Hunt Leather Pty Ltd ACN 000745960 & Anor v Transport for NSW; Hunt Leather Pty Ltd ABN 46000745960 & Ors v Transport for NSW ABN 18804239602

[2025] HCATrans 38

[2025] HCATrans 038

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S20 of 2025

B e t w e e n -

HUNT LEATHER PTY LTD ACN 000745960

First Appellant

ANCIO INVESTMENTS PTY LTD ACN 136917041

Second Appellant

and

TRANSPORT FOR NSW

Respondent

Office of the Registry
  Sydney  No S21 of 2025

B e t w e e n -

HUNT LEATHER PTY LTD ABN 46000745960

First Appellant

SOPHIE IRENE HUNT

Second Appellant

ANCIO INVESTMENTS PTY LTD ABN 50319048217

Third Appellant

NICHOLAS ZISTI

Fourth Appellant

and

TRANSPORT FOR NSW ABN 18804239602

Respondent

GAGELER CJ
GORDON J
EDELMAN J
JAGOT J
BEECH‑JONES J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 16 MAY 2025, AT 9.59 AM

(Continued from 15/5/25)

Copyright in the High Court of Australia

GAGELER CJ:   Mr Gleeson.

MR GLEESON:   Your Honours, on the slightly reconfigured timetable, we will finish by 11.15 am, which will leave us 15 minutes in reply. 

GAGELER CJ:   Thank you.

MR GLEESON:   In answer to two questions from yesterday, we have handed the Court the Second Restatement.  The short point is it does not support Fearn, and it supports the traditional view, as we would put it, of United Kingdom law prior to Fearn, plus Australian law as it currently stands.  It is remarkably similar to Australian law, subject to these matters, using the page numbering at the bottom at page 108 ‑ ‑ ‑

EDELMAN J:   Has not a Third Restatement been endorsed now?

MR GLEESON:   We could not find it – certainly, anything on this.

GAGELER CJ:   It is being talked about next week.

MR GLEESON:   Yes.  This view of United States law is slightly more structured than our view of the law, in the sense that, under rule 822, you need to show the:

conduct is a legal cause of an invasion of another’s interest in the private use and enjoyment of land –

and the fault element has been conceptualised as either “intentional and unreasonable” conduct, or “unintentional” conduct which is actionable through negligence, reckless conduct or Rylands v Fletcher.  So, that, we submit, indicates that unreasonableness of the conduct in all the circumstances, measured objectively, is viewed as essential to the United States law, consistently with the case we are putting.  The passage on 112, commencing:

Not every intentional and significant invasion of a person’s interest . . . is actionable –

is the passage that is picked up in Fleming, which we have given you in volume 7, tab 78.  And what then occurs is quite some discussion, from page 119 and following, of what is involved in the unreasonableness of an intentional invasion.  The first heading, the first factor is critical, namely, an analysis of:

the gravity of the harm –

compared to:

the utility of the . . . conduct –

The Restatement then provides further guidance on those topics of “gravity” commencing at page 124, and “utility”, importantly, at 129.  Under the utility factors, there is the social factor:

the law attaches to the primary purpose of the conduct –

which we would say would include the statutory underpinning of it:

the suitability of the conduct to the character of the locality –

that is where questions of “common and ordinary” can have some purchase in this approach in the United States, and then, importantly:

the impracticability of preventing or avoiding the invasion.

So, when I gave your Honours yesterday a list of factors that have emerged in the English and Australian cases under the rubric of reasonableness, they are essentially the type of factors recognised broadly in the United States, subject, perhaps to a slightly greater structuring of the unreasonableness inquiry.

The second matter was your Honour Justice Edelman asked about any cases where a non‑common use by the plaintiff might nevertheless found recovery.  There is at least one example.  If the Court goes to Gartner v Kidman 108 CLR 12, at volume 3, tab 24, at page 47, the passage in Justice Windeyer’s judgement that we have relied upon in writing as confirming the breadth of the inquiry commences by saying that:

Pronouncements concerning the scope of nuisance as a tort avoid stating rights and duties as absolute.  In respect of both what a –

person may do and what a:

neighbour must put up with . . . criteria are related to the reasonable use of the lands –

There is then some reference to earlier cases.  Then, in support of Justice Windeyer’s proposition, he cites Hollywood Silver Fox Farm v Emmett.  That is the case which you will see well explained in Balkin and Davis, which is volume 7, tab 77, at page 2324.  It comes back to what I put to your Honour Justice Jagot yesterday.

It was a case where the use was said to be non‑common and ordinary, because it was a silver fox farm where there were very unusual features of the silver fox that meant that if guns went off on the neighbouring property, they would be upset, and the argument was it was not common and ordinary because you should test common and ordinary by the creatures which were typically in the area, which did not include hypersensitive silver fox.

It was found to be a nuisance because of the defendant’s malice in carrying out the shooting of the guns, and so, in the balancing of the interests on both sides of the equation, it was no defence to say you are keeping very usually sensitive animals on your property.  So, that is the best example we could find, where it may be relevant, but it indicates the balancing of factors coming into the inquiry.

While your Honours have Balkin and Davis, without reading it, we would submit that it is a good example of the traditional approach where unreasonableness – this commences at page 2323 – is treated as a relevant controlling factor, and there is then quite some discussion of the elements of unreasonableness, and they can include – and this is fairly similar to the Restatement – various aspects of the conduct of the defendant – that is at 2324 – which picks up “social utility”, “malice” ‑ ‑ ‑ 

GORDON J:   Where do we see that, Mr Gleeson – I see, I understand.  I apologise.

MR GLEESON:   Social utility is at 14.22, and then “malice”, as in purpose, as in purpose, can be relevant on the side of the defendant’s activity; “locality” could be relevant, 14.25; and then:

Ordinary use of the land –

at 14.26 is regarded as:

a relevant matter –

citing Baron Bramwell, but not, of itself, a threshold determinative liability – it is but something to look at in the mix.  Then, importantly, over at 14.28, consistent with the Restatement:

Impracticability of preventing or avoiding the interference –

is one of the relevant factors.  On the appellants’ test, you would not be allowed to look at that once the use has been characterised as non‑common and ordinary.  So, that is on one side of the equation – that is the defendant’s side.  And then, on the plaintiff’s side:

The seriousness of the interference with the plaintiff’s use of land –

is assessed under a further series of subheadings.  That, we submit, is the traditional and correct approach you should adopt, and it is presented in a similar fashion in Fleming’s Law of Torts, the 2024 edition, which is tab 78.

The third matter from yesterday was:  I submitted, in answer to your Honour Justice Beech-Jones, in terms of the new variant of the entire period case, that that was not a case which was being run at trial, and certainly not in the Court of Appeal, and is not before you.  Could I just show you in the core appeal book, in volume 2, at tab 10, you have what was the present appellants’ appeal – really, a cross‑appeal – in the court below, and, apart from the funding commission, the only ground of appeal which sought to revive the entire period claim was the ground that said that if the use was:

exceptional, rather than a common and ordinary . . . the construction without more constituted an actionable nuisance . . . and:

d.for that reason, the period of actionable nuisance was the entirety of the occupation period –

That is why you do not see the Court of Appeal dealing with any other argument as to why the entire period claim ‑ ‑ ‑

BEECH-JONES J:   Mr Gleeson, could just tell me what page?

MR GLEESON:   Page 411.

BEECH‑JONES J:   Page 411.

MR GLEESON:   While I am completing the pleadings, Mr Bannon has handed up to you overnight the reply at trial.  Can I deal with that now, as it will be my last chance.  That reply, at paragraph 2, responding to the plea of statutory authority, firstly, denies that there was any authority under 104O prior to the declaration of the route.  That was designed to argue that the power under 104O was not enlivened when the project deed was entered prior to that date.  I have explained why that is too narrow a view of 104O, but in any event, they are the powers in the schedule.  Paragraph 2(ba) was keen to argue that:

after 11 September 2015 –

that is, when the route was declared, the defendant took no:

step to develop . . . or to facilitate the development of the Project by others –

everything having already occurred on 17 December 2014.  So, that is why I put yesterday that it was common ground that the conduct case against us focused on the entry of the deed on that date, and there was never an issue in this case that there was anything that the defendant could or should have done during the operation of the project which would have lessened the extent of the interference or its duration.  A similar point is emphasised in (d), and in (e) it is emphasised that if we were exercising:

any statutory power to develop . . . the nuisance . . . was not the inevitable consequence –

of the exercise of the powers, and that takes you back to 12(a) to 15 of the statement of claim, which was the four aspects of conduct identified yesterday leading up and including the project deed.  So, in terms of the issues that were being joined at trial, they were confined in the way I explained.

Your Honours, in terms of the remaining cases on the principal issue, in answer to a question from the Chief Justice, I had referred you to some of the cases on statutory authorities.  Without reading them, can I identify that the other cases in a similar vein include the decision in Cox (1933) 50 CLR 109, which is volume 2, tab 20, particularly Justice Dixon.

GORDON J:   Do you want us to go to these, Mr Gleeson?

MR GLEESON:   Perhaps only Justice Dixon, at page 121 ‑ ‑ ‑ 

GAGELER CJ:   What Commonwealth Law Report?

MR GLEESON:   ‑ ‑ ‑ page 584 of the book.

GORDON J:   It is 50 CLR.

MR GLEESON:   It is an example of a statutory authority carrying out a public utility and his Honour construes the relevant statute and determines, including in the absence of what used to be called a nuisance clause, a clause expressly preserving liability in nuisance, at about point 5:

it follows from the nature of the defendant’s statutory authority that he is not liable for damage caused by an escape of water . . . unless he has been negligent, and that proof of negligence lies with the plaintiffs.

GORDON J:   What page was that, please, I am sorry?

MR GLEESON:   At 121 of the CLR, page 584 of the book.

GORDON J:   Thank you.

MR GLEESON:   So, when your Honour the Chief Justice asked me, late yesterday, about can one see a distinction between the use – which may receive its statutory authority and therefore not be challengeable as such – and then the manner, which may raise different questions; and my answer was to say, you will then look at the statute to see how it has regulated the manner, and in a solid body of cases in this Court, the construction of the statute has led to the view that you can be chargeable in nuisance for the manner, provided the plaintiff alleges and then establishes negligence.

GAGELER CJ:   You accept that?

MR GLEESON:   That that is – that will not be the universal rule for every statute, but it is for many statutes and, indeed ‑ ‑ ‑ 

GAGELER CJ:   So, when Sir Owen Dixon uses the word “negligence”, he is not simply referring to a breach of a duty of care, but he is referring to something that is sufficient to capture your formulation of the rule in nuisance?

MR GLEESON:   Yes.  So, the formal plea would be in nuisance, and the first element would be:  this is my interest in land, and this is the interference with my interest in land; secondly, the conduct I am attacking from you, against you, is this manner in which you performed the statutory power, we would submit that under many statutes, and it would be our regime as well, you would need to identify what is the fault, and you would have the onus in identifying it and then proving it.

That then sits tolerably consistently within the broader framework, even as explained in the Restatement, that one is looking not just for intentional action causing interference, but unreasonableness.  This will be, through the statutory prism, what would need to be proven.  That, we submit, is the same notion as the Court expressed in Bankstown City Council 223 CLR 660 that I referred to briefly yesterday, which is volume 2, tab 14, and it was paragraph 16.

While I have Bankstown, could I refer your Honours to paragraph 32 on the other point we have made in writing, and it is in our outline, that there does appear to be a departure between the Australian approach and the more recent English approach on the relationship between injunction and damages in respect to nuisance.  The traditional Australian approach, which we would commend that you remain with, is referred to at paragraph 32, which is that if you have established an actionable wrong, the court has power to grant the injunction.

The court will then – this is at the final hearing – the court would then look at whether damages would be an adequate remedy, in which event it may decline the injunction, but in determining whether there is an actionable wrong, the court can take into account the range of factors, including public benefit, social utility, as per the authorities I have been to.

You do not, as per the current suggestion in the United Kingdom, wholly separate them and say, well, if there is public benefit, you will not get an injunction, but it is all right, because you can be forced to pay damages.

BEECH-JONES J:   Mr Gleeson, at some point could your team maybe have a look at Benning v Wong (1969) 122 CLR 249 at pages 256 to 257 – just on this question of onus.

MR GLEESON:   Yes.  So, there are number of different aspects in Benning v Wong, the judgements are also difficult, and we have the majority and the minority.  If I could go to Justice Windeyer ‑ ‑ ‑ 

BEECH‑JONES J:   So, you are coming to it now?

