The Trust Company (Australia) Ltd v Hungry Jack's Pty Ltd
[2021] WASCA 29
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: THE TRUST COMPANY (AUSTRALIA) LTD -v- HUNGRY JACK'S PTY LTD [2021] WASCA 29
CORAM: BUSS P
BEECH JA
VAUGHAN JA
HEARD: 4 FEBRUARY 2021
DELIVERED : 4 FEBRUARY 2021
PUBLISHED : 25 FEBRUARY 2021
FILE NO/S: CACV 129 of 2020
BETWEEN: THE TRUST COMPANY (AUSTRALIA) LTD
Appellant
AND
HUNGRY JACK'S PTY LTD
First Respondent
SELDEN PTY LTD
Second Respondent
CLASSIC SWAN PTY LTD as trustee for THE IANNANTUONI FAMILY TRUST
Third Respondent
CELESTINO MARIO IANNANTUONI
Fourth Respondent
GIUSEPPINA ANTONIETTA WETTER
Fifth Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: TOTTLE J
Citation: HUNGRY JACK'S PTY LTD -v- THE TRUST COMPANY (AUSTRALIA) LTD [No 2] [2020] WASC 427
File Number : CIV 3129 of 2016
Catchwords:
Practice and procedure - Pleadings - Application to amend pleadings - Whether any breach of procedural fairness - Whether a breach of procedural fairness was occasioned by determining the application on the papers - Whether a finding by the judge below, which the appellant contended was not advanced by the parties and of which the parties did not have notice, was material to the proposed amendments and to the application to amend
Legislation:
Rules of the Supreme Court 1971 (WA), O 4A r 4A
Result:
Leave to appeal refused
Appeal dismissed
Category: B
Representation:
Counsel:
| Appellant | : | R W Douglas |
| First Respondent | : | J T Schoombee |
| Second Respondent | : | J T Schoombee |
| Third Respondent | : | No appearance |
| Fourth Respondent | : | No appearance |
| Fifth Respondent | : | No appearance |
Solicitors:
| Appellant | : | K J Levy |
| First Respondent | : | HWL Ebsworth Lawyers (Perth) |
| Second Respondent | : | HWL Ebsworth Lawyers (Perth) |
| Third Respondent | : | No appearance |
| Fourth Respondent | : | No appearance |
| Fifth Respondent | : | No appearance |
Case(s) referred to in decision(s):
Defendi v Szigligeti [2019] WASCA 115
Hungry Jack's Pty Ltd v The Trust Company (Australia) Ltd [No 2] [2020] WASC 427
Kirk v Sutherland [1949] VLR 33
Mijatovic v Legal Practitioners Complaints Committee [2008] WASCA 115; (2008) 37 WAR 149
Nobarani v Mariconte [2018] HCA 36; (2018) 265 CLR 236
Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141
REASONS OF THE COURT:
Introduction
The appellant, The Trust Company (Australia) Ltd (TrustCo) sought leave to appeal against the decision of the primary judge[1] disallowing amendments to TrustCo's defence to an action brought by the first and second respondents (respectively, Hungry Jack's Pty Ltd (Hungry Jack's) and Selden Pty Ltd (Selden)).
[1] Hungry Jack's Pty Ltd v The Trust Company (Australia) Ltd [No 2] [2020] WASC 427 (primary reasons).
In the action, Hungry Jack's and Selden claim rights of adverse possession over land of which TrustCo is the registered proprietor. The land the subject of the plaintiffs' adverse possession claim is adjacent to land (the Leased Land) currently owned by the third, fourth and fifth respondents. Since about 1971, Hungry Jack's has operated a fast‑food outlet (the Outlet) on the Leased Land, occupying the Leased Land with the consent of the registered proprietor or the lessor from time to time. For certain periods within 1971 to present, Selden was the registered proprietor of the Leased Land or leased the Leased Land from the registered proprietor.
Hungry Jack's and Selden claim that, from about 1980, Hungry Jack's has exclusively possessed the land the subject of the claim (the Disputed Land) in the course of operating the Hungry Jack's Outlet and occupying the Leased Land. They claim that thereby Selden (through Hungry Jack's' adverse possession) or, alternatively, Hungry Jack's acquired title to the Disputed Land, by way of adverse possession.
