Mees v National Express Group Australia (Swanston Trams) Pty Ltd (recs & mgs appt)
[2006] VSC 196
•8 June 2006
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 9117 of 2005
| PAUL ANDREW MEES | Plaintiff |
| v | |
| NATIONAL EXPRESS GROUP AUSTRALIA (SWANSTON TRAMS) PTY LTD (RECEIVERS AND MANAGERS APPOINTED) | Defendant |
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JUDGE: | HARGRAVE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 24 May 2006 | |
DATE OF JUDGMENT: | 8 June 2006 | |
CASE MAY BE CITED AS: | Mees v National Express | |
MEDIUM NEUTRAL CITATION: | [2006] VSC 196 | |
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Judgments and orders – perfected orders of the Supreme Court of Victoria – all rights of appeal exhausted – actions of successful defendant under control of receivers and managers – whether judgments and orders susceptible to collateral challenge by unsuccessful plaintiff under s. 1321 of Corporations Act 2001 (Cth) – collateral challenge impermissible – application refused.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Dr Mees appeared in person | |
| For the Defendant | Ms E Gardner | Minter Ellison |
TABLE OF CONTENTS
Introduction.................................................................................................................................... 1
Evidence.............................................................................................................................................. 3
Facts.................................................................................................................................................... 4
Power of the court to grant the relief sought................................................................. 10
Extension of time.......................................................................................................................... 12
The merits of the application................................................................................................... 15
Conclusion and orders.............................................................................................................. 18
HIS HONOUR:
Introduction
The plaintiff is a lecturer in transport planning at the University of Melbourne. He also has a law degree and previously practised as a lawyer. The plaintiff represented himself at the trial of this proceeding.
The defendant previously operated the Swanston Trams network in metropolitan Melbourne. The defendant was in receivership at material times, receivers and managers having been appointed in December 2002.
The proceeding arises out of objections made by the plaintiff to an application by the defendant for a planning permit to construct a new tram interchange in Swanston Street, Melbourne adjacent to the University of Melbourne. The plaintiff’s objections to the grant of this planning permit were unsuccessful at every stage of the planning process and on appeal, or applications for leave to appeal, to this Court, the Court of Appeal of this Court and the High Court of Australia. Along the way, costs orders were made against the plaintiff in favour of the defendant.
The defendant has taken steps to enforce the costs orders by garnishee proceedings in this Court. In response, the plaintiff commenced this proceeding seeking to challenge, pursuant to s. 1321 of the Corporations Act 2001 (Cth) (“the Act”), the acts and decisions of the receivers and managers to oppose his proceedings in this Court and in the Court of Appeal of this Court, which opposition led to the costs orders being made in favour of the defendant.
In summary, the plaintiff seeks in this proceeding:
(1) an order setting aside the costs orders;
(2)an order setting aside the decision of the receivers and managers to issue garnishee proceedings against him in respect of the costs orders;
(3)an order that the receivers and managers take no further action against him in respect of the costs orders;
(4)an order that the receivers and managers pay him damages, including exemplary damages;
(5)a declaration that the receivers and managers acted beyond their power in defending proceedings brought by him in this Court and incurring the costs which have given rise to the costs orders in favour of the defendant; and
(6)to the extent necessary, an order extending the time within which he may commence proceedings under s. 1321 of the Act.
Section 1321 of the Act relevantly provides:
“A person aggrieved by any act, omission or decision of ….
(b)a receiver, or a receiver and manager, of property of a corporation
…
may appeal to the Court in respect of the act, omission or decision and the Court may confirm, reverse or modify the act or decision, or remedy the omission, as the case may be, and make such orders and give such directions as it thinks fit.”
The principal basis of the plaintiff’s claims is that the defendant, and thus the receivers and managers, did not at relevant times have any standing or power to continue to oppose his applications in this Court. This was because, on 18 April 2004, the defendant ceased to have any interest in the business previously conducted by it as a tram operator in Melbourne, or in any of the land or assets used by it in connection with that business.