MR GLEESON: I will come to it now – who is in dissent, it is interesting that, at pages 307 to 310 of the report, which is 122 CLR 249, when his Honour discusses:

Statutory Authority as an Exception or Defence.

He commences with the proposition that everything:

depends on the terms of the statute –

Then there is some discussion of how the statute might operate in different cases.  He deals with the burden at 308 and 309, and would appear, at the bottom of 309, to say if you were seeking to set up the statutory defence, the onus of inevitability is on you.  He then refers to the decision of the Supreme Court of South Africa in Bloemfontein Town Council v Richter, where:

It was there held that a defendant escapes liability . . . if he shews that the nuisance complained of was a consequence, inevitable in the relevant sense, of his doing the very thing he was authorized by the statute to do; but that nevertheless the plaintiff may reply that, although a nuisance was unavoidable, yet the defendant could by some means or precaution, reasonably practicable, have lessened the actual harm to the plaintiff which ensued from the nuisance.

Now, coming back to your Honour the Chief Justice’s question, in that pleading approach there is a recognition of the idea that the use of the land and the character of things said to flow inevitably from the use may be something that is set up through what is called, here, a defence.  But if the plaintiff wants to say there was some means or precaution, reasonably practicable, that could have lessened the harm, the plaintiff would then raise that by reply if they had not already pleaded it in their statement of claim.

In essence, that is what you see in the pleadings I showed you this morning, that the plaintiffs at trial say:  if you are setting up inevitability against us, we set up against you, in reply, the particular things we say are reasonably practicable which should have been done to lessen the harm.  And what were those things?  Those things were back to the four things leading up to and the entry of the project deed.  So, for that reason, that defined and confined the evidentiary case that had to be met on both sides of the case.

Justice Owen at length deals with the cases, including a number of the ones I have referred to, at the foot of 325, Metropolitan Gas; the previous page has dealt with Fullarton.  It is important to note, with the whole of Justice Owen’s analysis, that he said he was not dealing with the nuisance cases per se, although he did in fact refer to them in the end – you will see that at the foot of 322.  Counsel told the Court it was a Rylands v Fletcher count, and so it was in the context of a Rylands v Fletcher count his Honour was determining where the onus lay.

Now, that all has to be revisited, since Rylands v Fletcher has been folded in under the law of negligence.  That all provides the prism in which his Honour discusses the relevant matters.  Pages 256 to 257 is Chief Justice Barwick, who was in dissent.

GORDON J:   In Justice Windeyer’s judgment, he recognises that that form of pleading makes the last aspect an action of negligence.

MR GLEESON:   He expresses that that ‑ ‑ ‑

GORDON J:   Is that – that is just what he says.  Does he mean “negligence” in a true – I do not think he does.

MR GLEESON:   No, no, but one where an issue has been tendered within the nuisance count as to fault in that character.

GORDON J:   Thank you.

MR GLEESON:   As to Chief Justice Barwick, who was in dissent, he is speaking about where an onus would lie on the defendant in the Rylands v Fletcher count, and therefore, we would submit it is overtaken by Burnie.

EDELMAN J:   I mean, even though Rylands v Fletcher has now been absorbed into negligence, the onus principle would be the same, would it not?  The rationale for whether you take Justice Windeyer’s approach and have an onus that shifts back to the plaintiff once statutory authorisation is pleaded by the defendant, or whether you leave the whole of the onus on the defendant, whether it is Rylands v Fletcher or nuisance would be the same principle, would it not?

MR GLEESON:   That is probably so, your Honour.  Can I just add – given time, and for clarity of the issue – if we are in the entire period case, we do get anywhere near a statutory authorisation defence unless we have lost on our anterior questions, and we would submit the Court will probably decide and should decide the entire period claim based on the pleading as made, the ground that was in the Court of Appeal, and as long as “common and ordinary” is not the threshold test, it must fail.  In any event, on any sensible view of “common and ordinary”, it would – that factor was met in our favour.

Your Honours, on the cases – the two final ones I had wished to go but for time are Harrison and Fisher, because they are the construction cases.  Harrison is volume 5, tab 50 – that is the digging of the tunnel under the Thames.  It is in fact both a construction case and a statutory authority case.  In the judgment of Justice Vaughan Williams, commencing at 413 of the report, the issue is first analysed as if there had been no statutory authority, and down to 414, point 7, held even:

a private person would not . . . be held to have created a legal nuisance by reason of the annoyance . . . in the pumping for the purpose of sinking the shaft, unless it could be shewn that he had neglected to take all reasonable precautions for mitigating the annoyance to his neighbours.

Now, that is indicating, even in a purely private situation, the use of the land involving the pumping of the shaft and that which followed from that was not of itself a nuisance.  One was then in a manner case, a manner and extent case, and it would then depend, we would say, on what was alleged to be the neglect of a reasonable precaution.  But then it goes on to look at it through the statutory prism and comes to effectively the same result, where you would have to show – at middle of 415:

So far as the manner of execution is concerned, all that is necessary is that the works should be done with as little damage or annoyance as can be – that is, as reasonably as can be.

So, we would see that as a manner case where the plaintiff would say exactly what it was that it was complaining about.  The final case, which is Fisher, is in the same volume, at tab 46.

This was the blasting of the Eastern Suburbs tunnel.  There were three aspects to the nuisance.  The first was a physical nuisance through the landing of rocks on neighbouring properties, which was held to be such.  The second and the third were noise and vibration.  On page 11, dealing with noise.  Sir Laurence Street, without citing authority, but with reference to the authorities we have seen, commenced by recognising:

in the defendant’s favour –

the defendant here being the contractor, not the State Rail Authority:

that the work being done is of a lawful and proper character.  The construction . . . is authorised by statute.  Inevitably that construction will be attended by blasting and by noise.  The defendant’s conduct is not to be tested by the same standard as that . . . a private person who, in the midst of this peaceful residential area, took up a quarrying or blasting activity.  The defendant is entitled to have its conduct assessed with due acceptance that it is building a railway under the authority of a statute, and that the construction work would inevitably occasion noise and disturbance.

So, that provides the standard or the prism through which the blasting to build the tunnel is, of itself, not an actionable nuisance.  Where the nuisance arises is:

giving to the defendant the benefit of these considerations . . . the degree both of noise and of vibration exceeds that which . . . the plaintiff is compelled to bear.  The defendant must take steps to reduce –

it, and Sir Laurence Street says, at the foot of the page, on the evidence, he is satisfied:

the defendant could, by modifying the scale of . . . blasting . . . lessen substantially the emission of vibration . . . and totally prevent the emission of stones.

Now, that ‑ ‑ ‑ 

GORDON J:   What about the sentence before, where he says that it:

seems to me too high a claim for the plaintiff to make.

Is that putting it too high, rather than a question of onus?

MR GLEESON:   I think it is not onus, it is they have failed to prove that that ‑ ‑ ‑ 

GORDON J:   Thank you.

MR GLEESON:   ‑ ‑ ‑ more dramatic modification of methods was required by the law.  And so, I will just give the reference; in Codelfa itself, in this Court – Codelfa 149 CLR 337 at 367 – there is reference to the subsequent injunctions which limited the number of hours a day that blasting could occur, which then generated the frustration case in this Court.

So, it is an illustration again, perhaps, of the distinction between the use and the things which are inevitably going to follow from it at a level of some generality – namely, blasting leads to vibration, leads to noise – none of that is actionable, but the manner could be actionable if the plaintiff identifies what is the excess that it says is wrongful.  Just for reference, the statutory power which was being referred to by Sir Laurence Street is the City and SuburbanElectric Railways Act 1915, together with some incorporation of the Public Works Act 1912.

Your Honours, can I move to section 43A.  In volume 1 of the joint book of authorities you have, at tab 1, extracts from the Civil Liability Act 2002 (NSW). The structure of the Act is to divide it into Parts, which deal with different subject matters. Part 1A deals with negligence, and section 5A tells us that the Part applies to certain claims, namely, those:

for damages . . . resulting from negligence, regardless of whether the claim is brought in tort, in contract, under statute or otherwise.

That has, then, various provisions attached to it.  When one comes to section 40, one immediately sees the difference in section 40(1) that:

This Part applies to civil liability in tort.

And it:

extends to . . . liability even if the damages are sought in an action for breach of contract or any other action.

So, the clear contrast between section 40(1) and section 5A tells us that all of the provisions that follow in Part 5 apply to any civil liability in tort, which would include negligence, breach of statutory duty, nuisance and so on.  That is the fundamental entry point where we submit the error occurred in both courts below, because they read this provision down as not applying in nuisance.  It can apply in nuisance, because it is a civil liability in tort.

Then, under the definition of “public or other authority”, it was accepted at Court of Appeal, paragraph 162, that the defendant was a public authority constituted under an Act.  Section 43 then applies to a subset of the cases to which the Part as a whole applied – it applies where you have a claim for a breach of a duty of care, and it modifies the law in that area.

BEECH-JONES J:   Did you say duty of care?

MR GLEESON:   Duty of care, in – this is 42.

BEECH‑JONES J:   Section 42.

MR GLEESON:   Yes.  So, that one only modifies a particular tort action – breach of a duty of care.  Then 43 modifies a particular tort action – an action for a breach of a statutory duty where the liability is based on that breach.  So, we have now narrowed it down from the entire field of civil liability in tort to those where liability is based on a breach of statutory duty.  The Court of Appeal, in a case – Curtis – that we will not go to, has correctly said that when you try and work out what the liability is based on, you look at the allegations and you look at the substance of the allegations ‑ ‑ ‑

BEECH-JONES J:   By the plaintiff.

MR GLEESON:   ‑ ‑ ‑ by the plaintiff, and you determine whether breach of statutory duty is an essential element of the claim, to that extent, then you can get the protection of 43.

BEECH-JONES J:   But not a defence.

MR GLEESON:   But not a defence – yes.  Then, when one comes to 43A, it uses similar language, it:

applies to proceedings for civil liability to which this Part applies –

Down to that point, it has picked up the breadth of section 40(1), and then, like section 43, it has a “to the extent” provision:

to the extent that the liability is based on a public or other authority’s exercise of, or failure to exercise, a special statutory power –

So, you here need to look at the claim of the plaintiff and see if it is based on exercise or failure to exercise the statutory power, then you must ask, is the power “special”, in the sense that that it is not generally conferred on persons unless there is a specific statutory authority?

Then, if that be so, then, under subsection (3) the matters the plaintiff must prove are elevated, they must prove “any act or omission involving” the exercise of the power is Wednesbury unreasonable, and one can see from subsection (4) that the special statutory powers are not limited to those which prohibit or regulate an activity.  Now, in the present case – if your Honours could go to the primary judgment, I will take you to a series of paragraphs to the same effect.  They are commencing at paragraph 53.

GORDON J:   To the same effect being?

MR GLEESON:   Being that this claim was based on two matters in conjunction.  The first matter was that there was an invasion of the plaintiff’s interest in their land, being the interference with the amenity.  That is the first element.  The second element was that the defendant was responsible in law for that invasion, because it:

developed, procured, planned and organised the work.

With the critical element of that responsibility being the entry of the project deed.  So, the first element alone would not have generated liability in nuisance.  You needed the first and the second.  It is the second element, the development and the facilitation of the development of the SLR, which we say was done in exercise of the powers – two powers.

Firstly, section 104O of the Transport Administration Act – I will just give the reference again, that is on page 127 of volume 1 – that is the power to develop and facilitate development of light rail systems.  The second power is the power on page 135 to enter contracts ‑ ‑ ‑

GORDON J:   What section is that?

MR GLEESON:   That is clause 9 of Schedule 1.

GORDON J:   Thank you.

MR GLEESON:   It is the power to:

enter into contracts –

not in abstract, but:

in connection with the exercise of TfNSW’s functions –

and the relevant function which underpinned the exercise of the contracting power was clause 3(1)(a) and (c), read together with the definitions in clause 3(2) and 3(3).  So, for example, in (2)(b):

developing transport infrastructure includes:

. . .

(b)facilitating . . . development.

The entry of the project deed was an exercise of the power to contract in order to advance the function of facilitating the development of the SLR.  Now, paragraph 53 tells us that is one of the two essential elements of the nuisance claim and his Honour repeats correctly that identification of the essential element of the claim in these places:  paragraph 82, it is the:

conduct in authorising or permitting the construction . . . and/or causing the Civil Works delay –

which caused the interference.  That conduct is the entry of the project deed; in paragraph 90(f), an essential element of the case A was:

The defendant was responsible for the substantial interference –

that is “responsible” in the sense of paragraphs 53 and 82; paragraph 97, to a similar effect in relation to case B; and 98 and 99 to a similar effect in relation to case C.  And then it all comes together at paragraph 939, where his Honour returns to this allegation that you are liable because you are:

personally responsible for the creation of the state of affairs which led to the nuisance.

