Hope v The Council of the City of Bathurst

[1996] HCATrans 364

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S147 of 1994

B e t w e e n -

IAN GRANT HOPE

Applicant

and

THE COUNCIL OF THE CITY OF BATHURST

Respondent

Application for special leave to appeal

BRENNAN CJ
TOOHEY J
GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON MONDAY, 2 DECEMBER 1996, AT 9.59 AM

Copyright in the High Court of Australia

MR B.A.J. COLES, QC:   If Your Honours please, I appear with my learned friend, MR B. DE BUSE, for the applicant.  (instructed by Ben Gelin)

MR W.R. DAVISON, SC:   If it please your Honours, I appear for the respondent.  (instructed by McIntosh, McPhillamy & Co)

BRENNAN CJ: Yes, Mr Coles?

MR COLES:   If your Honours please, these proceedings concern the true meaning of the expression “farm land” in the Local Government Act, the text of which your Honours will find ‑ ‑ ‑

GUMMOW J:   The Local Government Act of New South Wales?

MR COLES:   Yes, of New South Wales, if your Honours please.  In the form that it existed from 1988 until it was repealed in 1993.

BRENNAN CJ:   The interpretation is, of the word:

has significant and substantial commercial purpose or character.

MR COLES:   Yes.

BRENNAN CJ:   What is the special leave in considering a question of that kind in a State statute?

MR COLES:   The special leave point is whether there is an error of law identified in the construction which has been advanced.

BRENNAN CJ:   Let us assume that there may have been. 

MR COLES:   On the assumption that an error that can be so identified, we then say that the relevant expression appears in a statute of general importance, at least to the people of New South Wales, and at least to those persons in that State in rural areas and there is a significant enough number of persons thereby affected to justify the consideration of the matter by this Court.

BRENNAN CJ:   It is a State statute?

MR COLES:   Yes.

BRENNAN CJ:   No special problems associated with rules of statutory construction construed by the ultimate Court of Appeal for New South Wales.

MR COLES:   Yes.

BRENNAN CJ:   It makes it a very difficult task.

MR COLES:   We concede all those factors operate as, in effect, weighing the scales opposed to the position we advance but we say, nevertheless, that this Court has not determined that no State statute is ever, for that reason alone, a suitable vehicle for consideration and we say that having regard to the, we would submit, relatively clear issue which the competing questions of construction throw up and the general importance in the way I have outlined, that there would be sufficient justification.  We would add, by way of summary also, if your Honours please, that the particular facts thrown up by this case seem, of themselves, to isolate very starkly the issue in question and thereby represent a suitable vehicle for your Honours’ consideration.  We add, your Honours, that the statutory provisions continue in substantially the same form in New South Wales to the present time. 

In the courts below there were two discrete issues, one of which is now no longer pressed before your Honours.  That concerned the position before 1988 and the rating years in questions then when the relevant issue was what was the definition or related to the definition of “rural land” before Justices Bignold in the Land and Environment Court and before the Court of Appeal which considered both the questions.  The central question, however, which we agitate before your Honours was the meaning of the expression “farm land”.

GUMMOW J:   Just stopping you there for a minute, Mr Coles.  One of the points made against you is to remind us of what was said on page 51 of the application book, line 21, that is to say, absence of factual finding.

MR COLES:   We put as to that, very shortly, it is true that one does not find in express language ‑ ‑ ‑

GUMMOW J:   Especially on line 24.

MR COLES:   At line 24 where Mr Justice Priestley said:

One striking feature.....there was no finding.....that the activity was carried on for the purpose of profit. 

We simply say, your Honours, that whilst one may not find those words exactly appearing in Mr Justice Bignold’s judgment, it is abundantly plain for a number of reasons, that his Honour came to that conclusion.  Two reasons will suffice.  Firstly, his Honour did make - and this is at the foot of page 19 of the judgment, at first instance.  His Honour said:

it is tolerably clear that if the definition of “rural land” was still the controlling statutory regime the Applicant’s use.....for agisting horses would, on the facts as found, qualify as carrying on the business of grazing.

His Honour can only have had in mind that the business of grazing necessarily in the light of the decision of this Court in the case at 144 CLR 1 involved the conclusion that there was thereby attracted activity which was engaged in for the purpose of profit on a continuous or repetitive basis. Other findings on page 14 of the application book, we would say, support that. Can we finish this aspect, or could we answer that suggestion with, by simply drawing attention to the fact that Mr Justice Bignold identified two issues before him. One was the question of whether the dominant use of the land was as the applicant contended, and he held that in the applicant’s favour, and he identified only one other issue, namely, whether the farming was one which had a significant and substantial commercial purpose or character. Had there been the third issue which Justice Priestley said, at page 51, was left unresolved, one would have thought his Honour would have said so and made a finding on it.

In short, your Honours, there can be no real doubt, in our respectful submission, that it was, if not the common assumption of the parties at least centrally implicit in his Honour’s reasoning process that he concluded that issue in favour of the applicant.

Your Honours, the rival contentions are plain enough from the judgments but the applicant says that the relevant words define or clarify the established ordinary meaning of the word “business”.  On the other hand, the Council and the courts below assert that this definition really adds a further ingredient requiring that the business activity be conducted or pursued at some level of magnitude or on some large scale.  Your Honours will recall that the factual findings include at least these, that the dominant use of the applicant’s land was a grazing one and, in particular, that the grazing use of the land reflects an actual use to the maximum carrying capacity of the land and is the only suitable form of grazing use of the land. 

In those circumstances, your Honours, the only matter that seems to have denied to Mr Hope the concessional rating treatment which he sought, was the conclusion that he did not make a large enough profit or perhaps that he did not agist more horses on his land so as to, in effect, exceed the maximum carrying capacity.