On 6 May 2020, TrustCo filed an amended defence. The plaintiffs objected to pars 20(b), 20(c) and 21(b) ‑ (e) of the amended defence. By those amendments (the impugned amendments), TrustCo advanced contentions essentially as to the proper construction and effect of a lease to which only Hungry Jack's, Selden and a related party were parties, referred to as the Selden Lease.
After receiving extensive written submissions from the parties, the judge disallowed those amendments. The judge found that:
(1)those amendments did not disclose a reasonable defence in that the contention they advanced was founded on a construction of the Selden Lease that was untenable; and
(2)further, even had the impugned amendments disclosed a reasonable cause of defence, leave to amend would have been refused for discretionary reasons, including the inadequately explained lateness of the making of the amendments.
TrustCo sought leave to appeal against that decision. It contends that:
(1)the judge breached the requirements of procedural fairness in:
(a)adopting a construction of a clause (cl 23) of the Selden Lease that was not advanced by any party and of which the parties had no notice; and
(b)resolving the application without an oral hearing;
(2)absent the breach of procedural fairness, the judge would have found that the pleas advanced a tenable construction of the Selden Lease and disclosed a reasonable defence; and
(3)absent the breach of procedural fairness, the judge would not have found that delay and other discretionary considerations justified the refusal of the impugned amendments even had they disclosed a reasonable cause of defence.
At the hearing of the application for leave to appeal and the appeal, having heard TrustCo's oral submissions, the court made the following orders:
(1)The application to adduce, as evidence in the appeal, the affidavit of Katja Jane Levy sworn 21 January 2021 is granted.
(2)Leave to appeal is refused.
(3)The appeal is dismissed.
(4)The issue of costs is reserved to be dealt with upon the publication of the reasons.
The court said that it would publish its reasons later. These are our reasons.
By way of summary, grounds 2 and 3 fail because they are premised on the success of ground 1, which fails. The reasons for the failure of ground 1 may be summarised as follows.
The first limb of ground 1, reflected in [6](1)(a) above, fails because the construction of cl 23 of the Selden Lease is immaterial to the critical question of construction of other provisions of the instrument arising from the impugned amendments and the subject of the judge's finding in [5](1)above. That finding is not capable of being altered by any view as to the proper construction of cl 23. Moreover, that finding, which is not challenged by any ground of appeal, is, in our respectful opinion, undoubtedly correct.
The second limb of ground 1, reflected in [6](1)(b) above, fails because, in the circumstances, procedural fairness did not require the judge to conduct an oral hearing in relation to TrustCo's application to amend its defence.
Factual background
The land
Hungry Jack's has, since about 1971, operated the Outlet to the south of the Dog Swamp Shopping Centre in Yokine.[2] The Outlet is located over two parcels of land.[3]
[2] Primary reasons [2], [11].
[3] Primary reasons [11].
The restaurant building and part of the drive through is located on one parcel of land (Lot 20 on Diagram 96882),[4] which Hungry Jack's has possessed by consent of the owner of the freehold and (when relevant) the lessor, from time to time.[5] The judge referred to this land as the Leased Land.[6] We will do the same.
[4] Second further re‑amended substituted statement of claim filed 15 March 2020 (Statement of Claim) [7.1]; Minute of first defendant's second further re‑amended substituted defence and counterclaim filed 6 May 2020 (Defence) [64].
[5] Primary reasons [11].
[6] Primary reasons [11].
The remainder of the drive through (and associated infrastructure) is located on the other parcel of land (now Lot 18 on Diagram 94853),[7] which lies to the east of the Leased Land.[8] This land ‑ the part of Lot 18 on which the drive through and associated infrastructure sits,[9] which part is more precisely marked in Annexure A to the Statement of Claim ‑ is the subject of the plaintiffs' adverse possession claim.[10] We will, like the primary judge, refer to this land, the subject of Hungry Jack's and Selden's adverse possession claim, as the Disputed Land.[11]
[7] Statement of Claim [7.2]; Defence [7](e), [59].