And in 940(3), the relevant conduct is contracting on terms that had certain effects, subparagraph (4) is taking the risk via that contract.  Paragraph 943 is the most central one:

the defendant entered into the Project Deed at a time –

a particular time and on certain terms, that was in circumstances where risks were known.  When the risks came home, that is what renders you personally responsible for the activity.  To like effect, 945 and 946.

So where, with respect, the error occurred in the Court of Appeal – who only dealt with the issue summarily, because they said it did not matter – it is between paragraphs 175 and 180.  Paragraph 175 is correct.  Paragraph 176 is correct in its premise but not in its conclusion.  It is not a necessary element:

of a claim for nuisance to show that  the defendant failed to take reasonable care.

In the sense required by the tort of a negligent breach of a duty of care.  That much is true, but what is not true is the last sentence, which is:

It follows that s 43A has no –

application.  What has happened there is that the court has overlooked that section 40(1) and the opening words of section 43A itself have applied the section to all proceedings for civil liability in tort, rather than simply to proceedings which involve negligence, as per Part 1A.  So that is the critical entry point of the error.

Then, at paragraph 177 there are two errors in reference to Gales Holdings.  The two errors are that, firstly Gales Holdings is distinguishable, and secondly it contains an error within it.  I can deal with the second first.  If you see the two extracts from Gales, the second reads:

Gales’ claims are not based on any allegation that the Council failed to exercise a particular statutory power or that it exercised a particular power negligently or unreasonably.  Rather, Gales sues in nuisance, not for breach of statutory duty, in relation to the continuing operation of the Council’s stormwater drainage network.

Where Justice Emmett puts in the words “not for breach of statutory duty”, that appears to be limiting section 43A to claims framed in the tort of breach of statutory duty.

BEECH‑JONES J:   Is he saying that, or is he saying nuisance is not based on the exercise of the statutory power, because nuisance – the elements of the plaintiff’s claim in nuisance are agnostic about that?

MR GLEESON:   If I am reading it over‑literally, then so be it.  Reading it literally, his Honour seems to be saying:  if you are suing a nuisance and you are not suing for breach of statutory duty, then you cannot have the benefit of this provision.  So, that is one debate.

But, secondly, can I show your Honours why the whole of the comment is distinguishable in any event, by looking at what happened in Gales, which is volume 5, tab 47.  At paragraph 174, the nuisance was found, that the council directed:

the flow of stormwater runoff onto –

the plaintiff’s:

Land in greater . . . volumes than the natural flow –

So, the nuisance is constituted by directing excessive water onto the plaintiff’s land.  It is physical harm case.  The pleading under 43A is in 177, particularly the second bullet point, and what the council sought to set up was that it had exercised two statutory powers.

One was approving a nursing home development and related development, and the second were certain decisions it made about whether it would construct additional drainage, and then there was a third decision whether to approve or construct a road, and that is what generated the relevant statutory power.  What his Honour says at 178 to 179 is that he does not characterise any of those exercises of power as, of themselves, constituting a nuisance.  He says expressly in 178:

The nuisance is not to be found in –

any of those three things.  He says in 179 the nuisance is:

in directing the flow of stormwater runoff –

So, what that shows is there was a disconnect between the conduct of the council said to constitute the nuisance, which was the directing the flow of stormwater runoff, and the special statutory powers that the conduct was relying – the council was relying upon for section 43A.  So, his Honour says:  they are my reasons – that is 180.  Then, what is referred to in 196 to 197, and quoted by the Court of Appeal, is an elaboration of those reasons.  You see in 196, what his Honour is saying is:

A clear distinction is drawn . . . between a liability that is “based on” the exercise of, or failure to exercise, a special statutory power, and an act or omission “involving” an exercise or failure to exercise such a power –

citing Precision Products.  Then, at 197, he comes back to the earlier point:

Gales’ claims are not based on any allegation that the Council failed to exercise a particular statutory power or that it exercised a particular power negligently –

When his Honour says:

Rather, Gales sues in nuisance, not for breach of statutory duty –

Even reading it in a more generous way, Justice Beech‑Jones, but now reading it in context, what his Honour is coming back and emphasising is that it is not an essential element of your claim in nuisance that a council made the three exercises of statutory power which had been referred to in 177; they were merely matters that might sit in the background, but they were not elements of your claim.

So, in a pleading sense, his Honour was saying, what the plaintiff would plead is:  invasion of my land, your conduct being directing stormwater runoff onto my land, and there is no argument made that directing stormwater runoff constitutes the exercise of a special statutory power.

BEECH‑JONES J:   And is your point here, well, the way the plaintiff framed its case was entry into a contract?

MR GLEESON:   Entering into the contract was pleaded as an essential element of the claim.  It was the thing which was said to render the defendant personally responsible for the nuisance.  It did not merely sit in the background, it was the claim, and that was clear from the statement of claim, and it was clear from the reply I showed you this morning.

EDELMAN J:   This is on Lord Sales’ conception of the concept of nuisance?  Because on the majority conception in Fearn, these issues would not be part of the claim, would they?

MR GLEESON:   They are most clearly part of the claim – I agree with your Honour – if one is looking at the tort of nuisance as we see it.  But not just is it what they pleaded – namely, they had to plead some conduct which rendered us legally responsible for it – this is the conduct; they pleaded it.  So, even if you were in a Lord Leggatt‑type case, the element of the claim is:  your conduct in entering that project deed – which you did under your statutory powers – constituted an authorisation to the contractor who then committed the nuisance.  If your Honours have paragraphs 49 to 53 of the Court of Appeal, which we have not challenged, it still is an essential element of the claim, however it is framed.  See 53, the defendant:

created or procured the conduct which constituted the alleged nuisance.

And what was that creation or procurement done by?  Done only by the entry of a project deed.

GORDON J:   Is that what is set out in paragraph 49?  The essence of the problem.

MR GLEESON:   Yes.

BEECH-JONES J:   The power to enter into a contract is clearly not, per se,  a special statutory power. 

MR GLEESON:   So, I then come to the special.  What makes it special here is you are not give some general power to enter contracts, you are only given a power to enter contract in order to exercise your functions.  So, the essential function is either 104O, which makes it perfectly clear the function is building a light rail, and no ordinary person has the ability to construct a light rail or authorise someone to construct a light rail – that is Justice Isaacs in Fullarton. 

GAGELER CJ:   You hardly need Justice Isaacs in Fullarton for that proposition.

MR GLEESON:   You would not, but to the extent the appellant says in the written submissions this is not special, because they say it is just about planning and anyone can plan a light rail, that does not come to grips with the fact that the exercise of power is to contract so as to authorise the doing of a thing on the public road which would be unlawful without statutory power, and parliaments do not ordinarily give ordinary citizens – even Mr Bannon or I – the power to build light rails, including those that Mr Bannon does not like very much.

GORDON J:   I think Justice Edelman asked you this yesterday, is there a distinction, in relation to that proposition, between a duty and a power?

MR GLEESON:   For this purpose, it is a power that is all that is necessary.  You do not need a duty.  What it is saying is, if the case is based on an exercise of a power, and then – provided it is a power which is not generally conferred on people, then it is special, then you are in the territory of this protection.  Your Honours, could I just add this as to what the special is doing.  This is an elevated onus and standard that is being put on the plaintiff and it is being done for this reason:  there may be some statutory powers which effectively replicate powers which citizens have in the community. 

Your Honour Justice Edelman asked yesterday, in a different context, about statutory authorities being given extra protections over ordinary citizens, the Parliament is not saying that if the power you have from statute is of the same character as a power that any citizen could have, you then have more ability to escape liability.  What it is looking at is that category of power which is not generally conferred on citizens, whereby, necessarily, the statutory body or person will be bringing to account a range of considerations – some public, some private – often incommensurable. 

EDELMAN J:   There is a generality question, as well, with section 43A(2), which is:  is the statutory power one just to enter into contracts generally, or is it a power to enter into contracts for the performance of the function of building a light rail?

MR GLEESON:   We are putting it at that more specific level, and we are not saying any contract entered by the defendant has this protection, but a contract for the purpose of building and then operating the light rail, that comes within a special test.  The reason it then makes sense is that, in exercising that power to enter the project deed – as we have seen on the fact case – the defendant was charged with balancing a range of considerations, some public, some private, and in many senses, incommensurable. 

From one perspective, you might say the later we delay the exercise of the entry of the project deed, the more chance we might have to investigate utilities, including perhaps by ripping up large parts of George Street beforehand.  In one sense, that would improve our state of knowledge, and one might think that if that were a successful exercise, it might reduce the ultimate period of interference once the project deed has been entered.

On the other hand, as the Court of Appeal pointed out in the earlier part of their judgment, if you were to engage in extensive works invasive of the street to try and find every utility, you would be causing considerable disruption to neighbouring land owners, including the same ones perhaps at a different point in time, and you would also perhaps be delaying the ultimate process of the building of the SLR, and that would have detriments to the community.

So, when the defendant had to make the difficult decision on 14 December – should we now enter the deed, should we defer it until we have done more work, should we hold out and try and get better terms – it was exercising the very type of power which attracts the consideration of this provision, which is that you will then, under subsection 3 – if you are charged with an act or omission as relevant to your liability, the question will be:  was the act or omission so unreasonable that no authority having the power in the question could properly consider it to be reasonable?  Then, to complete this provision, we have the findings at first instance, between paragraphs 750 and 756, that the plaintiffs failed to get the necessary finding of fact based upon the expert evidence.

BEECH-JONES J:   Mr Gleeson.  Was the reliance on the contract power raised in the Court of Appeal?  Their Honours did not seem to address it.

MR GLEESON:   Yes, it was raised.  I am told Mr Moretti was there.  It is also referred to in the judgment.  Mr Bannon agrees it was raised at trial – he refers you to paragraph 733 and following of the primary judge – and we say it was raised on appeal, as well.

GAGELER CJ:   Mr Gleeson, if you are right about section 43A being applicable here, does it operate, in effect, in this case, as a ground for a demurrer?  You say that the case just was not put on the basis of Wednesbury unreasonableness.

MR GLEESON:   No, because case B was put on Wednesbury unreasonableness.  So, 750 to 756 of the primary judge is – if that is the case – and the onus, clearly, is here on the plaintiff:  you failed.

GAGELER CJ:   I see.

MR GLEESON:   Your Honours, I am told you have the notice of appeal from us to the Court of Appeal, but perhaps not the amended one, and the point was raised squarely in the amended one.  So, if we can provide that document to the Court, once we can pick it up.

EDELMAN J:   It may not, and probably does not matter in this case, but you said that the findings of fact in your favour in relation to the Wednesbury unreasonableness standards were based on an onus that the plaintiff had.  Why would the onus – is that based on the same type of reasoning as Justice Windeyer in Benning v Wong?

MR GLEESON:   No, it is stronger than that your Honour.  It is because of what the Court of Appeal said at paragraph 175.  It attenuates that which the plaintiff must prove as part of its action.  Your Honours, the final matter I want to do before handing over to Mr Moretti for the funding commission is this.  In relation to claim case C, which I dealt with relatively summarily yesterday, in case your Honour need it, can I show you where the Griffith report is, because it is volume 2B of the respondent’s book of further materials, at tab 8.

GORDON J:   Before you do that, can I just ask you about, or take you to paragraphs – I think you took us to them before – 177 through to 181.  Are they the ones where they are dealing with the section 43A question?

MR GLEESON:   Yes.

GORDON J:   Sorry to interrupt, Mr Gleeson, I just want to make sure we tidy off that end point.

MR GLEESON:   Yes, so, I went through ‑ ‑ ‑

GORDON J:   I do not think you kept going.  I wonder whether 179 and 180 are the ones which ‑ ‑ ‑

MR GLEESON:   Yes, 180 is critical, that is where we have to show there is error.  Paragraph 179 is partially correct.  That is how the section works if you are in a negligence action, but that does not exhaust how it works if you are in a nuisance action.  Paragraph 180 is the critical part, what the court there has failed to correctly characterise is the claim as it was made, and as it succeeded.

It was not a complaint about mere planning, it was not a complaint about incomplete identification.  It was a complaint about entering a project deed at a time when and on terms which authorised the nuisance that is now complained of.  And so, it is the mischaracterisation of what the case was based on in 180, that is the first error.  The second error is the failure to squarely consider how section 104O and the powers I have taken you to from the Schedule are the powers that were being exercised in the entry of the project deed.