In summary, the defendant opposes the plaintiff’s claims on the following grounds:
(1)Each of the costs orders is a perfected order of this Court. Accordingly, this Court does not have the power to re-open, set aside or vary the costs orders. The only court with power to set aside the costs orders is the High Court, and the plaintiff’s application for special leave to appeal to the High Court is deemed to have been abandoned due to the plaintiff’s failure to comply with applicable rules.
(2)The originating process under s. 1321 of the Act was filed 19 months out of time, and an extension of time ought not be granted.
(3)The defendant and the receivers and managers had the requisite power and standing to defend the plaintiff’s applications for leave to appeal in this Court and to obtain costs orders upon successfully opposing those applications. This standing and power arises from of the terms of relevant contractual and appointment documents, directions given by the Director of Public Transport for the State of Victoria to the receivers and managers, and under s. 420 of the Act.
(4)The plaintiff is not a “person aggrieved by any act, omission or decision” of the receivers and managers within the meaning of s. 1321 of the Act.
(5)There is no relevant “act” or “decision” of the receivers and managers which can form the subject of an appeal under s. 1321 of the Act.
(6)The plaintiff is in any event estopped from raising the matters he desires to raise in this proceeding because those matters ought properly to have been brought forward as part of the plaintiff’s unsuccessful applications for leave to appeal.
Evidence
By order of Mandie J made 25 November 2005, the plaintiff was given leave to rely on his affidavit sworn 3 November 2005 filed in proceeding 5198 of 2004. That affidavit was before me on the hearing of this proceeding. The plaintiff was not cross-examined.
Mandie J also gave leave to the defendant to rely upon certain affidavits sworn in proceeding 5198 of 2004. Further, the defendant filed affidavits in this proceeding. The following affidavits, and exhibits thereto, were tendered in evidence:
(1) Affidavit sworn by Prani West on 31 October 2005 in proceeding 5198 of 2004;
(2)Affidavit sworn by Colin Nicol on 17 October 2005 in proceeding 5198 of 2004;
(3)Affidavit sworn by Colin Nicol on 22 December 2005 in this proceeding;
(4)Affidavit sworn by Hector McKenzie on 23 December 2005 in this proceeding;
(5)Affidavit sworn by Jane Salveson on 9 May 2006 in this proceeding;
(6)Affidavit sworn by Colin Nicol on 11 May 2006 in this proceeding.
The plaintiff cross-examined Mr McKenzie and Mr Nicol. As certain parts of the affidavit evidence of Mr Nicol included hearsay statements made to him by an employee of the receivers and managers, Mark Gerstel, Mr Gerstel was called to give oral evidence. He was not cross-examined by the plaintiff.
In the course of cross-examination, and the examination of Mr Gerstel, the parties placed some further documents in evidence.
Facts
From 1999 until 18 April 2004, the defendant (trading as “M Tram”) operated the Swanston Trams network in metropolitan Melbourne. The principal agreement pursuant to which the defendant was authorised to operate that tram network was a Franchise Agreement dated 25 June 1999 (“the Franchise Agreement”) between it and the Director of Public Transport (“the Director”). The office of the Director is constituted under the Transport Act 1983 (Vic). In making the Franchise Agreement the Director was acting on behalf of the Crown in right of the State of Victoria.
Under the terms of the Franchise Agreement, the defendant was granted a franchise to operate certain passenger services on rail infrastructure and land which it leased from the Director pursuant to an Infrastructure Lease dated 25 June 1999 between it and the Director (“the Infrastructure Lease”).
Also on 25 June 1999, the defendant executed a deed of charge in favour of the Director (“the charge”). Under cl. 6.1 of the charge, the Director was authorised to appoint receivers and managers of all of the present and future assets of the defendant.
Clause 21.6 of the Franchise Agreement is in the following terms:
“21.6 Assistance in securing continuity
To facilitate the continuity of the operation of all or any part of the Franchise Business on expiry or termination of the Franchise Period, the Franchisee must, and must procure that each other Franchise Entity does, do everything, both before and after the expiry or termination of the Franchise Period, as the Director may reasonably require to assist and advise any Successor Operator or prospective Successor Operator in operating the Franchise Business.” (Emphasis added.)
