Ryan v Westgroup Pty Ltd (Receivers and Managers Appointed)
[2004] WASC 1
RYAN & ANOR -v- WESTGROUP PTY LTD (RECEIVERS AND MANAGERS APPOINTED) [2004] WASC 1
| Link to Appeal : | [2005] WASCA 68 [2005] WASCA 68 |
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASC 1 | |
| Case No: | COR:289/2003 | 16 DECEMBER 2003 | |
| Coram: | PULLIN J | 14/01/04 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Declarations made | ||
| B | |||
| PDF Version |
| Parties: | MICHAEL JOSEPH PATRICK RYAN IAN CHARLES FRANCIS WESTGROUP PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ACN 067 744 254) NATIONAL AUSTRALIA BANK LTD (ACN 004 044 937) POLICE & NURSES CREDIT SOCIETY LTD (ABN 69 087 651 876) |
Catchwords: | Mortgages and charges Debenture Construction of document Turns on own facts |
Legislation: | Airports (Transitional) Act 1996, s 21, s 22 Airports Act 1996 |
Case References: | Neat Domestic Trading Pty Ltd v Wheat Export Authority (2000) 64 ALD 29 R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 Wik Peoples v State of Queensland (1996) 187 CLR 1 Agnew v CIR [2001] 2 AC 710 Arturi v Zupps Motors Pty Ltd (1980) 49 FLR 283 Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 Blizzard v O'Sullivan [1994] 1 Qd R 112 Chapmans Ltd v Australian Stock Exchange Ltd (1994) 123 ALR 215 Chittick v Ackland (1984) 53 ALR 143 Craddock Bros v Hunt [1923] 2 Ch 136 Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 Herman v Gill (1921) 24 WALR 10 Manchester Ship Canal Co v Manchester Racecourse Co [1901] 2 Ch 37 McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579 Neat Domestic Trading Pty Ltd v AWB Ltd (2003) 198 ALR 179 Ninety Five Pty Ltd (in liq) v Banque Nationale de Paris [1988] WAR 132 Pan Foods Co Importers & Distributors Pty Ltd v Australia & New Zealand Banking Group Ltd (2000) 170 ALR 579 Pilcher v Rawlins (1871) LR Ch App 7 259 Re Michael; Ex parte WMC Resources Ltd [2003] WASCA 288 Rye v Rye [1962] AC 496 Swiss Bank Corporation v Lloyds Bank Ltd [1979] 1 Ch 548; appealed [1982] AC 584 The National Mutual Life Association of Australasia v Hamersley Iron Pty Ltd, unreported; FCt SCt of WA; Library No 5642; 27 November 1984 Wallis v Downard-Pickford (North Queensland) Pty Ltd (1994) 179 CLR 388 Wilson v Anderson (2002) 190 ALR 313 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- IAN CHARLES FRANCIS
Plaintiffs
AND
WESTGROUP PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ACN 067 744 254)
Defendant
- Plaintiff
AND
POLICE & NURSES CREDIT SOCIETY LTD (ABN 69 087 651 876)
Defendant
(Page 2)
Catchwords:
Mortgages and charges - Debenture - Construction of document - Turns on own facts
Legislation:
Airports (Transitional) Act 1996, s 21, s 22
Airports Act 1996
Result:
Declarations made
Category: B
Representation:
COR 289 of 2003
Counsel:
Plaintiffs : Mr C G Colvin SC & Mr J A Thomson
Defendant : Mr J Gilmour QC & Mr D J Pratt
Solicitors:
Plaintiffs : Mallesons Stephen Jaques
Defendant : Phillips Fox
CIV 2159 of 2003
Counsel:
Plaintiff : Mr C G Colvin SC & Mr J A Thomson
Defendant : Mr J Gilmour QC & Mr D J Pratt
Solicitors:
Plaintiff : Mallesons Stephen Jaques
Defendant : Phillips Fox
(Page 3)
Case(s) referred to in judgment(s):
Neat Domestic Trading Pty Ltd v Wheat Export Authority (2000) 64 ALD 29
R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327
Wik Peoples v State of Queensland (1996) 187 CLR 1
Case(s) also cited:
Agnew v CIR [2001] 2 AC 710
Arturi v Zupps Motors Pty Ltd (1980) 49 FLR 283
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
Blizzard v O'Sullivan [1994] 1 Qd R 112
Chapmans Ltd v Australian Stock Exchange Ltd (1994) 123 ALR 215
Chittick v Ackland (1984) 53 ALR 143
Craddock Bros v Hunt [1923] 2 Ch 136
Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500
Herman v Gill (1921) 24 WALR 10
Manchester Ship Canal Co v Manchester Racecourse Co [1901] 2 Ch 37
McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579
Neat Domestic Trading Pty Ltd v AWB Ltd (2003) 198 ALR 179
Ninety Five Pty Ltd (in liq) v Banque Nationale de Paris [1988] WAR 132
Pan Foods Co Importers & Distributors Pty Ltd v Australia & New Zealand Banking Group Ltd (2000) 170 ALR 579
Pilcher v Rawlins (1871) LR Ch App 7 259
Re Michael; Ex parte WMC Resources Ltd [2003] WASCA 288
Rye v Rye [1962] AC 496
Swiss Bank Corporation v Lloyds Bank Ltd [1979] 1 Ch 548; appealed [1982] AC 584
The National Mutual Life Association of Australasia v Hamersley Iron Pty Ltd, unreported; FCt SCt of WA; Library No 5642; 27 November 1984
Wallis v Downard-Pickford (North Queensland) Pty Ltd (1994) 179 CLR 388
Wilson v Anderson (2002) 190 ALR 313
(Page 4)
1 PULLIN J: These are two sets of proceedings being heard together. In the company proceedings, COR 289 of 2003, the plaintiffs seek a declaration that, as receivers, they validly entered into possession of the lease and licence interests of the defendant, Westgroup Pty Ltd ("Westgroup"), at Perth International Airport under the terms of a debenture dated 28 August 1995 ("Debenture").
