Nullagine Investments Pty Ltd v The Western Australian Club Incorporated

[1992] HCATrans 308

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Perth No P12 of 1992

B e t w e e n -

NULLAGINE INVESTMENTS PTY

LIMITED

Appellant

and

THE WESTERN AUSTRALIAN CLUB

INCORPORATED

Respondent

BRENNAN J
DEANE J

DAWSON J

TOOHEY J

GAUDRON J

Nullagine(2) 54 15/10/92

TRANSCRIPT OF PROCEEDINGS

AT PERTH ON THURSDAY, 15 OCTOBER 1992, AT 9.36 AM

(Continued from 14/10/92)

Copyright in the High Court of Australia

BRENNAN J: Yes, Mr Pullin.

MR PULLIN:  Your Honours, there are just four other cases

that I wish to refer to; three of them can be dealt

with fairly quickly and one I just want to deal
with in a little more detail. I refer to them,

bearing in mind something that I mentioned

yesterday, that is that for the purpose of these

proceedings it has been accepted by the parties

that the existence of this perpetually renewable

pre-emption provision will affect the price of the

land. So that if the parties have to go to

arbitration there would be an effect on the price

which would bring the price below market value.

If it ever becomes necessary to go to

arbitration then, of course, that would be an issue

there but for the purpose of these proceedings at

all levels, that is before Mr Justice Rowland,

before the Full Court and, as I have pointed out in

the submissions, it seems to be accepted by the

parties that the effect of the perpetually

renewable pre-emption is that there will be a

reduction in the market value.

The three cases that can be dealt with fairly

quickly are in the volume and I would like to start

with the one under tab 19, which is In re Rosher,

(1884) 26 Ch 801. The facts are adequately set out

in the short headnote. This is the judgment of

Justice Pearson where in this case it was:

A testator devised an estate to his son

in fee, provided always that if the son, his

heirs or devisees ..... should desire to sell

the estate ..... in the lifetime of the
testator's wife, she should have the option to

purchase the same at the price of 3000 pounds

for the whole, and at a proportionate price

for any part or parts ..... The real selling

value of the estate was, at the date of the

will and at the time of the testator's death,

15,000 pounds:-

Held, that the proviso amounted to an

absolute restraint on alienation during the

life of the testator's widow; that it was void

in law -

There is a very learned review of all of the

authorities by Justice Pearson, which I do not go

into, but he did say that the basis for this rule

about not permitting conditions in restraint of

alienation. At page 823, he said:

Nullagine(2) 55 15/10/92

I find that the original rule which says that

you cannot annex to a gift in fee simple a

condition which is repugnant to that gift is a

plain and intelligible rule.

So His Honour's view was that the rule was founded

on the idea that the condition would be repugnant

to the grant or the gift.

TOOHEY J: It seems to me two things arise out of that,

Mr Pullin. One is:  is there any difference in

principle between restraint on alienation attached
to a gift and a restraint on alienation arising

from a contractual arrangement between, in this

case, the co-owners of property? The second is:	I
am still not entirely clear in what sense it is
said that the proviso depresses the price at which
the land can be sold. Just let me put the
difficulty to you and see if I have missed a step
somewhere.

Clause 4(b) confers a right of pre-emption.

The right of pre-emption is to be exercised at a

price to be fixed by arbitration if the parties

cannot agree, that price reflecting the value of

the land. But from what you said a moment ago, the

point is that the existence of a right of

pre-emption depresses the value of the land.	I
just have some difficulty with that in this

context. If the land is to be valued for the

purposes of exercising the right of pre-emption,

why does the right of pre-emption itself become a

factor in the assessment of the value of the land?

MR PULLIN:  Can I say this, Your Honour, that it has been

the understanding of the parties throughout and the

evidence has seemed to suggest it but we would

certainly argue the point that Your Honour is now

putting to me. If we failed on this appeal and we

can only, therefore, follow through the steps of

would certainly be arguing what Your Honour is now	the pre-emption clause and go to arbitration, we
putting to me. We would be saying that the price
must be determined without regard to the right of
pre-emption that would be perpetually renewable.
But we would say on that arbitration that it would
be an irrelevant consideration.

So this is the second point where if we lose

the appeal, and it is on the basis that the

assumption that has been made throughout is

incorrect, then that will also be a valuable

guidance to the parties for any future litigation

to save them wending their way through the courts

again.

Nullagine(2) 56 15/10/92

TOOHEY J:  I did not want to take the Court into an area

that was not the subject of the appeal but I

thought you were using the pre-emption depressed

value argument in some way as going to a restraint

on alienation.

MR PULLIN: Yes, I am, Your Honour, and these three cases -

there are three cases, two of them being conditions

in grants; that is In re Rosher and In re Cockerill

where the pre-emption was at a price which would

result in the purchase of the land below the market value and, for that reason, it was said, "Well, the

rationale is somebody shouldn't try and control the

price of the land at some time in the future after

they've ceased using the land". That seems to be
the rationale, whether you found it in public

policy or as Justice Pearson is, that it is on the

basis of repugnancy when you are talking about

conditions.

But for the purpose of this appeal, if it be

the position, as it appears to be all through, that
the parties have accepted that the existence of
this pre-emption clause and the perpetual
renewability of it will work a reduction in the
value of the land at the arbitration level, then
these cases apply. If this Court reaches a
contrary conclusion and says, "Notwithstanding the

way the parties have conducted the case and these

cases of Rosher, Cockerill and Saliba" - which I

will be referring to - "therefore have no relevance

because they were cases about where the price was

reduced, then that has helped in resolving the

differences between the parties".

But I am now arguing it on the basis that

before Justice Rowland, in all of those places, and in the evidence, as I have indicated in paragraph 3

of our outline, there are an extensive number of references in the evidence and, as I say, even in	the outline of submissions from my learned friend	here today and here yesterday, the proceedings are
steaming along on the basis that there is an effect
on the price.
As I say, that enables us to argue on the basis of these cases that there is a restraint in
alienation. If that is not accepted by the Court, notwithstanding the fact the parties have argued it on that basis for the purpose of these proceedings and it says so, at the arbitration there will not
be any need for a further set of steps through the
courts to have that resolved because there will be
a decisive decision on that point.

DEANE J: But, of course, if the case has been conducted on

the basis of a joint assumption which you are now

Nullagine(2) 57 15/10/92

almost inviting us to disown without argument, it

would raise the question whether leave should be revoked because it would be a most inappropriate

course for this Court to override that assumption

in a context where it has not heard proper argument

on it.

MR PULLIN:  Yes. I am not inviting it at all, Your Honour.

I am just saying that I have got to be realistic. When I look at the clause, I can see the force of

what Mr Justice Toohey has been saying to me and it

occurred to me very early, when I was briefed on

this matter, but then I looked at the way the

parties had proceeded, what Mr Justice Rowland had

said, the fact that it was then put in the course

of argument in the Full Court when I read the transcript and it appears again in my learned

friend's outline of submissions. So I say that

enables me then to argue on the basis of the

authorities that I am now going to refer to. So I

am not trying to draw back from the assumption that

seems to have allowed these proceedings to steam

along as they have.

BRENNAN J: But the problem is rather an intractable one, is

it not, because the proposition that Justice Toohey
put to you is a proposition which is derived as a

matter of construction from the clause, not from

any fact?

MR PULLIN: Yes.

BRENNAN J:  And your contention is that the clause, properly construed, imposes a restraint on alienation?

MR PULLIN: Yes, but on the basis of the assumption that has

been made for the purposes of these proceedings to

date and I know that that can lead to an artificial

result but assumptions are often made by parties

which the courts do not question and if that	assumption is simply stated and accepted but noted	that maybe it is not a correct assumption then the
matter can be dealt with on that basis. But I am
in the Court's hands. I recognize what
Justice Toohey is saying to me but I point to the way the matter has been dealt with to date.

BRENNAN J:  No doubt you have considered questions of issue

estoppel?

MR PULLIN:  Your Honour, I do not know whether issue

estoppel is likely to arise because it has been

dealt with on this basis and I have looked for it.

There has been no agreement on this at all.	It
simply proceeded through on this basis and we

certainly would not want to find ourselves in the

position where if it came to the arbitration there

Nullagine(2) 58 15/10/92

was a limit because of the way the thing had

drifted along without there ever being any final

agreement. I think if that were the position, and

not knowing whether we were going to definitely

succeed on the appeal, we would not want the matter

to be dealt with on the basis that the assumption

was correct, if it is going to bind us at some

later date and we lost the appeal. If we win the

appeal it all becomes irrelevant, of course.

So that is the difficulty, Your Honour, and I

do not know that I can do anything better. That is

the stage that seems to have been reached. Really,

the position seems to have been reached that the

parties have argued it through on this basis. If

later on we have to have an argument in the

arbitration because we failed on the appeal then

the parties will address that problem. Now, there

it is and I am glad that I have had the opportunity

of making this absolutely clear in these

proceedings.

DEANE J: That is one way of describing what you have done.

MR PULLIN: I hope it does not wend its way - I hope we are

successful in the appeal and it does not have to

wend its way through any other courts, Your Honour.

In any event, on the basis of the approach

that the parties have taken, it then does bring in

these cases. In re Rosher was certainly a

condition in a grant and not a contractual

arrangement. As I say, Justice Pearson said that

he thought the rule was explained on the basis of
repugnancy. If that were the only basis for the

rule, it would not seem to help when you came to

contractual restraints on alienation because no

grant has taken place in the contract.

This seems to have been recognized by various

writers and judges and there is an article right at

the end that I have included which is quite early

in time. It is an article by Edward Jenks in The

Law Quarterly Review. It is under tab 25.

BRENNAN J:  You do not need to read this, I take it?

MR PULLIN: No, I do not. It just says that:

The rule is sometimes justified -

on the basis that it -

is 'contrary to the nature of the estate'.

But in truth it rests on no such doubtful

justification. It is, or was, a fundamental

Nullagine(2) 59 15/10/92

rule of English law, based on broad

considerations of policy.

The same is said by an American writer under

extensive review of the American position and

tab 23, Merril Schnebly, Restraint upon the

adopts the same approach and says it is based on

the idea that land should be circulated and not

tied up. It does not suit the interests of

commerce at all to have land tied up and landowners

seem absolutely determined to try and tie land up

after their death and for future generations. It

is a bit of a human aspect of behaviour to try and

achieve that tying up.

The next case, Your Honours, is In re

Cockerill, which is under tab 20, (1929) 2 Ch 131.

This is a case where - from the headnote, I am

reading the facts - there was:

A testator, by his will, devised land

to P -

with -

the proviso that if within twenty years of the

testator's death P should desire to sell the

land, he was to give the Governors of the N

Grammar School the option of purchasing the

land at the price of 300 pounds an

acre .... The land ..... was in fact worth -

much more -

670 pounds an acre at the date of the

testator's death.

It seems a rather mean result on the facts because what happened is that if it was passing pursuant to

that provision the governors of the school would

have to pay the estate duty and what happened was

that in compliance with the condition P, who was

the person involved, offered it to the school

at 300 an acre and it was accepted and then there

was an argument about who had to bear the estate

duty and the governors then argued that the

provision was void, there was a restraint on

alienation and that, therefore, it must have been a

voluntary sale because it could not have been

pursuant to that condition and, therefore, poor old

P had to pay the estate duty having sold at this

depressed price, thinking he was bound by the

condition and there was a comment.	I will just
read one sentence, at page 135:

Nullagine(2) 60 15/10/92

The devisee in this case is not restrained

from selling to a particular person, but from

selling it to anybody but a particular person,

and this, in my opinion, creates a state of

facts not to be found in any reported case in

which a condition imposing partial restraint

has been treated as an exception to the

general rule that "the owner of property has

as an incident of his ownership the right to

sell and to receive the whole of the proceeds

for his own benefit."

And there is a reference to Muschamp v Bluet and

In re Rosher and cases which are on that summary

that I gave.

Now, both of those were conditions in grant cases and the final of this group of cases was the

one back under tab 18, a more modern case, a New

South Wales case, Saliba v Saliba, which was dealt

with by the Chief Justice in his judgment, (1976)

Qd R 205. And this has a number of similarities: there was a plaintiff and defendant who were

tenants in common of some land; there was then a

supplementary agreement where there was a

pre-emption provision or an option provision giving
the other the right of - it was a pre-emption -

first refusal to sell it for $4,075 being one-half

of the purchase price of the land. And the value

of the property at trial was $22,000, and it was

held that the agreement was against public policy

and void, and there is a reference by

Mr Justice Kneipp on page 206 to the authorities,

many of which I have referred to, and there is a

reference to a case that I did not mention when I

was dealing with Hall v Busst, that is a case of

Crofts v Beamish, (1892) 2 IR 349, which was

referred to by Justice Fullagar in his judgment of

Hall v Busst. I will just refer to that briefly a

little later.

