Perpetual Trustee Company Limited v Westfield Management Limited & Anor

[2007] HCATrans 325

[2007] HCATrans 325

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S166 of 2007

B e t w e e n -

PERPETUAL TRUSTEE COMPANY LIMITED

Applicant

and

WESTFIELD MANAGEMENT LIMITED

First Respondent

CITY OF SYDNEY COUNCIL

Second Respondent

Application for special leave to appeal

GUMMOW J
KIRBY J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON THURSDAY, 21 JUNE 2007, AT 10.36 AM

Copyright in the High Court of Australia

MR N.C. HUTLEY, SC:   If the Court pleases, I appear with my learned friend, MR S. FLANIGAN, for the applicant.  (instructed by Deacons)

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friend, MR. R.G. McHUGH, SC, for the first respondent.  (instructed by Speed and Stracey Lawyers)

MR E. KONDILIOS:   May it please the Court, I appear for the second respondent.  (instructed by Maddocks Lawyers)

GUMMOW J:   Yes, Mr Hutley.

MR HUTLEY:   Thank you, your Honours.  On 31 July ‑ ‑ ‑

GUMMOW J:   Just before we get into the detail can we indicate our present thinking and then see how counsel responds to it?  Our present thinking is to direct the application for special leave into the Full Court to be listed together with the appeal in the other matter.  That appeal is presently listed, I think, for Tuesday, 31 July in Canberra.

KIRBY J:   You are not going to be difficult, are you, Mr Walker?

MR WALKER:   No, your Honour.  Your Honours, should we take it that that is a direction on the basis that counsel should prepare as for arguments on an appeal?

GUMMOW J:   Yes, if you are called on to do so.

MR WALKER:   Yes.

GUMMOW J:   But, on the other hand, it is really a question – what is at stake is the validity of this instrument, what it means.  Do we need much more material than we already have in the special leave book?  I would not have thought so.

MR WALKER:   Neither would I, your Honour.

GUMMOW J:   If any further material is required can it just be annexed to the submissions, if indeed there are any further submissions?

MR WALKER:   Yes.  Your Honours, there are two points, I suppose that are invoked by that.  The first is when your Honours talk about the validity of the instrument there is, of course, the whole instrument of which this condition was but part.  One and one only of the judges addressed the severability question.  No one, I think, was concerned to render illegal the building and use of this development in the middle of Sydney.  Certainly, we do not shoulder the task of showing that our neighbours have unwittingly been using this land illegally.  It is a question of whether the condition is of such force that it may be enforced.  So the validity of the instrument issue, we think, in relation to the parties at the Bar table does not extend to the horror consequence of the whole consent falling.  It extends only to the question of whether there is, if you like, anything condition 56 which imposes obligations on my friend’s client.

GUMMOW J:   I think that is right.  I think what you are saying is reflected in Mr Hutley’s draft notice at page 118 of the book.

MR WALKER:   It is.  I just wanted to make that clear.  Your Honour used the expression “validity of the instrument”.

GUMMOW J:   Yes, I understand what you are saying.

MR WALKER:   The second point is this, in our submission, perhaps unusually, that all the unusual circumstances are to the detriment of the applicant’s position.  This is a case where the prior question of an extension of time ought to be, in our submission, taken not for granted but be the subject of examination of the way in which, as we would put it, quite insufficient explanation is advanced.

KIRBY J:   We are talking of six months, are we not?

MR WALKER:   We are talking of about six months and we are talking about half of that, a bit more, being unexplained and indeed inexplicable and your Honours have seen the material which can fairly be paraphrased as to the first part, what we have submitted in writing to be an unaccountable form of reasoning by which their failure at first instance in the equity suit, notwithstanding they are the ones who successfully appealed against that to the Court of Appeal, deflected them or deterred them from taking any steps in relation to the Court of Appeal’s decision in this case.  That does not make sense then or now but that was ‑ ‑ ‑

GUMMOW J:   You are asking us to refuse the extension of time now?

MR WALKER:   Yes, your Honour.  The alternative to that is that that is an issue which will be ‑ ‑ ‑

GUMMOW J:   Mr Hutley is about to ask to grant it, now?

KIRBY J:   The problem with that is that extensions of time or refusals thereof are very much bound up in the merits and likelihood of success of the application itself.

MR WALKER:   And, your Honours, that is the reason why I was raising as an alternative that that simply is a matter that requires decision of this Court after it has examined the application and, indeed, what I will call the prospective appeal at the occasion ‑ ‑ ‑

KIRBY J:   You want to keep a live issue available to you before the Full Court?

MR WALKER:   Very much so.  Yes, your Honours, this Court has been told by a very wealthy property interest, “We didn’t give this very serious thought for some months” for a reason which is unaccountable, and then they say, “But, latterly, we have decided it would be in our commercial interests to try to overturn this result”.

KIRBY J:   Do we read between the lines that there is a mention there of some commercial negotiation?  Maybe that was going on and they thought ‑ ‑ ‑

MR WALKER:   Your Honour, it would be extraordinary when your Honours look at and can take judicial notice of and perhaps seen the evidence about the nature of my client and the nature of my friend’s client and what they are doing and how they do it.