GORDON J:   Sorry to interrupt.

MR GLEESON:   Thank you, your Honours.  I just wanted to show you that in the RBFM 2B at tab 8, that is the Griffith report, which creates the amended IDP.  At paragraph 37 – this is an oddity of the report – he was first:

asked to assume –

that there was a failure:

to appropriately manage –

the risk.  They are the assumptions which were not made good after the expert debate between the people who were qualified.  Then, at paragraph 38, he says:

Those assumptions . . . are consistent with the opinions that I have formed . . . based on my project management expertise.

The point is that these assumptions called for the expertise of either a procurement person or a utilities person, they do not rest in the field of a programmer, and therefore, when you come, for instance, to 44 and 45, these are the things he says should have been done – these were outside his expertise, but these are the things which led him to generate the amended IDP which had the two critical assumptions in it which were not made good, the first being that all utilities would be found in advance, and second, all agreements with operators would be reached in advance of the project deed.

So, your Honours, the only other thing I can say – given time – on case C, to the extent it is alive, is that you will see, between about paragraphs 350 and 750 of the judgment, the detailed findings on the experts which showed that the critical assumptions which underpinned the amended IDP were not made good.

BEECH‑JONES J:   That was the primary judge?

MR GLEESON:   The primary judge, yes.  And they are the findings which are reviewed more briefly in the Court of Appeal between about paragraphs 50 and 70.  Your Honours, there are the submissions on the main case.  If I can hand over to Mr Moretti briefly.

GAGELER CJ:   Thank you.  Mr Moretti.

MR MORETTI:   Your Honours, turning to ground 3 of the notice of appeal, there are three basic reasons why funded group members should not be entitled to recover the funder’s commission as damages.  The first is that both of the courts below found that Transport for New South Wales’ conduct was not the legally significant cause of the appellants having incurred a loss.  Second are the policy concerns identified particularly by the Court of Appeal.  The third point is that the funder’s commission was too remote to be recoverable.

Before turning to those three points, I think it is helpful to frame this issue by making some observations about the nature of private nuisance and how the characteristics of the tort must inform how the court goes about determining the appropriate measure of damages.  Fundamentally, the compensatory principle has the basic goal to undo, by monetary equivalent, the consequences of the wrong experienced by the plaintiff, so far as is reasonable.

However, in order to give effect to that principle, it is necessary to focus on the nature of the wrong in question and it is only when regard is had to the interest protected by the tort that you can calibrate the analysis both as to causation and also to the question of whether a loss is too remote.  Now, for nuisance, the wrong is an interference with the plaintiff’s interest in land, therefore, the award of damages must be directed at reversing the effects of the interference with that interest.

That point can be seen in your Honour Justice Gordon’s judgment in Brown v Tasmania 261 CLR 328, it is in volume 2 of the joint book of authorities, and if I could just take your Honours to it very quickly, it is tab 16, at page 406 of the joint book of authorities, it is paragraph 385. This passage I think you have already been referred to, but there, in the middle of the paragraph, your Honour says:

There must be a material interference, beyond what is reasonable in the circumstances, with the plaintiff’s use or enjoyment of the land or of the plaintiff’s interest in the land.

But then your Honour goes on to say:

The effect of the interference on that interest in land then provides a measure of damages regardless of whether the nuisance was by encroachment, direct physical injury or interference with the quiet enjoyment of the land.

And your Honour cites there Hunter v Canary Wharf at 724 to 725 in the judgment of Lord Hope, which we do not need to go to, but his Lordship there emphasises the importance of damages being about reversing the interference with land.

The point that we made at the outset is that these basic principles which define the scope of liability in nuisance provide the starting point for the analysis as to whether Transport for New South Wales’ conduct caused the funded group members to suffer a loss and whether any such loss should be treated as too remote.

Turning to the first basic reason why the funder’s commission should not be recoverable as damages, it is that both of the courts below found that it was not apt to characterise as a loss the incurring of liability for the funder’s commission by funded group members; and secondly, in any event, Transport for New South Wales’ conduct was not the legally significant cause of such a loss, if it is proper to frame it in those terms.

Your Honours can see that in the judgment of the Court of Appeal at paragraph 183.  There, their Honours characterised the nature of the litigation funding agreement and the rights and obligations it provided for.  So, the second sentence – this is at page 480 of the second core appeal book – their Honours said:

The litigation funding agreement with International Litigation Partners No 16 Pte Ltd provided, relevantly, that the funder would pay all legal costs and disbursements, meet any adverse costs orders, provide any security for costs, provide “litigation management services”, and upon receipt of a “Resolution Sum” would be entitled to reimbursement of the costs it had paid, plus a “Funder’s Commission”.

And so, what we see there is that, as your Honour Justice Edelman pointed out yesterday, this was an agreement whereby group members who executed it obtained substantial benefits:  not only were they able to prosecute their claims, but they were able to do so on a risk‑free basis.  The courts below noted that the funder’s commission was basically the quid pro quo agreed to by the appellants to obtain those benefits.  You can see that most clearly at paragraph 194 of the Court of Appeal, where their Honours said:

there can be no doubt that the entry into the funding agreements was a voluntary act . . . Moreover, the premise of common question 10 was that no assumption was to be made that the group member was impecunious or that any impecuniosity was brought about by the tortious conduct of the defendant, thereby serving to emphasise the voluntariness –

Over the page, at paragraph 196, their Honours said:

The group members who entered into funding agreements have chosen to bargain away the risk of being exposed to an adverse costs order and a liability to pay security for costs –

They then cited three critical paragraphs from the primary judgment, paragraph 109 in particular:

What the plaintiffs have really done is enter into a bargain with a third party, by which they agreed to give the third party an amount of money in return for the third party taking the risk on the litigation.

At 197 they said:

We respectfully agree –

The point is that the appellants emphasise and focus on the use of the word “voluntary” in this passage, and also over the page at paragraph 198 where, again, voluntariness is used, but our first answer – sorry, and they say that it is not correct to say the entry into litigation funding agreements was voluntary or, alternatively, they say even if it was voluntary, that does not break the causal chain, because it is the very sort of thing that you would expect to occur.

But in our submission, that does not engage with the full breadth of the reasoning of the courts below, which pointed out not just the entry into these agreements was voluntary, but it did not actually give rise to a loss, properly so understood.  Further, even looking at the high point of the appellants’ evidence on this question, which is essentially that Part 10 of the Civil Procedure Act requires someone to act as lead plaintiff, and the evidence of Ms Hunt and Mr Zisti was that neither would have been willing to act as lead plaintiffs had it not been for the litigation funding agreements.

We say, first, that this really tells us very little about the position of the other 50 to 70 group members to whom the answers to these common questions will apply and are not exposed to the risks of being a lead plaintiff.  But also, turning to the other way that the appellants put this argument, at paragraph 15 of their oral outline and also as it was developed yesterday in argument, they say that their nuisance claim was, in essence, an asset that could not be realised without incurring liability to pay the funder’s commission.

In our submission, that contention tends to highlight two points.  First, that the incurring of liability to pay the funder’s commission is divorced in time and nature from the interference with the amenity of land, which is what the damages are addressed at – that is drawing back the first point I was making earlier about the scope of liability in nuisance.  But secondly, this way of characterising what has occurred does tend to emphasise that this additional amount does not form part of the substantive rights to be protected by an award of damages; rather, it is an expense incurred as part of vindicating those rights.

So, this brings me to the first policy of reason identified by the Court of Appeal as to why the funder’s commission should not be recoverable as damages, and it also relates to the question that Justice Beech‑Jones put to Mr Bannon yesterday, namely, that the appellants are seeking to recover litigation expenses as damages.  So, this point is dealt with from paragraph 202 in the Court of Appeal, where their Honours said that the funder’s commission appears to be:

a cost or expense of litigation –

such that if it is to be recoverable, it must be as costs and not as damages.  Now, in their submissions, the appellants have criticised this reasoning, because they said – this is at paragraph 57 of their written submissions:

the Court of Appeal erred in characterising litigation funding costs as legal costs.

Now, with respect, we say that misses an important nuance in the Court of Appeal’s reasoning.  The primary judge held – and we do not need to go to it, but it is at 61 of the funding commission judgment – that:

the funder’s commission is not “costs”.

As that term is defined in the Civil Procedure Act.  That is not disputed by either party.  However, “costs” in the technical sense provided for by the Civil Procedure Act does not encompass all expenses associated with litigation, and this was a point that arose for consideration by this Court in a decision that has been handed up – I think it was sent to the Registry yesterday, handed up this morning – Birketu Pty Ltd v Atanaskovic [2025] HCA 2, which, if your Honours would take up ‑ ‑ ‑

GAGELER CJ:   Mr Moretti, you could just give us the references, I think.  It is a very recent decision.

MR MORETTI:   Yes.  Your Honours, as you say, will be familiar with the case, it concerned whether an unincorporated law firm was entitled to obtain recompense for legal work performed by its employed solicitors.  At paragraph 11, the majority referred to the:

power to make an order for costs –

as being:

conferred on New South Wales courts by s 98(1) –

which is also the applicable provision in this case.  At paragraph 13, reference was made to:

The definition of “costs” –

which is:

that “costs, in relation to proceedings, means costs payable in or in relation or in relation to the proceedings, and includes fees, disbursements, expenses and remuneration”.

The point is that these provisions are the descendants, in New South Wales, of statutory provisions that go all the way back to the Statute of Gloucester in 1278.  You refer to that history at paragraph 17, and you say that the provisions embody:

the general common law principle . . . that costs are awarded only by way of indemnity or partial indemnity “for professional legal costs actually incurred in the conduct of litigation”.

So, the point is that the Civil Procedure Act confers a right to costs, but it also confines the entitlement, consistent with the common law’s traditional rule.  It must follow from that that there is a penumbra around “costs” in the technical sense, that are litigation expenses – the classic example is solicitor‑client costs – those costs cannot be recovered as costs from an unsuccessful party in litigation.

It must follow, as an outworking of that principle – and, indeed, it has been found in the cases cited at 202 to 203 in the Court of Appeal’s judgment in respect of party‑solicitor’s costs – that those broader category of costs cannot be recovered as damages, because otherwise it would undermine the general common law principle that your Honours were dealing with in Birketu.  And so, the point ‑ ‑ ‑ 

BEECH‑JONES J:   Mr Moretti, can I just ask you a question.  Could you just tell me, what is the difference between the recovery of this and the recovery of the costs of funds management, which injured plaintiffs often get to manage the fund of the pool of money they get as compensation?

MR MORETTI:   So, your Honour, I think the critical point there comes back to a point that the Court of Appeal made about the assumption or “the premise” built into common question 10, which is:

that no assumption was to be made that the group member was impecunious –

by reason of the tortious conduct.  So, in cases like Nominal Defendant v Gardikiotis – I am no doubt not pronouncing that correctly – the point was made that those sorts of management costs will be recoverable where it is the tortious conduct that has rendered the need for management services to be acquired, but they will not be more generally available.  So, if your Honours were to be analysing it in terms of that prism, we say that is the critical distinction between that case and this.

Your Honours, I can see the time.  The point that we were going to make finally, following on from the policy considerations, was the question of remoteness.  I can deal with that very quicky and just say that, at first instance, it was found – and this is at paragraph 100 of the primary judgement on the funding commission, that:

it may have been foreseeable on the part of the defendant that the business owners –

would bring an action, but, at paragraph 102, having regard to the nature of the liability in nuisance, his Honour said that the funder’s commission was too remote to be recoverable.  At paragraph 207 of the appeal judgement, the court said “it may be doubted that” incurring liability for the funder’s commission was reasonably foreseeable and, in any event:

reasonable foreseeability is a necessary but not a sufficient touchstone for damages in this area.

Your Honours, we say no error has been shown in the conclusion that it was too remote, and that would provide yet another string as to why the funder’s commission should not be recoverable in this case.

There was one other final point that is not related to the funder’s commission that needs to be dealt with.  It concerns a submission by the appellants in respect of ground 1 at paragraph 26 of their written submissions.  There, they submit that in the event that they succeed in respect of the argument based on Fearn:

Costs of the trial without apportionment should also be ordered –

Now, there is a costs judgement in this case from the primary judge, it is Hunter Leather v Transport for NSW [2024] NSWSC 776, in which his Honour awarded Transport for New South Wales costs in respect of common questions 10 and 11 – that is the funding commission claim – and also reduced the costs payable by 35 per cent more generally, to reflect the fact that two of the lead plaintiffs’ claims failed in public nuisance and the private nuisance claim in respect to the QVB store was also rejected.