Now, that is a case of a contract imposing the

restraint, and that is the same as we have here.

But it was based upon the kinds of cases that I

have been referring to in Re Rosher, which was the

case concerning a condition. So that stood as an

authority which had to be dealt with by the Court,

and the Chief Justice did deal with this but in

doing so, as I say, ignored the assumption that has

been made by the parties without there ever having

been a formal agreement. He said this at page 207

of the appeal book, opposite line 30. His Honour

says:

In my opinion there is no substance in

the appellant's contentions -

Nullagine(2) 61 15/10/92

that is dealing with the contention that the

pre-emption clause was a limit on Nullagine's right

to secure an order for power of sale, and I have

dealt with that argument already.	And then he goes
on at line 40:

In Saliba v Saliba ..... an agreement was entered into in 1967 -

and he states the facts, and he mentions the fact

that "the property was valued at five times" the

price which had been set in the pre-emption clause:

It was this fact that led Kneipp J to hold

that the agreement was void and provided no

obstacle to partition or sale. Here the

purchase price would be half the present value

of the land.

Now, His Honour, as I say, has ignored the fact

that the party seemed to approach it on the basis
that that was not the assumption to be made for the

purpose of these proceedings, and if you restore

what is being said by the other side that it does,

and as I say, the assumption for the purpose of

these proceedings, then Saliba has to be dealt
with. His Honour did not deal with it because he

ignored that assumption.

Now, finally, Your Honours, I want to refer,

by way of cases, to the case of Reuthlinger

v MacDonald which I handed up.

BRENNAN J:  Can I just take you back to your last

proposition for a moment.	You say His Honour
ignored the assumption?

MR PULLIN: Yes.

BRENNAN J: There has been no agreement.

MR PULLLIN: There has been no agreement, no.
BRENNAN J:	Whence does the assumption arise?
MR PULLIN:	Your Honour, as I say, I have given the references to it in paragraph 3, and perhaps I
should give those references - - -
BRENNAN J:	No, I do not think it is necessary to repeat

them, but I just wonder whether it is right to

describe it as an assumption in the absence of

agreement, or whether His Honour here has perhaps
adopted the view that Justice Toohey put to you and

has simply proceeded on that basis.

Nullagine(2) 62 15/10/92

MR PULLIN:  Your Honour, it does put us in a difficult

position because it was the position at the trial,

and I was not involved at the trial, but it was

actually put in evidence by counsel for the Club

that this was the effect, and I have given the

references in paragraph 3, which suggested that

that was the effect, and certainly Justice Rowland

has noted it several times in his judgment. And as

I say, I had a look at the transcript in the - it

appeared to be the same in the Full Court, what was

being put, and I will give a reference for my

learned friend's purposes if he wishes to deal with

that himself. So it reached that point and

His Honour then simply - he did not deal with it;

just stated in a sentence something that had not

been argued. I suppose the same problem arises

that His Honour then decided it without having

heard argument because the parties were steaming

along on the basis that it had this effect.

BRENNAN J: Yes.

DEANE J: Mr Pullin, can I divert you for a moment. This

restraint against alienation is a common law

doctrine, is it not, and purely common law?

MR PULLIN: Yes, I believe so, Your Honour.

DEANE J:  I am not trying to bind you to that. But in this

case there is no restraint on the alienation by

both owners by agreement. Well, now, if restraint

on an alienation is a common law doctrine, how

could it apply to sale by one co-owner in a

situation where the common law remedy, in terms of one co-owner, was primarily directed to partition?

MR PULLIN:  It was a remedy provided at common law and then

equity stepped in purely to assist because of

procedural problems that had developed. So the

remedy of partition was both an equitable remedy

and a common law remedy.

DEANE J:  I have put that badly, but I have difficulty in

translating the basis of the doctrine against

restraint on alienation of property and the history

of it to a restraint on alienation, not of the
property itself but of a limited interest in the

property.

MR PULLIN: But, Your Honour, the transfer or alienation of

property, the property never moves in the case of

real estate; all transfer of property consists of

a transfer of a bundle of rights.

DEANE J: Yes, that is so. I have put it badly. I have

trouble in seeing how the regulation between

themselves of the persons holding the individual

Nullagine(2) 63 15/10/92

rights in the property, which is always subject to

their right to alienate acting together, has

anything at all that attracts the doctrine of

restraint of alienation of property.

MR PULLIN:  We would submit that the same principles apply.

Whether or not they have a right together to sell

the land, which is to sell a bundle of rights,
applies equally to the right of an individual to

sell his bundle of rights in relation to that land.

DEANE J:  I follow that, and I do not want to delay you, but

I felt I should raise with you something that does

not appear to me to be self-evident.

MR PULLIN: Yes, and obviously I am not fully understanding

the point, Your Honour, because I - - -

DEANE J:  What I am putting to you is this: I fully

understand the rational basis of the doctrine

relating to restraint on alienation of property.

Now, it does not seem to me to be self-evident that

in a context where you are not concerned at all

with joint action of the owners of the property,

internal arrangements, whether they be contractual
or otherwise, between them as to their respective

rights in relation to some of the incidents of

ownership comes within the content or the rationale

or the doctrine of restraint against alienation.

MR PULLIN: Yes. I give two answers which is the one I have

already given which is that it is still property -

the fact that there is a co-owner with limited

rights dealing with his property, we would say that

the principle should apply in that case as well.

The other aspect that Your Honour might be hinting

at is the approach taken by the Court of Appeal in

the Caldy Manor case in England, which is very much
to say, "Well, look, the grant is clean, that is
the conveyance has got no conditions in it so the

land can be freely conveyed, it has no condition in

it." When it comes to a contract the parties are

allowed to regulate their rights in relation to

that land and there is no basis for applying the

rule. That is really the English position.

But we would say that that is quite an

artificial position in reality because

Lord Justice Russell in the Caldy Manor case said

that, "Well, the land can be alienated freely,

there is no restraint on that. So far as the

contract is concerned there may be damages which

would arise because of the personal promises made

by the parties, and, sure, there may be an

injunction granted which might bring about the same

result but that is a matter of discretion and might

not be granted". Now, that seems, with respect,

Nullagine(2) 64 15/10/92

very artificial because the reality is an

injunction will be granted.

DEANE J: No, what I am really putting to you is: it is not

self-evident to me that joint tenants or tenants in

common cannot, by agreement between themselves,

vary the individual rights flowing from their

interest in the land, and that while doctrines of

restraint of alienation would affect something that

limited their ability to deal with the land, it

simply has nothing to say as to the variation

between themselves by agreement of their respective

rights and entitlements.

DAWSON J: Can I add something to that. Joint ownership is

really of itself a restraint on the alienation of

land so far as the joint owners are concerned. You

have to get rid of it before you can alienate it
without ..... and what Justice Deane is saying, that
they reorganized that situationJ merely

reorganization and nothing more.

MR PULLIN: Yes, but, Your Honour, we would see it -

ownership of land, as I have said before and I am

sorry for repeating this, but it is simply a bundle of rights, it is not the land itself that one owns;

one owns rights and has certain remedies which mean

that when you bundle them altogether, one ends up

with property.

DEANE J: But the doctrine of restraint on alienation has

not developed in that way really, in that

underlying it is an equation of the right to behold

and the property itself, in terms it has been

concerned with tying up whatever you care to put

under the feudal system or however you care to

approach it.

MR PULLIN: Yes, but the policy, Your Honour, can be seen -

first, it is a matter of degree. In the	Wollondilly case, Justice Young makes the point
For example, and Mr Justice Needham mentions this
in Reuthlinger. One can mortgage land for 50 years
- well, that seems to be a restraint because it is a certain restraint if you transfer the land
subject to the mortgage, one can lease the land for
very long periods of time. Certainly the law has
developed certain exceptions to this blanket
statement and so it is always a matter of degree.
But the problem in this case, we say, is that it is
an attempt to perpetually tie up the parties and successors by this arrangement, and what is wrong
with it, in terms of policy, is here is an owner -
a present owner - saying, "I am going to control
what happens to this land even when I no longer
have anything to do with it".

that of course some restraints are permissible.

Nullagine(2)	65	15/10/92
DEANE J:	I will stop after this.	It seems to me you beg

the question when you say "a present owner". You

might as well say, when you have got successive

interests in land, the present owner can say, the

doctrine of restraint on alienation extinguishes

the interests of the owner of the residue.

MR PULLIN: Yes, and one can see the policy working there

with the rule against perpetuity.

DEANE J: Yes, but that is a different rule.

MR PULLIN: It is a different rule, Your Honour, but what I

had hoped to do at the end was to say this is just

one aspect of a whole lot of rules which are

designed where equity has worked, the common law

has worked and the legislature have all worked in a

determined fashion against those land owners - and

there are lots of them, because the cases throw

them up and it appears to be as, I think

Mr Justice Young said, the expression he used was,

a favourite sport of 17 century land owners, to try

and tie up their land for ever and that was how the

entails estates tale developed and the struggle

that went on with fictions and the like to try and

avoid that happening. Now, it is a matter of

drawing the line and we say that the law has to be

drawn in this case, because while pre-emption

arrangements have been held to be acceptable, and I

would not want to argue against that.because they

have been around for a long time and courts in this

country and in England, of course, have accepted

that as one of the dealings with land that is

permissible, such as mortgaging, such as leasing,

but when one gets to this situation where the owner

says, "Well, here is something that I would like to

happen, but I am now going to control all

successive owners for all time while the land

remains in this state", and we say that is what is

wrong with this case.

And, further more, if the price is depressed,

that has that aspect which is unacceptable, was

mentioned in Saliba's case as being the basis for

the unacceptability of the restraint in that case,

and it is mentioned in that case that I referred to

in Justice Fullagar's judgment, which I have not

taken you back to, but I will mention it a little

later, because he mentioned that as the case where

there was an arbitration where the price was to be

determined by "three country gentlemen", I think

was the expression.

So, I can understand that in essence

Your Honour is saying to me, some restraints are

permissible and I could not dispute that at all; it

Nullagine(2) 66 15/10/92

has to be a matter of drawing the line and we say

the line has to be drawn in this case.

BRENNAN J: Is there any instance where a doctrine of

restraint on alienation has been applied to a

partial interest in land?

MR PULLIN: Well, Saliba is a case, Your Honour. The Saliba

case was, in fact, a case like this, tenants in

common, and in fact it was struck down for the

reason that it involved a setting of the price

which was well below market value, based upon

Rosher and Cockerill, which were the same things,

but at conditions in grants, not contractual

arrangements.

TOOHEY J: But it was struck down as being against public

policy.

MR PULLIN: Yes.

TOOHEY J: Well, it is not by any means clear in what way it

was against public policy.

MR PULLIN: Well, except that Rosher was referred to,

Your Honour, and the cases that - I think Rosher and one of the other cases - which are clearly

restraint on alienation cases. That is in the case

of Saliba, Your Honour?

TOOHEY J: Yes, but the trial judge does not seem to have

addressed the distinction between restraints on

alienation and restraints that arise from some

contractual arrangement between the parties. So,

it is a question as to what the decision is

authority for.

MR PULLIN: Well, except that, of course, he had the

authority of the High Court in Hall v Busst, which had said - he had the authority of the decision in

Hall v Busst, to that effect.

TOOHEY J:  I take it this case did not go any further?

MR PULLIN: Which, the Saliba case?

TOOHEY J: Yes.

MR PULLIN:  Not that I am aware of, no. And I suppose that

brings me to a judge who I know is highly respected

in New South Wales; that is Justice Needham in the

Reuthlinger v MacDonald case, and it was down at

the bottom of my list of cases to be mentioned but
not referred to in detail, but I thought it would

be cowardly not to confront this case, because

Justice Needham is definitely against Hall v Busst

and if left to his own devices would say that Hall

Nullagine(2) 67 15/10/92

v Busst should not have reached the conclusion that

it did, so I thought I should refer to that case at

the end, rather than let Your Honours read it and

consider - - -

BRENNAN J:  You would like to draw its own frames, would

you, Mr Pullin.

TOOHEY J: Sounds a fairly pessimistic note to end on,

Mr Pullin.

MR PULLIN: It does, Your Honour.

TOOHEY J:  What is the reference, Mr Pullin?

MR PULLIN: It was handed up, Your Honours, yesterday, not

in the book. It is Reuthlinger v MacDonald (1976)

1 NSWLR 88 and as I say, it was handed up and I

would like to refer to that case, Your Honour.

BRENNAN J: Yes.

