NSW Rifle Assn v C of A

[1998] HCATrans 76

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S97 of 1997

B e t w e e n -

NEW SOUTH WALES RIFLE ASSOCIATION INCORPORATED

Applicant

and

COMMONWEALTH OF AUSTRALIA

Respondent

Office of the Registry
  Sydney  No S98 of 1997

B e t w e e n -

NEW SOUTH WALES SMALLBORE AND AIR RIFLE ASSOCIATION INCORPORATED

Applicant

and

COMMONWEALTH OF AUSTRALIA

Respondent

Applications for special leave to appeal

McHUGH J
GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 13 MARCH 1998, AT 2.01 PM

Copyright in the High Court of Australia

_______________________

MR R.J. ELLICOTT, QC:   Your Honours, I appear with MR R.J.J. DARKE for the applicant.  (instructed by Hunt & Hunt)

MR J.J. GARNSEY, QC:   If your Honours please, I appear with MR G.L. RAFFELL for the respondent in this matter.  (instructed by the Australian Government Solicitor)

McHUGH J:   Yes, Mr Ellicott.

MR ELLICOTT:   Your Honours, can I just hand up a map that, by agreement, would satisfy the document at page 67.

McHUGH J:   Yes.

MR ELLICOTT:   Your Honours, there has, in this matter, been a great deal of disputation between the judges before whom this issue has come.  Mr Justice Waddell first dealt with it in the late 80s and your Honours have been give a copy of that judgment.  His Honour agreed with our submissions that the document was contractual in nature and, indeed, he said what we say, and that is it means what it says.

McHUGH J:   What does that mean?

MR ELLICOTT:   That means, your Honour, that when it says “land being no longer used as a rifle range” it is not confined to use by the Defence Forces or the

Commonwealth; it includes use by us, because that is the whole reason why we went there.  But I will come to that.

Before Justice Bryson, he ultimately came to the view that it was contractual.  Justice Powell, his view seemed to be, although it is not easy to grasp it completely, that because the consideration was illusory, therefore it was not contractual but he said, well, it was “an arrangement” and on that basis it terminated when the Defence Forces ‑ ‑ ‑

McHUGH J:   I think we are very familiar with the judgments and the reasoning and your time might be better ‑ ‑ ‑

MR ELLICOTT:   Your Honours, that will save me some time.  Your Honours, there are two questions of law of public importance, we say.  The first is as to those circumstances in which contractual relations exist between the Commonwealth, or a government, if you like, and a subject, and that was clearly involved in this.  The other question is, what would amount to consideration?  Here, although they had all the facts before them, they were unable below to see any consideration flowing to the Commonwealth from these particular events. 

What is consideration and what are legal relations and what is illusory, your Honours will recall, were dealt with in Placer Development v The Commonwealth and since then that decision has been the subject of some controversy amongst text writers, particularly, because one finds that whereas in those days there was a rather narrow view of what was contractual, even when the Commonwealth entered into what was called an agreement, since then there has been a more expansive view taken of what is an agreement.  Of course, the judgments of Justices Windeyer in particular, and also the judgment of Justice Menzies, have been referred to as applying what we would submit is the present law in relation to the matter.

Your Honours, in order to indicate to your Honours the significance of the error below, it is necessary for us to take your Honours quickly to the background facts that existed.  I do not want to obviously go into those at great depth, but what we are submitting, in effect, is that the courts below, apart from Justice Waddell, have ignored the history.  If one takes that history into ‑ ‑ ‑

McHUGH J:   It is hard to say that in respect of Justice Powell who has set it out at very considerable length.

MR ELLICOTT:   It is a very learned judgment in relation to military history, but when it came to dealing with the agreement he did not apply that history to the agreement because had he done so, in our submission, he would have seen that his statement that the consideration for the Commonwealth was illusory.  When one bears in mind these facts, first of all there had indeed been a very long history, going back over a century, of an association - this is at - we have to look at it with 1968 eyes, not 1998 eyes.  The contract has to be construed as of that date, and to put ones position in the position of both the Army and these association. 

