Port Stephens Council v Melaleuca Estate Pty Ltd

[2006] HCATrans 329

[2006] HCATrans 329

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S91 of 2006

B e t w e e n -

PORT STEPHENS COUNCIL

Applicant

and

MELALEUCA ESTATE PTY LTD

Respondent

Application for special leave to appeal

HAYNE J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 16 JUNE 2006, AT 11.09 AM

Copyright in the High Court of Australia

MR B.W. WALKER, SC:   May it please the Court, I appear with my friend, MR E.G. ROMANIUK, for the applicant.  (instructed by Sparke Helmore)

MR J.J. WEBSTER, QC:   May it please the Court, I appear with my learned friend, MR M. GREEN, for the respondent.  (instructed by Hunt & Hunt)

HAYNE J:   Yes, Mr Walker.

MR WALKER:   Your Honours, to illustrate the significance for the issues between the parties of the more important of the points we seek to raise, may I take your Honours directly to page 77 of the application book and paragraph 83.  The context is the finding on the facts of this case requisite to determine the issue of good faith raised by the applicable New South Wales provision being, as it happens, the provision that this Court has already been concerned with in Alamdo v Bankstown. 

The significance in terms of general importance of what is, of course, an adjudication of particular facts in paragraph 83, to which I am about to come, is that the way in which councils operate concerning the allocation of budget, the way in which councils deal with would‑be developers, in this case, some 8 hectares with a swamp was the subject of a development application for residential subdivision, and the way in which all around the country good faith defences are available for the exercise of statutory authority, elevate the method illustrated in paragraph 83 from a particular fact case to one which provides an appropriate vehicle for this Court, an appropriate vehicle to consider a matter which was not determined in Alamdo in relation to the creation of the nuisance.

In paragraph 83, line 35 on page 77 Justice Giles starts by noting that which is (a) true, but (b) surely not decisive or determinative of how one approaches the good faith question in section 733:

The respondent’s acts and omissions in the 1970s and 1990s created the state of affairs resulting in the nuisance.

Well, yes.  Section 733 and the possible demonstration by the Council of its good faith in the acts and omissions in question presupposes as a premise that there has been a liability which would otherwise be sheeted home at law to the Council and it is impossible to understand how any such liability in nuisance, for example, water nuisance causing a flood, could arise otherwise than by the Council creating the state of affairs resulting in the nuisance.  So at the very beginning where the ‑ ‑ ‑

CALLINAN J:   But did not the Council cause the water to be collected and discharged in a greater, more concentrated flow?

MR WALKER:   Yes.

CALLINAN J:   Is that not clearly a nuisance?

MR WALKER:   Yes.  I have gone straight to the end of the story, that is, assume against us nuisance.  As your Honour Justice Callinan has, with respect, correctly pointed out, the paradigm case, at least in this country, of water nuisance is the collection of water in a concentrated way so as to have a greater effect - even if exactly the same volume passes on to your neighbour’s land just the concentration will have the greater effect.  In this case it is worse for us.  It is not just concentration.  It is also greater volume because there is not the soakage that would have happened before the urbanisation since the 1920s that produced from the 68 hectare catchment area formerly largely subterranean flow and the swamp coming and going so as to be an ephemeral feature.  We have both concentration and increase of volume.  Certainly as a result we have higher levels of water in the swamp and for longer periods than had hitherto been the case.  There is no doubt about that.

My first point that I am concentrating on is that that, of course, would produce, but for section 733, on the assumption I am making against myself for the purpose of this second point, the liability which section 733 is intended to provide a measure of protection against.  So your Honours appreciate from the written material that our first point was the statutory authorisation was such that the nature of a drain is to collect, concentrate and discharge water, hence that being a necessary or inevitable consequence of drainage.  In the circumstances of this case, there could not be liability in nuisance.

But for my first point, what we would submit is the better special leave point, I wish to pass over that and go straight to the question of 733 for the purposes of which it is, of course, necessary first to posit the liability against which it might be protecting the Council.  That liability is, of course, in nuisance and along the lines of how Justice Callinan has described the matter.  So that the first two sentences of paragraph 83 on page 77 merely describe that which is, of course, the agreed premise for the possible application of section 733.  In other words, is the conduct in relation to which or with respect to which the inquiry as to good faith is being carried out and because section 733 presupposes a liability against which it might be providing protection, it cannot be a lack of good faith, of course, to have merely done that which rendered you liable.

CALLINAN J:   It might.  It might depend upon how you do it.

MR WALKER:   Yes.

CALLINAN J:   Over what period you do it.

MR WALKER:   Yes.

CALLINAN J:   What opportunity you had to abate whatever you have done.

MR WALKER:   Yes.  I accept all of that, your Honour, but the mere fact that you have done that which would render you liable but for 733 ‑ ‑ ‑

CALLINAN J:   But you use the words “the mere fact”.

MR WALKER:   Yes.

CALLINAN J:   It is the collection of facts that are relevant surrounding what you have done or failed to have done.