MR PULLIN:  From the headnote it can be seen that

Mr Reuthlinger and his wife owned some shares and then at the bottom of that first full paragraph in

the headnote, there was a sale of the shares or an

arrangement concerning the shares and then:

MacDonald -

who was the other party -

bound himself not to transfer the shares, or

give any transfer notice to the company, until

the shareholding of Mr and Mrs Reuthlinger

should be greater than that of all the other

shareholders, other than MacDonald.

MacDonald sought to ignore that restraint and:

Mr Reuthlinger sought an injunction against

the transfer of the shares.

And from the headnote it can be seen that it was

held that the agreement was not void.

Paragraph (2), first:

(2) The doctrine ..... applies to personalty as

well as realty.

(3) This doctrine applies also to contractual

restraint, unrelated to the grant or

transfer of property -

on the basis of Hall v Busst and you will see from

the headnote that the conflict between Caldy Manor

Nullagine(2) 68 15/10/92

and Hall v Busst has been noted and His Honour has

followed, of course, Hall v Busst, not Caldy Manor.

And then, if I can take the Court to page 94

and there is a heading, you will see:

Alleged voidness of agreement.

And His Honour said:

Primarily, the question was whether the doctrine of the invalidity of total restraints

on alienation of property applied to merely

contractual restraints, as opposed to

restraints imposed in a gift by will, or in a

conveyance, or transfer inter vivos. If the

doctrine did apply, the question arose whether

the restraint imposed was a total restraint

within the meaning of the authorities; a
subsidiary element of the question was whether
a restraint otherwise invalid could be imposed

in aid of a lawful collateral purpose.

And on page 95 His Honour said, at the bottom of

the page, just above G:

I know of no authority which suggests that an

option to purchase, or a right of pre-emption,
granted by contract between capable parties

unconnected with the transfer of property -

and when he says that he is distinguishing away re

Rosher and re Cockerill because they are such cases

would be void at law merely because the price

fixed was substantially below the market

value.

Now, in fact this judgment was handed down on	8 March 1976 and Saliba was handed down some months	later, so His Honour could not have been or was not
aware - well, Saliba had not been decided. But
Saliba is such an authority now - and also to this passage that I do not think I referred to
yesterday. It is just a passage in Hall v Busst
that I would like to refer to. Can I take the
Court back to that decision. It is under tab 17 on
page 225, because His Honour Justice Fullagar in
that case had made that statement. It said, at
page 225:

It is true that, on my construction of the

deed -

Nullagine ( 2) · 69 15/10/92

this is remembering the Hall v Busst case with the

clause 3 which Sir Owen Dixon had said stood on its

own and was a restraint, whereas Justice Fullagar

said, "Well, it can also be read" and he read it

"as part of the pre-emption arrangement" and still

struck it down, and this is what he said, it is

just a few of sentences:

It is true that, on my construction of the

deed, it is possible to get rid of the
restriction. But the appellant can only get
rid of it by giving to the respondent an
option of purchase at a fixed price. She may

not wish to alienate for many years: the

restriction is of indefinite duration.

Now all of these things apply to our case.

She may then only wish to let the property for

twelve months or to mortgage it for a few

hundred pounds.

Same thing here; remember ours is a total restraint

on all dealings with the property.

But she cannot sell or lease or mortgage

without giving the option of purchase to the

respondent. And, when she does wish to

alienate,the property may be worth a great

deal more than 3157 pounds plus and minus the

items mentioned in clause 5: it was apparently

in fact worth nearly three times that sum at

the end of 1957. I feel no doubt that the

restraint is repugnant and void.

So that statement stood and was accepted, as I say,

by Justice Menzies, which is really contrary to -

well, it was a statement contrary to what

Justice Needham was saying. It is true that there

was no decision of all the Justices on that point,

so strictly speaking Justice Needham is correct

when he says there is no authority, but there are certainly clear statements to that effect in that

judgment of Justice Fullagar.	Then if I could take
the Court to page 96 - - -

TOOHEY J:  Mr Pullin, I am just having some trouble with

your analysis or reliance upon your reference to

this case. You are not seeking to pull down

Hall v Busst; you rely on it. In the case that you

are dealing with now, Justice Needham expressed

some reservations about the scope of what was said

in that case and what was held by it, and going so

far as to say if he were free to decide the issue,

he would hold that the doctrine of restraint

against alienation does not apply to contractual

restraints unrelated to the grant or transfer of

Nullagine(2) 70 15/10/92

property but, as he said, he is bound by

Hall v Busst and there it is.

MR PULLIN:  So he is.

TOOHEY J: Well, unless Mr Heenan seeks to attack

Hall v Busst, and there is no suggestion, I think,

in his written submission that he does, is that not

our starting point?

MR PULLIN: Yes, there is only one aspect that - it is the

basis for the rule against restraint on alienation,

which is mentioned and I would like to just refer

to that, Your Honour, and I am coming to that point

now, because His Honour deals with the Caldy Manor

decision on page 96, if I could just mention that,

between D and F, and there is a quotation from that

judgment where, as I have said,

Lord Justice Russell said, "Well, it might be a

breech of contract, but you can still clearly

alienate the land", and we would say that is quite

artificial as a distinction and the point is then

made by His Honour on page 99, and.this was the

point I was going to lead to, and it is the last

reference that I wish to make to this case. At

page 99, His Honour refers to an article by

Glanville Williams in the Law Quarterly Review and

attacks:

the doctrine of repugnancy -

and at some stage quotes Glanville Williams as

saying that -

the doctrine of repugnancy ..... is a useless

piece of medieval lumber.

But all His Honour is saying there is that the

basis for this rule on restraint in alienation is

not founded on the doctrine of repugnancy; it is

founded in public policy; and I have indicated that

there are various articles that indicate that that

is the proper basis for it, not the doctrine of

repugnancy, and the doctrine ·of repugnancy could

not explain the rule in so far as it relates to

contracts.

And then he says this, and this is the last

reference, just under B:

Part of Williams' attack on the logical basis

of the doctrine could be summarized as

follows: "The doctrine applies to conditions

or executory limitations; there is no logical

distinction between restraints so imposed and

those imposed by contract; but the latter are

Nullagine(2) 71 15/10/92

not within the doctrine; ergo the former

should not be."

And then His Honour says:

It seems to me, with great respect to

Chief Justice Dixon, that Williams' views cannot be used to justify the converse

argument, ie: "There is no logical distinction

between restraints imposed by conditions or

executory limitations on the one hand and by

contracts on the other; ergo, contractual

restraints should be added to the list of

restraints void under the doctrine of

restraint on alienation."

And then he says, "If I were free I would decide

Hall v Busst the other way". But we say, with

respect, the contrary; we say, why should there be

this artificial distinction, that if you impose a

condition which is bad in a grant, that you can

avoid having it struck down by just taking it out

of the grant and putting it in a supplementary

contract and then enforcing that by injunction, and

it just seems an artificial distinction and we

would respectfully accept the summary of

Justice Needham's view as to what

Glanville Williams was saying as being the proper

approach. And then, of course, it comes down to

the matter of degree and whether or not this case

is to be regarded as an impermissible restraint on

alienation.

I would just like to close by mentioning the various policy approaches of the court - and I can

do this very quickly - which indicate part of the

overall approach of, as I say, common law equity

and the legislature, that bring about a situation

preventing people trying to tie up land in ways

that are unacceptable. Justice Young in the

Wollondilly case said that chancellors had to

invent the modern rule against perpetuity in order

to put a brake on what appeared to have been the

18th century Englishman's sport of trying to

control his land after his death. We have the

fundamental concept of quia emptores of freely

alienable property, of course, as the start of the

whole concept. We have the collusive actions and

fictions allowed at law which enabled entails to be

barred; so stopping the tying up of land in that

way.

In case it is thought these are all ancient

rules and things have changed, we now have the kind

of restrictions that can be seen in modern

legislation. In the Property Law Act an option to purchase land is limited to a life of 21 years and

Nullagine(2) 72 15/10/92

then it becomes of no further operation. That is section 110(2) of our Property Law Act, and if an

option is to be struck down on that basis after

21 years, what really is the difference between a

pre-emption and an option? I know that one can say

that the option probably gives an interest in land,

but there is a view that even a pre-emption clause,

once the circumstance arises giving the right to

have the opportunity to purchase that an option

arises there. So why should there not be

consistency between options to purchase land and an

approach to say that an attempt to tie up land in

the way of using the pre-emption device should be

all right? And we say that the same policy should

be carried through in relation to pre-emptions.

Leases or licences to occupy land for more

than 10 years are void under our Town Planning and

Development Act unless they are approved by the

Town Planning Board, and there is an attempt by

government to make sure that there is some control

over long leases by requiring approval. And

partition legislation itself is part of this

overall policy introduced as a common law remedy by

the creation of a writ. Then the stepping in of

chancery and equity to allow the remedy, when the

common law remedy did not look as though it was

working very well.

Now, all of those things indicate the appropriate approach of the law and give guidance

to this Court, we would submit, in viewing this

provision and deciding whether or not it steps over the bounds of permissible restraints. They are our submissions, may it please the Court.

BRENNAN J: Thank you, Mr Pullin. Mr Heenan.

MR HEENAN: 

May it please, Your Honours, we rely on the findings and conclusions of Their Honours in the

Full Court and in particular on the reasoning of	the Chief Justice, with only two minor and, we
would suggest, inconsequential qualifications.	The

first is as to the prominence which His Honour

the Chief Justice has given to the question of

whether the deed of occupation conferred a lease of

the defined areas of premises to the parties or

only a licence.  We certainly argued at first

instance and in the Full Court that it did confer

the lease.  We maintain that argument. We suggest

that the conclusion is correct and irrefutable, but

it is only one part of the case and were the
decision on that issue to be different, that would
not affect our outcome. This was recognized by

His Honour Justice Pidgeon and, in any event, the

learned Chief Justice accepted our alternative

submissions that clause 4(b) would endure for its

Nullagine(2) 73 15/10/92

effect, even if the parties only had a licence of
the defined areas of the premises, and that

conclusion on the alternative submission is to be

found at page 27 line 40.

The only other slight qualification that we

would entertain about the reasoning of the

Chief Justice is a product of a decision of the

House of Lords which has been given, or at least

published, since this case was argued and decided. And that decision, which is not on our list, and I

mention it only for the information of the Court,

is Hammersmith v Fulham London Burrough Council v

Monk (1991) 3 WLR 1144. That case is also the

Law Quarterly Review of this year. That case dealt with the question of whether one of two joint tenants could solely terminate a lease to the two

subject of a note in volume 188 of the

joint tenants of rent controlled premises in London

and it was held by an examination of the

authorities dealing with joint ownership for a

periodic tenancy that notice by one would be

sufficient to terminate the tenancy. And that

decision might - I stress no more than might - call
for some reconsideration of His Honour's

conclusions about the capacity of the parties

unilaterally to terminate the lease of the car

park. That, as I indicated, is inconsequential for

the present appeal, although I considered that I

should bring the existence of that authority to

Your Honours' attention.

Your Honours, much has been made by my learned

friend of an alleged assumption between the parties

as to the effect of clause (b) on the operation of

which a price for the purchase of a half interest

in this land would be determined in the manner that

the case was conducted at trial and on appeal and

assumed between the parties.	I suggest, with
respect to my learned friend, that he is mistaken

in his understanding as to what the position

between the parties truly was and as to how the

litigation was conducted at a time, of course, when

he was not counsel, but it is necessary for me to look very briefly at the pleadings and the manner

in which the case was conducted in order to

elucidate this.

Can I take Your Honours to the statement of claim on page 1 of the appeal book. It is an

entirely simple and conventional plea for an order

for sale in lieu of partition reciting no more than

the co-ownership of the land in a claim by the

co-owner or partitioner. In the defence and

counter-claim at pages 3 and 4, the objective facts

are admitted and there is the plea of the

Nullagine(2) 74 15/10/92

occupation deed; there is the plea by the defendant
of the failure of the present appellant to follow
the clause 4(b) procedure of offering to sell its
interest at a fixed price and then agreeing in the

event of a dispute that the matter should go to

arbitration.

And that failure is admitted in the reply on page 7 and then in the counter-claim on page 5

there is a specific claim for a stay of proceedings

and a declaration that the appellant can only

dispose of its interest in the land in conformity

with the clause 4(b) procedure. That claim is

analogous in pre-judicature terms to a suit in
equity to restrain the pursuit of the action in a

common law court, but by virtue of section 25(10)

of our Supreme Court Act, it is converted into an

application for a stay and that application was, in

the event, successful, and the order in the

Full Court was to make a declaration that

conformity with the clause 4(b) procedure was

necessary for the appellant to sell its interest.