[8] Primary reasons [14].
[9] Primary reasons [14].
[10] Statement of Claim [7.2].
[11] Primary reasons [14].
A wall runs along the northern boundary of the claimed land.[12] The plaintiffs' case is that the claimed land extends to the northern most edge of the northern wall (as opposed to the southern side of that wall).[13] It appears that, in its defence, TrustCo describes the land on which this wall sits as the 'Northern Sliver'.[14]
Ownership of the Leased Land
[12] Primary reasons [6].
[13] Primary reasons [6].
[14] Primary reasons [7].
The parties agree that Hungry Jack's has operated the Outlet on the Leased Land from about 1971 until present.[15] They also broadly agree as to who were, and who are, the registered proprietors of the Leased Land, from time to time, over this period.
[15] Statement of Claim [1.4], [11]; Defence [1](d)(i), [11](a).
The parties also agree that, since 30 June 2002, Hungry Jack's has leased the Leased Land under a written lease. The parties, by their pleadings, do not agree as to the position prior to 30 June 2002. The plaintiffs plead that Hungry Jack's has occupied the land from 1971 until 30 June 2002 under oral leases (or an inferred lease) and oral subleases from the registered proprietor or lessor from time to time. TrustCo denies that this is so, while admitting that Hungry Jack's has been present on the Leased Land with the permission of the registered proprietor (and, when relevant, also the permission of the lessor) from time to time.
On 1 July 2002, Westpac Funds Management Ltd (Westpac) became the registered proprietor of the Leased Land.[16]
[16] Statement of Claim [21]; Defence [21].
The third to fifth respondents have been the registered proprietors of the Leased Land since 2009.[17]
Ownership of the Disputed Land
[17] Statement of Claim [6]; Defence [6].
The parties agree that Selden was the registered proprietor of the Disputed Land from no later than 27 February1975 and that Selden sold the Disputed Land to Javy Pty Ltd by an instrument of transfer dated 26 January 1977, the transfer not being registered until 12 December 1984.[18]
[18] Statement of Claim [9]; Defence [46], [47], [54].
TrustCo pleads a detailed history of the transfers of the various lots which were a predecessor to Lot 18, part of which is the Disputed Land. Among other things, TrustCo pleads that in December 2003, the then owner of Lot 18, incorporating the Disputed Land, transferred Lot 18 to Westpac, the transfer being registered on 27 May 2004.
On a date in early 2011,[19] TrustCo became the registered proprietor of Lot 18 as transferee from Westpac.
[19] In their pleadings, the parties plead different months of 2011.
The pleadings
The plaintiffs' case
The case advanced by the plaintiffs, namely Hungry Jack's and Selden, may be summarised as follows:
(1)Since about 1971, Hungry Jack's has continuously leased or subleased the Leased Land and has possessed and occupied it continuously, successively and exclusively, with the intention to do so.[20]
[20] Statement of Claim [10] - [22].
(2)Hungry Jack's has, since 1980 possessed and occupied the Disputed Land:
(a)solely and exclusively and in conjunction with the Leased Land;
(b)for the purpose of operating the Outlet;
(c)continuously, peacefully, openly and without permission of TrustCo or any of its predecessors in title to the Disputed Land; and
(d)with the required intention (animus possidendi) for adverse possession.[21]
(3)The result is that Selden has acquired title to the Disputed Land through the adverse possession of Hungry Jack's, as Selden's lessee for the period of more than 12 years during the leases of the Leased Land by Hungry Jack's from Selden for the periods 15 November 1988 to 26 June 2002 and 26 June 2002 to 1 July 2002.[22] Alternatively, Hungry Jack's has acquired title to the Disputed Land by adverse possession.[23]
(4)Alternatively, TrustCo's title to the Disputed Land was extinguished or rendered unenforceable by Hungry Jack's' adverse possession as lessee under the Selden Lease and under a subsequent written lease between Hungry Jack's and the third to fifth respondents.[24]
TrustCo's case
[21] Statement of Claim [23] - [36].