In March 2002, the Director determined that the defendant was not conducting the Swanston Trams network in a manner which was financially sustainable. As a result, in late 2002 the Director and the defendant entered into a Interim Operating Agreement (“Interim Operating Agreement”) on confidential terms. It can be said, however, that the Interim Operating Agreement recited that the Director and the defendant had agreed to an orderly process for the competitive tender of the Swanston Trams business, on the terms set out therein. Further, the Interim Operating Agreement required the defendant to continue to operate the Swanston Trams network on a “business as usual” basis during the tender process and to complete certain existing infrastructure projects in accordance with the requirements of the Infrastructure Lease. This included improvement of tram stops and the refurbishment of tram safety zones.
By deed of appointment dated 20 December 2002, the Director appointed Colin Nicol and Peter Anderson as joint and several receivers and managers of the defendant pursuant to the charge (“the receivers and managers”).
On 21 October 2003, the defendant, acting through the receivers and managers, applied to the relevant council for a planning permit to construct a tram interchange in Swanston Street, Carlton adjacent to the University of Melbourne (“the Superstop”). The defendant objected to this application. However, his objection was rejected and the council issued a planning permit for the Superstop (“the permit”).
On 19 December 2003, the plaintiff lodged an application in the Victorian Civil and Administrative Tribunal (“VCAT”) for review of the decision to issue the permit.
On 19 February 2004, the defendant entered into an agreement for the sale of the Swanston Tram franchise business to a consortium of companies trading as “Yarra Trams” (“the sale of assets agreement”). The sale of assets agreement was to take effect from a specified completion date of 18 April 2004.
On 19 February 2004, the Victorian Government issued a media release announcing the entry into the sale of assets agreement. Completion was stated to be in mid-April 2004. The plaintiff was obviously aware of this media release, as he made comments about it that day which were reported in the media.
The sale of assets agreement is confidential. However, it can be said that it provided that all assets (save for “excluded assets” as defined) used by the defendant in the conduct of the Swanston Trams franchise were to be transferred to Yarra Trams with effect from the completion date on 18 April 2004. Pending completion, the defendant was required to carry on the Swanston Trams franchise business in the usual way and to consult with Yarra Trams about any material decision in relation to the business.
The plaintiff’s application to VCAT for review of the decision to grant the permit was heard by VCAT on 23 February 2004. On 5 March 2004, VCAT delivered a decision confirming the council’s decision to issue the permit. No costs were awarded against the plaintiff in relation to the VCAT hearing.
On 29 March 2004, the plaintiff filed an application in this Court seeking leave to appeal from the VCAT decision (“the Supreme Court application”). The council was named as first respondent and the defendant in this proceeding was named as second respondent. The defendant filed an appearance and briefed solicitors and senior counsel.
On 7 April 2004, a regular meeting took place between representatives of the Director, representatives of the defendant and representatives of the receivers and managers. It appears that there were no representatives of Yarra Trams present.
On behalf of the Director, Mr McKenzie was the senior person in attendance at the 7 April meeting. He was then the General Manager of Franchise Relationships, Public Transport, within the Department of Infrastructure. Mr McKenzie gave evidence that he did not have a very good recollection of the details of that particular meeting. However, he did recall, in general terms, that at about this time it was agreed that the receivers and managers would continue to take whatever steps were necessary to secure the permit to allow the construction of the Superstop, including defending the Supreme Court application.
Mr Gerstel, who was an employee of the receivers and managers, had a much better recollection of the 7 April meeting. He recalls seeking a direction from “the State” as to whether the receivers and managers should continue to defend the Supreme Court application. He recalled that, in response to him raising this issue, he received a “positive response” from Mr McKenzie as “the State’s representative”.
Mr Gerstel’s recollection is supported by his contemporaneous email sent on the following day to the receivers and managers. In that email, Mr Gerstel stated that the issue of what action should be taken in response to the Supreme Court application was raised with Department of Infrastructure representatives at the 7 April meeting, in the following terms:
“This issue was raised with DoI at M Tram’s Franchise meeting on 7 April 2004 and DoI (Hector McKenzie) gave support for M Tram to continue with the case and that the Receivers and Managers should continue with the case post 18 April 2004.”