Now, the significance of that counter-claim is that by paragraph 13(b) it squarely sought a

declaration as to the efficacy of clause 4(b) and

we submit that if there,was to be a defence that

clause 4(b) was illegal and unenforcible, because

it contravened the rule against freedom of

alienation on any similar rule, it was necessary

for that to be pleaded specifically, and that is

simply the product of the common pleading rules

that we have; our rule, Supreme Court Order 20 rule

9 is comparable with the English rule 8, which

provides that, in any case where there is an

intention to rely on a plea of a statute of

limitation or illegality or any matter of surprise

or any fact or matter which would make the claim

not maintainable, it must be specifically pleaded,

but there was no plea in defence to the

counter-claim, dealing with the question of

restraint on alienation. And indeed, a question of

restraint on alienation received almost no

attention when the matter was before the court at

first instance, and that was because of the manner

in which the appellant put its case.

The manner in which the appellant put its case

at first instance went like this, that under the

occupation deed there were no rights at all

conferred on the parties after the expiration of

the first 10 years and that clause 4(b), whatever

effect it had, lost that effect by effluxion of

time in 1986. And further, the appellant's

position at first instance was, as was found by

Mr Justice Rowland and overturned by the

Full Court, that the occupation deed did not create

Nullagine(2) 75 15/10/92

any estate or interest in land, but just a mere

licence to occupy. And, in those circumstances,

the only significance of the doctrine of restraint

on alienation lay, in our submissions, that the

authorities permitted a contractual limitation or

surrender of the right to partition by the grant of

the right of pre-emption or by any other fashion,

so long as that did not amount to a restraint on

alienation. And that is the position we put, and

that position was accepted by His Honour

the learned trial judge, but the decision at first instance turned on his construction of clause 4(b)

in that it expired in 1986.

Now, in the Full Court we appealed on the

grounds of the construction question, also

asserting that the occupation he gave us stated

leasehold and asserting that we did have an equity

which would justify intervention by remedy

equivalent to an injunction. All those submissions

were upheld and His Honour the Chief Justice dealt

with the question of a restraint on alienation on

the footing that no notice of contention had been

filed by counsel for the present appellant.

Your Honours, that deals with the question as

to the significance of the issue of the restraint

on alienation but there are other areas as well in

which the conduct of the proceedings below are, in

our submission, important.

BRENNAN J:  You say that the question of restraint on

alienation cannot be the foundation of the judgment

of this Court, having regard to the way in which

the litigation was conducted below?

MR HEENAN: Well, Your Honour, it certainly was not argued

for the appellant at first instance. There was

some qualified attempt to rely on it in the

Full Court but without a notice of contention, and

hence the condition that has been imposed on the

grant of special leave, that if elucidation of the
question of restraint on alienation requires the
recepti.on of further evidence, then the appeal must

fail. In my respectful submission, that condition

would appear to reflect a recognition by the Court

that if this were purely a question of law which

could be determined authoritatively, and reliably,

without the need for further evidence, then it
would be appropriate for it to be dealt with here.

But if, as we contend, that the questions of the

reasonableness of the restraint meaning that

further evidence on the question is needed, it is

not appropriate for the Court to deal with it and

resolve it on this point. And that, in our

respectful submission, appears to be consistent

with the condition imposed.

Nullagine(2) 76 15/10/92

BRENNAN J:  So your point is really one of whether or not

reasonableness of a restraint, if the Court should reach that point, requires the adducing of further

evidence?

MR HEENAN:	Yes, Your Honour.
DAWSON J:	And what do you say we should do, rescind special

leave?

MR HEENAN: Well, Your Honour, we would say that we could

meet the arguments of the appellant to show that

there is no restraint on alienation which the law would condemn, imposed by this provision. But if the Court were against us on that, we would say

that on the question of whether or not the
restraint was reasonable, it would be necessary to
take further evidence and consistently with the

condition, the appeal should be dismissed.

DEANE J:  Or if that position were reached, it was not open

to the appellant to argue that the restraint was

unreasonable?

MR HEENAN:	Yes, Your Honour.
DEANE J:	Which I think was my understanding of the

condition.

MR HEENAN:  Yes, Your Honour. Your Honour, can I come now

to the question of the so-called assumption upon

which it is alleged the parties have proceeded, and

this affects the price that would be payable under

the two eventualities contemplated by clause 4(b).

Clause 4(b) can be found in a number of passages in

the appeal book, but one convenient place is in the

judgment of the Chief Justice, pages 169 to 170.

As the result of my learned friend's

submissions made a little while ago this morning,

it is quite plain that it is the appellant's belief

that we contend that evaluation conducted at an

arbitration contemplated under the provisions of

page 169, line 25 and thereabouts, contemplate that

the selling price, which the contract contemplates

as being:

at a price equal to FIFTY per cent of the

value of the Land at that date -

It does not mean that at all, it means the selling

price of the land subject to a self-perpetuating

right of first refusal, requiring success of

purchasers to enter into a deed of covenant. Now,

that is not a position which we have ever put in
these proceedings, not at first instance and not in

the Full Court, and we do not put it now.

Nullagine(2) 77 15/10/92

It is evident that my learned friends may have

misunderstood our position. We suggest that we

have never once done anything to encourage any such

apprehension.

There is a contrast between the two prices

which might be fixed by clause 4(b). The

arbitration price is, and if I may repeat and

simply quote:

FIFTY per cent of the value of the Land at -

the date of arbitration. Simply that. Now, if it

is not sold pursuant to the arbitrated value, the

co-owner is then free to sell to any third party in

the next succeeding twelve months on any terms, and

at any price that he can achieve - that is the

effect of the balance of the clause at lines 40 to

45 - subject, however, to the condition that he

must procure the purchaser to enter into a deed of

covenant to comply with the terms of the occupation

deed, namely a perpetuation of the right of first

refusal which, in turn, by implication denies

access to the remedy of partition or sale in lieu.

Now, when we put to the appellant's witness

that the effect of the deed may be to depress the
price, it is only in relation to that second
potential method of sale that the depressive effect

applies, because the third party would not be

paying presumably 50 per cent of the value of the

land, he would only be buying a one undivided half

interest with the co-owner with whom he would,

presumably with little prior contact, or possibly

no prior contact. So, in the first place the value

of the one undivided half share does not

necessarily equate with 50 per cent of the value of

the land as a whole, but secondly, by entering into

the deed of covenant, that new co-owner would be

accepting the absence of the statutory remedy of

partition and would be acknowledging that he had no

potential to acquire the opportunity to force a

sale and make a profit from reacquiring an

opportunity to sell, to participate in an equal

division of the sale of the entirety.

That is the only sense in which we suggested

that the operation of the clause would depress the

price. And, Your Honours, can I take the Court

very briefly to some evidence to some evidence of

the appellant's witness, Mr Michel? It is page 24,

line 50 in his cross-examination.

Was it the case that when Laredo -

Laredo is the company which presently holds the shares in Nullagine. Perhaps I should go back a

Nullagine(2) 78 15/10/92

stage; Nullagine was the company controlled by a

Mr Tony Motion and others who purchased the half

interest in the club subject to these occupation

deeds in 1976. At some later stage Mr Motion

relinquished their investment in this property, not
pursuant to the occupation deed but by selling the
shares in Nullagine, so Nullagine was, in effect,
taken over by the company, Laredo, and the sale of
the interests was effected without triggering any
mechanism which required the implementation of
clause 4(b) and, of course, that opportunity
remains open, but that is not what we are talking

about. But, Laredo is the company presently

controlling Nullagine after that takeover.

Mr Michel was asked whether, at the date of the

negotiations for the takeover, Laredo had access to

the documents being, among others, the occupation

deed, and it was acknowledged that it did, and at

page 25, line 15:

From what you have said, we are to assume, I

suggest, that the present shareholder of

Nullagine, namely Laredo, was aware of the

restrictions in the occupation deed and in

particular clause 4B?---It was aware of the

deeds and it was aware of the expiry date.

It knew that it couldn't have purchased

Nullagine's half interest in the club without

going through the procedure laid down in

clause 4B in 1981? -

the date of takeover:

That's correct.

And then at the foot of that page 25:

If the deed is valid, any purchaser of

Nullagine's interest would have to be willing

to enter into a deed of covenant?---That would

possibly be correct.

These questions are obviously directed, not to a

sale for the other co-owner under the valuation

provisions of the pre-emption, but a sale to a

third party subject to deed in covenant:

The commercial effect of that is that the

restrictions in the deed depress the price

which would otherwise be paid for a half

interest?---That is correct.

Page 26:

Now, since differences arose between the club and Nullagine about renegotiations of a new

Nullagine(2) 79 15/10/92

occupation deed, has Nullagine ever offered to

sell its interest to the club at a designated

price in the terms of clause 4B?---No, it has

not: not after '86.

To put the appellant's position, perhaps beyond

doubt at page 27, line 12:

If it were to do that it would leave itself in

a position where the selling price could be

determined by arbitration?---That depends

whether the deeds are afoot.

If the deed is valid---Yes.

Is it the position of Nullagine that it is not

prepared to sell at an arbitrated price: it

wants to sell at the market price?---That's

correct.

And this is what this case is about, price.

The market price we believe is the realistic price.

And there is a similar passage at page 32, line 30:

The position simply is that Nullagine is not prepared to sell at a value worked out in

accordance with clause 4B?---That's correct.

It seeks market value.

Now, in our respectful submission,

Your Honours, what is plain from that is that the

appellant seems to be under the apprehension that

if it sells pursuant to 4(b) it will not get a

market price. It is true in the sense that if it

sells to the Club it will get an arbitrated

valuation but, in our respectful submission, what

that arbitrated valuation will be, will be that

determined by the first method contemplated in

clause 4(b) itself, mainly 50 per cent of the land

as a whole, which in all probability would be

greater than the sale value of an unencumbered one

undivided half share.

Your Honours, as to whether or not the

position of the parties at trial relected this

recognition, it can best be seen from the reasoning

of His Honour Justice Rowland at the first

instance, commencing at the foot of page 154.

BRENNAN J:  Do we need to trouble you with this once the

basis of it is put forward? I mean we are

concerned with the construction of the clause, are

we not?

MR HEENAN:  Yes, Your Honour.

Nullagine(2) 80 15/10/92

BRENNAN J:	And in terms of determing whether or not the clause provides a restraint on alienation, it is
common ground that the first basis is one of value
of the land itself and the ascertainment of
50 per cent.
MR HEENAN:	Yes.
BRENNAN J:	I do not know that there would be any argument

of restraint on alienation based upon the provision

relating to the sale within the ensuing twelve

months in the event of non-sale to the co-owner.

MR HEENAN:  My learned friend has not explicitly presented

argument which is directed solely to the provisio

in clause 4(b), namely the self-perpetuating right

of pre-emption subject to a deed of covenant, but

that was the point which appeared to attract most

interest on the special leave application.

TOOHEY J: It seems to underlie 2.4 of the grounds of

appeal, Mr Heenan.

MR HEENAN:	Yes, and although it is for my friend, of course, that would appear to us to be the strongest
argument against us, that the clause contemplates that if the exercise of the right of ..... was not exercised, but it was necessary to sell to a
stranger, it could only be done on terms which
would perpetuate the right of first refusal or pre-
emption.

Because of that it is necessary, in our

respectful submission, to say - or just to complete

what I was going to say about the way in which the

case was conducted before. His Honour,

Mr Justice Rowland at pages 154 and 155 says, in

support of a conclusion that was overturned on

appeal, namely that the respondent had no equity to

seek the intervention of the court, because it was

unfairly trying to exploit an opportunity, the

opportunity being that, so it was alleged, it was

not willing to buy 50 per cent of the market price

as fixed by valuation, but it would stand back

knowning that if the appellant sold to a third

party it would get less than 50 per cent of the

market price if the land is not a whole. And it

was therefore, presumably, an opportunity for

negotiation in which some lower price might acquire

the property for the respondent. That was the

argument which found attraction with His Honour,

and which was discarded, and that was examined as a

whole on 154 and 155.

And that is exactly the way my learned friend,

Mr Anderson, as he then was, put the case for the

appellant at first instance. And that is utterly

Nullagine(2) 81 15/10/92

different from the position at present that it was

assumed that if it was sold at arbitration at an

arbitrated value, there would be a depressed price.

Your Honours, can I say one further thing

about the way in which the case has been presented.

My learned friend has made a valiant effort to submit that the construction of the Full Court, that clause 4(b) outlasted the ten year provisions

for the occupation of the designated areas of the

subject premises was wrong and that, in truth,

clause 4(b) should be construed as ceasing to have

effect at the expiration of that ten year period

or, an alternative and intermediate position, which

again I suggest was never put at first instance or

below, that it had an effect limited to a holding

over period under what my learned friend calls a
tenancy in sufferance, but we have all been calling

a tenancy at will, not that there is any

difference, after 1986.