2 In CIV 2159 of 2003, which action is being heard at the same time, the plaintiff bank ("Bank") seeks a declaration binding the defendant, the Police & Nurses Credit Society Ltd ("Police & Nurses"), that upon the sale or disposal by Westgroup of its leasehold interest, the Bank is entitled to the proceeds in priority to the Police & Nurses to the extent that the proceeds do not exceed the moneys due to it under the debenture.
Relevant Facts
3 On 28 August 1995, Westgroup granted the Debenture to the Bank.
4 In July 1997, the Commonwealth leased to Westralia Airports Corporation Pty Ltd ("WAC"), land at Perth International Airport, and WAC then subleased the land to Westgroup ("Sublease").
5 Subsequently, on or about 11 February 2002, the Police & Nurses took a mortgage by way of sub-demise over the Sublease.
6 The Police & Nurses contend that the Debenture does not apply to the Sublease. If that submission is upheld, then the Police & Nurses will be entitled to the proceeds of sale.
The Dispute
7 The dispute involves a short point of construction.
8 Clause 41.1 of the Debenture provides:
"If, without any consent, … (… 'Requisite Step') being obtained, … ('Completed'), a Statute prohibits any property or asset of the Mortgagor from being charged or provides that if such property or asset is charged, this Deed is void:
(a) this Deed does not operate to charge that property or asset unless and until the Requisite Step has been Completed with respect to the property or asset concerned; and
(b) the Mortgagor undertakes diligently to make all applications, pay all costs and expenses and do all things
(Page 5)
- necessary to have the Requisite Step Completed in relation to all the property and assets concerned."
9 The term "statute" is defined in cl 1.1 of the Debenture to mean:
"Any statute, regulation, rule, ordinance or by-law and includes any instrument or order made under any of them".
10 The Police & Nurses contend that under this extended definition of statute, the Sublease is a "statute". The Police & Nurses further argue that the Sublease, being a statute, contains within it a prohibition of the kind referred to in cl 41.1, because cl 18.4 of the Sublease provided that Westgroup should not mortgage or otherwise encumber its interest in the Sublease without the prior consent in writing of WAC. For the purposes of the present application, the Bank accepts that prior consent in writing of WAC was not obtained by Westgroup before the grant of the Debenture.
11 Before 1996, airports were owned and operated by the Federal Airports Corporation. In 1996, the Airports (Transitional) Act 1996 and the Airports Act 1996 were passed by the Commonwealth. The explanatory memorandum to the Airports (Transitional) Bill 1996 read as follows:
"There are 22 airports which are currently owned and operated by the Federal Airports Corporation (FAC) and referred to as Federal airports. This Bill puts in place a framework which gives effect to the Government's decision to lease all the Federal airports effectively as ongoing businesses with staff and management in place. The framework allows for:
• the revesting of the land at, and operating assets and liabilities (other than debt) of, Federal airports in the Commonwealth;
• a flexible disposal strategy which, in respect of each of the airports, allows either;
i) the granting of leases and transfer of assets and liabilities to Commonwealth owned airport-lessee companies and the subsequent sale by the Commonwealth of its shares in those companies;
(Page 6)
- ii) the sale of Commonwealth owned companies and the granting of leases and transfer of assets and liabilities to those companies after the Commonwealth has sold its shares; or
iii) the granting of leases and transfer of assets and liabilities to private airport-lessee companies.
