Promenade Investments Pty Limited v State of New South Wales

[1992] HCATrans 208

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S28 of 1992

B e t w e e n -

PROMENADE INVESTMENTS PTY

LIMITED

Applicant

and

STATE OF NEW SOUTH WALES

Respondent

Application for special leave

to appeal

MASON CJ ·
GAUDRON J

McHUGH J

Promenade 1 3/8/92

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON MONDAY. 3 AUGUST 1992. AT 4.34 PM

Copyright in the High Court of Australia

MR D.M.J. BENNETT. QC:  May it please the Court, I appear

with my learned friend, MR J.T. GLEESON, for the

applicant. (instructed by Aubrey F. Crawley & Co)

MR K. MASON. OC, Solicitor-General for New South Wales: I

appear with my learned friend, MR J.B. MASTON, for

the respondent. (instructed by H.K. Roberts, Crown

Solicitor for New South Wales)

MASON CJ:  Mr Bennett?

MR BENNETT:  May I hand up some submissions. They are a

little long but they may shorten my argument.

MASON CJ: Yes, Mr Bennett?

MR BENNETT:  If Your Honour pleases. The valuation issues,

if I can start with those, can be put in a very

short compass. We pay $25 million for a long term

sublease with an expectation, or a hope perhaps, of
having the lease varied and the zoning varied to

enable attack of commercial development.

One then has a number of steps leading up to a

point where cabinet says in November 1988, "in
principle we agree with all that". Then, from our

point of view, things start to go wrong. The Friends of Luna Park start demonstrating, the public perception changes and a series of events

occur which result, ultimately, in our lease being

acquired and then there being no prospect

whatsoever of the sort of development we want to do

being permitted.

Now, we say, in that situation there are two

principles which, working together, entitle us to

the higher figure, or at least a higher figure

discounted by the risk of it not happening from the

starting point of November 1988. The first is the

everything which is part of the scheme of which the	Pointe Gourde principle which says that you ignore
resumption point formed part. We say, that process
commences immediately after November 1988, after
the cabinet decision in our favour, when things
start going downhill. That is the point
immediately before the scheme of which the resumption point formed part commenced.

We then say the second limb is the Trocette

house point, and this does not depend on the true

views in Trocette house. Trocette house is the

marriage principle. It says, where you have two

interests, whether adjoining neighbours or landlord

and tenant, and the combined interest is of greater

value than the two interests individually, because

there is something which the two can do together

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which neither can do individually, then one is

entitled to compensation for the chance or the

possibility of that occurring, and, we say, of

course with our lease we could not have the

development in question but nor could the landlord

have it without our permission, but if the two of

us got together the problems in relation to the

lease vanished because working together the

conditions of the lease did not matter, we could

have whatever development we agreed on. And the

landlord, of course, at that stage was willing.

So, we say, putting together Pointe Gourde and

Trocette house you go back to November 1988 and we

are entitled to our $23 million not our

$3.S million.

GAUDRON J: That depends, however, whether at 8 November you

say there was a new scheme in prospect - - -

MR BENNETT:	Yes.
GAUDRON J:	- - - which was to develop the land in the way

you said. It is whether there were two competing schemes, one of which eventually prevailed rather

than whether there was something attaching to the

value of your leasehold.

MR BENNETT:  That is not the way the arbitrator put it,

Your Honour.

GAUDRON J:	No .
MR BENNETT:	He did not really ask himself that question;

that is part of the problem. He seems to have

assumed that you could not put Trocette house and

Pointe Gourde together as I have just done, because

what he said was, and it is pages 69 to 72 -

GAUDRON J:  But did he not say something very similar to

that, he said you only ever had a leasehold, no

matter how close you came to having something else,

all you ever had was the leasehold.

MR BENNETT: That is the error, Your Honour, that is the

error, because assume we had the simple case that

we only ever had a leasehold, and assume the

landlord was not the government for the moment to make the point clearer, and there were conditions

in the lease which prevent the development in

question, but the development is a desirable one

from the point of view of lessor and lessee, if the

government resumes both interests both lessor and

lessee can say, "Well, I am entitled to the

marriage value, or some allowance for marriage

value, because I could have got together with my

landlord and solved that problem and had this

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development", and the landlord says the same thing,

"I could have got together with my tenant and had

the development", and if they got together the
terms of the lease would not matter.