Your Honours, we have copied pages 3 and 4 of

the transcript of the special leave application.
It is the first document in our bundle of papers,

and if I might just invite Your Honours'

attention - it is either the first or the last. At

page 3, Justice Gaudron, on 9 May this year, asked

my learned friend:

Does this mean that you accept the

construction put on clause 4(b) below?

My learned friend said:

Yes, Your Honour.

Justice Gaudron said:

Even though the clause in terms only deals with the individial interests of the

co-owerners?

DAWSON J:  I am sorry, I am a bit lost with the papers,

Mr Heenan.

MR HEENAN:	I am sorry, Your Honour.
DAWSON J:	What are you reading from?

MR HEENAN: This is the transcript of the special leave

application. It is among our list of papers that

have come - - -

TOOHEY J:  Can you give us the transcript page please,

Mr Heenan?

Nullagine(2)	82	15/10/92
MR HEENAN:	Pages 3 and 4.	It is at point 2 on page 3.

Justice Gaudron asks:

Does that mean that you accept the

construction put on clause 4(b) below?

Yes, Your Honour.

Justice Gaudron asks:

Even though the clause in terms only deals with the indiviidual interests of the

co-owners?

Then there are two sentences and then a third about point 4 down the page:

While we might disagree with the construction

of the documents put on the documents by the

Full Court we realize we will not get special

leave to argue a construction point, so we

therefore accept the construction purposes of

the appeal so that we can -

"construction" presumably "for purposes of the

appeal" -

raise the point which then follows, and that

means that the first 37 pages of the

Chief Justice's reasons for decision are no

longer of concern and can be ignored -

and then on page 4 in the last series of
submissions by my learned friend, beginning with

the passage:

Yes, thank you, Your Honour. That deals with

what I might call the two preliminary points

on which the respondent tries to say that

special leave should not be granted. So, on

the construction point, we accept the

construction, and on the second point we say

that it was argued -

That dialogue emerged from the series of questions directed to the significance of the

proposed ground of appeal which is now ground 2.2

and my learned friend defended reliance on that

ground, not by a challenge to the construction but

as to the effect that such construction did have in

the event of the statutory remedy being one that
prevailed; at least, that was my understanding of

my learned friend's position, but he will no doubt

have an opportunity to expatiate on that.

So, in our respectful submission,

Your Honours, it should not be necessary for this

Nullagine(2) 83 15/10/92

Court, now, to undertake a re-examination of the construction of clause 4(b) on the issue of whether

or not it lives after 1986. But if it is necessary

for the Court to do that, we are content to rely on the reasons of Their Honours in the Full Court, who

each examined this as a question of construction,

and each, for slightly different processes of

reasoning, came to the conclusion that it endured,

after 1986 and for the full period of the

co-ownership of the parties.

May I simply, respectfully, contend the

reasons advanced by Their Honours for those

conclusions are the reasons that we rely on to

submit that that is the appropriate construction if

ever that question requires examination.

Hence,we say, that the only two points of substance raised by the appeal are whether the

contractual provision limiting or inconsistent with

a co-owner statutory remedy of applying for

partition or sale in lieu may validly curtail the

statutory remedy. This in paragraph l(a) of our

outline. And, secondly, whether clause 4(b) of the

occupation deed constitutes a restraint on

alienation and if so, whether it is contrary to

public policy and unenforcible in whole or in

part.And it is that second issue which is subject

to the condition imposed on the grant of special

leave which we have already discussed, and which we

say would require further evidence for its

evaluation.

I have already made a series of submissions in

relation to clause 4(b) itself. May I just

supplement those by the propositions in paragraph 2

of our argument. We say that the mechanism

contemplated by clause 4(b) ensures that either
co-owners undivided half interest in the land can

be sold at a price firstly, at least determined by

processes of negotiation fail, or secondly, after	evaluation, that is, of a co-owner if the ordinary	the initial alternatives are exhausted by market
forces, that is the sale to the third party. It
also ensures that the purchase price is paid within
a reasonable period and the sale of that is under
the right of pre-emption, and then the second alternative, sale to a third party, it leaves open
entirely questions of price and terms within the
twelve month period, and we say the only control or
restriction upon the co-owner's right to sell is a
temporal one, namely the time necessary to proceed through the process of arbitration and valuation
and that the right of pre-emption itself creates
no, we would say, invalid or objectionable
restraint upon alienation and there is reference to

Nullagine(2) 84 15/10/92

Hall v Busst and Megarry and Wade, passages that

have already been cited.

In view of the submissions which have been

made to the Court in relation to Hall v Busst, can

I say that our postion in relation to that

authority is simply this, that the major

significance of the reasoning of Sir Owen Dixon in

that case was to expand the doctrine, striking down

restraints on alienation from conditions in the

grant or provisions of forfeiture contained in the

grant, or conveyance, which were of a proprietory or controlling nature, to any form of contractual limitation, and that remains the single difference

between the law in Australia and in the United

Kingdom on this question, as emerges from Caldy

Manor case, and the decision of Sir Nigel Bowen In

re MacLeay not to follow Caldy Manor, and for that

matter, the decision in Reuthlinger which has been

outlined to Your Honours this morning.

It is quite obvious that there is in existence

a considerable body of academic writing and careful

reasoning by judges of intermediate courts which is

critical of the extension of the rule propounded by

Their Honours in Hall v Busst and it may be that,

in an approopriate case and at an appropriate time,

it would be necessary to examine whether or not

that reasoning, which can be classified as obiter,

is correct. But we do not invite Your Honours to

do that in this case and, in our respectful

submission, the case can be resolved in the

respondent's favour without going that far, and

that is our position in relation to that decision.

Can I pass on. The present appellant.

purported to terminate the deed of occupation by a

letter. That was not accepted, and that has been

discussed by His Honour the Chief Justice at

page 201, and there is no challenge to that finding

in the present grounds of appeal.

Now, can I come to what we say about the significance of the statutory right of partition or

sale in lieu conferred by section 126 of the

Property Law Act and other equivalent legislation.

We outlined the authorities in paragraph 4 of our

written submissions and, of course, Bray v Bray is

a decision of this Court which applies the decision

of the House of Lords in Pitt v Jones. Bray v Bray

has been consistently followed in this country,

including the two decisions in this State to which

reference is made, but many other authorities

applying Bray v Bray can be found. And we accept

what my learned friend, Mr Pullin, has submitted to

the Court that in an ordinary case which does not

have the overlay of any contractual arrangements

Nullagine(2) 85 15/10/92

between the parties in the background, but deals

simply with the question of the rights of

co-owners, then a claimant for partition who has

the requisite interest in the land has an

unanswerable claim for one of two species of

relief: either partition, or an order for sale in

lieu, the only discretion being as to which.

Our submission has always been, and it has been accepted by His Honour Justice Rowland at

first instance, by the Full Court, and is

supported, we would say, by the authorities relied

on, that it is possible by contract to limit or

control or subordinate the right to the statutory

remedy. And these cases, which we do not challenge

in any way, do not deal with a situation in which

there is any attempt to control or limit access to

the statutory right. So when it is said that a

claim for partition is, in that sense,

unanswerable, that only applies, we submit, in a

situation where there is no overlay of contractual

arrangements between the parties.

Your Honours, I pass to the cases which do

deal with contractual rights limiting access to the

statutory remedy. They are Peck v Cardwell, Dale v

Hamilton, Redwood, Fletcher v Ashburner paragraph 5. They have all been explained to

and

Your Honours by my learned friend. A digest of the

cases has been put up to Your Honours and I do not

intend to go through them in any close detail.

That has been done by the Chief Justice in his

reasons for decision and, we respectfully contend,

done correctly, and we rely on that.

I would prefer, however, to address the

attempt of my learned friend to distinguish those

authorities. My learned friend submitted to the

Court that they do not support the proposition for

which they are cited in the first edition of
Halsbury which has been handed up.	The contention

is that that, Your Honours, is the passage at

paragraphs 15 and 16 of the first edition in terms:

The right to partition may be lost by

agreement between the parties for disposal of

a property in a different manner.

My learned friend's attempt to distinguish those

authorities is to classify them all as cases

dealing with partnership, and to question the

Chief Justice's analysis of Peck v Cardwell that it

was not a partnership case.

May I first go to Peck v Cardwell. It is not necessary for Your Honours to have the reported

Nullagine(2) 86 15/10/92

copy of the reasons, but it can be consulted if

necessary. I should add, Your Honours, that in the

authorities that we have supplied in these older

cases we have provided copies from the revised

reports rather than from the nominate reporter or

from the English reports. Nothing turns on that,

but I am afraid to acknowledge that I have reached

the age where the small print in the English

reports is a bit of an ordeal, and the revised
reports are preferable.

That was a case of a joint venture between persons to develop land on the outskirts of what

would become a metropolis for house building.

There were covenants in the deed or contract which

set up this joint venture providing for the

purchase of the interests of anybody who wished to

retire from the joint venture in a designated way,

and thus preventing partition or alienation. It is

questionable whether the joint venture was a

partnership or equivalent to a partnership.

Their Honours appear to have treated it as going

further than a partnership and having an obligation

equivalent to that of fiduciaries or trustees

between parties.

But one thing is clear from the reasoning as a

whole, and it is that the result did not turn in

any shape or form on the fact that the partnership
doctrine of conversion, by treating the interest in

the entire land not as realty but as personalty,

meant that an otherwise unavoidable partition was

prevented. No reading of the judgment as a whole could support any conclusion that the only reason

that partition was prevented was because realty had

been converted to personalty. Nor, in my

respectful submission, can a reading of the

judgments in any of the other cases, many of which

are partnership cases, show that that distinction

had any contribution to resolve and, on principle,

Your Honours, it would be peculiar if it did.

It might be true, as my learned friend has

submitted, to contend that the doctrine of
conversion in partnership which has the effect of

converting real interest into personal interest as

between the partners is a product of the

Partnership Acts, but the application of the

Partnership Acts is by the covenant or contract

between the partners to enter into partnership.

And it is the contract between the partners which

imposes this condition. Therefore, in our

respectful submission, the distinction is not well

made.

But there is an even more fundamental reason

why the attempt to distinguish this line of

Nullagine(2) 87 15/10/92

authority should fail, and it is that so far as it

is possible to say, the doctrine of restraint on

alienation applies with equal force to personalty

as it does for realty, and that proposition was

evident from the reading of the judgment in

Reuthlinger v MacDonald that was undertaken just

some minutes ago this morning, the judgment of

Justice Needham, because at page 97 between letters

Band C His Honour says:

I should say that it is clear that the

doctrine -

meaning the doctrine of restraint against

alienation -

has always been applied to personalty as well

as realty: cf Holmes v Godson,

(1856) 44 ER 347.

So, in our respectful submission, on a series of

tests the attempt to distinguish Peck v Cardwell

and these lines of authority must fail.

The next proposition is that the right to

partition, certainly the right of sale in lieu, is

not, at least if one accepts an historical

analysis, an incident of co-ownership, that is, an engraftment of the rights of co-owners produced by

statutory intervention of very long lineage dating

back to 1540, Cap I 31 Henry VIII, admittedly, but

it is statutory in origin and not a creature of

common law. And it is not therefore true, in our

respectful submission, to say that it is an

inescapable incident of co-ownership.

This, we would say - dare I say - fact, was

commented on by Justice Connolly in the Canberra

case, and I will refer Your Honours to the passage

in a moment.	If the decision of the House of Lords
in Hammersmith and Fulham London Borough Council v

Monk that I mentioned at the outset has any

significance at all, it is that the courts will

examine the attributes of joint or co-ownership

based entirely on their common law content and not

having regard to the engraftment of a series of

statutory remedies which are layered upon them,
such as the intervention of the Rent Acts, and it

is that determination to analyse the common law content of the rights of co-ownership which has

attracted the criticism of the learned author of

the article in the Law Quarterly Review to which

reference has been made.

Your Honours, can I take the Court to

paragraph 6 of our outline. These are the

authorities which, we submit, demonstrate that in

Nullagine(2) 88 15/10/92

Australia and contemporary times the courts will

recognize that the statutory right may be curtailed

or abrogated by contractual provisions between the

parties. My learned friend, Mr Pullin, has sought

to distinguish this line of cases by pointing to

the fact that a number of them, the New South Wales

and Queensland cases, are decisions on the

equivalent of the English law Property Act of 1925,
the New South Wales provision being section 66 of

the Conveyancing Act which has abolished the

mechanism of partition or orders of sale, and has

replaced it with the right to apply to the court
for the vesting of the land in statutory trustees

for sale with a court supervised sale and

distribution of proceeds.