KIRBY J:   You say all the more reason to protect your interests in order that you do not have this problem.

MR WALKER:   Can your Honours really suppose that an applicant advised, as it clearly is, took the position that it dare not insert into negotiations with Westfield the prospect of a pending application for special leave?  I mean, really.  In our submission, it is a state of affairs which by reason of its lack of explanation and by reason of the nature of explanation offered ought to alarm this Court as to the approach to serious commercial litigation taken by this clearly serious applicant.

When one considers the nature of the prejudice about which evidence has been put on, in our submission, it is a substantive matter, perhaps unusually, but then the circumstances of the delay in this case are unparallel.  Your Honours, I have said what I wanted to say about the importance of that issue.

GUMMOW J:   I know you have but to what effect?  Are you now applying for us to refuse the extension of time?

MR WALKER:   Yes, I am, your Honour, that is my primary position.

GUMMOW J:   All right.  We will hear what Mr Hutley says about that.

MR WALKER:   May it please the Court.

HEYDON J:   Just on prejudice, Mr Walker, if there had been no other appeal or no grant of special leave in the other appeal, I follow the reasoning, but now that that has happened, does it not mean there is in truth no, as it were, marginal delay, no additional delay and therefore no prejudice flowing from any additional delay?

MR WALKER:   The analogy with, as it were, a critical path in the timing of the project becoming uncritical but not critical does arise, your Honour.  There is reference in the affidavit to how, in any event, bearing in mind that there are two routes to obtain an easement.  There is the condition 56 route and there is the equity route.  I will call it equity because of the equity division suit that this Court is hearing on 31 July.

KIRBY J:   I am just a bit surprised if the Court is minded to refer this into the Full Court, that with your usual highly tuned sense of strategy you do not want to have this left as a little bit of poison in the side well that might get into the main well when the matter is returned.

GUMMOW J:   Or, in other words, provide an exit.

MR WALKER:   We have the benefit of ‑ ‑ ‑

GUMMOW J:   All right.  We will hear what Mr Hutley says.

MR WALKER:   I am not sure that I fully answered Justice Heydon’s question, I am sorry.

HEYDON J:   You were saying there were two routes.

MR WALKER:   Yes, there were two routes and, in our submission, while ever this route, condition 56 was secured to us, then we cannot say that there is a subsuming of the importance of our capacity to plan and the time that our capital is tied up unproductively, et cetera.  One cannot say there is a subsuming of that by the grant of special leave in the equity suit.  That is my only comment.

GUMMOW J:   Yes, Mr Hutley.

MR HUTLEY:   If one accepts, as in our respectful submission one would accept, that the question of construction of the easement is intimately tied up with validity of the condition because, as the Court of Appeal said, one of the central relevant surrounding circumstances to the construction of the condition was the easement.  Assume that no delay had taken place by my client, what would have happened almost inevitably is that a special leave application would have come on in the condition appeal, if I can call it that, at a time after the easement appeal had been determined, adversely, the Court would have been told that these two matters were coming forward which were linked in the way which I have indicated and ‑ ‑ ‑

KIRBY J:   Yes, but, Mr Hutley, you are old enough to know that if you had come up to the High Court 30 years ago or 20 years ago and you were out of time by six months and you had not really explained why you were out of time and you are not a refugee, you are very well‑advised corporate entity with very good lawyers and top silk, I mean, really, in the old days you would not even be at first base, I am afraid.  What has changed?

MR HUTLEY:   I accept what your Honour says.  Can I come to that?  What I am dealing with in the first instance is my learned friend’s submission that there is prejudice.  What we are saying is, as things have turned out ‑ ‑ ‑

KIRBY J:   Is that not a second issue?  The first issue is, you have to explain the reason for the delay and show that you have an argument on the merits and then that can be undone if it is shown that they are prejudiced.

MR HUTLEY:   Your Honour, we have set out the delay.  We have explained it and we have, when I was before his Honour Justice Gummow, frankly accepted that from a certain date, that is, the date of the determination of the appeal in the easement case, that is, 1 December explanation in 2006, we have no explanation.  I accept that.  But the absence of explanation and the jurisprudence of this Court, as we understand it, does not debar a ‑ ‑ ‑

GUMMOW J:   It is not a question of jurisprudence, it is a question of practice, apparently.

MR HUTLEY:   Practice, thank you, your Honour – as a matter of practice does not debar.  What one has to establish, as we understand the cases, is that an injustice would be done to us by a strict application of the rules.  What would happen if we are not offered the opportunity to have our case heard – which we say is a good case – is that it could come about that this condition is found valid on the basis of an assumption as to the construction of the easement which this Court has found is an incorrect assumption because of the developments in the case of Westfield as to the scope of this easement which has evolved from first instance to now to the point before this court where they put, in effect, that this easement is to be construed as conferring a right upon the dominant tenement to invite people from ever remoter properties forwards and backwards across their property and over

the servient tenant.  That would be an injustice to us that a determination for validity of a condition would take place in that context.