Now, for that reason we say that one ignores the - it is not correct to say, as the arbitrator

said, that because we only had a lease which did

not have the right to have this development we
never had the relevant prospect. If one applies

the Trocette house principle properly we had that
prospect. But the factor in this case which led to

the difficulty was that one had to do it with

Pointe Gourde because it was talking in a

hypothetical as at November 1988 rather than in an

actual as at April 1990.

The passages Your Honour refers to, and the

passages which we say are the ones which contain,

very clearly, this error, starting at page 69, he

says - perhaps I should start a bit earlier, 68 in

paragraph 78 line 15:

The conclusions advanced by Promenade in

support of its reliance on the Pointe Gourde

principle are that i~ April 1989 -

actually we say in November 1988 but leave that -

the government wished to buy out the lease in

order to enable tourism-style development on

the site. The flaw, however, in the Pointe

Gourde argument emerges in the two concluding

paragraphs in the State of Conclusions and I

quote them:

"3. There was no immediate change by the

Government ..... after 14 April, 1989. The

decision was simply made to defer matters .....

part of the scheme and should be ignored - 4. Under Pointe Gourde that deferral ..... was a

et cetera. Then says:

The evidence establishes beyond doubt that, long before the introduction of the

legislation on 6 June 1990, the government's

policy was crystallised -

that is correct -

The Pointe Gourde principle would undoubtedly

apply to prevent the government from

asserting, in answer to the present claim for

compensation, that no purchaser would have

paid a full, income earning based value for

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the lease of land that the government intended

to sterilise as and when it could. But that

is not what the government has contended in

this arbitration, and I do not regard the

Pointe Gourde principle as applying so as to

entitle Promenade to have the lease valued on

the basis of whatever commercial expectations

might have been entertained in April 1989.

Again, we say, in November 1988. But we say that

is exactly what Pointe Gourde does do, in

conjunction with Trocette house. He then says:

It is of primary significance to identify what

precisely -

what is the asset, and he says it was a lease and

deals with that, and then at line 16 on the next

page:

The added value that Promenade seeks to derive from the prospect that in 1987 when it

purchased the lease, and in 1988 and 1989 when

it was negotiating with the government, there

would ultimately come together both the

lessor's approval and the changing of existing

zonings ..... is not, in my view, a sound

starting off point for the application of the

Pointe Gourde.

That can only mean, I do not think you can apply a

Trockett house marriage approach in conjunction with a Pointe Gourde.

GAUDRON J:  No, the arbitrator explains that in the

following sentence though, does he not. He does

not say you cannot marry the two together, what he

says was there was never more than a mere chance,

there was never any scheme which allowed this to

happen, as such there was never any plan, there was

never any permission, it was just a prospect, which as it happened did not eventuate.

MR BENNETT:  Your Honour, what we had was described at

page 154 I think, yes, at page 154 is perhaps the

easiest place, although it is in the judgment of

the arbitrator as well.	The cabinet decision as at
November is set out at the top of that page.	Now,
this is something which is agreed between the

parties to have the effect of a cabinet decision:

"It was agreed that:

(i) the Government should allow the existing

Lessee to proceed with the re-development of

the Luna Park lease area as a tourism style

development encompassing the preservation and

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the integration of heritage items from the fun

park.

(ii) a new lease for 99 years .... .

(iii) the negotiating team ..... to be

co-ordinated -

et cetera. So, it was more than a mere hope, it

was something which was, as at November 1988,

cabinet policy, and we say that it is from that

point that things, from our point of view, went

downhill and the scheme of which the resumption

formed part developed, and everything which

occurred along that stream should be ignored.	And
in the light of that, what we interpret the
arbitrator as saying, although he does not use
these words, at 70 and 71 is, you cannot put together Trocette house and Pointe Gourde.