My learned friend's submissions went along the

lines that the 1925 model legislation confers an

unrestricted discretion as to the grant or

withholding of remedy, and it is pursuant to that

discretion that contractual rights of the kind that

we rely on have been recognized and allowed their

purview. In our respectful submission,

Your Honours, we contend that a reading of these

decisions as a whole would negate that, and that

prima facie there is the right to relief under the

1925 model legislation, and that the principles

which have emerged under these cases demonstrate

that it would only be in extraordinary

circumstances in which the relief were to be
withheld in the exercise of the discretion.

Perhaps this is most apparent in the decision of Justice Needham in Ngatoa v Ford,

(1990) 19 NSWLR 72. The facts of this case and its

result have already been explained by my learned

friend. I take Your Honours directly to the

judgment at page 74 at line E, where His Honour

said:

The question of whether the Court has a

discretion to refuse an order under s 66G(l)

when application is made by a co-owner has

been the subject of a number of decisions.

Unfortunately, there is no decision on the

point by the Court of Appeal or the High

Court, although I was referred to a decision of the Full Court of the Supreme Court of

Queensland, to which I will later refer. The related question of whether the word "may" in

s 66G(4) is permissive or mandatory was left

open by the Court of Appeal in Pannizutti v

Trask, (1987) 10 NSWLR 531.

His Honour then undertakes a close examination of the cases at first instance where the remedy has

been examined, and in particular a decision of

Nullagine(2) 89 15/10/92

Justice McLelland in Reuthlinger and says at

page 77 letter C:

With respect, I agree with the

conclusions of the Full Court. Despite the

respect one accords to a decision of

McLelland J, it is my opinion that His Honour

erred in decision, in Re Fettell, that no circumstances existed under which a valid

application under s 66G could be refused. It follows that I also disagree with Kearney J's

statement in Hayward v Skinner if His Honour

intended to say that no discretion existed in

cases under s 66G(l).

It is not, I think, desirable that one

should attempt to define exhaustively the
circumstances in which an order may be
refused; judicial experience is that such
matters should be resolved on a case by case

basis. My opinion is, however, that a

contractual limitation upon the exercise of

the right, provided it does not fall within

the principle of Hall v Busst, is a proper

consideration to be taken into account in such

applications.

His Honour goes on to withhold relief in the

circumstances in that case.

Now, Your Honours, a similar result was

reached by the Full Court of the Supreme Court of

Queensland comprised by Justices Kelly, Connolly

and Moynihan in Permanent Trustee Nominees

(Canberra) Ltd, (1989) 1 Qd R 314. In this case,

Their Honours overturned the judgment of

Justice McPherson which was given on 1 July 1987,

part of which was cited to Your Honours by my

learned friend yesterday.

In this case the judges in the Full Court

addressed a number of potential objections to

contracts abrogating or limiting access to the statutory remedy of partition or sale in lieu.

They included a submission that such a clause could be void as ousting the jurisdiction of the court; that it be void as fettering the exercise of the

jurisdiction of the court involving proprietary

remedies in which the parties alone are interested,

and as amounting to a restraint on alienation under

the Hall v Busst rules. The senior puisne judge,

Justice Kelly, at page 316, addressed first the

argument based on the objection of alleged ouster

of the jurisdiction of the court and rejected that

for reasons which he gives in the second and third

paragraphs.

Nullagine(2) 90 15/10/92

His Honour then went on in a paragraph

commencing "The next matter" to deal with the

question of the alleged application of the doctrine

that was ..... against alienation in the Hall v Busst

principle. His Honour says:

To my mind a covenant which does no more than

to require the giving of a period of notice,

even as long as twelve months, before steps

may be taken to obtain an order to have land
held on the statutory trust for sale cannot

properly be regarded as amounting to a

restraint on alienation. The view of the

majority (Dixon CJ, Fullagar and Menzies JJ)

in Hall v Busst was that the principle

applicable to a condition against alienation

of land is applicable also to a contractual

restraint on such alienation.

Then there is the long citation from Hall v Busst,

the passages which have already been cited to the

Court.

His Honour Justice Connolly came to similar

conclusions, and the passages of his judgment which

I cite to the Court begin at page 320. At line 30

His Honour says of this particular contractual

provision:

It is no more than a mutual promise by both

parties not to exercise a right of a
proprietary character save on twelve months

notice -

and rejects the contention that it is an attempt to

oust the jurisdiction of the court. Then

His Honour commences a passage which we rely on at

about line 50 on that page:

It is necessary to say a word about the nature of the rights conferred bys 38 of the

Property Law Act. His Honour has carefully

set out the history of partition actions and I

shall not go over the same ground. Whether it

be correct to say that the right to partition

has become an incident of the property of a

co-owner:  Hayward v Skinner, it is a

proprietary remedy in which the co-owners

alone are interested. There was, as
His Honour points out, a time before the

Statutes of Partition in the 16th Century when there was no such right save in the case of

coparceners. There followed a long period

when physical division was the only remedy

available; and this was followed by a
substantial period during which there was

jurisdiction also to order sale and division

Nullagine(2) 91 15/10/92

of the proceeds, this being regarded as the

primary remedy.

Missing the next sentence, His Honour said:

The learned judge has said that nonetheless the power has been held to be mandatory in

effect. I do not, with all respect, consider

that this view is correct.

Then His Honour goes on to explain the reasons for

his doubt, and at line 35 comes to the conclusion:

To say therefore that the exercise of the

jurisdiction is virtually mandatory is an

adequate statement for most cases but it is,

in my opinion not strictly the law and should

be avoided.

For my part I see no reason why the

parties to this agreement should not be
permitted to forego, by mutual agreement, the

right to have it partitioned or sold by an

order of the court, at least for a limited

period.

His Honour Justice Moynihan appears to have reached

similar conclusions at page 323 between lines 30

and 40.

TOOHEY J:	Mr Heenan, if you seek to apply those principles to clause 4(b) how does the analysis proceed? If
there is no formal undertaking not to invoke the jurisdiction of the court, there is an obligation
on the part of one co-owner to offer its interest
to another before selling. If the co-owner to whom the offer is made declines to buy, then we have
that other provision that you spoke of which
permits the first co-owner to put his interest on
the market. But I take it that if the right of
pre-emption is not exercised, then the co-owner who
has made the offer and wishes to sell is not
obliged to go through the mechanics of putting the
co-interest on the market, but could then invoke
the jurisdiction of the court.
MR HEENAN:	Your Honour, that proposition has not been put

by the appellant at any stage of these proceedings,
but if it had been put we would say that it was not

at liberty to do that, and that it would be obliged

to go to the second stage contemplated by

clause 4(b) and, if it wished, offer on the market

its interest for a period of up to twelve months on

any terms as to price or method of payment, subject

to the condition that the deed of covenant must be

entered into by a purchaser.

Nullagine(2) 92 15/10/92

TOOHEY J:	And if, during that period of twelve months or at the end of that period, no offer had been received?
MR HEENAN:	Well then, the situation would be that the right

of pre-emption in the example postulated ..... my

client would ..... and there could not be a sale at

the expiration of that twelve month period without
the right of pre-emption, and if necessary,

valuation being respected.

TOOHEY J: Yes, but that has an air of perpetuity about it,

does it not? I mean, does that mean that that

formula contained in clause 4(b) has to be

continually repeated until such time as the right
of pre-emption is taken up, or the interest is sold

during the period of twelve months on the open

market?

MR HEENAN:  Yes. And it is that proviso which appears to be

the strongest element of the case against us, for

stripped of the proviso clause 4(b) would not

appear in any wise to be different from a perfectly

conventional right of pre-emption which has long

been recognized and can be found in any of the

conveyancing books, and which attracted the remark

of the learned Chief Justice in the Full Court that
it provided for a perfectly ordinary right of

pre-emption. His Honour Justice Deane, during the

special leave hearing, singled out the learned

Chief Justice's observation as a reason for

perceiving that the issue of restraint on

alienation could not have been fully ventilated in

the Full Court, because if it had been, the

significance of the proviso should have been

perceived as creating a difference between

clause 4(b) and a more conventional right of

pre-emption.

TOOHEY J: But on your analysis of clause 4(b) the

contractual undertaking not to invoke the

jurisdiction of the court implicit in the subclause

may, given a particular set of circumstances,

continue indefinitely.

MR HEENAN:  Yes, and we go on to address that.

DEANE J: While you are being directed at that, can I raise

a related question, and that is: you say the

contractual obligation implicit in

clause 4(b) - does that not lead to the

identification of the extent of the obligation?

And if one accepts Hammersmith and Fulham as

meaning that the provisions of the deed as to

occupational rights effectively terminate at the end of the ten year period, why would you not in

the context of recital E read the implied term in

clause 4(b) precluding approach for sale as

Nullagine(2) 93 15/10/92

operating only for so long as these separate rights

under the agreement were provided for by the

agreement?

MR HEENAN:  To answer Your Honour's question it would be

necessary to go to many of the other clauses in the

deed. For example, clause 4(c), page 82, which

contains prohibition against either party

mortgaging its interest without consent.

DEANE J: But that obviously applies for so long as joint

ownership survives, but that says nothing to the
question whether the implication of a clause
precluding approach for sale should extend beyond
the period in which the contract conferred

occupational rights.

MR HEENAN:  Your Honour, the first point I would make - and

I am not in any wise seeking to evade Your Honour's

question, I will answer it as best I can - is that

this opens up the construction question which my

learned friend conceded on the special leave

application.

DEANE J:  Can I just raise that, because we need to work out

how muc.h it is open. I would have thought what I

am putting to you to be dealt with was covered by

the entitlement to assert that 4(b) was completely confined to the 10-year period which was raised by one of the grounds of appeal which, as I understand
it, the appellant was left free to explore. What I
am suggesting to you is that even if you do not
confine 4(b) to that 10-year period, when one turns
to the arguments which would support an implication

of a term which precluded an application for

partition or sale, there is a great deal to be said

for the view that the implied term in clause 4(b)

to that effect is confined to the period of joint

occupation or divided occupation under the deed.

MR HEENAN: In our respectful submission, Your Honour, a

number of factors would suggest a contrary

construction. This list may not be exhaustive but
it would include at least the following:
clause 4(b) deals with proprietary rights. Quite

obviously questions of pre-emption go to

proprietary rights and not possessory rights.	The
question of the division of possession of the property for the 10-year period is entirely

distinct from the ultimate fate of ownership and it

may be that it was uneconomic for the appellant to

run the hotel or it may be that it wished to have a

different regime in which a third party was

introduced to run the hotel and which more formal

arrangement may have been required at the end of

the 10-year period and not simply a subdemise.	Or
there could have been a variety of commercial

Nullagine(2) 94 15/10/92

factors to have made it necessary to rearrange the

mutual sharing of possession of the property.

All that can be accommodated as day to day or

periodic business of co-owners. That is not what
clause 4(b) addresses. Clause 4(b) addresses the

overall final proprietary entitlements of each

party and against the genesis of this contract in

which the Club was the sole proprietor of the
freehold and had established a presence in the
centre of Perth to perpetuate a long presence as a

gentlemen's Club, it is a plain inference that the

preponderant purpose of clause 4(b) was to ensure

that the Club was never evicted without - - -

DEANE J:  I do not want to take time, but is that not the

significance of the decision in Hammersmith and

Fulham, if it be correct, and that is under this

overall arrangement the Club was entitled to

occupation for 10 years and no more. Thereafter

Mr Pullin's client could prevent the Club from

continuing in exclusive occupation.

MR HEENAN:	Yes.
DEANE J:	Now, in that context, I can fully appreciate the

force of the argument that implicit in 4(b) in the
context of recital E there was an implied term that

during that period the co-owner would not seek

partition or sale. But what I am directing your

attention to is it is not so apparent that in that

context the implied term should go beyond the

period of joint occupation. I am not saying that

it does not; I am just trying to bring your
attention to it. Now, having gone for that long,

if it is something you feel had not been squarely

raised and you would prefer to deal with by written

submissions pointing to the particular clause, and
subject to the views of the other members of the

Court, I would be completely content with that.

MR HEENAN:  Your Honour, it is not necessary for me to avail

of that generous opportunity. We rely on the

reasoning of Their Honours in the Full Court which

examines the implications to be drawn from

clause 4(b) very closely. But can I say, in answer

to the proposition - - -

DEANE J:  And I will cease interrupting you after this, that

reasoning does not take account of recital E and it

proceeds on what, if Hammersmith and Fulham be

correct, is a misapprehension of the position which

existed at the end of the 10-year term.

MR HEENAN:	Your Honour, with all respect, we would suggest otherwise and we do so for these reasons: the
Hammersmith case deals with the termination of

Nullagine(2) 95 15/10/92

tenancies; clause 1 of this deed deals with a
tenancy, clause 4(b) deals with proprietary rights.

