Olde English Tiles Australia Pty Ltd v Transport for New South Wales

[2023] HCATrans 12

[2023] HCATrans 012

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S107 of 2022

B e t w e e n -

OLDE ENGLISH TILES
AUSTRALIA PTY LTD
ABN 97002435449

Applicant

and

TRANSPORT FOR NEW SOUTH WALES ABN 18804239602

Respondent

Application for special leave to appeal

GAGELER J
EDELMAN J
STEWARD J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA AND BY VIDEO CONNECTION

ON FRIDAY, 17 FEBRUARY 2023, AT 9.30 AM

Copyright in the High Court of Australia

GAGELER J:   In accordance with the protocol for remote hearings, I will announce the appearances for the parties.

MR B.W. WALKER, SC appears with MS L. NURPURI for the applicant.  (instructed by Mills Oakley)

MR R.P.L. LANCASTER, SC appears with MS. A.C. HEMMINGS and MR B.K. LIM for the respondent.  (instructed by Herbert Smith Freehills)

GAGELER J:   Mr Walker.

MR WALKER:   May it please the Court.  Your Honours, there can be little doubt about the general importance, we would say, socially and economically, as well as legally, of defining the scope of the obligation for compensation payable pursuant to a statute which includes the self-serving title “Just Terms”.  In particular, as we have drawn to attention, implications of the decision against which we seek special leave to appeal apply directly to lawful occupation, pursuant to permission or, as we would put it, by way of a privilege enjoyed as a result of dealings between the owner, say, of a fee simple or of a lease hold and the occupiers lawfully enjoying that occupation.  Those abstract terms should not conceal the significant and concrete ways in which that kind of privilege by way of occupation ‑ ‑ ‑

GAGELER J:   Mr Walker, are we concerned with anything more than a bare license in this matter?  Are there some other particular features that you drew our attention to?

MR WALKER:   No.  The record shows only the controllers of the land owner, a fee simple, being, of course, the same as the controllers of the corporation, and thus, a permission spelled out from that long conduct, no doubt including arrangements considered satisfactory on what might be called both sides.

EDELMAN J:   Mr Walker, the decision in Hornsby has stood for 25 years.  You really need to establish that that decision is at least arguably wrong, do you not, in order to succeed?

MR WALKER:   Yes, and the Court of Appeal in DADI, as we have drawn to attention in particular in our written submissions and in reply – in our application and in our reply – has already, with respect, wound back what might be called the literal breadth of Justice Meagher’s reasons in Hornsby.  One of the difficulties in Hornsby is that it would appear to start from what could only be a destination; namely, by staring with the proposition that it must be a limitation.  When one is talking about statutory words, particularly bestowing such important rights as the compensation in question under this statute, one starts surely by not positing that there must be a limitation but, rather, applying the contextual meaning of the words used.

EDELMAN J:   Mr Walker, if there were not a limitation, it would mean every member of the public who had a liberty, in the sense of a broad ability to use to land, would be entitled to compensation.

MR WALKER:   No, you are only entitled to compensation if you can show that there is something for which money’s worth ought to be paid, and that, of course, is the significance of market value – to which I will come in just one moment – as well as the other heads in section 55.  We are not here talking – and the privilege in question over this land is not the licence implied from the existence of a path from your front gate to your front door – to use the hackneyed example of the implied licence to come onto land.

We are talking here about something which is far removed from those fleeting and multifarious occupations of private land from time to time by members of the public.  We are talking here about an arrangement – explicit and solid, so to speak – by which there is a valuable occupation of the land by a business for the sake of carrying on its business, regardless of the fact that that occupation, though lawful, is pursuant to a privilege, terminable at will.

GAGELER J:   Mr Walker, does the point that you have just made go to the identification of the privilege or to the quantum of compensation?

MR WALKER:   It must go to both because they cannot be severed.  It certainly is part and parcel of identifying the nature of the alleged privilege to identify the plain permission created by the same natural persons on both sides of the exercise.  It is also, we accept – and this goes to so‑called “market value” – part and parcel of that identification to see – in common with many other matters – undoubtedly, general law interest in land such as a tenancy which are terminable at will.  So, that is a feature. 

Now, the relation of that to that value which – or compensation, I should say – which may be informed by, among other things, market value, is plain because a tenancy terminable at will – and if one assumes that rent was payable under a different hypothesis at market rates – is not going to have market value.  That is what will apply in an enormous number of cases across the city.