In the balance of his email, Mr Gerstel sought the consent of the receivers and managers for the defendant “to take this case further” and incur costs. Mr Nicol, on behalf of the receivers and managers, subsequently gave approval for the defendant to continue to defend the Supreme Court application and incur costs in that regard.
There was a further regular franchise meeting on 13 April 2004. This meeting was attended by senior representatives of all interested parties, including Hubert Guyot (Chief Executive Officer of Yarra Trams), Bernie Carolan (Chief Executive Officer of the defendant), Colin Nicol and Hector McKenzie. Mr Nicol gave evidence that those present confirmed an earlier agreement between all interested parties that the defendant would continue to pursue the legal defence of the Supreme Court application.
A handwritten file note made by one of Mr Nicol’s assistants during the discussions at the meeting on 13 April 2004 records:
“Melb Uni
–Paul Mees to challenge VCAT dec’n – seeking leave in Supreme Court.
–M Tram to pursue legal defence.”
On the following day, Peter Anderson, one of the receivers and managers, wrote to the defendant’s solicitors and instructed them to continue to defend the Supreme Court application. Mr Anderson’s letter included the following statement:
“Under its obligations to the Director, Yarra Trams is required to continue with the Melbourne University tramstop development. It has been agreed with the Director that M Tram is the appropriate party to continue to defend the Supreme Court Action and retain Minter Ellison to that end.”
Completion of the sale of assets agreement took place on 18 April 2004. This had the effect of bringing the Franchise Agreement to an end. Accordingly, the Infrastructure Lease was also at an end. The defendant ceased to have any interest in the Swanston Tram network or in the land and assets previously owned or leased by it for the conduct of that business.
On 30 April 2004, Balmford J heard and determined the Supreme Court application. The Supreme Court application was dismissed and the plaintiff was ordered to pay the defendant’s costs. This was the first of the costs orders which is the subject-matter of this proceeding.
On 11 May 2004, the plaintiff applied for leave to appeal to the Court of Appeal against Balmford J’s decision (“the Court of Appeal application”). The Court of Appeal application named the defendant as a respondent.
By letter dated 24 May 2004 to the solicitors for the defendant, the plaintiff suggested that there may be value in a conference to settle the Court of Appeal application. The defendant’s solicitors did not reply to this letter.
On 18 June 2004, the Court of Appeal heard the Court of Appeal application and dismissed it. The plaintiff was ordered to pay the defendant’s costs. This is the second of the costs orders which is the subject of this proceeding.
On 13 July 2004, the plaintiff filed an application in the High Court for special leave to appeal from the dismissal of the Court of Appeal application (“the High Court application”). The defendant was named as the second respondent to the High Court application. The High Court application was deemed to be abandoned by notice dated 20 January 2005, as a result of the failure of the plaintiff to comply with applicable procedural rules of the High Court. The defendant has not sought any costs orders in the High Court application.
The defendant’s costs of the Supreme Court application were taxed in the sum of $9,894.80 by order of Master Bruce made 18 January 2005. The defendant’s costs of the Court of Appeal application were taxed at $9,751.55 by order of Master Bruce made 18 January 2005.
By summons dated 17 October 2005 in proceeding 5198 of 2004, the defendant (as second respondent in that proceeding) sought an order that the earnings of the plaintiff be attached in satisfaction of the costs orders made against him (“the garnishee application”). On 3 November 2005, on the return of the garnishee application, the plaintiff sought to set aside the costs orders on the basis of an interlocutory process and a supporting affidavit filed by him in that proceeding. As this interlocutory process appeared to be an appeal under s. 1321 of the Act, the Senior Master did not have jurisdiction to entertain it. Accordingly, the Senior Master adjourned the further hearing of the garnishee application until a date to be fixed, pending the plaintiff’s foreshadowed appeal under s. 1321 of the Act. This proceeding is that foreshadowed appeal.
Power of the court to grant the relief sought
It was submitted on behalf of the defendant that this Court did not have any power to grant the relief sought by the plaintiff. This was because the orders made on the Supreme Court application and the Court of Appeal application, including the costs orders, had both been perfected by authentication. Further, the costs had been taxed and the orders on taxation had been perfected by authentication. In these circumstances, it was submitted that this Court did not have the power to re-open, set aside or vary any of the relevant judgments or orders. Reliance was placed upon Bailey v Marinoff[1] and DJL v The Central Authority.[2]
[1](1971) 125 CLR 529 at 530-2, 539.