In our submission, the considerations identified by the primary judge there are unaffected, even if the appellants succeed on ground 1, and so there would be no basis to disturb that costs order, even if the appellants were to succeed on ground 1.

Your Honours, those are the submissions in chief. 

GAGELER CJ:   Thank you, Mr Moretti.  The Court will take the morning adjournment.

AT 11.21 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.32 AM:

GAGELER CJ:   Mr Bannon.

MR BANNON:   Thank you, your Honours.  Can I respond to a submission made yesterday and again today by my learned friend that case C was limited to the limited period claim, and did not cover the entire period claim.  That is not correct, as is apparent from the primary judge’s reasons and the statement of claim.  If I can identify the relevance of it, first, then I will go to the part.

The relevance relates to ground 2 of the notice of appeal, which has two aspects, which is this – if the light rail construction work was a common and ordinary use, consistently with the authorities to which we have been, the onus is on the respondent to show that all reasonable precautions were taken to protect the interests of the appellants, and that aspect invites this Court to endorse what we say is the time‑honoured principle.  The other basis on which ground 2 has put forward is that ‑ ‑ ‑

BEECH-JONES J:   Is that ground 1 or ground 2? 

MR BANNON:   Ground 2.

BEECH‑JONES J:   Ground 2.

MR BANNON:   In other words ‑ ‑ ‑

EDELMAN J:   Ground 2, but where you lose on “common and ordinary use” application.

MR BANNON:   Yes.  We say, consistently through all those cases I went through, the onus falls on the person asserting “common and ordinary use” that they did it “reasonably”, in the sense used.

The other basis on which we rely on ground 2, if, contrary to our primary position, the Court of Appeal is correct to adopt a generalised reasonableness test, à la Lord Sales, Lord Sales himself says there has to be some reasonable standard – and these are the paragraphs which we referred to in our submissions at paragraph 32:  Fearn, at 166 and 240, where he cites, as an example of a reasonable standard, the very matter of a person who asserts that they have done something, as a common and ordinary activity, such as building, has done it in a reasonable way.

So, in other words, if we are stuck with a Lord Sales‑type approach, there still has to be a reasonable standard; that is a reasonable standard, and it is their onus.  Now, if I could come to explain why the case was not as limited as my learned friend indicates, if I could take your Honours to primary judgment ‑ ‑ ‑

GAGELER CJ:   That is all in your ground 2, is it?

MR BANNON:   Yes.

GAGELER CJ:   All right.

MR BANNON:   I am going to work on ground 2, then I will come back to ground 1.  I invite your Honours to go to the primary judgment at paragraph 98.

GORDON J:   Why are we going here, Mr Bannon?

MR BANNON:   To support the proposition that, contrary to what has been said, case C was not limited to the limited period claim.

GORDON J:   Thank you.  Not even to the partial period, it covers the entire period?

MR BANNON:   It covers the entire period.  What is said there at paragraph 98, and accurately so:

The second alternative case . . . proceeds on the basis that, contrary to the plaintiff’s primary position, the use of the land during the SLR construction was a common and ordinary one . . . if there was a finding that:

it was:

for the purposes of . . . construction as common and ordinary, then the onus lies on the defendant to establish that it took reasonable and proper precautions to prevent disruption –

So, that covers the whole of the disruption to which we are referring to.  And paragraph 99 is important:

The plaintiffs submit that the defendant has not discharged its onus in this regard.  Further . . . if it was up to the plaintiffs to prove –

which we denied:

that the defendant failed to take reasonable and proper precautions . . . then the plaintiffs have adduced such evidence –

by reason of Mr Griffith.  So, in other words, that is capturing the part of the case which says, if it is common and ordinary, the words going back to Lord Bramwell and subsequently interpreted conveniently, onus is on them, and that is true in building cases, and we see that in Alldridge, et cetera.

BEECH-JONES J:   Mr Bannon, sorry to go back to the foundation, paragraph 90 of the primary judge outlines case A.

MR BANNON:   Yes.

BEECH-JONES J:   And in 90(h), his summarises case A as involving:

no statutory authority defence –

Is that meant to mean no statutory authority defence is made out?

MR BANNON:   Yes.

BEECH-JONES J:   Right.

MR BANNON:   And I will take you to the pleading, because there ‑ ‑ ‑

BEECH-JONES J:   All right.  And that may involve on your case, is it, an onus about inevitability or reasonable conduct as well?

MR BANNON:   Correct, yes.

BEECH-JONES J:   So, in that respect, 90 is a bit similar to 98.

MR BANNON:   We – and I will take your Honours to the pleading, something has been said about this, but so far as we were concerned, we pleaded the whole period was a nuisance.  They pleaded, in response to the whole period, the statutory defence.  In other words, it was an inevitable consequence, not – I am not sure if this argument has been made – that this particular statute abrogated any claim to nuisance.

That is something which we have heard today – if we have heard it, I am not sure we have – relying on things like Cox.  That has never been argued before.  It is not and was not in the grounds of defence and it is not in the notice of contention, but if I have to come back to that, I will.

GORDON J:   So, just so I am clear, the “no statutory authority defence” point is, as I understand it, that they failed to demonstrate the onus being on the defendant, that they had done it reasonably.

MR BANNON:   That is right.

GORDON J:   That is, the flipside of inevitable consequence.

MR BANNON:   Exactly.

GORDON J:   So, that is case A for the entire period.

MR BANNON:   That is right.  Can I indicate where I am going with all of this.  My ultimate conclusion is to invite your Honours that the principles that we espouse are correct, and they apply happily in this circumstance, looking at either case A or case C.  And in relation to case A, where it is not an ordinary use, they have the statutory authority defence, and they have an obligation to prove either to the whole or to some extent, that it was inevitable.

They did not do that, but, nevertheless – and your Honour Justice Edelman asked me this earlier – we did prove, through Mr Griffith, what should have been the period of effect, taking all reasonable measures.  The court of appeal’s – and I am going to come back to that – attack on Mr Griffith is simply unfounded – and deal with the point my learned friend raised in relation to that.

And so, what you have here is, from a purist point of view, we would say that the relying on the Griffith evidence is not the same as what you should prove, that there was no other reasonable way of doing it, because Mr Griffith deals, in effect, with the process they did go through, and there are other ways, but standing here, after all this evidence, your Honours asked me, is that a sufficient proxy?  The answer is probably “yes”.

So, the point is that if case A applies, then the answer would be they have to prove inevitable consequences for the partial, what they should be saying to their Honours, or your Honours can do it anyway, is to say Griffith stands for that, you end up at the same judgment as his Honour.  Alternatively, case C, it is common and ordinary, onus is on them, they did not discharge it, and nevertheless we did, and Mr Griffith’s evidence is accepted for what should have been the reasonable period, and you go back to his Honour’s judgment.

His Honour’s judgment is, we say, in error in the sense that his Honour did not adopt the correct principle.  But we ultimately invite your Honours to adopt what we say is and confirm the correct principle, and either of those two funnels will lead you to the same ultimate result in terms of the judgment of his Honour.  So, that is where I am heading with all of this, and I am going to deal, under case A, with a bit more about inevitable consequence, but if your Honours could bear with me on case C on the working assumption it is a common and ordinary use, that is how I am going to deal with it.

BEECH-JONES J:   Can I ask this.  If you are right about the principle, that the court of appeal’s finding about Mr Griffith stands, that is better for you, is it not?

MR BANNON:   It is.  And that is how we put it.

GORDON J:   The answer is “yes”.

MR BANNON:   And that is what we ask for.  But if your Honours take the view that Mr Griffith is gone, then they are gone on both fronts.  It is a matter for your Honours.  And that is – my learned friend talked about equivocal submissions I made in the Court of Appeal.

I think what I just said, when they were attacking Mr Griffith, I said you have to be careful what you wish for, because if Mr Griffith goes, you are in for the high jump – you are in for the whole period, because you have nothing to defend on case A and you have nothing to defend your onus on case C.  So, I ‑ ‑ ‑ 

GAGELER CJ:   You do not want more than you got from the trial judge, do you?

MR BANNON:   Well, we always want more, but ‑ ‑ ‑

GAGELER CJ:   What are you asking for?

MR BANNON:   Justice Beech‑Jones frames it correctly, in this sense:  we support Mr Griffith’s evidence as appropriate, and if it is a case C common and ordinary, then the outcome of the primary judge is correct; if Mr Griffith’s evidence goes, then on case C we get the whole lot; case A, if it is common and ordinary, Mr Griffith’s is not evidence that they should have led, but your Honours may take the view that it is a sufficient proxy, even so.  But if Mr Griffith goes, then we get everything.

BEECH-JONES J:   So, you are saying you want what you think you are entitled to?

MR BANNON:   We want what we think we are entitled to, but if  your Honours think that Mr Griffith’s evidence – and I stand here to support it, do not get me wrong – is not sufficient and/or does not answer the purest question of proving what was the limit of inevitable consequence, then we get the whole lot.

GORDON J:   But I had understood, on your analysis of the principles, you had had no onus on that question.

MR BANNON:   Correct.  But there is evidence – yes, I agree.

GORDON J:   So, Griffith becomes irrelevant to that analysis, on your part.

MR BANNON:   Well, unless you say ‑ ‑ ‑

EDELMAN J:   But you discharged their onus.

MR BANNON:   I have discharged their onus – exactly.

EDELMAN J:   In part.

MR BANNON:   Yes.  It is not quite the same analysis, because – as I have tried to explain, and as I think the Manchester Case refers to – you have to look at what was reasonably possible, within technological limits, in a regional scope.  So, therefore, the onus was on them to prove, for example, that they could not have done it in a different way – for example, with more night works.

GORDON J:   Or they could not have done it, for example, because what was possible was too expensive and would have made it economically unviable.

MR BANNON:   They could have proved all that if they wanted to, yes, but they did not – they just . . . . . from it.  So, the answer to your Honour the Chief Justice’s question, we want as much as we can get, but we recognise that the Griffith evidence may stand – well, certainly, if we are – no, if the Griffith evidence, which I am going to support, and your Honours accept that, then that will interfere with a full claim on case C, and, if your Honours take the view that it is a near enough proxy for case A, then it will limit our case A.

GAGELER CJ:   That is a good enough answer.

MR BANNON:   Is that a good enough answer, your Honour?

GAGELER CJ:   I think so.

MR BANNON:   I do not want to sound greedy – I want to sound reasonable – but if I am being principled, then we should get the whole lot.  But that is a matter for your Honours.

So, against that background, could I then make this point, that it is important to appreciate that once – perhaps I have said this again, but once we establish the respondent was responsible for the nuisance, and that is a sense which is referred to in Gales – and I will find the passage in a minute – and that was a major argument before the trial, but not pursued in the Court of Appeal, which – and there is a lot of case law about it, as to are you responsible for the state of affairs which is created, which might include some knowledge of the risk which fell in.

That does not involve any breach of duty, all that involves is saying:  well, you knew about this, you knew it was going to be a major work, and you knew about this utilities problem, and that was the problem which fell in.  So, the way we pleaded it was to say:  you knew about this risk, it was a utilities risk, and that risk fell in.  And proved the risk falling in by Mr Griffith – and that was a big issue, did Mr Griffith prove that the cause of the delays was the unknown utilities?  And the primary judge said he did prove that, and the Court of Appeal affirmed that finding.

I made the point that if there was a delay, there must be two points in time, so how you can use Mr Griffith’s evidence as good for one point and not for the other point is a rather existential question.  That passage in Gales if I just read it out, it is paragraph 131, it says:

There will be a nuisance if a state of affairs created, adopted or continued by an owner or occupier –

It is that sense, and that was the big issue, and it is the same way a property owner will engage a builder – it is no answer to the property owner that they say the builder seemed like a good person at the time, the fact that he or she is doing jackhammering at crazy hours, that is not my responsibility – the property owner will get sued.

Now, if I can then go to the pleading, the way we pleaded this, this is in RB 3, tab 10, at page 961.  And at paragraph 15 we plead – it is on page 971, paragraph 15, it is tab 10, the particular page is at 971, “Private Nuisance”:

Through its conduct in:

(a)authorising or permitting the construction of the Project; and or –

so, they are alternatives:

the defendant has caused a substantial and unreasonable interference –

And you go over the page, it just talks about the interference, and at paragraph 16, it talks about the whole of the period, in particular, in 16(a)(i), the whole of the period.  The reference to:

By reason –

or:

Through its conduct in:

(a)authorising or permitting –

that picks up matters which paragraph 12A and 12B, failures to take note of, et cetera, and then the entry into the project deed later on.  Paragraph 9 is the entry into the project deed, which is 17 December, but there is no breach of duty required there, all it needs is to plead a responsibility.