There is the clearest distinction maintained

between them.

To take Your Honour's suggestion that the

implied term should also be limited in a temporal

sense to that 10-year horizon, can I say that it

would be hardly necessary to have clause 4(b) there

at all if that was the intention because the

leasehold interest would be sufficient. If one of

the co-owners had sought partition during that

period, then we would say that partition would be
awarded only subject to existing encumbrances which

would include the existing demise for the 10-year

period, so that the Club would be assured of its

occupation until 1986, even if a decree for sale in

lieu of partition were made. Your Honour raised

with my learned friend the question of -

DEANE J:  I am going to break a promise, but this is the

only time I will break it. That, of course, if

that be correct, it removes a considerable part of

the ground for implying any term in clause 4(b) at

all. In other words, if clause 4(b) had a proviso,

provided that "nothing herein shall preclude either
party from applying to the court for an order for
partition or sale", it could not be suggested that

there was any inconsistency. So one has to look at

4(b) and ask the question, they have only provided

for sale of the interests of one or the other, can

one imply a term saying that neither party can

approach the court to get a sale of the whole in
circumstances where either party would be quite

free to purchase the whole interest.

MR HEENAN:  As best I may, could I endeavour to complete the

submission I was making previously, and I assure

you that I will return to the point that

Your Honour has just raised.	We would submit that
if it were not for clause 4(b) and the appellant

had come to the court seeking partition in lieu or

sale in lieu before the expiration of the 10-year

period, and it were granted, it would be granted on

terms subject to existing encumbrances, including
the leasehold interests which would, we would say,

endure until 1986.

There is some division of authority in this

State as to whether or not sales pursuant to section 126 must be subject to existing

encumbrances. There is a decision of the Supreme

Court of Western Australian in McMahon v A.F. Wade

Pty Limited, (1983) WAR 152 - this is not on our

list because we were not anticipating this point -

where His Honour Mr Justice Pidgeon held that a

court in this State exercising jurisdiction under

Nullagine(2) 96 15/10/92

section 126 had power to order that the sale should

take place free of encumbrances, thus obliging one

of the co-owners to redeem a mortgage over his

undivided half share. That case appears to be

inconsistent with a decision of the Supreme Court of Victoria in Fulton v 523 Nominees Pty Limited,

(1984) VR 200, where under the provisions of the

Property Law Act of Victoria it was held that an order for sale would not be made otherwise than

subject to a mortgage taken out by a co-owner upon

his undivided half share unless the mortgagee's

consent was first obtained or the mortgage

redeemed.

We would say that the better view is the Victorian view, without going into the reasons, and

that McMahon's case should not be regarded as

authoritative.

TOOHEY J: But in the ordinary case, Mr Heenan, if the court simply directed a sale, section 68 of the Transfer

of Land Act would pick up existing encumbrances,

would it not, and the purchaser would take subject

to those encumbrances?

MR HEENAN:  Yes, Your Honour.

TOOHEY J: Which is a different question from the question

of whether the court may direct a sale only after

certain encumbrances have been extinguished.

MR HEENAN:  And this situation raises itself more obviously

in cases of encumbrances other than mortgages, such

as leases and easements and so on. But if that is

correct, then the situation is that in the example

postulated by Justice Deane, the sale will take

place and the Club would be assured of its right of
occupation of the premises up until the expiration

of the demise in 1986, but would have lost its

right of pre-emption. That circumstance means that

the right of pre-emption has its greatest value

after 1986 and that if the limited implication

contemplated by Justice Deane in the example put to

me in argument were to be adopted, that would mean

the deprivation of the right of pre-emption when it

was most needed, and to develop Justice Deane's

example a little further and take the position

which would occur once the 10-year period had

expired and the appellant was asserting its unity

of possession and demanded a rearrangement of the

sharing of the possession of the property in such a

way that would disrupt the continued occupation of

the Club post-1986, that is the situation when the

Club would wish to buy, exercising its right of

pre-emption. And that is not a threat or an

eventuality which could ever arise until after 1986 or the termination of the holding-over period. And

Nullagine(2) 97 15/10/92

therefore, the right of pre-emption has its

greatest utility after that date.

There is a further answer which we would give

to Justice Deane's suggestion that the implication

might be only for a limited period and that is that

any right of pre-emption in a case where the

parties were not - the co-owners were not also

tenants of the property, so no question of

agreements as to sharing of possession entered into

the matter, would be defeated if one of the

co-owners was to approach the court for partition

or sale in lieu before the time had been reached

for the exercise of the right of pre-emption.	So
that if we return to the proposition, the
provisions dealing solely with possession or occupation are in marked contrast to provisions
conferring proprietary rights and there is no

reason why the former should be used to read down

the implications arising from the latter.

BRENNAN J:  What is it that gives rise to the implication,

the existence of the right of pre-emption?

MR HEENAN:	Yes, Your Honour.
BRENNAN J:	And the liability of that right to be defeated

in the event of an order for sale?

MR HEENAN:	Yes, Your Honour.
BRENNAN J:	Why is it that the right of pre-emption extends

to any more than the interest of the co-owner so

long as that interest should survive?

MR HEENAN:  Because by implication it is a right to acquire the entirety.

BRENNAN J: Which an order for sale might, but would not

necessarily, defeat?

MR HEENAN:	Would most probably defeat.
BRENNAN J:	You mean because - it would not honour the right

of pre-emption, of course, but why do you say it

would most likely defeat it?

MR HEENAN:  The defeat of the right would only be prevented

by the co-owner buying in at the sale.

BRENNAN J:  Quite. And he would buy in at a sale, one would

expect, at the market value and he would be

entitled to credit, of course, in respect of his

own half interest.

MR HEENAN:  Yes.

Nullagine(2) 98 15/10/92

BRENNAN J:  So that the price at which he would buy in at a

sale in lieu of partition would be the price which,

at least in theory, should be calculated by an

arbitration under the pre-emption clause.

MR HEENAN:	Yes.
BRENNAN J:	Is that the foundation for the implication? I

should say is that a satisfactory foundation for

the implication?

MR HEENAN:  If it were not, there would be no basis to protect the right of pre-emption.

BRENNAN J: Quite. In other words, it would be a right

which would subsist only so long as the interest to

which it is expressed to relate subsists.

DAWSON J:  I suppose you could say not all sales on the

market are at market price. Take risks that you

would ..... procedure.

MR HEENAN:  Yes, there is certainly that. But the most

substantial risk that an entity such as the Club

would face in that circumstance is the possibility

that it may lose its proprietary right in the

property entirely. The right of pre-emption keeps

open the possibility that the Club can re-acquire

the entirety, having in mind the history of the

situation, namely that the Club intends a long term

presence of this site.

BRENNAN J: That rather assumes that the rights of the

parties inter se are to be calculated according to

the history, not according to rights created by the

instrument. Because whatever rights the Club might

have, one would have thought Nullagine would have

the same.

MR HEENAN:  I do not suggest that to Your Honour, but there

pre-emption respected and not being put into a	is a tangible advantage in having the right of
position where one is forced into the market at a
random point of time and forced to buy.

BRENNAN J:  I can appreciate that. I am thinking in terms

of a test for implying the term.

MR HEENAN:  Yes. The advantage of the right of pre-emption

is that it ensures that the Club is always in a

position to re-acquire the freehold and that it is

not exposed to a loss of the entire freehold. But

if one creates only a diminished implication which

would protect the right of pre-emption which would,

in effect, give no protection to the right of

pre-emption, leaving the Club in a position where

it could be forced to an auction at any point, it

Nullagine(2) 99 15/10/92

suffers a real risk that it could lose the

freehold. That is as much as I dare say in

relation to point 7.

I am treating it that I am formally citing

each of the cases that are listed even if I do not
make express reference or read them. Point 8 deals
with the availability of a remedy and the pith and

substance of the proposition which we develop here

is that depending on whether one classifies the

entitlement under a right of pre-emption in the

conventional sense as being purely contractual or

in a controversial sense as being analogous to a

property right, there will be availability by

injunctive remedy to prevent any threatened breach

of that right. If it is purely a contractual

right, the basis of the jurisdiction of the court

to protect it would be the recently acknowledged

power of equitable courts to grant injunctions to

enforce mere stipulations in covenants and one must

always entertain some doubt as to whether the

injunction or a declaration would go, that remedy

being discretionary. But in our respectful

submission the consequence if it became necessary

to resort to the court for relief against a
threatened breach of a sale otherwise than in

accordance with 4(b) would plainly reveal that

damages would be an inadequate remedy because the

Club would be faced with the threatened loss of its

proprietary interest. So that it is probable, but

by no means certain, that preventive relief would
be available.

Now, Your Honours, on the question of the perpetual possibility of this proviso operating,

can I simply, because of the time, attempt to

truncate the submissions which we make in the

remaining pages of our outline, which I

nevertheless rely on, and put them as succinctly as

I may.

There are certain rights of a perpetual nature

which are entirely acceptable to the law and to

equity. For example, a lease with a
self-perpetuating option to renew is acceptable.

It is construed narrowly and will not be admitted unless the plain language of the document calls for

it, but if it does, it will be recognised and it

will not be regarded as offending the rule against

perpetuity. On the other hand, a self-perpetuating

option to purchase or aversion contained in the

lease will not be tolerated by the law for longer than the perpetuity period, the reason apparently being that while a lessee in possession has privity

of estate, a lessee holding an option to purchase

does not and self-perpetuation of the option to

purchase will not be allowed beyond the perpetuity

Nullagine(2) 100 15/10/92

period. That is to be found in all the books on
perpetuity and in section 110 of our Property Law

Act, copies of which are among the materials which

were given to Your Honours.

What about a self-perpetuating right of

pre-emption? If it were an option it would be

confined to the duration of that perpetuity period,
21 years. If it not an option there appears to be
no authority which would confine it, the reason

being it is not even a contingent interest in land,

or not even an interest in land in futurity, but

merely a contractual expectation. This has

generated some division of opinion over the years.

Now, in the Hailsham edition of Halsbury,

volume XXV, dealing with perpetuities, copies of

which I hand to Your Honours - - -

DAWSON J: While that is being distributed, Mr Heenan,

forgive my ignorance, but what is the essential

difference between a right of pre-emption and an

option?

MR HEENAN:  The option cannot be avoided by the landholder.

The loss of the estate cannot be prevented by the landholders under an option, but it can under a

right of pre-emption.

Now, paragraph 201 on page 110 provides that:

An option to arise on any intended sale or

other particular kind of alienation by the

owner, eg, a right of pre-emption or first

refusal, is subject to the rule -

perpetuity rule -

and, to find the land or property must comply

with it, unless the right is conferred by

statute. It may be entirely void, even where

limited to a proper period, if intended merely

as a total check on alienation by the owner.

In the current edition, the fourth edition of

Halsbury, the contrary proposition is advanced.

Perpetual rights of a pre-emption do not offend

against the perpetuity rule, and the reason or the basis for the authority is said to be the decision

of the Court of Appeal in Pritchard v Briggs,

(1980) Ch 338, at the foot of page 6 of our

outline. And that long and complicated case
contains an analysis of the decision of the Court

of Appeal in London and South West Railway Co

v Gomm, (1882) 20 Ch 562, where at first instance

Justice Kay held that a self-perpetuating right of

Nullagine(2) 101 15/10/92

pre-emption did not offend the perpetuity rule, but

the Court of Appeal held that it did.

Pritchard v Briggs constitutes an analysis of

London and South West Railway Co v Gomm which, in

effect, concludes that what was dealt with there

was an option, or it was something which created an

interest in the land, to the presence or absence of

the perpetuity rule from self-perpetuating rights

of pre-emption would appear from these two

authorities to depend on whether or not an interest

on land is conferred, and the modern view,

consistent with the present thinking about rights

of pre-emption and the absence of any proprietary

interest embedded in them, is that the rule does

not apply.

That leaves rights of pre-emption as oddities in the scheme of control, which has been alluded to

by my learned friend as part of the public policy
of keeping under control the alienability of

property, because the traditional device of

controlling perpetuating interests was the rule

against perpetuities and, if that applied, the

implication from the rule was that the law would

tolerate them for 21 years which, in this case,

would have tolerated this self-perpetuating right

of pre-emption until 1997. But there is no

authority that we have been able to find that

squarely faces this problem, and we are now at a

situation, with which this Court no doubt is very

familiar, of being at the frontier of an emerging

or little frequented corner of the law, namely,

what are the requirements of public policy, if any,

to control these self-perpetuating rights of

pre-emption.