[2](2000) 201 CLR 226 at 244-5.
The general rule was stated by Barwick CJ in Bailey v Marinoff with respect to the power of the New South Wales Court of Appeal:
“Once an order disposing of a proceeding has been perfected by being drawn up as the record of a court, that proceeding apart from any specific and relevant statutory provision is at an end in that court and it is in its substance, in my opinion, beyond recall by that court. It would, in my opinion, not promote the due administration of the law or the promotion of justice for a court to have a power to reinstate a proceeding of which it has finally disposed.”[3]
[3](1971) 125 CLR 529 at 530.
This statement of the general rule was quoted with approval in DJL v Central Authority.[4]
[4](2000) 201 CLR 226 at 245, per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ.
Although there are some exceptions to this general rule, such as judgments fraudulently obtained or judgments containing an accidental slip or omission, none of these exceptions is applicable in this case.
By this proceeding, the plaintiff seeks to re-open the judgments of this Court on the Supreme Court application and the Court of Appeal application, and the orders consequent upon taxation of costs ordered to be paid as a result of the dismissal of those applications, in an impermissible way. The only remedy which the plaintiff had to avoid the consequences of the costs orders was by way of appeal. He exercised all of the rights of appeal open to him, including by making the High Court application. As I have said, that application is deemed to have been abandoned.
It would in my view be inconsistent with the public interest in finality of litigation if the plaintiff was permitted to use the procedure under s. 1321 of the Act to now seek to challenge the costs orders made against him in circumstances where all of this rights of appeal have been exhausted. To the extent that I have any jurisdiction under s. 1321 of the Act, that jurisdiction is discretionary. That discretion ought not be allowed to form the basis of a de facto appeal against perfected orders of this Court.
On behalf of the plaintiff, it was submitted that the judgments of this Court were liable to be set aside because they were obtained in the absence of Yarra Trams, which was a necessary party. The plaintiff did not develop this argument by reference to any authority or rules of court.
Although a judgment may in certain circumstances be set aside if it is obtained in the absence of a necessary party,[5] such an application is, in my view, one which could only be made by the absent party whose interests had been adversely affected by the decision. The plaintiff is not such a person. The fact that Yarra Trams was not joined as a party to the Supreme Court application or the Court of Appeal application does not have the effect that the costs orders in favour of the defendant are invalid.[6]
[5]See News Limited v Australia Ruby League (1996) 64 FCR 410 at 523-7.
[6]Cf rule 9.05 Supreme Court (General Civil Procedure) Rules 2005.
It follows that the plaintiff’s claim in this proceeding ought be dismissed on the first ground raised by the defendant. The Court has no jurisdiction to entertain the proceeding. If it does, that jurisdiction is discretionary. If I have a discretionary power to deal with the plaintiff’s claims, I would exercise my discretion against granting any relief to the plaintiff. In my view, the impermissible use of s. 1321 as a de facto right of appeal would constitute a sufficient discretionary ground to refuse any relief. However, as appears below, the plaintiff’s claim ought in any event be dismissed on a number of other grounds.
Extension of time
In the event that I do have power to hear this proceeding, it is necessary to consider whether the plaintiff ought be granted an extension of time to commence the proceeding.
Rule 14.1(2) of the Supreme Court (Corporations) Rules 2003 (“Corporations Rules”) provides that any appeal under s. 1321 of the Act must be filed within 21 days of the act, omission or decision complained of.
Rule 14.1(3) of the Corporations Rules provides that the Court may extend time for filing an originating process before or after the time expires and whether or not the application for extension is made before the time expires.
In the present case, the conduct complained of is the defence of the Supreme Court application and the Court of Appeal application from and after 29 March 2004. As the plaintiff did not file the originating process until 4 November 2005 (that is, 19 months after the earliest act complained of) an extension of time is necessary.
In Derwinto Pty Ltd (in liq) v Lewis[7], Austin J referred to a number of factors relevant to the exercise of the discretion to grant an extension of time for filing an appeal under s. 1321 of the Act:
[7](2002) 42 ACSR 645.