When I look back to November 1988, or however

far back Point Gourde makes me look, all I see is

that you have a lease which has conditions in it so

you cannot get that, and he ignores the fact that

if you apply the marriage principle that can be

ignored. Your Honours, the question whether you

can put the two together - - -

GAUDRON J: There was a bit more than a marriage principle,

though, involved if you look at the cabinet

resolution, was there not? It was a whole new

scheme that simply did not come to pass. It

involved surrender of the lease; granting a new

lease; presumably Act of Parliament to overcome

the objections of council if there were any.

MR BENNETT: Yes, but I do not submit for a moment - and I

will not if we obtain leave, succeed in the appeal

and go back to the arbitrators, be submitting that

we should get 100 per cent of that. But it is a

very significant chance which we lost, a chance

rather like the sort of reasoning that this Court

has applied in Amann, where the Court looked at the

chance in relation to a renewal of a lease. And

there is no doubt that, even as recently as Crown

v Murphy in this Court, it was said that one can

have regard to the chance of securing a change in

zoning.

Your Honours recall in that case - perhaps I

should hand up a bundle of cases for Your Honours

in which that one is present. It is

Crown v Murphy, 64 ALJR 593, it is the third case

in the bundle. What happened there was, this Court

affirmed the principle that one can have a negative

Pointe Gourde. What happened there was that there

was a scheme for rezoning being considered by a

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council in relation to an area which was used as a

turtle rookery, and a developer owned the land,

then the environmental authorities complained about
it and persuaded the council not to go ahead with

the scheme and, ultimately, to resume the land. And the Court said that what you valued was the

whole situation the developer was in before the

environmental authorities commenced their

activities, and that was a piece of land with a

strong prospect of rezoning. And at page - - -

GAUDRON J: A strong prospect of not being rezoned, was it

not?

MR BENNETT:  Yes, Your Honours, but when one values it,

there is no problem with valuing that. One sees

every day developers pay for a piece of land more

or less because of a prospect of rezoning.

At page 595, in the left-hand column, in the

middle paragraph:

The statement of principle by the

majority in the Full Court ..... are

unexceptionable. One purpose of this

principle is to ensure that a resuming

authority does not employ planning

restrictions to destroy the development

potential -

that is what I might call the positive Pointe

Gourde.

The principle applies in cases where there is

a direct relationship between the planning

restriction and the scheme of which resumption

is a feature and extends to cases where there
is merely an indirect relationship, provided

that the planning restriction can properly be

regarded as a step in the process of

resumption.

McHUGH J:  But that is the whole point about this case. I

must say I am bewildered, truly bewildered, as to what Point Gourde has got to do with this case at

all.

MR BENNETT:  Your Honour, what Pointe Gourde has to do with

it is that, but for the scheme which led to the

resumption - - -

McHUGH J: But what scheme? You use this word scheme, I

mean, in the case the scheme means resumption

process, that is what it means.

MR BENNETT:  Your Honour, it did not in the Crown v Murphy.

In the Crown v Murphy it was held to include the

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pressure bought to bear on the local council

causing it not to rezone the land and that was held

to be part of the scheme, so that what one values

is the chance of rezoning. That is referred to in

the second column of 595.

McHUGH J: But in this case after November 1988, putting

everything in your favour, there was some prospect

that you would be allowed to develop the land as a

tourist development.

MR BENNETT:  Yes.

McHUGH J:  Now, public pressure apparently built up and then the government decided to resume the land. Now,

what they resumed was a leasehold; nothing that

they did in that resumption imposed any

restrictions on you.

MR BENNETT:  No, what it did was, and this is almost exactly

what Crown v Murphy was about, it stopped a process

which might have occurred.	Your Honour, if one
has -

McHUGH J:	No, it did not stop the process that occurred, the process had already been stopped before any
resumption had started.
MR BENNETT:	Yes, but what stopped the process was the

scheme of making Luna Park into an amusement park,

having had the public ownership and part of that is

having the lease resumed, that was - - -

McHUGH J:  We have just different understandings of what is

meant by "scheme" in this context I am afraid,

Mr Bennett.