It is for those reasons, in our submission, that in identifying the privilege as being the lawful occupation, pursuant to an arrangement which nonetheless has as a feature terminability at will, that one has both identified the nature of the privilege and rendered, of course, tenuous not to say, in many cases non‑existent, the notion of market value.

EDELMAN J:   You accept that what you are describing as a privilege does not confer any interest in the land at all in any legal sense.

MR WALKER:   If one is looking – yes, is the answer.  Could I go to the definition of “interest in land” with which your Honours, of course, are familiar.  The first limb, I will call it (a), refers to:

a legal or equitable estate or interest in the land –

Without pausing to do more than note that one would obviously avoid the absurdity of feeding the definition of interest back into a definition which uses the word “interest”, that is enough surely, textually, to demonstrate that my answer to Justice Edelman is, of course, the kind of permissive occupancy by way of the privilege in question that we claim is not one which would give – if I can use the epithet – a proprietary interest in the land.  Nor do we need to go – I think this is in further answer to Justice Gageler’s first question to me – nor can we go on the facts to licences pursuant to contract, et cetera.

STEWARD J:   Mr Walker, can I ask you a question.  Have you quantified the amount of compensation you seek?

MR WALKER:   Yes, is the answer, your Honour.

STEWARD J:   What is the figure?

MR WALKER:   As I understand, it starts at 2.4 million.

STEWARD J:   And how is that calculated?  In general terms.

MR WALKER:   Relocation, your Honour.

STEWARD J:   I see.  Thank you.

MR WALKER:   That is, obviously, not in itself today the subject of our special leave application, and it may be a challenging issue ever to be the subject, in itself, of special leave.  But is there a substantial claim which has been barred by the ruling against us?  Yes, there is.

STEWARD J:   Can I ask whether any part of the amount paid to the owners of the company – the 10.7 million – included compensation for relocation?

MR WALKER:   No, your Honour.

STEWARD J:   Thank you.

MR WALKER:   I am sorry, yes, you can ask, and the answer is no, it was not.  Your Honours, it is for those reasons that, as your Honours have seen, we point to something which Hornsby standing, so to speak, for 25 years, can say nothing about; namely, the proper meaning of the expression as defined in item (b) in the statute, namely: 

an easement, right, charge, power or privilege over, or in connection with, the land.

By way of an extension, following the conjunction “or” to item (a), which, of course, simply used the familiar general law language of:

a legal or equitable estate or interest –

Now, “over, or in connection with” are, obviously, words which expand rather than contract the closest of the connection that is necessary by way of attributing the power or privilege, the privilege to the land.

EDELMAN J:   Mr Walker, you are constantly referring to this as a privilege.  Justice Basten, in his judgement, explains the concept of privilege in the strict Hohfeldian sense and refers back to Hohfeld’s notion of a privilege.  In that strict sense, you would be talking about a right would you not, rather than a privilege?  What you have got is a right to be present, it is not a special liberty that other members of the public do not have.

MR WALKER:   The first point that I need to make clear by way of accepting the position, is that this has been argued as privilege, as you will have seen from the record.

Second, it may be in the nature of the words used in the definition that there is inherently and unavoidably an overlap between a number of the words used.  To take an obvious, bordering on trivial, example, an easement is a species of right and the very next word that appears in the list.  The same is obviously true with respect to right and privilege and, indeed, the Hohfeldian analysis to which Justice Basten draws attention at page 58 of the book.  His Honour’s paragraph 34 is one which, plainly enough, bears a very close fundamental relation to the notion of right, hence the philosophical jargon of “no‑right”.

Now, in our submission, a privilege, obviously, does not cease to be a privilege because it might be shared with someone else.  A privilege does not cease to be a privilege because it is for members of a class.  Indeed, that is a very ordinary English understanding of the notion of a privilege, comparing those with it and those without it.

When one looks at the phrase “over, or in connection with land”, there are no doubt practical considerations as to why one is not talking about an innumerable crowd enjoying a privilege – and that is not this case.  This statute requires persons to come forward – legal persons to come forward – with a claim.  Here, our clients did and came with a claim not factually in question concerning its lawful occupation, for a long time, accepting it was by arrangement which necessarily entailed termination at will.