GORDON J:   What about the reply that we were taken to?

MR BANNON:   Sorry?

GORDON J:   What about the reply that we were taken to this morning?  Does that matter?

MR BANNON:   Yes.  I will come to the reply.  The reply was pleaded, with a raft of breaches of duty, on the supposition – which we denied – that 43A applied ‑ ‑ ‑ 

GORDON J:   Thank you.

MR BANNON:   ‑ ‑ ‑ in which case we had to deal with an argument which was referred to in case B, which I will come to.

BEECH-JONES J:   So, you have taken us to those parts of the pleading to address 43A, or some other?

MR BANNON:   No, to explain that ‑ ‑ ‑

BEECH-JONES J:   How you put your case?

MR BANNON:   A lot of what my learned friend said – well, we did not have to go into evidence to address the issue of either inevitable consequence ‑ ‑ ‑ 

BEECH‑JONES J:   I see.

MR BANNON:   ‑ ‑ ‑ or that we took all reasonable steps, because we limited our pleading to a certain level.  We did not limit pleading to a certain level; we said – as the judge recorded, in those paragraphs of the judgment – it is your onus, you have done nothing, but, in a sense, if you are not happy with that, we have proved it for you through Mr Griffith.  So, there was always an evidentiary – well, it was a legal onus for them, which we never excluded by anything we said in the pleading.  So, that is the short answer to that.

They did address our attempts – and I will I come to the reply – to overcome – if we were wrong, and 43A applied – to say this was a decision so unreasonable, et cetera.  Then the paragraphs at 939 to 946 – which your Honours have been to, which are his Honour’s finding about responsibility – pick up, to a more or a lesser extent, those allegations which were just designed to achieve responsibility.  Now, my learned friend then referred to paragraph 45 of the judgment.

BEECH-JONES J:   Primary, or Court of Appeal?

MR BANNON:   Of the primary judgment, I am sorry.  The second part of paragraph 45 – my learned friend referred to this at 3105 of the transcript:

The conduct of the defendant of which the plaintiffs complain is the conduct prior to construction, during the design, planning and contract negotiation phases –

His words were, that “became case C”.  No, that never became case C.  That related to case B, and that was, as I say, our attempt to deal with 43A if it applied – and, your Honours, I will show you in the reply in moment.  But where his Honour dealt with it is at paragraph 93, where his Honour records – this is the primary judge, of course:

Case B is put in the same way . . . except that it is assumed that s 43A of the CLA applies –

And then 94:

would . . . in the circumstances –

say it is:

so unreasonable –

And then, 96:

They then identify the reasons why no authority having a special power . . . could properly consider the conduct to be a reasonable –

Then:

Case B necessarily involves an extensive consideration of the expert evidence and the steps taken by the defendant in the planning and procurement . . . which form the basis of the allegations –

That came out of the allegations we made in the reply, and his Honour deals with that at paragraph 780.  It starts at 780.  So, part of the argument in dealing with the section 43A point was to say:  well, they could have done it differently, had an “alternative delivery model”, and this set Mr Samson, Mr McIntyre and Mr Griffith into the debate, and that is 780 through to 790.

His Honour rejected that, as my learned friend said.  His Honour picks that up again at 747 – sorry, this is partly picked up at 747, where his Honour – was the conduct so unreasonable?  Through to 756, where his Honour finds that it was not.  There, he is dealing with what we had pleaded in reply.  Just to pick that up, firstly, could I go to the defence, which is in volume 3, at tab 11.

JAGOT J:   Sorry, Mr Bannon, I am just behind the eight ball here.  You said that the paragraph of – was limited to case B, not case A.

MR BANNON:   Not case C – sorry, limited to case B, yes.

JAGOT J:   So, not case A or C, then.

MR BANNON:   Yes, quite.

JAGOT J:   So, in case A, where, paragraph 90(f):

the defendant was responsible for the substantial interference –

Does that not link back into the pleadings at statement of claim 12 through to 15?

MR BANNON:   Yes.  But they are not breach of duty; they are just contracting with knowledge of the awareness that there was a risk of unknown utilities.

JAGOT J:   So, does it not follow, then, that that paragraph – which, of course, I now cannot find – paragraph 43, was it?

MR BANNON:   Paragraph 45.

JAGOT J:   Paragraph 45, “the conduct” is the conduct prior to construction?

MR BANNON:   No.  No, because that is talking about planning and procuring, it is wider.

JAGOT J:   That is what I am not following.  I thought the whole case of sheeting home liability – whether it would be through A, B or C – was based on what the defendant is said not to have done properly during design, planning and construction.

MR BANNON:   The purpose of going to this is to indicate – my learned friend said case C limited the complaints to certain matters ‑ ‑ ‑

JAGOT J:   I understand that.

MR BANNON:   ‑ ‑ ‑ and therefore they did not have to address the issue as to whether everything done reasonably during the course of the work to avoid the minimised disruption.  But that is two different issues.  One is what is enough to make them responsible for the conduct – which was the nuisance – the nuisance itself is the actual construction work ‑ ‑ ‑

JAGOT J:   Sure, I understand that.

MR BANNON:   ‑ ‑ ‑ and in the construction work, we never said anything as to what they did or should not do.  We said it is your onus always to prove that you did everything reasonably possible.

JAGOT J:   But given that they did not do the construction work, or any part of it, is that liability or responsibility not sheeted home through the allegations in 12 through to 15?

MR BANNON:   That makes them responsible for whatever nuisance happened.

JAGOT J:   Yes, in all A, B and C, that is my point.

MR BANNON:   Yes – quite.  Sorry, yes.

JAGOT J:   Or I missed that.  Okay, yes, that is fine, then.  Okay.

MR BANNON:   I am sorry, your Honour, I have been a bit obtuse.

JAGOT J:   So, when you said not only case B ‑ ‑ ‑

MR BANNON:   Yes, my main point of the exercise is to contradict my learned friends’ proposition that they did not have to address any defaults ‑ ‑ ‑

JAGOT J:   The whole – yes, I get that.

MR BANNON:   ‑ ‑ ‑ because we just pleaded certain things – the things we pleaded was to achieve responsibility, but we always said it is your responsibility to say we did everything reasonably possible via the contractor, because that is the nuisance and that is their job.

JAGOT J:   Sorry, yes.  Got it.

MR BANNON:   So, that is the point of this rather slightly tortuous exercise.

JAGOT J:   Sorry, you are going to the reply, but I interrupted.

MR BANNON:   First, if I can go to the defence, where they plead – this is on tab 11 of RB3 – at 1002, 21U(c):

“special statutory power” –

And just while I am here, on a slightly different point, at page 998, this is where they pleaded 21K:

inevitable consequence –

statutory power, which picks up paragraph 15, which is the allegation in relation to interference with the whole of the period.  So, then the reply, which we have handed up or sent up separately, and we have hard copies too – maybe they have been made available.  In the reply, we say at paragraph 10 – in responding to that 21U paragraph, I said (c), but it goes on to (f) as well – we say a whole lot of things come down to 43A(1) and (2), and that picks up different model entry, and we go over the particulars, one sees the evidence of Mr Szmalko.

GORDON J:   Sorry, where are you reading now, Mr Bannon?

MR BANNON:   I am reading paragraph 10 on page 12.  As our response to their statutory power claim, we say if it is a special statutory power, then we say – in (b) – that no person could possibly have – what they relied on, to enter into the contract as the power, no person could have done that reasonably for the following reasons, and we say a whole lot of things which his Honour did not accept.

GORDON J:   So, all those four were rejected.

MR BANNON:   Yes, they were rejected, but that explains that there was a big debate between experts on this other issue – I think my friend described me as glossing over those parts because they were related to that part, case B, which we lost.  That is all part of saying that this notion that we limited their responsibility in terms of issues they had to plead to particular matters is just wrong.

Perhaps just to draw the threads on that, so, therefore, in case C – either way on the Lord Sales way or the Bramwell principle – they failed to take the ordinary or reasonable steps to show that they did not and that is a test, we say, that the Bramwell principle your Honours would continue to adopt – that has been going for 150 years – and perhaps just pausing there, government authorities will build buildings, and that would be a common and ordinary use.  They will be subject to a positive requirement, if someone complains, that they have taken all reasonable steps.

Without going through it, but cases affirming this principle – I have been through it, but Andreae was the building case.  Gartner, we say, is an application of the same point.  Just to complete the circle, Justice Leggatt in Fearn, in paragraph 37, affirmed the same principle when he dealt briefly with building as opposed to other matters.  As I have said before, absent that evidence, accepting the evidence of Griffith and accepting the onus on either Lord Sales or the Bramwell principle, they are liable for the whole lot, and it is not outside any pleading.

Now, could I then say something about Mr Griffith’s evidence in response to what my friend has said.  At transcript 3927, my learned friend submitted that the Court of Appeal had overturned paragraph 819 of the primary judge’s judgment.  If I could take your Honours to 819 of primary judge’s judgment:

I accept Mr Griffith’s opinion that the defendant could have done more to discover unknown utilities and that if it had, the delays . . . would have been lessened –

And I emphasis the words:

(as the D&C contractor could have reached agreement on treatments in advance of starting the Civil Works sometime in 2015).

And note the reference to “D&C contractor”.  The Court of Appeal did not overturn that paragraph at all.  You will not find a reference to paragraph 819 in their reasons.  There was a concerted attempt, before the Court of Appeal, to persuade them that that paragraph should not stand or was wrong on the basis which my friend has referred to today.  Namely, that paragraph 487 of the primary judge’s judgement – that 487(b) had an assumption of:

reaching concluded agreements with utility providers –

This was all on the basis before the D&C contract was entered into.  What we said to the Court of Appeal is that the primary judge took that evidence, as he was entitled to do, and found that it was not necessary to do it before the D&C contractor.  Indeed, he took account of and accepted that the process of looking for the utilities is done after you have gotten a design of where the track is precisely going to go.  He accepted that part, and that was part of the rejection of our case B in the alternative delivery model. 

So, he accepted that you had to look for the utilities once you got the design and contract in.  He saw no reason to think that Mr Griffith’s evidence did not apply equally as to when you looked for the utilities, whether the design contract was there or not.  Indeed, implicitly his Honour is saying it is obviously better to go looking for the utilities when you know precisely where the track is going to go.  That was a finding of the primary judge, taking into account all of the evidence, which he is entitled to do, and it was not overturned. 

Our learned friends’ attempts to suggest today – over the last couple of days – that the assumption in 487(b) rendered 819 and Mr Griffith’s evidence . . . . . value is not supported when one reads properly paragraph 819.  It is not supported when you see that the Court of Appeal’s reasons, when they deal with his evidence in paragraphs 90 and following, do not rely on that point.  The only two matters they rely upon is to say they have questioned, but without finding that is not impractical, they say it may be impracticable to find them all, but we have not proven that finding and identifying them and resurfacing the road would not cause more interference.

As to the first point, I say the Court of Appeal did not find the evidence that he could find them all was impracticable.  Yes, he had evidence from Mr Sampson and others to say it is all very difficult, but he also had Mr Griffith who, as I mentioned yesterday, looked at the – if I could take your Honours back to that paragraph – as‑built documents, which recorded everything that happened.

The evidence was there was this thing which everything that had happened on the site, he looked at every one.  His Honour refers to some of this evidence in more detail at 776, and the evidence concludes, over the page:

(1)the evidence of Mr Griffith, being the only witness who examined the as‑built drawings and undertook a Windows analysis to determine what actually happened . . .

(2)      the annexures . . . including the table of utility claims –

That every time they found a utility that it was a claim.  Paragraph 777, his Honour himself went – they were all tendered, and there was this very large number on an electronic base – and did his own homework on it to test Mr Griffith’s evidence.  That is not in the judgment, but he did report to us that he had spent a considerable number of hours doing it.  But one can tell from it by the number of documents he looked, and he makes comments on them all.

So, this is an example of a trial judge faced with all the evidence who has decided that Mr Griffith’s evidence as to doing deals with the utility providers can be done by the D&C contractor at a relevant point of time, logically.  Secondly, he has accepted the evidence that they could have found the utilities, having looked at it all and considering all the evidence and in the round.  No doubt that is why, notwithstanding there are some concerns from the Court of Appeal where there was this uncertainty as to whether it was practical or not – who did not look at any of this evidence, unlike the trial judge – made that comment, but they did not overturn that part, and they did not overturn 819.