There had been a long relationship between the Army, both in colonial days and subsequently, and these particular clubs, whether it is one client or the other client in this matter.  There had been a long history of financial support by the Commonwealth Government of rifle clubs and State rifle associations and the smallbore association which continued well beyond the time when these documents were executed.  Indeed, in 1983, the Act was amended to emphasise the support of the Commonwealth for these clubs.  Until 1949 the rifle clubs were treated as part of the military reserve.  Therefore they were part of the Defence Forces.  That was done by virtue of the Act and therefore a significant matter in the eyes of those involved.  These were the people, of course, who were in clubs which were drawn on for the purposes of World War I and World War II.  We are talking about people who give an oath to defend the country against Her Majesty’s enemies.  That is the oath that they have to give, in addition to that which is given by the Defence Forces, in addition they have to give an oath to keep the peace.  So they apparently are seen as having some civil obligation, perhaps, at some time.

But after 1949 when they ceased to be part of the Defence Force, or the Defence Reserve, the financial support of the Commonwealth remained.  They continued to be regulated by regulations of which your Honours have a copy, and which dealt in immense detail with every aspect of their existence.  I will come to those, very shortly, in a moment.  I just want to stress that after 1949 they were still treated as if they were, in a sense, an agency of the Defence Forces of the Commonwealth.  Therefore, although they had ceased to be part of the Reserve, the Army attitude towards them was still the same.  At that stage, the rifle association had been - this is in the mid-60s - had been for 40 years at Holsworthy.  It is around the mid‑60s that the cold war is still there, Vietnam is a large issue, and the forces are being sent off to Vietnam and, for some reason, the Army wanted Holsworthy and a special arrangement was entered into and this is the arrangement that was entered into to remove the clubs or the rifle association from their premises at Holsworthy to the range at Malabar.

Now, in doing that, the Commonwealth made a contribution.  In doing it, the Association had to spend something of the order of $170,000, $180,000 and later on the Smallbore Association had to spend something in excess of $100,000 ‑ ‑ ‑

McHUGH J:   They did not have to, but that was their choice.  They did it and it was done with the consent of whoever the relevant officer was.

MR ELLICOTT:   It was done with the consent of the officer and with the consent of the Government.  These are matters that went to Cabinet.  The whole thing happened in that context and in a context where they were still treated as bodies which were set up under the Australian Rifle Regulations.  Now, under those regulations, a rifle club could not be formed without approval of the Secretary of the Department of Defence, all its activities were controlled, the State associations were controlled under it.  A director of rifle clubs was set up.  A supervisor of rifle clubs was set up.  Their office bearers were controlled and disciplined.  From time to time grants were made to rifle clubs in order to set up the ranges that they might want. 

So this particular agreement comes into existence at a time when they are still treated as part of and, as it were, both physically and otherwise, of the defence purposes of the Commonwealth.  They remained so right up till the present time as part of the defence purposes of the Commonwealth.  If your Honours just go quickly to page 99, Justice Stein said:

I agree with the observation of Bryson J that the existence and activities of the clubs is essentially ancillary to the defence activities of the Commonwealth -

and section 123G is referred to.  That, I think, went into the Act in 1983, so we are looking back before that in order to deal with these agreements that were entered into. 

GUMMOW J:   What is the first general point, the Placer point, how does that enter into this?

MR ELLICOTT:   The Placer point arises because the question is whether or not these were legal relations because the courts below have said they were not.

McHUGH J:   I know, but one problem, it seems to me, that you have in this case is that these documents are so badly drawn, and their intention to operate contractually is so problematic, that the cases just are not suitable vehicles for determining fundamental questions of consideration or intention to create legal relations between subject and State.

MR ELLICOTT:   Your Honour is simply echoing what was said below.  With very great respect, you start off surely in a court by trying to do ones best to give a meaning to what the parties have done.  Taking up your Honour’s point, this document is executed, not in 1968 but after they have been there 42 years ‑ ‑ ‑

McHUGH J:   Yes, I know, but your construction would lead to the conclusion that your clients had perpetual occupation of the relevant land - and I leave aside for the moment whatever it is - rent free, even though the Commonwealth would be put to considerable cost and expense in maintaining it and no longer wished itself to use it as a rifle range.

MR ELLICOTT:   Your Honour, let me put against that the other construction, and that is - and it is quite contrary to - if your Honours go through the documentation, your Honours have it here - your Honours will find it is quite contrary to what was intended at the time.  The other construction is that having expended all this ‑ ‑ ‑

McHUGH J:   Intended or expected?  They are two different ‑ ‑ ‑

MR ELLICOTT:   The other construction is that from day one, the Commonwealth could have decided to put these people out.  Now, there was nothing further removed from anybody’s mind than that, and that is a completely unreal construction of this agreement.