MR WALKER:   Without question, your Honour, and if there is a weakness in the claim to special leave on this point, we accept that it may be that there were highly particular facts, so it might be said.  Our answer to that is there are not highly particular facts here beyond the simple scheme that emerges as follows.  These are conclusions which, we apprehend, the respondent would support, namely, that there were opportunities presented – and, indeed, your Honours know they included consent dealings in the Land and Environment Court between the Council and the developer by which the developer undertook to carry out certain drainage works in order to get the residential subdivision consent – and those opportunities which extended over a number of years with varying budgetary or engineering ‑ ‑ ‑

CALLINAN J:   They had 30 years almost.

MR WALKER:   Quite.  With varying budgetary and engineering feasibilities, for example, the trial judge found that in the 1970s certain engineering expedients which were the subject of evidence were not reasonably to be required of the Council, whereas in the 1990s they may have been.  Now, in our submission, when one then looks at every other factor in paragraph 83, what one sees is that correctly looking at the circumstances of the case, we accept that that is what has to be done, all his Honour has identified in relation to the good faith question are matters which show the commission of the nuisance.  Take, for example, that pollution control basins were not constructed and a commitment to contain peak flood levels was not honoured.

CALLINAN J:   Well, breach of a commitment, does that not argue against good faith?

MR WALKER:   Both as a matter of ordinary English and for the legal context in question, one would hope so.  Yes, your Honour, we accept that.  I was about to say, the word of colour not honoured is one which involves no breach of contract and which involves the conduct of a local government body with responsibilities for matching its budget to that which calls to be ordered in priority ‑ ‑ ‑

CALLINAN J:   It should not make commitments if it does not think it is going to carry them out.

MR WALKER:   Your Honour, it is impossible, with great respect, to gainsay that as a general proposition and I do not suggest there should be exceptions to it.  Much lies, however, in the nature of the so‑called commitment.  There may be commitments which are more political than legal in nature and it should not be, in our submission, necessarily the case that alterations of policy in democratically elected bodies or, as to operational matters, alterations of perceptions as to priorities in relation to the expenditure of money would necessarily, without a great deal more, show a lack of good faith. 

Indeed, in our submission, being open to the possibility of altering what had previously been determined upon as an appropriate action by reference to a different appreciation of the facts or new facts altogether is, in our submission, a hallmark of good faith and certainly not a badge of bad faith.

The balance of paragraph 83, in particular, calls up matters which, in our submission, contradict the intended place in the statutory scheme by which risk is allocated as between private landowner and the public representative body, the Council, in relation to such drainage work.  For example, at line 44, my client is stigmatised in the following terms that its:

attitude was that it had a right to put the road drainage onto the land.

In our submission, so it did under the statutory provisions in question have a right, that is, a statutory authority, to drain its public roads so as to throw what, in the former provision which governed in the 1970s when much of the work was built, so as “to carry off water, mud and filth from the road by drains or sewers”.  Now, in our submission ‑ ‑ ‑

CALLINAN J:   Do you say that is a licence to put filth on private property?

MR WALKER:   I must say yes to that.  Yes, your Honour.  The whole point is the authorisation is a broad one and that if a council has authority to do that which one might suspect has been expressed in 19th century language, and all the better for it because it confronts one with the real nature of what happens, the filth is not the creation of the Council, of course.

CALLINAN J:   But it is collected?

MR WALKER:   Yes.  The filth is, as it were ‑ ‑ ‑

CALLINAN J:   Collected and concentrated.

MR WALKER:    ‑ ‑ ‑ the contribution of the natural world and human activities ‑ ‑ ‑

CALLINAN J:   But then collected and concentrated.

MR WALKER:   Then collected because there is a public road and the legislature has said the amenity of having a public road – which one might suppose this developer of residential subdivisions is greatly appreciative of – carries with it certain disadvantages for the neighbouring land, particularly when it is lower than the public road or the catchment area over which water flows from above and over the road.  Washouts of roads are obviously important matters in this country greatly regulated by the allocation of statutory power and authority on roads authorities to carry out works which would otherwise constitute either trespass or nuisance.  That will include where filth is generated both by human and natural activity and carried downhill in the natural way of water.  It naturally includes, and we submit inevitably or necessarily involves, the inclusion of that filth – the waste pollutants it is called in the politer language of today – in the water which is collected pursuant to statutory authority.

CALLINAN J:   Would the collection and concentration and then discharge in a concentrated form give rise to damages which could be claimed under section 241(3)?

MR WALKER:   It may well and this was a case where there was no section 241(3) application.

CALLINAN J:   No.

MR WALKER:   And that represents, as it were – and this was the argument your Honours appreciate below – the height of the correlative benefit given to those who were burdened by the grant of authority to roads authorities, such as councils, to collect and carry off water, mud and filth from the road onto neighbouring land and it must be onto neighbouring land because water flows downhill.  It is not suggested this is an authorisation only to drain roads by somehow collecting the water on the roads and ensuring that it does not flow downhill across any land which might be in private ownership, or in ownership which is not the road authority’s.