Your Honours will find that in what Mr Justice Bignold said at page 23 and in the discussion commencing on page 51 in the judgment of Mr Justice Priestley.  In short, your Honours, the applicant contends that the magnitude or scale of operation is not what the section is directed to, rather it is more concerned with the circumstance that activities are pursued simply for genuine - and I emphasise “genuine” - commercial purpose. 

The applicant’s contentions, we submit, can be tested for their correctness by a number of propositions.  Firstly, we say, your Honours, from its own text the relevant provision, both (a) and (b), of the definition of “farming land” appear together to describe the judicially determined notion or ordinary idea of the expression “business”.  That proposition was criticised in the courts below because it was suggested that would make paragraph (a) tautologous or, in fact, otiose.  But, of course, we point to the fact that if the proposition which we put forward is not right, then we put plainly, on any view, (b) is otiose or tautologous because on any view of the word “business” it must be something engaged in for the purpose of profit on a continuous or repetitive basis, and if the second part of the definition is, in effect, otiose, or tautologous, I should say, there is no particular reason, as a matter of construction, why the first part of the definition should be in any different condition, the result being that neither provision is really tautologous.  Both, rather, on the other hand, stand together as definitional or as clarifications of the concept in question, namely, whether the farming business qualifies for that description.

The second reason we would put forward in support of our argument is to say that it is supported by the historical evolution of the expressions used in case law.  Subparagraph (b), of course:

is engaged in for the purpose of profit on a continuos or repetitive basis.

Speaks for itself; (a), the one in contention:

significant and substantial commercial purpose or character -

is derived, we think, ultimately, from the expression of Mr Justice Walsh in Thomas’ Case in 1972.  It is apparent from what his Honour said that there may be excluded from the notion of business those pursuits which do not have a significant commercial purpose or character.  His Honour had in mind recreational or hobby farm-type purposes. 

The next event then was Mr Justice Rath in the Court of Appeal in New South Wales in the late 70s.  He took Mr Justice Walsh’s words to convey that there must be something significant or weighty before there could be a business.

This Court corrected that in 1980 in the case of 144 CLR, and the result, we would say, is that it is not part of the ordinary meaning of a business that it must be weighty or substantial, although it is certainly part of that ordinary meaning, but whilst it may be carried on on a small scale it may not be, on the other hand, insignificant or insubstantial.  That is say, the result is that the ordinary meaning of the expression itself necessarily excludes the insignificant or the insubstantial and what was built in - what was being done in the legislation was to insert clarifying words. 

It might be said against us, I suppose, your Honours, that the draftsman used the expression “has a significant and substantial commercial purpose or character” meaning to say “does not have an insignificant or insubstantial commercial purpose or character”, and we, indeed, contend that is what he did say and only the proper avoidance of an undesirable double negative in fact prevented him from saying that because that would exactly accord with the language of Mr Justice Walsh as absorbed through the decision of this Court in Mr Hope’s Case in 1980. 

The fourth reason we say why the appellant’s view is correct is to be drawn from certain extrinsic material, and I need not take your Honours to that, but that material supports simply the view that the enacted words carry with them both a purpose of clarification, not a purpose of narrowing or tightening, and the purpose involved simply in ascertaining that the pursuit is a genuine one as opposed to a significant, weighty, or voluminous, or, for that matter, a greatly profitable one.

Lastly, we would point to the fact that if the applicant’s view is not the correct one then there is a certain degree of absurdity or inconvenience, at least, resulting from the situation.  That is to say, if one takes the criterion of magnitude of profitability as the relevant test, then one, in effect, has potentially a varying situation from year to year even though the actual activities or pursuits on the land itself may never change continuously.  Indeed, we point to the fact that it is difficult to know what is a suitable dividing line between what is profitable in the sense that expression was used, and what is not.

Other difficulties include the problem of substantiation of the profitability and the problem that the relevant country person has to make a judgment, really, each year as to whether he is sufficiently profitable enough to carry out the obligation which the statute casts on him to notify the council that the rating quality of his land has changed.  These matters do tend, without elaboration, your Honours, to rather add up or rather impose even greater rural misfortunes than those which the ordinary incidence of cyclic economies and economic conditions generally carry with them.

In short, your Honours, we submit that it was not intended, when the law was clarified by the means we say it was, to restrict or narrow the available rating concession.  Indeed, Mr Justice Bignold concluded that had the matter been decided under the pre-existing statutory regime, Mr Hope would have qualified for the concession.  There was certainly no purpose involved in restricting it or narrowing it; rather, we would say that the general purpose can be perceived adequately enough by regarding the statutory language as clarifying or perhaps codifying or describing the particular situation. 

The meaning of “substantial” we say, your Honours, is a matter which - and “significant”, its related expression, is one which raises an important question of law and we say, ultimately, that it would be wholly unreasonable on the facts as they have been found to come to any other conclusion than that the applicant was engaged in farming which had a substantial and significant commercial purpose or character.  For those reasons, if your Honours please, special leave should be granted.

BRENNAN CJ:   We need not trouble you, Mr Davison.

Despite Mr Coles’ careful argument, the application raises only a question of the interpretation of a phrase in a New South Wales rating statute.  It does not raise any issue of general rules of statutory interpretation and the construction attributed to the provision by the New South Wales Court of Appeal is not manifestly erroneous.  Prima facie, questions merely of construction of such a statute do not command a grant of special leave to appeal to this Court.  This case has no particular feature that requires this Court’s consideration.  For these reasons, special leave will be refused.

MR DAVISON:   I seek an order for costs, if the Court pleases.

BRENNAN CJ:   You have nothing to say about that, Mr Coles?

MR COLES:   No, your Honour.

BRENNAN CJ:   Special leave will be refused with costs.

AT 10.14 AM THE MATTER WAS CONCLUDED