McHUGH J:   One view is that the Commonwealth might want the land at some stage but as long as the range was not wanted in the event of mobilisation or no emergency had been proclaimed or that the Commonwealth ceased itself to use it as a rifle range, your clients could stay there.

MR ELLICOTT:   So they can be tossed out without compensation.  And, your Honour - and it is important from our point of view to understand this ‑ your Honour’s approach to this is exactly, with great respect, that which was adopted by Justice Powell, and that is ‑ ‑ ‑

McHUGH J:   That may be that ‑ ‑ ‑

MR ELLICOTT:    ‑ ‑ ‑not to look at these matters in the light of what had happened.  I have already emphasised ‑ ‑ ‑

McHUGH J:   Yes, I know, but the background facts - ultimately one has to construe the agreement, no doubt as you say, in its factual context or matrix, as the cases say.

MR ELLICOTT:   Can I just, your Honour - it is a little frustrating ‑ ‑ ‑

McHUGH J:   But can I point out to you, you are spending a lot of time - it may be frustrating - you are spending a lot of time on this point but, eventually, you could not succeed in a special leave application unless you could convince us, so it seems to me at the moment, that the document or agreement, assuming there was one, was not lawfully terminated.  And even on your view, that must turn, must it not, on the meaning of those words “land no longer being used as a rifle range”.

MR ELLICOTT:   It does; but at the end of the day, that involves getting there by application of legal principle.  What I am endeavouring to do is to fix the Court’s mind, as I was unsuccessful in doing below because the judge did not want to listen to me, if I may say so with respect, on the Bench, trying to fix the judge’s mind on the question of consideration, because it is that which will lead a court to decide that this was a true agreement.  What was the consideration?  The consideration is found in condition (a), if one looks for it, not as consideration but it has got the pointer to it. 

The permissive occupancy to be terminated only in the event of mobilization ‑ ‑ ‑

McHUGH J:   “an emergency proclaimed” ‑ ‑ ‑

MR ELLICOTT:   Now, we can look at it today through today’s eyes and say, “Oh ridiculous, mobilization, who would want those premises out at Malabar” ‑ ‑ ‑

GUMMOW J:   But that is one of a number of things.

MR ELLICOTT:   But what had happened was that, at Malabar, as a result, premises had been established; they were built in accordance with Army regulations and they provided quarters in times of emergency or mobilization to the Commonwealth.  That was the consideration that was very large in the mind of the Commonwealth at the time.  There is a document to indicate that.  That was emphasised to Cabinet at the time.  That is why it is important to cast one’s mind back at the time to realise that then the parties saw this as of immense importance.

McHUGH J:   I know, but Mr Ellicott, you are spending a lot of time on the contract point but all judges below found against you on the termination point.  Now, for my part, the critical matter for me at the moment, Mr Ellicott, is this.  What is the meaning of the words “land being no longer used as a rifle range” and if it was intended to cover your clients’ activities, what was the necessity for the following clause, “or if the New South Wales Rifle Association desires to vacate the area”?

MR ELLICOTT:   If your Honour pleases, clearly enough it does not say what the Commonwealth wants it to say.  It is pointing to user, and the contemplated user was use by our clients and use by the Army.  They were two uses and if one went into the facts, one would probably find they were substantial in both cases but even more substantial in ours.

McHUGH J:   Here is the Commonwealth conferring a benefit on your ‑ a privilege, giving you a privilege, and it really is very difficult to accept that the Commonwealth were just going to give you a perpetual occupation of this land ‑ ‑ ‑

MR ELLICOTT:   If they were going to do that, they could resume it and they could pay us compensation.  The other point is that they can throw us out and not give us anything.  Your Honours, if we vacate, the other point that your Honour raised, then the purpose of the agreement disappears and that is why - in other words, we cannot go on using the rifle range if we vacate the area, and we cannot go on using the buildings.  The permissive occupancy and the incidental right to use the rifle range terminate.  Now, there is nothing unfair about that from the Commonwealth’s point of view, and that is quite different to the phrase “land being no longer used as a rifle range”.  In other words, the land continues to be used; if it does, by either the Army or the rifle clubs ‑ ‑ ‑

McHUGH J:   On this hypothesis, if both parties decide not to use it as a rifle range, that would be the end of the agreement, on any view.