MR BENNET~:	Your Honour, in Crown - - -
GAUDRON J:	In Crown v Murphy it was somewhat the other way

around. The complaint was that they had not taken

the Pointe Gourde principle into consideration.

MR BENNETT: Yes.

GAUDRON J: And the question was whether they needed to when there was a finding on the probabilities that there

would never have been any rezoning any way.

MR BENNETT:	Yes.
GAUDRON J:	So it does not really assist you because you

have to take this case one further, you have to say

that there was something there in the first place

on which Pointe Gourde could operate.

MR BENNETT:  I had a cabinet decision.

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GAUDRON J:  You had, but that itself was another scheme,

surely, which as things happened did not eventuate.

MR BENNETT: May I put this example to Your Honour. Suppose

in December 1988, immediately after the cabinet

decision, either a tortfeasor had destroyed the

land or rendered it useless, or someone in breach

of contract with us had caused us to forfeit our

lease and lose all chance and one was assessing

damages, one would not ignore that cabinet decision

in assessing damages. The court would say:

looking at this decision what was the probability

of you achieving the venture; being allowed to go

ahead with it; cabinet not changing its mind and

the venture being successful, and that chance would

have been valued.

McHUGH J: But that only means to say that in November 1988

the value of the land was greater than at the date

when it was resumed. It still does not seem to me

to invoke Pointe Gourde.

MR BENNETT:  If Your Honours go to the passage at page 192,

where Mr Justice Sheller cites a decision of the

English Court of Appeal, and it is at line 10,

where he says:

"A scheme is a progressive thing. It starts

vague and known to few. It becomes more

precise and better known as time goes on.

Eventually it becomes precise and definite,

and known to all. Correspondingly, its impact

has a progressive effect on values. At first

it has little effect because it is so vague

and uncertain. As it becomes more precise and

better known, so its impact increases -

et cetera. It is this increase - - -

McHUGH J: But it has to be the scheme of the government or

the resuming authority, it is part of the
resumption process.	A public clamour is not part
of the scheme.

MR BENNETT:  But the consideration of it by the government

is, and, Your Honour, we were not given one penny

for our prospects as at December 1988 of getting

the development through.

McHUGH J: Because that was not the relevant date.

MR BENNETT:  The relevant date is, when did the scheme of

which the resumption formed part commence? That is

the question which has to be asked. Now, we say it

was some time shortly after November 1988 on the

facts as found by the arbitrator.	It may need to go
back to have that clarified.

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McHUGH J: If I recollect the authorities correctly, you

have got to, as best you can, determine the period

when the resumption process begins. Now, you have

got to fix that date and after the resumption

process begins you can say any changes in value

from that period on can be ignored.

MR BENNETT:  Your Honour, with respect, it is not the

resumption process. Pointe Gourde requires one to

look at the overall scheme of which the resumption

formed part. It is something broader than the

resumption process.

GAUDRON J:  But it does not say you have regard to and make

allowance for public pressure. You see, in the

Murphy case the rookery was on the land and the fact that the rookery was on the land was one of those facts which made it likely that it would not get rezoned.

MR BENNETT:	Yes.
GAUDRON J:	Now, in this case the fact that it was used

ordinarily, or had for some time been used for an

amusement park, was one of those facts that made it

likely that there would be public clamour if you

tried to develop it in any other way. That does

not fall within Pointe Gourde at all, the public

clamour, the public protest. What that simply does

is indicate that the prospect of the redevelopment

was not very great.

MR BENNETT: 

Your Honour, what that would require, accepting

everything Your Honour puts to me, is that we would
get a bit less, but one would say - - -

GAUDRON J: Or a lot less?

MR BENNETT:  Maybe a lot less, but something. What one

would do is one would say the relevant date is the

first moment when the government started reacting

and thinking seriously about the public

clamour - - -

GAUDRON J: Which would seem to be at the earliest, would it

not, when it gave you notice to reopen?