[22] Statement of Claim [36.8].
[23] Statement of Claim [36.9].
[24] Statement of Claim [37].
In broad summary, TrustCo denies that Hungry Jack's possessed the Disputed Land and denies that it did so with the necessary intention (animus possidendi). Among many other things, TrustCo also pleads that because Westpac was registered proprietor of both the Leased Land and the Disputed Land from December 2003 to April 2009, any previously existing adverse possession interest in the Disputed Land merged and was thereby extinguished.[25]
[25] Defence [102A] - [102G].
Procedural history
On 13 March 2018, the court ordered that the question of whether any plaintiff had attained adverse possessory title be tried as a preliminary issue. The trial of preliminary issues commenced on 23 March 2020. The parties' openings were concluded on 24 March 2020. The trial was then adjourned due to COVID‑19.
The trial is currently listed to resume on 17 February 2021, to be heard over 10 days in February and March 2021.[26]
[26] Order of Tottle J made 7 December 2020.
The parties had filed amended pleadings in the lead‑up to the trial of preliminary issues. On 10 March 2020, it was ordered that the plaintiffs file and serve a re‑amended writ of summons and second further re‑amended substituted statement of claim, identifying with specificity the precise extent of the plaintiffs' claim in respect of the retaining wall to the north of the land over which they claim adverse possession, by 4.00 pm on 13 March 2020. It was also ordered that the defendants file and serve any further re‑amended substituted defence by 9.00 am on 19 March 2020.[27]
[27] Primary reasons [5].
As the primary judge explained,[28] those orders were made to resolve a dispute that had arisen in the course of the preparation of the papers for the judge concerning whether the northern most limit of the claimed land ran along the north side or the south side of the concrete wall that runs along the northern boundary of the claimed land.
[28] Primary reasons [6].
In response to these orders, the plaintiffs filed a re‑amended writ of summons on 13 March 2020 and second further re‑amended substituted statement of claim on 15 March 2020.
TrustCo erroneously construed the orders of 10 March 2020 as granting it leave to amend its defence generally. On that basis, TrustCo filed a further re‑amended substituted defence and counterclaim dated 19 March 2020 which contained amendments which were not consequential on the plaintiffs' amendments.[29]
[29] Primary reasons [8].
The plaintiffs objected to the amendments. After hearing the objections, the primary judge disallowed the amendments, but granted leave to TrustCo to make a further application to amend its defence and counterclaim. Directions were given for the filing of a minute of the proposed amended pleading, submissions and an affidavit in support. TrustCo did not adhere to the directions.[30]
[30] Primary reasons [9].
On 6 May 2020, TrustCo filed a minute of first defendant's second further re‑amended substituted defence and counterclaim. The amendments contained in the minute were the subject of its application to amend.[31]
[31] Primary reasons [9].
In support of its application for leave to amend, TrustCo relied on an affidavit sworn on 7 April 2020 by its solicitor, Ms Katja Levy. The plaintiffs relied on two affidavits in opposition: the first sworn by Mr Christopher Hood on 3 June 2020 and the second sworn also on that day by Ms Alina Andres.[32]
[32] Primary reasons [10].
On 14 May 2020, TrustCo filed submissions in support of the application for leave to amend. On 10 June 2020, the plaintiffs filed submissions in opposition, objecting to the amendments to pars 20(b) and (c) and 21(b) ‑ (e).
TrustCo filed submissions in reply on 23 June 2020.
By email of 8 June 2020, TrustCo's solicitor requested that, for medical reasons, the special appointment to determine its application to amend, then listed for 12 June 2020, be heard on a date convenient to the court no earlier than 18 June 2020.[33] In response, the plaintiffs' solicitors indicated that they did not oppose the request to adjourn the hearing of TrustCo's application, but requested that, assuming the adjournment is granted, the application be heard on the papers.[34]
[33] Affidavit of Katja Jane Levy sworn 21 January 2021 (KJL 21 January 2021) - Annexure KJL12, 118.
[34] KJL 21 January 2021 - Annexure KJL12, 117.