MR ELLICOTT:   Yes.

McHUGH J:   What purpose do the words “if the association desires to vacate the area” serve?

MR ELLICOTT:   Simply that they could not move over the road, for instance, and build premises and still go on using the rifle range, or they could not vacate the land where their buildings are and go somewhere else for the simple reason that those buildings were put there partly as a benefit to the Commonwealth because they provided a mobilization asset for the Government.  The Government would be able to come in there and take them.  If we get out, the Government has an option to purchase them under this agreement.  There are other provisions in there that indicate that we are to have an ongoing occupation and possession of the premises and of the land.  We are responsible for it.

McHUGH J:   I see that your time is up, Mr Ellicott.

MR ELLICOTT:   Your Honour, in those circumstances, we would submit quite clearly that this is a contractual arrangement, one that was intended to be that between the parties and one for which the Commonwealth was given considerable consideration.  If your Honours look at (j) and (k) they will indicate to your Honours that the rifle association was responsible for the buildings and that the buildings were to be maintained by them.  We would ask your Honours to treat this as a case for special leave and allow those who, after all, are the ‑ ‑ ‑

McHUGH J:   I know what you are going to say.  Sorry.

MR ELLICOTT:   They are, your Honour; your Honour knows what I am going to say, and they are people worthy of being heard by the highest Court in the land, when the thing that they have done over the years is to be suddenly terminated at the whim of the Commonwealth and against the whole intention at the time that these arrangements were entered into.

McHUGH J:   Thank you, Mr Ellicott.  The Court does not wish to hear you, Mr Garnsey.

The applicants in these matters seek special leave to appeal against orders of the Court of Appeal of New South Wales dismissing their appeal against orders giving the respondent possession of land known as the Anzac Rifle Range.  The applicants contend that they have agreements with the respondent entitling them to occupy the land, or at least part of it, until they no longer wish to use it as a rifle range.  The trial judge held that, under separate arrangements, the applicants had been given a right of occupancy but the Commonwealth, having ceased to use the land as a rifle range in March 1988, the right of occupancy had terminated.  He also held that if notice of termination was required, the giving of three years notice was reasonable.  The Court of Appeal unanimously held that if there had been binding agreements they had been lawfully terminated.  Two of the judges, however, were of the view that there had been no binding contract between the parties. 

We are of the opinion that the case involves no point calling for the grant of special leave to appeal and that, in addition, the appeal would have no reasonable prospects of success.

The applicants contend that the case involves important questions concerning the intention to create contractual relationships between a subject and the Commonwealth and the nature of consideration sufficient to support a contract.  In particular, they contend that consideration was given in this particular case because public benefits can be seen to be afforded to the Commonwealth from the activities of a rifle club and that that does constitute consideration for the occupancy of the Commonwealth owned rifle range.  However, the two documents relied on by the applicants are so inelegantly drawn, and their intention to operate contractually is so problematic, that the cases are not suitable vehicles for the elucidation of questions of fundamental principle concerning the doctrine of consideration or an intention by a subject and the Commonwealth to enter into a contract.

A further reason for being doubtful as to whether the case really raises any question of fundamental principle is that arguably the meaning of the documents depends on the facts arising out of the parties previous relationship.  Any decision of the Court would therefore be a decision on a particular agreement, and would not result in the elucidation of questions of important principle.  But, in any event, even if there were binding agreements between the parties, an appeal could not succeed unless the Court reversed the finding made by the trial judge and upheld by each judge of the Court of Appeal that the agreements were lawfully terminated.  The correctness of that finding turns on the question whether the words “land being no longer used as a rifle range” in the documents means “used by the Commonwealth”: or “used by the Commonwealth and the applicants”.  We see no reason to doubt the correctness of the finding of the courts below on this point who held that those words referred to the land no longer being used as a rifle range by the Commonwealth. 

In the circumstances, special leave to appeal is refused.

MR GARNSEY:   I ask for costs, if your Honour pleases.

McHUGH J:   Anything you can say about that, Mr Ellicott?

MR ELLICOTT:   Only that it is an extraordinary application by the Commonwealth.  However, I can say nothing.

McHUGH J:   Thank you, Mr Ellicott.  Do you press your ‑ ‑ ‑

MR GARNSEY:   If your Honour pleases.

McHUGH J:   The application is dismissed with costs.

AT 2.29 PM THE MATTER WAS CONCLUDED