MR BENNETT:  It might be earlier than that, it would

probably be early 1989. But whatever the date is

one would take that date and one would then say,

"What have you lost?". What we have lost is a

piece of land which, under the lease, we can only

use for the limited purpose, with a cabinet

decision approving something much wider and the

possibility of public reaction that may cause

cabinet to change its mind, and one values that.

But that was not done. That was not valued at all.

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It was just totally disregarded on the basis that

there was a lease. But Your Honours, may I just

say this also in relation to Justice McHugh's

point. If one goes to what Mr Justice Jacobs said

in Housing Commission v San Sebastian, 140 CLR 196

at page 213, which is the last of the cases in my

volume, there there is a reference to a statutory

re-enactment of Pointe Gourde, and in commenting on

that His Honour says, at about a third of the way

down the page, just after the reference to the
Stocks & Parkes case the second time:

Section 124 refers to the establishment of public works. These words are in my opinion

wide enough to cover the whole subject matter

of the establishment of the particular public

work - proposal or requirement by the relevant authority, intention of the planning authority

by such a zoning to induce the establishment

of the public work, even urging by outside

bodies that the public work should be

established.

So, outside urgings are matters that one can take

into account, and there is ample reference in the

authorities to sections such as section 124, being

mere statutory re-enactments of the Pointe Gourde

principle.

So, Your Honour, that is the first point and

we would submit there is an important issue as to

whether you can put the two principles together;

whether you can say, as we say you can, that if

Pointe Gourde takes you back to the beginning of

the scheme in general terms of which the resumption

formed part, one can then superimpose on that a

marriage argument to say that one can look at what

would have happened if I had got together with the

other person who had the interest.

The second matter concerned the train park.

The train park is not a description of part of what

Luna Park was, it is an area next door to it in

which, apparently, trains are parked, and one of the matters that was considered at various times
was the possibility of enhancing the proposed

development that we were concerned about by

amalgamation with that site. And what the

arbitrator said and what the court said was, "Well,

you cannot have that because the owner of that

land, the government, would not have been part of

it II•

Now, what we say is that when valuing marriage value one should not look at the subjective

intention of the adjoining owner. This issue is

discussed extensively in only one case and that is

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an English decision of the Court of Appeal in

Trocette Property Co v Greater London Council. It

is reported only in 28 P & CR 408, and in that case

there was a division in the Court of Appeal. The

majority said that you can take into account the

subjective consideration as to what your neighbour

or landlord wants to do; the minority,

Lord Justice Cairns, said you apply an objective

test. We submitted for the objective case and we

failed. That, I submit, is an important question

of law, and may I just put to Your Honours the

principal argument as to why the minority is right.

It is the example I give in my submissions.

If you have two blocks of land each worth

$1 million on its own, together worth $3 million,

because one can build something bigger on the two

of them, and assume one owner is an economic

rationalist who says, "Of course, I would get

together with my neighbour if it is to my

advantage". The other, for reasons of obstinacy,

impecuniosity or irrationality says, "No, I will

not and there is no way I ever will".

Now, it cannot be the law that if the council

resumes those two blocks it pays the obdurate owner

$1.5 million because he gets his full marriage

value because a purchaser would have known he could

immediately join with next door, whereas the

rational owner only gets $1 million because of the

obduracy of his neighbour. Yet that is the

consequence of applying this view and, indeed, the

example given in Trocette house itself, where it is

landlord and tenant, is that if the landlord is

unreasonable about it and says, "I will not

consent to something sensible", then the result is

that on a resumption the landlord gets compensated

as if the marriage value were taken into account

and the tenant gets compensated on a different

basis, and, in our respectful submission, that just

cannot be right. This is an important question of

valuation law; it has never been considered in
Australia; there is no case considering Trocette

house; it has been referred to a few times in

English lower court decisions, I think once or

twice in passing in the Court of Appeal, but it has

never been discussed again. We would submit it is

an important issue, it arises squarely in this case

and it is a ground on which special leave should be

granted.