By email of 10 June 2020, the associate to the primary judge indicated that the hearing listed for 12 June 2020 would be vacated administratively and that the judge would reflect on the plaintiffs' request to have the matter determined on the papers.[35] It should be noticed that this communication, which made clear that there was a prospect that the application would be determined on the papers, was well before TrustCo filed its submissions in reply.
[35] KJL 21 January 2021 - Annexure KJL12, 116.
On 29 June 2020, TrustCo's solicitor provided combined unavailable dates for the parties for a hearing of the application for leave to amend TrustCo's defence.[36] An email from the primary judge's associate later that day indicated that the judge was considering whether the matter could appropriately be dealt with on the papers and, if not, the appropriate time to list the matter.[37]
[36] KJL 21 January 2021 - Annexure KJL12, 114.
[37] KJL 21 January 2021 - Annexure KJL12, 113.
By email of 1 July 2020, TrustCo's solicitors submitted that the parties' dispute on the pleadings may benefit from elaboration, whether in oral argument or by the making of full written submissions. The email indicated three specific matters which may be of significance and which may benefit from elaboration.[38] The matters said to require elaboration are detailed in [92] below.
[38] KJL 21 January 2021 - Annexure KJL12, 112.
By email of 17 September 2020, the associate to the primary judge indicated that his Honour was minded to determine the pleading amendment application on the papers.[39] The following day, TrustCo's solicitors emailed the court, saying that to any extent the court was considering whether or not to hear the amendment application on the papers, TrustCo's position remained that the just determination of the application may be assisted by an oral hearing.[40]
[39] KJL 21 January 2021 - Annexure KJL13, 121.
[40] KJL 21 January 2021 - Annexure KJL13, 120.
On 24 September 2020, the primary judge's associate emailed the parties advising that the judge did not intend to depart from his decision to deal with the matter on the papers.[41]
[41] KJL 21 January 2021 - Annexure KJL13, 120.
The impugned amendments
The plaintiffs' pleas in relation to the Leased Land include the following:
20.From 26 June 2002 until 1 July 2002, [Hungry Jack's] continued to lease the Leased Land from [Selden] in terms of a written lease dated 26 June 2002 which was for a term of 12 years and 2 days with two 5 year options to renew (the Selden lease) but which applied as between the Plaintiffs for the period 26 June 2002 to 1 July 2002.
21.[Hungry Jack's] continued to lease the Leased Land from Westpac Funds Management Ltd (Westpac) pursuant to the terms of the Selden lease, for the period of Westpac's ownership of the Leased Land, being 1 July 2002 to 12 February 2009.
In pars 20 and 21 of its proposed amended defence, TrustCo pleaded to pars 20 and 21 of the statement of claim in the following terms:[42]
[42] The amendments sought to be made are underlined or otherwise tracked.
20.TrustCo:
(a)admits that the Selden Lease commenced on 30 June 2002 for a term of 12 years, admits that it operated as between plaintiffs in the period on or about 26 June to 1 July 2002, and denies
makes no admission as toany prior lease;(b)says that from on or about 26 June 2002 Selden agreed that Hungry Jack[']s may and must use and maintain a drive‑through on the Disputed Land and the Northern Sliver: Selden Lease cll. 1.1 'Permitted Use', 8.4, 13.3(a) & 13.8;
(c)says that such provision did not grant enforceable rights over the Disputed Land or the Northern Sliver whilst Selden did not own the such land [sic], but specifically contemplated that Westpac (as successor in title to the drive‑through) would have such obligations and rights; and
(d)otherwise does not admit paragraph 20.