…"
12 The explanatory memorandum relating to the Airports Bill 1995 read:
"The purpose of the Bill is to establish the regulatory arrangements to apply to the airports currently owned and operated on behalf of the Commonwealth by the Federal Airports Corporation (FAC), and Sydney West Airport, following the leasing of those airports. The Bill also includes some provisions which can be applied to other airports.
…"
13 The Airports (Transitional) Act 1996 provided that the Minister might declare that the FAC's right, title or interest in the land should vest in the Commonwealth. Sections 21 and 22 of the Act authorised the Commonwealth to grant airport leases to a Commonwealth owned company or to privately owned companies. The Airports (Transitional) Act 1996 also authorised the making of regulations to prohibit various kinds of subleases of an airport lease, to prohibit specified terms from being included in subleases, to require various terms to be included in subleases, and prohibiting a sublessee of an airport lessee company from disposing of a sublease by way of declaration of trust. Regulations were made pursuant to some of these provisions.
14 The explanatory memorandum relating to the Airports Bill 1995 in relation to cl 34, which was the proposed power to make regulations prohibiting subleases of airport leases, contained within it the statement:
"This clause provides that the regulations may prohibit specified kinds of subleases of airport leases, that the lessee of an airport lease must not grant a sublease of a prohibited kind, and that a purported sublease which contravenes the regulations is of no effect.
(Page 7)
- The clause is intended to ensure that subleases are not used to avoid other provisions of the Bill. It is expected that the power it provides will not need to be widely used and is essentially a reserve power."
15 I now turn to consider whether the Sublease is an "instrument" "made under" the two Acts to which I have referred or under the Regulations to which I have referred. It is submitted that the Sublease is an instrument made under the Airports (Transitional) Act 1996, in effect, because its existence depends upon the WAC lease and because the Sublease is controlled by provisions of that legislation and the Regulations.
16 There is no doubt that the Sublease, as a formal legal document, is an "instrument". The issue is, however, whether it is an instrument "made under" the legislation.
17 The word "under" has a large number of meanings, some of them closely related and some not so. The Police & Nurses submit that "made under" means, in effect, "subject to the influence" of the legislation referred to.
18 Some assistance in resolving this debate may be found in relation to cases which consider similar phrases. The expression "decision made under an enactment" has been considered in cases under the Administrative Decisions (Judicial Review) Act 1977 (Cth). In particular, that expression was considered in Neat Domestic Trading Pty Ltd v Wheat Export Authority (2000) 64 ALD 29 by Mathews J. Her Honour considered a number of decisions on point and reached the conclusion that there was a dual test, namely, (1) whether the decision in question was expressly or impliedly authorised or required by the enactment, and (2) whether the decision was given force or effect by the enactment. That reasoning cannot be applied directly to this case because the expression in the Neat Domestic case (supra) concerned a "decision" made under an enactment, and the phrase here concerns an "instrument or order" made under a statute. In my opinion, "made" bears its ordinary meaning. In particular, it is my opinion that "made", or rather "make", means "to bring into existence … to produce … to constitute … to give rise to …". See Macquarie Dictionary. The question is, therefore, whether the Sublease was, in that sense, made under the legislation.
19 The Police & Nurses argue their case by first referring to the WAC lease. I agree that that lease was "made" under the Airports (Transitional)
(Page 8)
- Act 1996. It was that Act which authorised the Commonwealth to grant the lease; that Act therefore gave rise to the WAC lease. On the other hand, the legislation, although it imposes or potentially imposes restrictions on subleases, says nothing at all about the production or bringing into existence of a sublease. That is left to the ordinary law of contract. The Sublease is not brought into existence, produced by, or constituted by the legislation. The legislation does not give rise to the Sublease. The legislation recognises that there may be a sublease, but the recognition that there may be a sublease does not amount to the "making" of a sublease. The Sublease was brought into existence, produced, or constituted by reason of the contract entered into between WAC and Westgroup. That contract gave rise to the Sublease.
20 There was a submission by the Police & Nurses that the WAC lease was not a common-law lease by reason of various provisions in the legislation. Reference was made to Wik Peoples v State of Queensland (1996) 187 CLR 1 at 112 and 117 and R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 at 334, 340 - 344, to support this submission. It is not necessary to decide whether the WAC lease should be described as a common-law lease or as a statutory interest in land similar to, but different from, a lease, because that does not alter the outcome which I have referred to above. I am also of the view that it does not matter whether the Sublease should be regarded as a common law sublease or an agreement dealing with a statutory interest in land. The question is whether, however it is characterised, the Sublease was "made" under the Airports (Transitional) Act 1996, the Airports Act 1996, or the Regulations. In my opinion, it was not.
21 As a result, I will make the declarations sought by the receivers and by the Bank.
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