Now, one answer maybe that because they are

devoid of the proprietary content there is no

guarantee that they will be specifically enforced,

the remedy being entirely discretionary as I have
illustrated.	So that if they were to be insisted

upon in unconscientious circumstances, or in

circumstances which would work hardship, there is a

sufficient repository of discretion in the

equitable judge to refuse the relief, and that that

is a sufficient control. That is one answer.

The other answer may be that they are

tolerable for a certain period, and if one goes to

analogy one looks to the perpetuity period of

21 years, in which case one should adopt a wait and

see rule in the present case because the right of

pre-emption may, in fact, be exercised before 1997

either by direct negotiation between the parties

which has not been attempted, as we know from

Mr Michel's evidence, or by the process of

Nullagine(2) 102 15/10/92

determining a valuation at an arbitration so the

whole problem may disappear. Or it may be that in

the circumstances this is a reasonable restraint

having regard to the history of the matter, and the

price which Nullagine presumably outlaid for this
property recognizing that there was a fetter on its

free alienation. But we have no evidence about

that, and we cannot undertake a sufficient

examination of the reasonableness of this restraint

without looking at the knowledge of Nullagine and
whether or not it acquired its interest in the

property at a discount in return for the

self-imposed notation, and if that requires

analysis· then, consistently with the condition
imposed by the court, the appeal should be

dismissed.

But it is perhaps of interest to look at what

has happened elsewhere. We have - I am afraid

inadequately because of the limited materials

available and our inexperience in the

jurisdiction - attempted to look at some American

law in this area, and.we have located a work in the

Supreme Court Library, Restraints on the Alienation of Property by a Dr John Gray, second edition,

published in Boston in 1895 - extracts of which I will hand to the Court in a moment - and extracts

from the United States American Law Institute,

Restatement of the Law of Property, dealing with
future interests, which is dated 1930 and 1936.

Unfortunately, these materials are obviously

somewhat out dated. I was going to cite various

passages from them to Your Honours, but in view of the time I will simply content myself with handing

them up.

BRENNAN J: Are there some page references you can give us,

Mr Hennan?

MR HEENAN:

I have only copied the particular pages,

Your Honours.

BRENNAN J:	I see, thanks.
MR HEENAN:	Now, there is no clear path shown in these

authorities. There is a series of American

authorities to the effect that a restraint against

the exercise of the right to partition, by
contract, is acceptable if it is for a reasonable

period, and it has not been regarded as a restraint

on alienation. But there are cases the other way

as well. The ruling in the restatement is that it

is justifiable to impose a restraint on access to

partition, and that to do so does not work a

restraint on alienation so long as it is for a

reasonable period.

Nullagine(2) 103 15/10/92

On the question of what is reasonable, there too is a divergence from State to State, but many

States have adopted the perpetuity period by

analogy but not all, and these principles apply
equally to self-perpetuating rights of pre-emption.

But the American view of rights of pre-emption - at

least in 1936 and previously, so it would appear

from the American articles that have been referred

to by my learned friend - regard a right of

pre-emption as a species of ..... right. And once

that concession is made the American approach is

consistent with English doctrine.

I s-imply put those materials forward as an

illustration of how this dilemma has been

approached in an entirely different jurisdiction,

with significantly different underlying foundations

as to the attitude towards a right of pre-emption.

But if one treats the right of pre-emption as lying

in contract only, then there may be no need to be

alarmed about its self-perpetuating nature because

of the existence of the discretion and a remedy

becomes available.

If that is not sufficient there might be a

need to cut down the tolerance of self-perpetuating

rights of pre-emption to an acceptable period and

we would say the perpetuity period suggests itself.

And if it is thought that that is too long then
what would be reasonable in the circumstances must

necessarily be judged from the matrix of

circumstances or facts under which this right was

created, and that would require an examination of

the evidence in this case which this appellant did

not deign to attempt when it had the opportunity to

do so.

Now, should the Court take the view that

notwithstanding all those submissions there is an

unreasonable restraint, we suggest that the only

obnoxious feature of clause 4(b) is the

self-perpetuating right of first refusal produced

by the requirement to enter into the deed of

covenant in the second phase of its operation and,

if that is the extent of the disapproval which
public policy demands, that proviso could be

severed.

We refer in paragraph 11 to an authority

dealing with severance, Whitlock v Brew, a decision of the Supreme Court of Victoria, confirmed by this

Court, 118 CLR. And we also refer to the

Australian Encyclopaedia of Forms and Precedents,

volume 12 in the pages given - an extract of which

is among the materials we have handed to the

Court - as exemplifying well accepted modes of

creating rights of pre-emption in cases of

Nullagine(2) 104 15/10/92

co-ownership, and those passages or those

precedents were referred to and spoken of with

approval in Wollondilly Shire Council v Picton

Power Lines.

There is a cautionary note in the

encyclopaedia. Notwithstanding the absence of any

proprietary content in a right of first refusal, it

might possibly be the case that the perpetuity rule

might apply, and out of prudence such a clause

might need to be drafted, having conformity to the
perpetuity rule. But that adopts a pessimistic

view of Pritchard's case and the significance of the modern view of rights of pre-emption, and it

really reverts to the situation referred to in the

first Hailsham edition of Halsbury which I have

handed up.

So we would say that the worst that should

happen to us, if this Court were to come to a

conclusion that there was an obnoxious restraint on

alienation in this clause, it was unreasonable,

having regard to the evidence which is before the

Court, and so unreasonable that no other evidence,

which might possibly be produced by my client,

could change that view, would be to sever the

proviso, leaving us with the right of pre-emption

at valuation but exercise it once only.

Now, paragraph 12 sets out our views in

relation to the effect on price. We say that the

depressing effect of clause 4(b) on the price can

only be due to two factors: first, the fact that
the co-owner is selling an undivided half share in

the property rather than participating in an equal

distribution of the net proceeds of the sale of the

entirety, the latter being presumably greater than

the former; or the fact that a purchaser of one

undivided half interest is obliged to enter a deed

of covenant which restricts his access to the

statutory remedy of partition. We say that it is the inability to get partition which produces the

difference in price, anq I should identify the

reasons for that.

I have already endeavoured to explain why 50 per cent of the sale price of the entirety is

likely to be greater than the sale price of an

undivided unencumbered half share. But assuming

that is so then the only prejudice for this

appellant selling under clause (b) in the second

phase subject to a deed of covenant is that the

third party purchaser will be denied the

opportunity to make a windfall profit by buying an

undivided half share and forcing the sale of an

entirety, and that purchaser will be missing out on

Nullagine(2) 105 15/10/92

the opportunity to recoup a premium for the

recovery of the right to partition.

Now, we say, in point 13, that there has been

no offer to sell to us at the valuation, nor any

attempt to sell the appellant's moiety to a third

party under the deed of covenant and, unless and

until that is attempted, it is only speculation as

to the extent of any prejudice which might be

suffered by the appellant, and whether that

prejudice is so unreasonable that public policy

requires its intervention to strike down a proviso.

And our submission is that what the appellant is truly seeking is an advisory declaration to the effect that if the property were offered to the

club at a fixed price and rejected, and on

rejection offered again at a price fixed by an

arbitrated valuation and again rejected, then the

obligation to sell to the purchaser, who would

enter into a deed of covenant, is an invalid

restraint on alienation and void, so that the

appellant at that point is free to sell without any

such restraint.

I appreciate that my learned friend,

Mr Pullin, has argued for a contention, and he

should be free to partition immediately and not

honour the first potential exercise of the right of

pre-emption at all, that that would be to fly in
the face of the effect of long knowledge rights of

pre-emption. After all this is a right of

pre-emption to buy at, presumably, market price.

Now finally, we say that the question of a

restraint on alienation only arises if the right of

pre-emption is not exercised. There is no

restraint here on alienating what was actually

purchased by Nullagine if one treats the deed of

occupation as being part of a larger transaction.

The effect of clause (b) is that a co-owner can

always sell his undivided half interest but without

the statutory remedy of partition.

Now, Your Honours, just a few short additional

remarks that I would seek to make out of the

submissions which have been made. On the question

of whether the doctrine of restraint of alienation

has anything to do with the rights of co-owners

inter se, which was agitated between several

members of the Bench and my learned friend,

Mr Pullin, and which was answered affirmatively by
Mr Pullin in reliance on Saliba v Saliba, the

decision of Mr Justice Kneipp in that case would

appear to be the only case where a doctrine, which

may be speculatively identified as the doctrine of

restraint against alienation, was brought to bear

in those circumstances. And we would venture to

Nullagine(2) 106 15/10/92

question whether that is a correct application of

principle because, as has been observed by members

of the Court, the entirety remains freely alien in

those circumstances by cooperative action between

all the co-owners.

Can I simply offer one speculation as to the possible cause of the 10-year duration of the

lease. In 1976, as at present, there was in this

State a piece of legislation known as the Town

Planning and Development Act, and there is a

section in that, section 20, much amended and a

source of constant controversy as to its

application, resulting in a series of decisions

from the Full Court of the Supreme Court of Western

Australia, which are very difficult to reconcile,

which at about that period provided - I will not

say beyond question, but provided subject to many

esoteric legal controversies - that it was illegal

to lease, for a period of more than 10 years, any land which was not a lot or lots the subject of a

town planning scheme or otherwise defined. And it

was also illegal to grant an option to purchase one

of these species of interest for longer than

10 years without the approval of the town planning

board.

Now, that may have been a reason why it was

decided to limit this right of occupation to

10 years and create a right of pre-emption rather

than an option, because of some perceived problem

about obtaining consent from the town planning

board. Now, whether that is so or not cannot be

concluded with any reliability, but it is one
reason why the parties may well have chosen to make

the arrangements which they did.

Your Honours, because of the obvious

limitation of time I have dwelt more rapidly with

the submissions in our outline than I might

otherwise have done, and I have passed over a
number of the authorities which we intended to rely
on in the hope, which I hope is not misplaced, that

Your Honours will have an opportunity to examine

them if thought pertinent.	May it please
Your Honours.

BRENNAN J:  Mr Pullin, our time as you know is limited.

Would it be possible for you to put your reply in

writing?

MR PULLIN: Yes, it would, Your Honours.

BRENNAN J: Would you have any difficulty in doing so?

MR PULLIN: Not at all, there is one point though that

perhaps I should cover in case there is any

Nullagine(2) 107 15/10/92

difficulty arising out of it, and that was the

reference to the special leave transcript. I do

not know whether that leads to any difficulties but

I think my learned friend was really inviting the

Court not to construe the document when in fact one
of the grounds of appeal does raise the specific

point. That is ground 2.2. We were granted leave

in terms of clause 2.2, that is we challenged "the

conclusion of clause 4(b) was intended to operate

as long as the parties remained co-owners of the

property", and we were granted leave in those

terms.	I am not sure why my learned friend was
referring to the transcripts.	And I just would

like to mention that and clarify - - -

BRENNAN J:  How long would it take you, Mr Pullin?

MR PULLIN: Less than five minutes, Your Honour - three

minutes.

BRENNAN J:  Three minutes. And then may we say that

Mr Heenan if he feels that he has been constrained

in any way by the limitation of time is to be at

liberty to supplement his oral submissions with

written submissions, if he were to see fit to do so

within, say, seven days.

MR HEENAN:	We are most obliged.
BRENNAN J:	And then, Mr Pullin, if you would respond

further, then a further seven days with your reply.

MR HEENAN:  I think I can say, Your Honour, that I do not expect that we would wish to avail - - -

BRENNAN J: Yes. Three minutes, Mr Pullin.

MR PULLIN: Just this other point, Your Honour. In the

transcript of the special leave application, it

therefore accept the construction for the purposes	appears that I used the word "appeal" when maybe I should have used the word "application", so we
of the - and I said "appeal". I am not resiling
from the fact that obviously I said "appeal", but
clearly when one reads the whole transcript, and
clearly the Court understood it from that way, I
was saying, "I realize I am not going to get
special leave if I come down and try to convince the Court that the special leave point is the
construction point". So I set that aside for the
purpose of the application and dealt only with the point about - - -

DEANE J:  But that does not matter. The plain fact of it

is, if what you have put is within the allowed

grounds for appeal that is it, if they are not, so

be it the other way.

Nullagine(2) 108 15/10/92

MR PULLIN: Yes. It clearly is within the grounds of

appeal, Your Honour. The other points I can deal

with in a short note to the Court.

BRENNAN J: Yes, thank you, Mr Pullin. The Court is

indebted to counsel, both for the care with which

they have approached the making of the submissions

in this case, and also for the attempt to be as

brief as the circumstances permitted. The Court

will consider its decision in this matter.

AT 12.48 PM THE MATTER WAS ADJOURNED SINE DIE

Nullagine(2) 109 15/10/92