Manboom Pty Ltd atf the Outdoor Signage Unit Trust v Jemena Gas Networks (NSW) Ltd

[2024] NSWSC 445

Supreme Court

New South Wales

Medium Neutral Citation:

Manboom Pty Ltd atf the Outdoor Signage Unit Trust v Jemena Gas Networks (NSW) Ltd [2024] NSWSC 445

Hearing dates:

5 April 2024; further directions on 11 and 17 April 2024; written submissions 16 and 19 April 2024

Date of orders:

24 April 2024

Decision date:

24 April 2024

Jurisdiction:

Equity - Commercial List

Before:

Stevenson J

Decision:

Order for separate question refused; defendant’s Notice of Motion dismissed with costs.

Catchwords:

CIVIL PROCEDURE – separate determination of question – action in trespass in relation to underground gas infrastructure – alleged defence of statutory authority – whether that defence apt for separate determination

Legislation Cited:

Australian Gas Light Company Act 1837 (NSW)

Australian Gas Light Company (Amendment) Act 1858 (NSW)

Gas Supply Act 1996 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Tepko Pty Ltd v Water Board (2001) 206 CLR 1; [2001] HCA 19

Category:

Procedural rulings

Parties:

Manboom Pty Ltd as trustee for the Outdoor Signage Unit Trust (First Plaintiff/Respondent)
Outdoor Signage Pty Ltd as trustee for the Outdoor Signage Unit Trust No. 3 (Second Plaintiff/Respondent)
Jemena Gas Networks (NSW) Ltd (Defendant/Applicant)

Representation:

Counsel:
M S Henry SC / D J Delany (Plaintiffs/Respondents)
T F Robertson SC / D W Robertson (Defendant/Applicant)

Solicitors:
Arnold Bloch Leibler (Plaintiffs/Respondents)
MinterEllison (Defendant/Applicant)

File Number(s):

2023/168556

JUDGMENT

1. Since September 2021, the second plaintiff, Outdoor Signage Pty Ltd, who I will call the “Owner”, has been the registered proprietor of property adjacent to Qantas Drive in Mascot (the “Property”).

2. There is contained within the Property, underground, a gas network comprising distribution pipelines and other gas works. I will refer to this network as the “Gas Assets”. The Gas Assets distribute natural gas to approximately 1.6 million residential and industrial sites across NSW.

3. The Gas Assets were installed in the Property by Jemena’s predecessor, The Australian Gas Light Company (“AGL”). In 1976 AGL installed a primary gas pipeline and associated infrastructure, and in 1982 installed a secondary gas pipeline and associated infrastructure.

4. At the time that AGL installed the Gas Assets at the Property, the Property was owned by the Commissioner for Railways (the “Commissioner”).

5. AGL installed the Gas Assets pursuant to a written licence with the Commissioner pursuant to which the Commissioner could require AGL to remove the Gas Assets on one month’s notice in writing.

6. In January 1986, the defendant, Jemena Gas Networks (NSW) Ltd, became the owner of the Gas Assets.

7. On 5 June 1987, some 18 months after Jemena acquired the Gas Assets, the licence between the Commissioner and AGL terminated when the Commissioner’s statutory successor, the State Rail Authority, sold the Property to a third party.

8. The State Rail Authority retained title to a stratum through the centre of the Property, through which a freight railway line operates.

9. The third party sold the Property to the first plaintiff, Manboom Pty Ltd, in September 1995. Manboom transferred the Property to the Owner in September 2021.

10. None of these parties entered a replacement licence agreement with Jemena.

11. Manboom and the Owner contend that the presence of the Gas Assets on the Property following termination of the licence is a continuing and actionable trespass, that they have thereby suffered loss, and that the Gas Assets should be removed.

12. In December 2021, Manboom served written notice on Jemena to remove the Gas Assets from the Property.

13. On 26 May 2023, Manboom and the Owner commenced these proceedings seeking orders that Jemena remove the Gas Assets from the Property, make good all damage to the Property caused by such removal and pay damages.

14. By December 2023, the matter had proceeded to the stage where Jemena had filed its Amended Commercial List Response.

15. In its Amended Commercial List Response, Jemena alleged that, amongst other things, it had a defence of statutory authority which it contends to be a complete answer to the Owner’s trespass claim.

16. On 19 December 2023, Jemena filed a Notice of Motion seeking to have that question determined as a separate question under Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) r 28.2.

17. As originally formulated, the proposed separate question was:

“Whether [Jemena] has any legal right or entitlement to have its gas infrastructure remain in and on the land presently owned by [the Owner].”

18. There have since been a number of iterations of the proposed separate question.

19. In oral argument on 5 April 2024, Mr Robertson SC, who appeared with Mr Robertson for Jemena, submitted that Jemena’s defence of statutory authority relied on, as was then alleged in its Amended Commercial List Response, amongst other statutes, the Australian Gas Light Company Act 1837 (NSW) (the “1837 Act”), the Australian Gas Light Company (Amendment) Act 1858 (NSW) (the “1858 Act”) and the Gas Supply Act 1996 (NSW) (the “1996 Act”). The latter statute commenced operation on 12 July 1996.

20. In response, Mr Henry SC, who appeared with Mr Delany for the Owner, submitted that one reason the proposed question was not suitable for separate determination was that potentially disputable factual questions would arise in relation to the applicability of the 1837 Act, namely the manner in which the expression “way, road, street, lane, or other public place or passage” in s 52 of that Act should be construed.

21. That led to Jemena seeking to amend the separate question, and indeed filing a Further Amended Commercial List Response, to refer only to the 1996 Act.