“• the discretion to grant an extension is broad and flexible;
• whether it is just in all the circumstances to grant an extension;
•whether the time limits are of a substantive or procedural nature;
• whether the case is arguable;
• respective prejudice to the parties;
• length of delay;
• responsibility and reasons for the delay;
•whether the delay was intentional or the result of a bona fide mistake; and
•whether the delay was caused by the litigant or their legal advisers.”[8]
[8](2000) 42 ACSR 645 at [47] citing Rocom International Pty Ltd (in liq) v Prentice [2002] FCA 604 at [4], per Tamberlin J.
Austin J grouped those factors under three principal headings:
“(a)delay— including the length and nature of the delay and the reasons for it;
(b)prejudice to the respective parties; and
(c)whether the claim is arguable.”[9]
[9](2000) 42 ACSR 645 at [48].
In my view, the plaintiff has delayed inordinately in commencing this application. He was aware of the general nature of the sale of assets agreement in February 2004, including that it was to be completed in April 2004. Notwithstanding this, the plaintiff continued with his applications against the defendant and took no steps to raise the issue of its alleged lack of standing consequent upon the sale of the Swanston Trams Franchise to Yarra Trams.
Further, I am satisfied that the defendant has suffered considerable prejudice as a result of the delay by the plaintiff in raising the issues which he now seeks to agitate. In circumstances where the plaintiff chose to name the defendant as a respondent to his applications, the defendant has incurred legal costs in defending those applications, obtaining taxed costs orders and commencing the garnishee application. Further, had the plaintiff raised the issues he now seeks to raise at an early time, the defendant could have applied for Yarra Trams to be substituted as a defendant in its place or the receivers and managers could have applied for directions under s. 424 of the Act as to whether they should continue to defend the plaintiff’s applications.
On the other hand, I am of the view that the plaintiff will suffer no prejudice if an extension of time is refused. Whether the respondent to his applications was the defendant or Yarra Trams, the result of the applications would have been no different. He would still be exposed to the costs orders. The plaintiff made no submission to the contrary. The plaintiff’s submission was that, by reason of the conduct of the receivers and managers, he was deprived of the opportunity to conduct settlement negotiations with Yarra Trams. However, there was nothing preventing the plaintiff from approaching Yarra Trams directly, or from applying to join it as a respondent and then seeking to negotiate with it. The result of any such negotiations is a matter of pure speculation and this possibility does not, in my view, constitute a material prejudice to the plaintiff.
In my opinion, this is not an appropriate case to permit an extension of time. The period of delay and the prejudice caused to the defendant by reason of that delay are both considerable. Further, as appears both above and below, the merits of the claim sought to be raised by the plaintiff are lacking in any substance.
Before leaving the question of extension of time, it is necessary to note that the plaintiff sought leave to amend his originating process so as to invoke the jurisdiction of the Court under s. 423 of the Act. Section 423(1)(b) provides:
“423(1) If:
(b)a person complains to the Court... about an act or omission of a controller of property of a corporation in connection with performing or exercising any of the controller’s functions and powers;
the Court... may inquire into the matter and, where the Court... so inquires, the Court may take such action as it thinks fit.”
The plaintiff’s express reason for seeking to invoke the jurisdiction of the Court under s. 423 was to avoid the argument that he requires an extension of time in order to bring his proceeding before the Court. The plaintiff acknowledged that this was the only reason for his attempt to resort to the power under s. 423, and accepted that his submissions on the merits of the case would be exactly the same if he was granted leave to amend his originating process. In the circumstances, I deferred a ruling on the application for leave to amend the originating process to raise s. 423 and said that I would deal with that application at the time of determining the proceeding as a whole. As I have decided that the proceeding as a whole ought be dismissed, whatever the basis of the power sought to be invoked, the application for leave to amend the originating process to raise s. 423 of the Act is refused.
The merits of the application
Even if the plaintiff could overcome all of the obstacles discussed above, the plaintiff’s claim ought in my view be dismissed on its merits.