Not for the first time, this Court has had a situation where a trial judge, seized of all the facts, has made a finding; the Court of Appeal has perhaps looked at it without the benefit of the trial judge’s finding; they certainly did not overturn whether it is practical to do it; and to the extent that they said – as I have said before – there may have been other, wider, potential nuisance, and that was our proof.  Absolutely that was not our proof.

They could have called somebody to say:  look, I have looked at Mr Griffith’s work – nobody did that, Mr McIntyre did not – and I am telling you now to do all that – that would have caused X amount of noise.  As I have said before, they notified and what they did, they dig up the road at night and they find it and they resurface it – thousands of utilities, there is not a word of evidence that anybody is upset by that, and if you ever go around Sydney – no doubt in Melbourne, as well, and other cities – there are pits in the middle of the night – they get opened up, they get fixed up over the next day.  There was evidence here about that sort of thing happening during the early period.

So, for those reasons, we say the attack on Mr Griffith is baseless, and he had before him – the primary judge had before him evidence, which was the only piece of evidence on the relevant issue.  They did not call anything, they could have called something, and it was within the bounds of an ordinary approach by a primary judge to accept that evidence.  That would be if, as I say before, if your Honours accept us on the principle on case C and reject, in effect, Griffith, then we say we are up for the whole claim.

If your Honours – we do not shy away from Mr Griffith, we embrace Mr Griffith – your Honours will say – and your Honours find it is a common and ordinary use, then your Honours would restore the primary judge’s judgment.  So, that is case C, and I will come back to the impact of that on inevitable consequence in a moment.  We say it is ‑ ‑ ‑

EDELMAN J:   But on case C, and perhaps also on inevitable consequence, your attempt to defend Mr Griffith, if that is right, has the consequence, does it not, that all the universe of facts and possible facts had been raised at trial.  So, the alternative delivery cases is run and rejected, Mr Griffith has given evidence as to what might or might not have done.  Onus kind of falls away, in that sense, and you end up back with the result that the primary judge came to, rather than your entire period claim, is it ‑ ‑ ‑

MR BANNON:   Yes, quite, and I accept that.

EDELMAN J:   I see.

MR BANNON:   That he relied on Griffith.  No, I accept that, and we do not shy away from that.

BEECH-JONES J:   Except you say, for case A, Griffith – you are about to come to – has to be a proxy because he is ‑ ‑ ‑

MR BANNON:   At best.

BEECH‑JONES J:   ‑ ‑ ‑ not quite looking at the same test, you say.  Is that right?

MR BANNON:   That is right.

EDELMAN J:   For the statutory ‑ ‑ ‑

GORDON J:   But you say you do not need him.  I am sorry.

EDELMAN J:   And that is the case A; using Griffith for the statutory authorisation point.

MR BANNON:   Correct, as a proxy.  If for the first time, before your Honours, I am appearing reasonable, then there is nothing I can say to defend myself.  To be frank, one can understand a concern that if somebody has a statutory power – erected a railway, which inevitably was going to have caused some problems – a concern to say we get the whole lot, mainly because of forensic decision of the defendant, one can understand a court’s concern about that, but on a principle basis, that is potentially why I temper these things, to give your Honours the option.  That is as reasonable as I can get.

So, case A.  Your Honour Chief Justice Gageler raised the question:  is the potential inaptitude of a statutory authority doing something on its own land or land to which it is authorised, does it ever work – does it make any sense, as opposed to a neighbourhood dispute?  The answer to that, we say, is that if one looks at the inevitable consequence cases, they proceed on the assumption that there is a nuisance.  That is the only reason why you have inevitable consequence, is to ask the question:  does the statutory authority effectively abrogate what would otherwise be a nuisance claim?

So, perhaps in terms of a site, the Metropolitan Case – and I will not go to it, but volume 5, tab 57 – this is the case about erecting the hospital for people with contagious diseases.  As a demurrer point, the jury had found it did create a nuisance; it was in a residential area.  I think it was the House of Lords or a higher court said – well, it is unclear precisely why it was a nuisance, but the working assumption, in effect, one might think – although it was not as exposed – is it was a nuisance because it was doing something out of the ordinary in the particular area.

That is not exposed, do not get me wrong, but then at paragraph – at pages, for example, 201, 212 and 213, one will see references to the nuisance point.  Benning v Wong is another example, and I will go to that, if I may.  That is volume 2, tab 14.  At page 254 – page 310 of the report, I am sorry.  Justice Windeyer refers to the principle about a third of the way down:

this reasoning applies only to the situation where nuisance is an inevitable consequence of the exercise of powers . . . It does not apply in a case where the work or activity authorized by statute can, by the exercise of due care and skill . . . be performed without creating a nuisance or doing other harm . . . I think that decisions of high authority . . . that a statutory undertaker is liable for a harmful nuisance he created unless he can shew –

So, that is reinforcing the very principle in this Court which we appeal, and as I said, we do not understand our learned friends to say this is a statute which authorised the whole of the construction, whatever it took.  And so, we are in the permissive – and I did not understand the argument differently at trial or on appeal – that it is in the case of a permissive power, in the sense of they had to show that all reasonable steps have been taken.  Then, 269 is another reference to this general principle, about two‑thirds of the way down the page, that it never had:

been doubted, at least since Metropolitan Asylum District v. Hill, that where a body purporting to act under statutory authority is sued for committing –

et cetera.  Same point as to onus.

BEECH‑JONES J:   How do you reconcile ‑ ‑ ‑ 

JAGOT J:   But are they not – sorry.

BEECH‑JONES J:   Sorry.  You go.

JAGOT J:   Are they not in dissent on onus?  Is not the point that the other people said – flipped it?

MR BANNON:   They are, but I think, as the reasons – there was a loss, and it goes to the construction of the particular statute, as we understood it.

JAGOT J:   I mean, they were in dissent on the result, yes.

MR BANNON:   Yes.

JAGOT J:   And the way they saw onus.

MR BANNON:   In that particular statute? 

JAGOT J:   Yes.

MR BANNON:   Yes.  But the principle is not discounted.  And Cox is an example where ‑ ‑ ‑

BEECH-JONES J:   Can I just ask – just on that, and the cases Mr Gleeson took us to, where the onus was on the plaintiff, does that turn on the different statutes?

MR BANNON:   Yes.  If one looks at Cox, for example, in the same volume, at tab 57 ‑ ‑ ‑

JAGOT J:   It seems that it may turn on the inevitability of the uses.

MR BANNON:   Yes.  Exactly.

JAGOT J:   If the precise nuisance – the spark from the engine – is inevitable, then you, the plaintiff, have to prove a fault of some kind.

MR BANNON:   That is exactly it, your Honour ‑ ‑ ‑

JAGOT J:   If it is not inevitable, it seems the cases might run the other way.

MR BANNON:   Yes.  If it is inevitable in the sense of – the precise activity was defined and you could not do it fairly any other way, then you have to prove some additional negligence in carrying out the activity.

JAGOT J:   Yes, in a sense of, clearly, on the facts, it was accepted that sparks from a steam engine were unavoidable by any method.

MR BANNON:   Yes.  So, Cox, for example, at page ‑ ‑ ‑ 

JAGOT J:   Sorry, what tab?

MR BANNON:   Tab 20, volume 2, page 121, about the middle of the page, after the reference to the Waterworks Act in parentheses:

There is no statutory provision preserving a liability for nuisance arising from the conduct or maintenance of the system.

That is another way ‑ ‑ ‑

GORDON J:   This is the passage that Mr Gleeson took us to.

MR BANNON:   Yes, but if one reads that sentence, that is telling you that, on the construction of this statute, there was just no capacity for nuisance to be left, as it were, because it was dictatorial, it was not permissive.

BEECH‑JONES J:   Because:

He must distribute a constant supply of water –

Is that what we get?

MR BANNON:   Yes.

JAGOT J:   And had no option, other than to push water under pressure through a pipe.

MR BANNON:   That is right.  Yes.

BEECH‑JONES J:   And what similarities with this case?  You did not have to build the light rail.

MR BANNON:   That you could have built it any – there are a number of different ways.

GORDON J:   You did not have to build a light rail.

MR BANNON:   And you do not – sorry?

GORDON J:   You do not have to build a light rail.

MR BANNON:   No, you do not have to, right – you could have done a tunnel.

GORDON J:   No, let us not – you do not even need to go that far.

MR BANNON:   Yes.

GORDON J:   The question is:  what is the power?  It is a power, I have a power to do certain things; it is not directory, it is permissive.

MR BANNON:   No.

GORDON J:   And one of the functions is, probably, a light rail in certain circumstances, if it is a good idea.

MR BANNON:   Yes, exactly, your Honour.

BEECH‑JONES J:   But it had to be a light rail in that spot.  I think there was only one spot designated, was there not?

MR BANNON:   Well, once the declaration was made, which was after the project deed ‑ ‑ ‑

BEECH‑JONES J:   I see.

MR BANNON:   I will come to 43A – it cannot possibly be an exercise of special statutory power, because at the time they signed the project deed, the city light rail, as a statutory provision, did not exist, because there is no declaration – a point which the trial judge made correctly.

JAGOT J:   At some point, can you – sorry, this is totally out of order – the Court of Appeal was very specific about the assumption that it says Mr Griffith’s opinions were based on, being that every unknown utility would be identified before the project deed was entered into.

MR BANNON:   Yes.  No, they do not refer to that.

JAGOT J:   No?

MR BANNON:   Sorry, perhaps I will – maybe I will answer that very quickly.

JAGOT J:   Paragraph 86:

the amended IDP –

Griffith’s evidence:

proceeded on the basis that no construction would commence until there was complete knowledge of the thousands of sub‑surface ‑ ‑ ‑

MR BANNON:   Yes – that is no construction, that is not before the contract.

JAGOT J:   No, no, okay, yes, that is true.  I am just struggling to find that assumption myself, but anyway.

MR BANNON:   No, the evidence he actually gave at trial was:  look, there may be some residual ones you do not actually find, but he has allowed for that in his – and perhaps, if we can find that piece of evidence ‑ ‑ ‑ 

JAGOT J:   I am just trying to reconcile 86 of the Court of Appeal, last sentence, with the primary judge’s description of the effect of his evidence at 487 of the primary judge, which is much less absolute, but I do not ‑ ‑ ‑

MR BANNON:   Yes.  I think – I was asked a question, and the answer was recorded, paragraph 41 ‑ ‑ ‑ 

JAGOT J:   Paragraph 41 of?

MR BANNON:   There is immediate:

there’s 100% discovery . . .

BANNON:   [For] all intents and purposes.

LEEMING JA:   Okay.

BANNON:   He allows for some additional contingency –

JAGOT J:   Sorry, what is 41?  What are you reading from?

MR BANNON:   Sorry, paragraph 41 of the Court of Appeal judgment.  There is a reference to an answer I gave.  And that refers to the evidence about a contingency, which is why his Honour framed it the way it was:

but [for] all intents and purposes –

was subject to the contingency you would get everything.  But the contingency did exist.  But we can certainly, if it is useful, we can send up the precise piece of evidence which he made, if we have that liberty.

GAGELER CJ:   Are you asking for it?

MR BANNON:   I do, yes.  Can I come back to that?

GAGELER CJ:   Yes.

GORDON J:   So, we are back at Cox, and we have been through the category of cases where there is permissive versus directory statutory provisions.

MR BANNON:   Is Cox such a case?

GORDON J:   No, we have just been through those.

MR BANNON:   Yes.

GORDON J:   What is the next bit we are to go to?

MR BANNON:   In terms of cases – if I can refer your Honours just to paragraphs 824 and 825 of his Honour’s reasons, where he sets out examples of the principle which we have been talking about as to inevitable consequence.

GAGELER CJ:   So, you say, implicitly in the background of all these statutory authority cases, is everybody is accepting the starting point is that there would otherwise be an action in nuisance arising simply from the lack of ordinary use, or the ‑ ‑ ‑

MR BANNON:   There is no other explanation, because the mere fact that you build a train and it causes a lot of noise – all they ever talk about is the noise – implicit in that is the train is not “common and ordinary use”.  So, it does work.

BEECH-JONES J:   And is your point, to the extent that we get to statutes, there is a spectrum of statutes:  there are those that exempt entirely; there are those that mandate the activity, which would put the onus of fault on a plaintiff; there are those that permit, which put the onus of fault on the defendant.