21.TrustCo:
(a)admits that Westpac became registered proprietor of the Leased Land on 1 July 2002 and transferred proprietorship of the Leased Land to Selden in accordance with the applicable provisions of the TLA on 17 April 2009;
(b)says that by transferring title of the Leased Land to Westpac, encumbered by the agreement pleaded at paragraph 20 herein and without reservation, Selden conveyed whatever interest it held in the Disputed Land and the Northern Sliver to Westpac (whether accrued or unaccrued): PLA s 41;
(c)says that Selden thereby ceased to be in any possession of, and alienated any interest in, the Leased Land, the Disputed Land and the Northern Sliver to Westpac from at least 1 July 2002;
(d)says Westpac, by the Selden Lease, granted a licence or permission to Hungry Jack[']s to operate a drive‑through on the Disputed Land, although during the period Westpac was not the registered proprietor of the Disputed Land, such licence was not effectual;
(e)says that from 19 December 2003, when Westpac became the proprietor of the Disputed Land and the Northern Sliver as pleaded at paragraph 61A herein, the grant of licence or permission was effectual until 17 April 2009, when Westpac sold the Leased Land as pleaded at paragraph 6 herein; and
(f)otherwise does not admit paragraph 21.
TrustCo referred to the proposed amendments in pars 20(b) and (c) as 'the drive through plea' and the proposed amendments in pars 21(b) ‑ (e) as 'the transfer plea'.[43]
[43] Primary reasons [19].
The judge's reasons
The judge set out the procedural and factual background, and the principles applicable to an application to amend, in terms that are not criticised on appeal.
The parties' submissions
The judge referred to the lengthy written submissions filed by the parties. He set out an overview in the following terms:
Plaintiffs' submissions
In broad terms the plaintiffs' submissions were as follows:
(a)The terms of the Selden lease referred to in the drive through defence did not support the pleaded allegations and the reliance for the purposes of the transfer plea on s 41 of the Property Law Act 1969 (WA) (the PLA)) did not disclose a reasonably arguable defence. The plaintiffs argued that TrustCo's reliance on s 41 of the PLA was contrary to authority established by the Victorian decision of Kirk v Sutherland [[1949] VLR 33, 36].
(b)The impugned amendments suffered from confused and deficient expression which meant they were embarrassing. In summary, the contentions concerned: the use of the expression 'may and must' in par 20(b); the apparent contradiction between a provision that obliged Hungry Jack's to use the drive through but did not grant enforceable rights; an alleged imprecision in the expression 'drive‑through'; and an alleged uncertainty in the use of the expressions 'whatever interest' and 'accrued or unaccrued' in par 21(b).
(c)The amendments have been proposed and pursued in a manner that infringes case management principles. In particular, they were made late with no adequate explanation of the delay and in such a way that raised a question over the bona fides of the application and, if allowed, they would cause prejudice to the plaintiffs.
TrustCo's submissions
TrustCo developed its submission as to the merits of the drive through and transfer pleas by reference to the following contentions:
(a)It accepts that the decision in Kirk v Sutherland is authority for the proposition that s 62 of the Property Law Act 1928 (Vic) (repealed) (the equivalent to s 41 of the PLA) did not operate in such a way that a transfer of an interest in registered proprietorship carried with it all associated rights in any adverse possessory interest held by the transferor of the registered proprietorship. TrustCo says that it makes a different point. Rather than attempt a summary, I will set out the paragraphs of TrustCo's written submissions in which its case is explained [First Defendant's Submissions in Reply filed 23 June 2020]:
19.However, TrustCo does not rely on the narrow point rejected in Kirk. It makes a different point.
20.It is this: Selden, Hungry Jacks [sic] and Westpac were involved in a commercial transaction, comprising at least a lease in contemplation of the continuing operation of a Hungry Jacks [sic] fast food outlet, a transfer of at least the Leased Land to Westpac (who was also contemplated to become the registered proprietor of the Disputed Land and the balance of Lot 18) and, it appears likely, a contract for sale of land (now unavailable). The question is, in the context of the anticipated acquisition of the Leased Land and the Disputed Land by Westpac, what was (objectively) intended?
21."Appreciation of the commercial purpose or objects is facilitated by an understanding 'of the genesis of the transaction, the background, the context [and] the market in which the parties are operating'. Unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption 'that the parties … intended to produce a commercial result'. A commercial contract is to be construed so as to avoid it 'making commercial nonsense or working commercial inconvenience'".
22.There is material in that regard, since Westpac was involved in a mandatory public disclosure process explaining the rationale and commercial purpose of its acquisition of restaurant sites and shopping centres as part of the development of a managed fund. That material is discovered and in the tender bundle.