That, in our submission, rendered the right to be in occupation a kind of privilege in the sense that it distinguished us from others and it, in particular, immunised us from any count of trespass.  It is for those reasons that, in our submission, the ordinary and purposive understanding of the phrase “privilege over, or in connection with the land” manifestly describes what we claimed.  No doubt ‑ ‑ ‑ 

EDELMAN J:   Would that mean that any contractual right, whether or not terminable at will, but any contractual right to be present on the land for any purpose would have to be compensated if the land were compulsorily acquired?

MR WALKER:   Your Honour, I cannot answer that in terms so broad because it is the terms of the contract which would enable one to understand whether any compensation could be claimed – in particular, what I will call terminability and, more to the point, the content or substance of what the contract permitted with respect to occupation.  I certainly do not say that the licence – not to say, requirement – of an employment contract by which employees must come to the warehouse to work during work hours constitutes a privilege over or in connection with land, being the warehouse that they are obliged to attend. 

That is an ordinary example of cases presenting concrete questions to the Court upon concrete facts, and here we do not have anything like wage earners needing to attend the factory.  Here, we have the occupation by a business pursuant to a solidly factual arrangement that rendered lawful that which would otherwise not be lawful, which immunised them against any claim of trespass.  It is for those reasons that we below characterised this as a privilege, and that is the way in which the case was presented and the case for which I am bound in your Honours’ consideration of special leave.  But that longwinded answer should not disguise, of course, that naturally there are elements of right involved in most ordinary understandings of privilege, even if vice versa is not quite so straightforward.

Your Honours, with respect to privilege, we suffered strictures in Justice Basten’s reasons for resort to a dictionary.  We have sought to address that in our reply in this Court.  We should make it clear that we did not argue that one substituted copied text from a dictionary for an understanding of the statute.  Nothing so crude; nothing like that.  And we do go so far as to argue that, in fact, when one looks at the detail of the matters to which Justice Basten draws attention; namely, the so‑called selectivity of resort to one but not other of the proffered dictionary definitions.  There was a sound and substantive reason for that; namely, that the defined term “interest” tendentiously appears in two of the definitions, and the contrast with that is to be found in the definition to which we did resort. 

That, in our submission, was a proper way to observe the distinction textually proposed by the word “interest” appearing in (a) and not appearing in the extending expressions thereafter.  Now, obviously enough, it may be that neither Hohfeld nor the large OED was on the desk of the drafter, because it has to be said that an easement provides a fairly stark example of an interest in land.  And so, I cannot point to, as it were, any perfection of legal carpentry to support this point.  But ultimately, that is the reason for special leave, bearing in mind, the plain and beneficial purpose of the Statute.

It is for those reasons, in our submission, the informality, as some might call it – that is, the lack of an instrument to which Justice Basten drew attention by which this occupancy was permitted and governed – surely cannot defeat the application of, we would submit, the contextual and unstrained meaning of the word “privilege” in (b) in distinction from “interest” in (a), so as to include the many forms of non-contractual – thus, terminable at will – occupancies, so as to immunise one against the claim of trespass, for example. 

Whether they are granny flats, or friends and relations occupying a house by way of a friendly arrangement, they provide them a footing for the other point to which we have drawn attention as fitting for special leave; and that is the antitextual and anti-purposive requirement – gateway, as we put it – there can be no compensation at all, under any of the heads in section 55, unless you can point to a market value.

The statute obviously contemplates that there may be market value destroyed, not merely diminished, by the very proposal in question.  Hence, that the misread object in 3(1)(a), which manifests the quite good principle, with which your Honours are well familiar.  In other words, all the market value can be sucked out of your property by reason of the very proposal, for example, to build a dump there.  That, in our submission, highlights the fact that regard to the existence of a market, and the familiar notion that leases

at market rent will not have market value would exclude very important heads of compensation; in particular, for small businesses and residents.

May it please the Court.

GAGELER J:   Thank you, Mr Walker.  The Court at this stage will retire to consider the course it will take.

AT 9.51 AM SHORT ADJOURNMENT

UPON RESUMING AT 9.55 AM:

GAGELER J:   Mr Lancaster, we do not need to call on you.

MR LANCASTER:   If it please the Court.

GAGELER J:   We consider there to be insufficient prospects of success to warrant the grant of special leave to appeal.  Special is refused with costs.

The Court will now adjourn until 10.30 am.

AT 9.56 AM THE MATTER WAS CONCLUDED