MR BANNON:   Yes, and you do have statutes which actually abrogate the cause of action.

BEECH-JONES J:   Yes.

MR BANNON:   There is an example in this case:  section 141 of the Roads Act abrogates public nuisance.

GORDON J:   Another authority is Hearne, in this Court, in relation to ‑ ‑ ‑

JAGOT J:   Luna Park.

GORDON J:   ‑ ‑ ‑ Luna Park, thank you.

MR BANNON:   Yes.  So, the Roads Act provision is section 141, tab 8 of the first volume, at page 99.  There is a defence to public nuisance if something is done:

in accordance with the consent –

That was, we had a debate, well, they had not done in accordance with the consent; the judge rejected that at 980 and 981.  But there is an example.  The simple answer to all these things is it is within the power of any legislature, when they exercise a statutory authority or a provision, to say:  for the purposes of this, there will be no private nuisance.

GORDON J:   Well, that is what they did in Hearne, in relation to Luna Park.

MR BANNON:   I see, yes.  Yes, I think I have dealt with the point that on no view does this mandate or abrogate a private nuisance claim.  If I could just say something about the principles, so that – again, our learned friend listed eight factors, but said there were more, in support of an argument that reasonableness is a more workable standard, plainly not fearing to become his enemy in the instant that he preached, because one could never hear a more dissuasive argument as to why reasonableness is not a workable standard.

To send a message to lawyers, judges, potential victims of nuisance, potential perpetrators of nuisance, that here is a shopping list of factors which you might take into account – and, in fact, there is more, we will not list them all – with no guidance as to how you balance them is not a workable standard.  Principles which we ‑ ‑ ‑

GAGELER CJ:   But is it not the standard for negligence?  It is the standard we use for negligence.

MR BANNON:   Yes, but that requires a duty of care.

GAGELER CJ:   Yes – we assume we have this duty of care, and then we are into all of these factors.

MR BANNON:   Sure.  Yes.  I accept that.

GAGELER CJ:   It is not a recipe for disaster; it is the common law method.

MR BANNON:   But one should not be seduced, we respectfully submit, by text writers whose texts tend to be a bit more like a digest of different examples, without a consideration of how, appropriately interpreted, they are really assessing each instance.  So, for example, my learned friend referred to the spite case – that is not a promotion of general reasonableness, that is foursquare within “common and ordinary use”:  you have to provide you do act “reasonably” in the sense used, and spitefully is not reasonable.  You could explain all of these cases.

EDELMAN J:   I am not sure that is right.  I am not sure that spite has any role at all, but what the spite might show is – the spite might show that the particular use of land is one that is unreasonable not because of the fact that it is done with spite, but the fact that it is done without any rational purpose.  So, shooting on a country property in the 1930s might have been entirely reasonable, on your own property, but to do so in the air, not at anything, for any reason at all, becomes unreasonable, but it is not necessarily because of the spite.

MR BANNON:   Yes, perhaps so.  Yes, I accept that.  In any event, the principles accommodate, we say happily, 150 years of principles – happily accommodate, in the circumstances – to weigh things like potential indigence on one side and too much money on the other side without any guidance as to how you weigh them will open up a spectrum, we say, which this Court ought not endorse.  Can I just then say something about section 43A.  Firstly, the ‑ ‑ ‑

BEECH‑JONES J:   Does the social utility depend on what you are building?  Is the football ground worse than the hospital, or hotel?

MR BANNON:   Well, this is part of the problem.  You might have someone who has a rock band playing every night, and there is social utility – we are going to become Australia’s great band, which will bring in revenue to the country, and make Australia famous, or some particular town – I mean, you could frame social utility in such an amorphous way, it is an endless argument.

Could I then deal with section 43A in summation.  Apart from our written submissions, we rely on everything the primary judge said about this, and the Court of Appeal, but in particular, the primary judge went through each and every point.  But without addressing all of those, firstly, our learned friends rely on the power to contract.  Now, that is not, on any view, a special statutory power.  The power is:

may make or –

exercise:

contracts or arrangements . . . in connection with the exercise of TfNSW’s functions.

The fact that it is limited to “functions” does not make it a special statutory power.

BEECH-JONES J:   What is an example of one that is?  A special power to arrest, or something?

MR BANNON:   Sometimes it is a power to do something which affects other people’s rights – that is one of the text’s references, I cannot remember whether it was Gales Holdings or one of those cases – or something that somebody else cannot ordinarily do.  Now, they say, well this is for a light rail, but that is relying on 104O, which provides they:

may develop light rail systems –

but a “light rail system”, as I think my friend has fairly pointed out, but I emphasise, under 104N, page 126:

a light rail system is a system for the provision of light rail services along a route declared –

and the declaration did not take place until after the contract was entered into.  We do not have it before you, but I can assure your Honours that the – and again, if this is critical, then it may be accepted – the agreement with the contractor was to develop the light rail as defined – so, it was not just develop any light rail – but there was absolutely nothing that developer could do under that agreement until the declaration came good.  So, he could not – the developer, the company – could not go in or authorise or put up a barricade anywhere.  All that serves to demonstrate, all they were exercising is a contracting power.  On no view was it a special statutory power.

Secondly, we adopt also what his Honour found.  There is a difference between the entry into a contract generating responsibility for the nuisance and the acts which constitute the nuisance, and the acts which constituted the nuisance, although they may have been responsible for them, were the acts of interfering with the amenity.  So, it was not based on the exercise of statutory power.  The responsibility for it was, but – not a statutory power, our pleading in relation to the entry of the contract supported the responsibility, but the action was not based on it.

We also pray in aid, notwithstanding our learned friends’ submissions, what has been found several times now, that 43A does not textually refer to or logically apply to a nuisance which involves no standard of care involving reasonableness.  It is not apt to be so understood, for the reasons which his Honour exposes and which we endorse.

These sections are not to be construed liberally, and particularly in a context where you already have a well‑recognised, coherent system of inevitable consequence of exercise of statutory authority which permits a level of nuisance to continue to exist in the way described unless it is a specifically mandated or directed activity.  That is all I wanted to say on 43A.  The residual contingency of Mr Griffith’s evidence is before you, so I do not have to do anything, so the reference is volume 2 of the respondent’s further materials, page 718, paragraph (d) on that page, which was part of Mr Griffith’s report – it is probably tab 8, I would say.

Can I just very briefly – finally, your Honour Justice Jagot asked a question:  is it the construction or the building?  The finding of “common and ordinary use” is the nature of the construction which was associated with the ultimate object, but because it is a light rail which needed

platforms, as your Honour says, it blocking off the whole street and barricading off a whole street for a considerable period of time, that is different to your Honour the Chief Justice’s example of a tall building going up next to you.

The nuisance is not the tall building going up.  The existence of the tall building going up – if there is going to be a nuisance, it would be the construction, but the nature of the construction of a building is confined to its site, it does not block off all streets.  These businesses have frontages designed to be on the street, and this major construction was an uncommon use for the reasons I have indicated and explained by the primary judge.

I think I have already said this, but the section 141 carve‑out only related to public nuisance under the Roads Act, not private uses.  Then – over time, but the Restatement, we say, in short, does not really assist.  If Mr Hochroth could say a couple of things in the two minutes, if the Court would permit it, beyond our time, and my friend would permit it.

GAGELER CJ:   Yes.  Two minutes.  Thank you, Mr Bannon.

MR BANNON:   Thank you, your Honours.

MR HOCHROTH:   Your Honours, the short point is that the Restatement, although it adopts a different analytical framework, nonetheless comprehends and anticipates that non‑common and ordinary conduct may be a nuisance without more, consistent with the Bamford and Fearn position.

If your Honours have the extract that was handed up, your Honours appreciate that the way this works is that statements are made at general levels and are then unpacked in the subsequent sections.  So, the general rule is 822:

invasion is either

(a)     intentional and unreasonable –

The idea of intention is then itself unpacked at paragraph 825 on page 117, and the idea of unreasonableness is unpacked at 826 and following, from 119.  Now, 826 sets out what is said to be the general test, but in the United States style, instances of the general test have been reduced to their own rules, and your Honours will see that, for example, from section 829, at page 133 – that is one example of it, sort of similar to the spite example we were talking about earlier.  The most relevant example for our purposes is section 831, which appears on page 138, which states:

An intentional invasion of another’s interest in the use and enjoyment of land is unreasonable if the harm is significant, and

(a)the particular use or enjoyment interfered with is well suited to the character of the locality; and

(b)the actor’s conduct is unsuited to the character of that locality.

Now, those notions of “character of the locality” are also referred to in section 827, which my learned friend referred to, and he accepted that they are picking up a similar notion to “common and ordinary use” of land.  And, without going to all of it, we would ask your Honours to have a look at the comment which appears on page 139, under the heading:

b.  Private nuisance.

which states that:

The rule in this Section is a specific application of the general rule –

And, particularly, about two‑thirds of the way through that paragraph:

when it is found in a particular case that conduct that is unsuitable to the locality is causing significant harm through invasion of another’s use or enjoyment of land that is suitable to the locality, the invasion is unreasonable although the conduct has social value and although the actor is taking all practicable measures to avoid the harm.

So, the same idea is there, that when we have something unusual being done in an area which interferes with usual uses in the area, that is actionable without more.  One way of looking at it is the United States authorities consider that that is enough for the balancing exercise; it does not matter how much social utility you raise, if you are doing something unusual that impacts on someone’s usual use, that is going to be enough.

And we would also ask your Honours to look at the “Illustrations” on page 140.  Your Honours have not been given page 141, but you should look at it as well.  Those illustrations are illustrative, so, for example, the first one, a slaughterhouse in a residential area, even if all practical devices are installed to try to deal with nuisances, if they escape, then that is nonetheless considered to be unreasonable.  They are all based on real cases, and those real cases, in turn, are referred to on the next page.

GAGELER CJ:   So, underlying these submissions is an acceptance of the utility of looking at the American jurisprudence.

MR HOCHROTH:   We say that if your Honours are to look at the American jurisprudence, the Americans have got to the same place as the English and the Australians, albeit perhaps by a slightly different route.

GAGELER CJ:   Thank you.

MR HOCHROTH:   May it please the Court.

MR GLEESON:   Mr Hochroth chose not to read out the sentence in the middle which said zoning regulations can and may be decisive.  Your Honours, we have a strict right of reply on section 43A.  On that you heard four submissions this morning.  The first is the power is not special because it is merely the power to enter a contract for as function.  The argument we put was more specific than that.  It is for the functions identified in clause 3(1), (2) and (3) that makes it special, together with 104O, which makes it special.

Secondly, you heard a timing point, that the project deed which you have not been provided with entered in December 2014 was conditional upon the declaration of the route in 2015.  If that were correct, the conduct that we are sued upon, the entry of that deed, did not have any effect of authorising a nuisance until the route was declared, and so any timing issue with 104O is met, because it is September 2015 that the project deed can now carry out its authorising character.

Thirdly, it was said the action is not based on the entry of the contract, because the contract is merely necessary for liability.  The entry of the contract is one of two essential elements for the liability.  Finally, it was said it is not appropriate for this provision to cover nuisance if no negligence is alleged.  That submission was made without addressing the text that I took you to in section 40(1) and 43A, which say the provision applies to the part, in contradiction to the provision in (1)(a).

Your Honours, on the appeal, you have heard this morning a further attempt to explain what the case was, and we would like to respond to that in one of two ways, either to give your Honours a piece of paper with a road map as to how we say the issues arose, or I can do it now in about seven minutes.

GAGELER CJ:   We will embrace the first option, with an opportunity – if it were an agreed document, it would be preferrable.

MR GLEESON:   I do not think it is going to be possible, because what you have heard we disagree with.

MR BANNON:   Your Honour, I do not mind if our learned friend puts it in, but if we ‑ ‑ ‑

GAGELER CJ:   Then you will want to respond to it.

MR BANNON:   We have said what we have said.  If we are hysterically – if we do not think we have it, we might seek to say something, but ‑ ‑ ‑

GAGELER CJ:   Mr Gleeson, you can give us a document within a week.

MR GLEESON:   Yes, your Honour.

GAGELER CJ:   And Mr Bannon, if there is something you must say in response to it, you will say that within two working days.

MR BANNON:   Yes.  May it please the Court, what does your Honour call a working day?

GAGELER CJ:   I will amend that to three working days.  That completes the submissions?  Thank you.  The Court will consider its decision in these matters and will adjourn until 2.15 pm on Tuesday, 10 June.

AT 12.46 PM THE MATTERS WERE ADJOURNED