HAYNE J:   Could I just understand a little better than I do at the moment the point you now make.  It focuses on the acts and omissions of the Council?

MR WALKER:   It must be because of the statute, yes, your Honour.

HAYNE J:   It seeks to characterise the omission to abate over this period of many years as being done in good faith?

MR WALKER:   Yes, your Honour.

HAYNE J:   How can that task of characterisation be undertaken save by an examination of the whole of the record of events that occurred in relation to this land and what point of principle would emerge from that examination that is separate from the examination of the particular facts and circumstances of the case?

MR WALKER:   The answer to the first part of your Honour’s question is that task is involved in the appeal for which we seek special leave.  Your Honours appreciate from the kind of material that your Honours saw in Alamdo v Bankstown that that involves the material which the parties by their adversarial litigation efforts produced.  There is no indication, in our submission, notwithstanding what is raised, as it were, in terrorem by the respondent in writing.  There is no suggestion that there are conflicting facts of a kind where the inferences and findings, some of which are concurrent, of course, at trial and in the Court of Appeal, would present as a complicated or copious combing through of an obscure record.  That is not the case.

HAYNE J:   Be it so, let us assume that to be so, what do we at the end of it say that is useful, other than plaintiff wins, plaintiff fails, which is of particular moment to these parties?  Yes, I understand that, of course.

MR WALKER:   But it will not travel the distance from the Bar table to the Bench, no, your Honour.  I accept that.  So my answer to the first part of the question is, of course one will need to look at the facts and, indeed, in any case raising a matter of general principle about the application of a statute which is in the common form and which is of very considerable social importance, will always involve and must as a matter of our judicial method involve close attention not merely to the statute, but to the particular facts.  It all is in the application of the statute to the facts as, indeed, this Court said in Alamdo v Bankstown, specifically in relation to the good faith requirement and we accept both the strictures and the challenge that presents.  How then can such a case ever raise a matter of general principle ‑ ‑ ‑

HAYNE J:   …..that, Mr Walker.  Just tell me how it arises here.

MR WALKER:   I am sorry, your Honour, I was carried away.  How then in a case such as the present would one point to a matter of general principle?  Well, the answer is that when one can see that the particular factual adjudication, the assessment of all those circumstances for the application of a statutory protection in the particular case demonstrates an approach which, by reason of the circumstances which are regarded as nefarious, threatens to force, as it were, a judicial straightjacket on appropriate operational and local governmental decision making, then at least once a point of principle is raised for this Court.

CALLINAN J:   Mr Walker, I would just like to raise another matter with you.  I suggested to you that there might have been a claim under section 241(3).

MR WALKER:   Once upon a time, your Honour.

CALLINAN J:   Yes, and you acceded to that.

MR WALKER:   Yes.

CALLINAN J:   There seems to be authority in New South Wales against that I notice in paragraph 65 on page 69.

MR WALKER:   Your Honour I think is referring to ‑ ‑ ‑

CALLINAN J:   Rudd v Hornsby.  I have not read the case, I emphasise, Mr Walker, but it would appear to prevent such a claim in this case.  Page 69 of the ‑ ‑ ‑

MR WALKER:   Yes, your Honour.  I have got the ‑ ‑ ‑

CALLINAN J:   It just seems to me – as I say, I have not read the case, but it seems to me to be a curious result when the words were so general by the exercise of this power.

MR WALKER:   Yes.  The point about 241(3) is that you must be able to identify for your claim that the property has been damaged by the exercise

of the power.  Now, that is going to be by definition a factually driven conclusion.

CALLINAN J:   But as soon as there is a concentrated discharge of any polluted material there is going to be damage.  It may be slight, it may even be temporary.  It is still going to be damage.

MR WALKER:   Yes.  We would not be concerned in any appeal to contend against that and I stress there is no issue between the parties.

CALLINAN J:   I am just wondering whether you may have got the additional benefit of a principle which is, to say the least, doubtful.

MR WALKER:   Yes.  In our submission, this is an area which raises matters of general importance because the way in which paragraph 83 of Justice Giles’ reasoning, as adopted by the other members of the court, proceeds, it was the operational and policy decisions not to allocate the funds of a democratically elected and accountable local government authority with statutory power to drain roads, not to allocate in a particular way in order to upgrade drainage works which, when built, receive a clean bill of health from the trial judge, not disturbed in the Court of Appeal.  That is the 1970s.

Now, we will obviously have more direct difficulties in relation to the 1990s exercise, but, in our submission, there are not findings of fact which would, as it were, stand in the way of this Court investigating whether those simple priorities questions could ever amount to a lack of good faith.  I see the time.

HAYNE J:   Thank you, Mr Walker.  We need not trouble you, Mr Webster.

No point of general principle would conveniently fall for determination if special leave to appeal were granted in this matter.  In any event, in our opinion an appeal would enjoy insufficient prospects of success to warrant a grant of special leave.  Special leave to appeal is accordingly refused.  It must be refused with costs.

The Court will adjourn to reconstitute.

AT 11.30 AM THE MATTER WAS CONCLUDED