KIRBY J:   Do you say there is an explanation?  The explanation is supervening litigation which made clearer the paradox that would then arise?

MR HUTLEY:   Your Honour, I do not put that forward.  I say what happened is on 1 December last year that the Court of Appeal in the construction case delivered their judgment whilst the parties were in discussions up until January 2007, which is referred to in the affidavit.  I do not put forward that as an explanation.  I accept we could have moved and I accept we should have moved.  Your Honour, I accept that, but what we say is if this is a case which the Court obviously considers is worthy of consideration in the way proposed, it would be an injustice to my client, absent any prejudice, and we submit there would be no prejudice, none, except for this, absolutely none, to deprive our client of the opportunity of having the case heard in this Court.  Thank you, your Honours.

GUMMOW J:   Thank you.  Mr Kondilios, is there anything you want to say on this subject?

MR KONDILIOS:   Your Honours, we adopt the submissions of the first respondent.  What has not been set out to your Honours is the fact that the applicant at first instance in the Land and Environment Court had filed an appeal in class one being an appeal against the refusal of an application to the City of Sydney to delete condition 56 on merit.  Those proceedings were set aside for the moment whilst his Honour Justice Talbot proceeded to determine the validity of 56 which then went on appeal to the Court of Appeal ‑ ‑ ‑

GUMMOW J:   Yes.

MR KONDILIOS:   The applicant has abandoned those proceedings and abandoned those proceedings some time ago.  Then decided quite some time out of time to proceeding this matter before this Court seeking leave out of time.  That, I would submit, is a factor that would need to be taken into account when entertaining the application of Mr Hutley that his client’s appeal be permitted to proceed from this point.

GUMMOW J:   Application for leave?

MR KONDILIOS:   Yes.

GUMMOW J:   Thank you.

MR KONDILIOS:   The final point I need to inform your Honours is the fact that the fixture for 31 July is a litigation that involves Perpetual and Westfield.  The City of Sydney is not a party to that ‑ ‑ ‑

GUMMOW J:   That is right.  Yes, we understand that.  Mr Walker.

MR WALKER:   Your Honours, nothing my learned friend, Mr Hutley, has said detracts from the fact that that ‑ ‑ ‑

GUMMOW J:   We have let you all run on so that our colleagues on the Full Court hearing will have the benefit of this on transcript.  We would not ordinarily sit here on a special leave day spending half an hour debating this sort of problem.  Anyhow, go on.

MR WALKER:   Nothing he has said detracts from the proposition that they were content to accept their failure in the Court of Appeal on this case and that we have, as one sees in the application book at page 96, paragraph 26, proceed on that basis in relation to the connected question of compliance by us with conditions of our relevant consent.  May it please the Court.

GUMMOW J:   The application for special leave in this matter, including the necessary application for extension of time, will be referred into the Full Court to be listed on 31 July with the appeal in Westfield Management v Perpetual Trustee and the costs of today will be costs of the application as it transpires in the Full Court.

MR WALKER:   Your Honours, could I just simply raise the question of the estimate of time for the two arguments?

GUMMOW J:   Yes.

MR WALKER:   For our part we are apprehensive that the addition of these issues will make it quite difficult, obviously subject to direction by this Court, to finish within the day hitherto expected to be required.

GUMMOW J:   We are talking about adding an extra 40 minutes, at the moment.

MR WALKER:   I simply raise that so that the Court may make such directions as are necessary.

GUMMOW J:   Yes.

MR WALKER:   Do your Honours have in mind that my friend and I should argue both cases in full in one day?

GUMMOW J:   Let me speak to Mr Hutley.

MR HUTLEY:   Your Honour, any course that meets the convenience of the Court we will fall in with and we can divide time between my learned friend and myself.  It might be, for convenience, that if we could approach in relation to perhaps a slight expansion of the size of the written submissions to overcome any necessity to dwell upon any matters of fact we rely on for the Court and perhaps more fulsome written submissions than we otherwise would in one or other of the appeals.

HEYDON J:   Full, not fulsome.

MR HUTLEY:   I have failed twice.  I am lucky to be here, your Honour.  Or fuller.  It might be a course which would ‑ ‑ ‑

GUMMOW J:   Counsel should prepare themselves and divide the time on the basis that both matters could be fully concluded and fully argued out, if need be, on Tuesday, 31 July.  There is some prospect of some time being available on Wednesday, 1 August, if necessary for half an hour or three‑quarters of an hour, but we can deal with that when we come to it.

MR WALKER:   May it please the Court.

MR HUTLEY:   As to the length of written submissions, having regard to that, your Honour.

GUMMOW J:   I do not see why written submissions need to be that much longer.  This is not exactly a highly technical litigation.

MR HUTLEY:   Thank you, your Honours.

GUMMOW J:   The application for special leave, including the application for extension of time, will be referred into the Full Court on the date indicated and costs of today will be costs of the application as referred to the Full Court.

MR WALKER:   May it please the Court.

AT 10.57 AM THE MATTER WAS CONCLUDED