The Arbitration Act point is an adjective

point - - -

GAUDRON J: But must that not be your main point? The only

outcome of this appeal could be for the matter to

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go back to the Court of Appeal to be considered

again.

MR BENNETT: If I succeeded on the arbitration point, yes,

Your Honour.

GAUDRON J:  We would not, would we. grant leave and hear an

appeal in this Court as though it were an appeal in

the supreme court?

MR BENNETT:  It depends which points Your Honour regards as

important.

GAUDRON J: Your first point must really be your arbitration

point, must it not, and it is only a question of

leave to appeal.

MR BENNETT:  Your Honour, the arbitration point, I would

submit, is a significant point. It arises under a

new provision of the law which has an extremely

dramatic effect in relation to arbitration,

especially in a case like this where the

arbitration was not consensual but was forced upon

us by statute. And the question is, what is meant

by the phrase "manifest error" in the formulation

of the right of appeal?

The section appears in the appeal book, perhaps most clearly at the beginning of the

judgment of Mr Justice Sheller, at page 173.

Your Honours see:

The Supreme Court shall not grant

leave ..... unless it considers that -

the first is clearly made out -

the determination of the question ..•. could

substantially affect the rights of one or more

parties -

I suppose there is 20 million reasons why that is

made out, and -

(b) there is:

(i) a manifest error of law on the face of the

award; or

(ii) strong evidence that the arbitrator or

umpire made an error of law and that the

determination of the question may add, or may

be likely to add, substantially to the
certainty of commercial law.

It was for that reason that I dealt with the substantive point first, because if I satisfied

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Your Honours that either of those points were

points of public importance of a type that would

justify special leave in their own right, then it
is probable that they would fall within that

provision, although the test is not identical, of course, the wording is different, the probability

is that something falling within the one would fall

within the other, and if it fell within (b)(ii) the

Arbitration Act point, which I am now dealing with,

would not arise.

But if Your Honours were against me on either

of those points being special then the first

question arises as to what is meant by "manifest

error of law".

McHUGH J: Is it not a problem for you, though, that at 196

the court took the view that disclosed no error of

law, full stop, manifest or otherwise?

MR BENNETT:	Your Honour, that is something I have to deal with, and I seek to deal with it. But, in addition
to the two matters I have referred to, there was
another error of law and that is the central one of
simply never considering when this scheme, of which
the resumption formed part, commenced. Now,
His Honour never applied himself to that question
and, we submit, that, on any view of it, is an
error of law and a manifest error of law. It may not be a special leave point in its own right and it may not add to the certainty of commercial law,
but it is a manifest error of law.
Now, what is said about the word "manifest" is that it must be apparent without argument. That
was a test which Mr Justice Rogers took, and
Mr Justice Sheller seems partly to have parted from it and partly not to have parted from it, and he comes up with something which seems very similar and it must be clear without argument. And that
appears most clearly, it is at pages 181 to 184.
He refers to cases in which the word "manifest" has been dealt with and refers to the policy of the section, and then, in relation to argument, he says
this at page 183 line 24:

There is nothing, in my opinion, in the

language of the subsection or in any other

material, to which consideration can

appropriately be given pursuant to the terms

of the Interpretation Act which would allow

the judge to proceed to determine the application without hearing argument.

So he says it does not mean that you have got to be

persuaded without hearing any argument, but as

Your Honour pointed out:

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"manifest", in the context of the subsection,

which contemplates the grant of leave before

an appeal can be pursued, connotes an error of

law that is more than arguable.

That is a reference to Your Honour's judgment in

Larkin v Parole Board. Now, "more than arguable",

of course, has nothing to do with whether one has

to hear forensic argument or not, it simply means

at a higher level in the strength of the point, or strength of lack of it if the point is succeeding, than arguable. If one thinks of the range which

might be put in an interlocutory injunction argument, there is just arguable, arguable,

strongly arguable, reasonably likely to succeed,

one can have a hierarchy, and Your Honour's

description, which we respectfully submit is

correct, is more than arguable is something above

arguable, wherever that appears on the scale.