22. Thus, the next iteration of the proposed separate question was:

“Whether [Jemena] has any defence of statutory authority under the Gas Supply Act 1996 (NSW) to the allegation of trespass pleaded in paragraph C24 of the plaintiffs’ Commercial List Statement filed on 26 May 2023.”

23. There was a third iteration:

“Whether [Jemena] has any defence of statutory authority under the Gas Supply Act 1996 (NSW) to the allegation of trespass pleaded in C24 of the plaintiffs’ Amended Commercial List Statement filed on 11 April 2024, on and from 12 July 1996 when the Act commenced operation.”

24. In response, Mr Henry and Mr Delany submitted:

“a)   the answer to the separate question will leave unresolved whether the retention and/or use of the gas infrastructure by [Jemena] was in trespass between 19 September 1995, when [Manboom] acquired the land, and 12 July 1996, when [the 1996 Act] commenced;

b) [Jemena] relies upon s 52 of [the 1837 Act] and s 5 of [the 1858 Act] as statutory authority for the installation, maintenance and use of the gas infrastructure. Hence, if the separate question is ordered and answered unfavourably to [Jemena], subject to subpar d) below, [Jemena] will run a further defence of statutory authority, but in reliance upon s 52 of the 1837 Act and s 5 of the 1858 Act, at a second trial. This … affords [Jemena] multiple opportunities to run that defence;

c)   in order to answer the separate question, the Court will have to determine whether, as the plaintiffs contend, [Jemena] was in trespass as at 12 July 1996, when [the 1996 Act] commenced. So much necessarily followed from the fact that, absent trespass, answering the question is a hypothetical exercise. The plaintiffs have invited [Jemena] to admit that, as at 12 July 1996, there was no lawful justification for either the gas infrastructure to remain in or on the land or [Jemena] to use the gas infrastructure. [Jemena] has not made the admission;

d)   whether there was trespass as at 12 July 1996 depends, inter alia, upon whether the gas infrastructure was installed and retained in or on the land pursuant to the licence only (as the plaintiffs and [Jemena] contend) or pursuant to s 52 of the 1837 Act and s 5 of the 1858 Act (as [Jemena] also contends). It is agreed that the licence terminated on about 5 June 1987. Hence, it did not provide lawful justification for the retention or use of the gas infrastructure beyond that date. Therefore, in order to determine whether there was trespass as at 12 July 1996, and answer the separate question, the Court will have to determine [Jemena’s] statutory authority defence pursuant to s 52 of the 1837 Act and s 5 of the 1837 Act. If that is incorrect, subpar b) above applies. As previously submitted, [Jemena’s] statutory authority defence pursuant to s 52 of the 1837 Act and s 5 of the 1858 Act is unsuitable for separate determination[.]”

25. That led to this rejoinder from Mr Robertson:

“The plaintiffs argue that the failure of the separate question to bridge the gap between 1995 and 1996 leaves open the question of whether [Jemena] was a trespasser when the 1996 Act commenced. They point to the failure of [Jemena] to admit that allegation, now made for the first time in their note.

[Jemena] will argue, in response to this allegation, that its occupation of the land was justified by the 1837 and 1858 Acts. Of course, it will argue that the 1996 Act applies to pipelines of the statutory description in fact, without regard to their legal status. However, if that argument is rejected, then it has pleaded lawful justification as described above.

To ensure that the statutory authority point is not frustrated, the separate question should be extended to include whether there was statutory authority for the installation and maintenance of the Gas … Assets under the 1837 and 1858 Acts until the commencement of the 1996 Act.”

26. It also led to a reformulation of the separate question, now once again to rely on the 1837 Act and the 1858 Act, as well as the 1996 Act, as follows:

“Whether [Jemena] has any defence of statutory authority to the allegation of trespass pleaded in paragraph C24 of the Plaintiffs’ Amended Commercial List Statement filed on 11 April 2024, pursuant to:

(a) section 52 of the Australian Gas Light Company Act 1837 (NSW), as supplemented by s 5 of the Australian Gas Light Company (Amendment) Act 1858 (NSW) until 12 July 1996;

(b)   the Gas Supply Act 1996 (NSW).”

27. Mr Robertson submitted that no factual questions would thereby arise. He submitted:

“The previous submissions [of the plaintiffs] asserted that there were live facts that were controversial and relevant to the question of the application of the earlier Acts. There is no factual question of that description. The only fact referred to is whether there was a railway on the land when the licence terminated. We undertake to prove, if necessary, by incontrovertible evidence (aerial photography), that the railway which was constructed in 1961, was present on the land when the pipelines were installed, when the land was first sold and then on-sold to [Manboom]. Otherwise, all other relevant facts are admitted or agreed.”

28. Many facts are agreed, but now that Jemena eschews reliance only on the 1996 Act in relation to its statutory authority defence and, once again, seeks to call in aid the 1837 Act and the 1858 Act, the issue Mr Henry raised that I have set out at [20] will arise. This shows that there is now a dispute between the parties as to whether any factual questions would arise on the hearing of the question now posed for separate determination. That, alone, is a reason not to order a separate question.

29. There are other reasons not to order a separate question; in particular, what I see as the near certainty of an appeal from a determination of the proposed separate question with all the potential complications and inefficiencies that would thereby arise, and which are a familiar reason for declining to order a separate question. ^[1]

    1. See, for example, Tepko Pty Ltd v Water Board (2001) 206 CLR 1; [2001] HCA 19 at [170] (Kirby and Callinan JJ).

30. I refuse to order a separate question. Jemena’s Notice of Motion of 19 December 2023 is dismissed with costs.

31. I stand the matter over for further directions on 3 May 2024.

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Endnote

Decision last updated: 24 April 2024