The plaintiff concedes that, prior to the sale of assets agreement being entered into, the receivers and managers had power to pursue the application for the permit and to defend the proceedings commenced by the plaintiff in VCAT. However, the plaintiff submitted that the effect of the sale of assets agreement was to make it inappropriate for the receivers and managers to defend the Supreme Court application at any time, even though it was commenced prior to completion of the sale of assets agreement on 18 April 2004. In this regard, it was submitted by the plaintiff that the defendant ought to have taken steps to have Yarra Trams joined as a respondent to the Supreme Court application and that the receivers and managers ought to have taken no steps in defence of it. Alternatively, it was submitted by the plaintiff that, from completion of the sale of assets agreement on 18 April 2004, the defendants, and thus the receivers and managers, ceased to have any interest in defending the Supreme Court application or the subsequent Court of Appeal application.
In these circumstances, it was submitted by the plaintiff that the defendant, and thus the receivers and managers who made decisions on its behalf, became mere intermeddlers in the Supreme Court application and the Court of Appeal application. The principal basis for this submission was that, upon completion of the sale of assets agreement, the defendant ceased to have any interest in the land on which the Superstop was to be constructed or in any business associated with that Superstop. Accordingly, as a planning permit is not a personal asset but something which “runs with the land”, the only persons who had any interest in opposing the Supreme Court application and the Court of Appeal application were Yarra Trams and the Director. Reliance was placed upon Shire of Sherbrook v Aitken[10].
[10][1981] VR 873 at 877, per Gobbo J.
I accept the plaintiff’s submission that a planning permit is not a personal asset of the applicant for that permit. A planning permit is a right which is incidental to the land to which the planning permit relates. Accordingly, in the usual course, once a person ceases to have any interest in the subject land, or at least in a business conducted on that land, a person ceases to have any interest in maintaining the relevant permit. However, each case must depend upon its own facts.
In my opinion, the defendant remained a person who was sufficiently interested in the permit so as to give it standing to continue to oppose the Supreme Court application and the Court of Appeal application. It must be remembered that the plaintiff chose to join the defendant as a respondent to each application, knew of the sale of assets agreement in general terms and took no steps to join Yarra Trams or the Director as a party to the proceedings commenced by him.
The defendant was no mere intermeddler in the proceedings commenced by the plaintiff. It had previously been the operator of the Swanston Trams network and, in that capacity, had applied for and obtained the permit. The defendant and its legal advisers were fully appraised of all of the relevant circumstances. It was obviously convenient and cost-effective for them to continue to oppose the applications made by the plaintiff to set aside the permit. With the agreement of the owner of the relevant land,[11] and with the agreement of Yarra Trams as the new operator of the Swanston Trams network and lessee of the relevant land, that is what the defendant did. In effect, the defendant, through its receivers and managers, agreed with the owner and lessee of the land to represent their interests in opposing the proceedings already commenced by the plaintiff. Viewed in this way, the defendant was acting as agent for the owner and lessee and was no mere intermeddler.
[11]The Crown in right of the State of Victoria represented by the Director.
Further, I am satisfied that the discussions between the Director, Yarra Trams, the receivers and managers and the defendant in April 2004, as a result of which it was agreed that the defendant would pursue the defence of the Supreme Court application on behalf of the Director and Yarra Trams, fall within the terms of cl. 21.6 of the Franchise Agreement. In my view, the discussions and agreement constituted a requirement by the Director that the defendant defend the Supreme Court application, so as to assist Yarra Trams as the successor operator of the Swanston Trams network. I reject the submission by the plaintiff that the discussions and agreement fell outside the terms of cl. 21.6 because the agreement was not preceded by a request by the Director that the defendant continue to defend the Supreme Court application.
I find that the defendant, acting through the receivers and managers, had power and standing to defend the Supreme Court application and the Court of Appeal application. Even if I have power under s. 1321 of the Act to entertain an application by the plaintiff in respect of the conduct of the receivers and managers in that regard, this is clearly an inappropriate case for the exercise of that power.
In these circumstances, it is unnecessary to consider the other grounds of opposition to the plaintiff’s claim.
Conclusion and orders
For the reasons expressed above, the proceeding will be dismissed. I will hear the parties as to the form of orders and as to costs.
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