easement for a 10 metre right of carriageway as shown on DP 601049 Annexure ‘B” to the affidavit of Bruce Stephen Woolf filed 9 April 2003 within 42 days of such instruments being submitted for execution.

3. Orders 1 and 2 hereof are conditional upon the provision of an undertaking by the applicant to do all things necessary to remove the easement referred to in order 2 from the title of the respondent’s land being lot 529 in deposited plan 1003396 in the event the respondent’s appeal to the High Court of Australia is successful.

4. The notice of motion of the respondent dated 16 April 2003 be dismissed;

5. Costs of each notice of motion be paid by the respondent.