But the approach taken by the trial judge, and

the approach which Justice Sheller seems to take in

the balance of what he says, is that it must be so

clear that it is apparent without forensic

argument.	Now, that can mean one thing to one
judge and one thing to another.	If one has a very

complicated fact situation but when one has

carefully worked through it there is a strong case

one way, I would submit, there is manifest error,

but on the test laid down there would not be.

And His Honour goes on to put the test of the

judge below because, at line 32, he says, having

referred to Your Honour's test:

There should, in my opinion, before leave is granted be powerful reasons for considering on a preliminary basis, without any prolonged

adversarial argument, that there is on the

face of the award an error of law.

Well, that takes something a little bit more

intermediate. It says, "Well, you can have some argument but it mustn't be prolonged". That is, with respect, an impossible test.

The test, in my respectful submission, must

depend on the strength of the case rather than the

degree of argument required to justify it and one

could take the analogy of what was said in cases

like General Steel where, in considering whether to

strike out a claim on the ground that there is no

reasonable cause of action, one often may have to

have days of argument before one sees that it is

clear beyond doubt that one party must succeed.

There is nothing surprising about that, or

inconsistent, and that is, in my respectful

Promenade 15 3/8/92

submission, a far more appropriate meaning to be
given to "manifest" in this context, because

otherwise the consequence is that arbitrators can

be as wrong as they like and unless the case is

terribly simple, so that one can just glance at it

and say, "Oh, yes, I see an error", without any
argument or perhaps without more than a few moments

of explaining the point, there is no possibility of
leave to appeal. In my respectful submission,

however draconian the legislation was intended to

be, it was not intended to be all that draconian.

I stress that our point in relation to what I

have called the negative Pointe Gourde decision,

the failure of the arbitrator to ask the question:

when did this commence? is a matter which has

never, by any court, in this litigation, been

tested against that sort of test.

GAUDRON J: But would that take you the full distance,

Mr Bennett, because you are still subject, are you

not, to (S)(a), to showing that it would:

substantially affect the rights of one or

more -

and if you go back to what I said earlier, the

suggestion that the probabilities of the

redevelopment were never high, and your concession that you would never get it all in any event, then

you may be very short of establishing that you

would make a substantial difference just by looking

at the time when the scheme commenced.

MR BENNETT:  Your Honour, we would submit this: a

percentage - and we would submit a high percentage,

~nd that is a matter for argument on another day -

of $19.5 million is something substantially

affecting our rights. It is a very large sum of

money and a proportion of it, particularly if we

we are wrong and it is a 40 per cent proportion or	are right and it is a high proportion, but even if
a 30 per cent proportion, that is still a lot of money and, in my respectful submission, clearly a
matter which substantially affects our rights. So
I would submit that the first limb is clearly
satisfied and the question is whether I satisfy either of the second limbs.

The only other minor matter I need to mention

is that there was a question as to whether the

amendment to the Arbitration Act which brought in

this provision was picked in an ambulatory way by

the Luna Park Act which said the question of

compensation would be referred to arbitration under

the Commercial Arbitration Act. We lost that point

in both courts below. It is not a point which is

Promenade 16 3/8/92

special, but if the Court is going to hear

argument, it would not take more than half an hour,

or perhaps an hour at the most on both sides, to

argue that out, and we submit that also should be

allowed to be in the notice of appeal.

I have prepared an amended notice of appeal

which tidies up the notice a bit and puts more

clearly the points I have referred to in argument.

I have given my learned friend copies. Could I

hand that to the Court. May it please the Court.

MASON CJ: Thank you, Mr Bennett. The Court need not

trouble you, Mr Solicitor.

The Court is not persuaded that the

applicant's prospects of success in the proposed

appeal are sufficiently strong to justify the grant

of special leave to appeal.	The application is
therefore refused.

MR MASON:	I seek costs.
MASON CJ:	You do not oppose that, Mr Bennett?
MR BENNETT:	No, Your Honour.
MASON CJ:	The application is refused with costs.

AT 5.19 PM THE MATTER WAS ADJOURNED SINE DIE

Promenade 17 3/8/92