23.TrustCo contends that, in the context (and in any event), the most rational construction of that commercial construction (and, indeed, only rational construction) is that the result to be expected and effected was that Westpac was to become the proprietor of the whole of the situs, Selden was to alienate all of its interests and Hungry Jack's was to continue as a bare tenant, with Westpac as its incoming landlord, to replace in all respects Selden and having proprietorship over the whole of the premises which were used to conduct the restaurant including, expressly, the 'drive‑through'.
24.Whether the parties subjectively understood each mechanism by which that result would be effected is not decisive. What is relevant to the approved method of construction is that the commercial object be discerned from the relevant instruments and any relevant surrounding materials, and the express terms (to the extent that they can be identified) be construed in light of the discerned commercial object.
25.Here, where the sale contract is absent, the objective commercial intent and legal effect, and thereby effect, falls to be understood from the actually available instruments and materials. That is what TrustCo has pleaded.
...
32.To hold, as Kirk does, that a transfer of proprietorship over does not ‑ ipso facto ‑ carry with it all possessory interests or titles arguably associated with the transferred title is not a holding that the statute has nothing to say in a transaction which concerned land where the parties agreed that 'another title' was to be dealt with by the leasehold, as concerned a future landlord who is yet to become the registered proprietor.
33.Moreover, that is not TrustCo's case. Here, rather, there is in the contemplation of Selden (the undoubted transferor of the registered proprietorship of the Leased Land, to which any argued adverse possessory interest is appurtenant), Westpac (the indubitable transferee of the Leased Land and contemplated to become the registered proprietor of Lot 18, including the Disputed Land) and the uncontested lessee (Hungry Jack[']s), provision in the Selden Lease that the 'drive‑through' may be and shall be maintained (as pleaded at Defence [par] 20). That drive through is substantially on the Disputed Land.
(b)The 'mandatory public disclosure process' to which reference was made in par 22 of TrustCo's written submissions appears to have included various business records (including Product Disclosure Statements) published by Westpac in its capacity as the responsible entity of the Westpac Family Restaurants Property Trust (the Trust). Those business records contained statements to the effect that in July 2002 the Trust acquired 36 family restaurants fitted out as Hungry Jack's or KFC outlets (including the Dog Swamp Hungry Jack's outlet) from Competitive Foods Australia Pty Ltd.
(c)The essential point made by TrustCo was that in 2002 there was a transaction to which Selden, Hungry Jack's and Westpac were parties and, on an objective assessment, it is to be inferred that as part of this transaction the parties intended that Selden's possessory title to the Disputed Land (if it had one) would be transferred to Westpac because without such a transfer Westpac could not fulfil its obligations to permit Hungry Jack's to maintain a drive through on the Disputed Land. This was said to be the contemplation of the parties because at the date of the Selden lease was entered into the drive through was on the Disputed Land.
(d)TrustCo argued that the transfer defence could not be characterised as one that was 'so clearly untenable that it cannot possibly succeed' for the purposes of the General Steel Industries Inc v Commissioner for Railways (NSW) [(1964) 112 CLR 125, 130] test.
The terms of the Selden Lease
The Selden Lease was executed by Selden, Hungry Jack's, and Competitive Foods Australia Pty Ltd (which company Selden and Hungry Jack's commonly owned).[44] Competitive Foods Australia Pty Ltd was a party to the lease as guarantor of Hungry Jack's' obligations.[45]
[44] GAB 215; primary reasons [3].
[45] Primary reasons [12].
The judge set out the terms of the clauses of the Selden Lease upon which TrustCo relies, namely cl 1.1, cl 8.4, cl 13.3(a) and cl 13.8. It is convenient to repeat what his Honour said. The emphasis in the various quotes is ours.
Clause 1.1 of the Selden Lease contained the following definitions of the expressions 'Permitted Use' and 'Premises':
'Permitted Use' means the use to which the Lessee must put the Premises being a drive‑in and/or take‑away restaurant and/or restaurant operated under franchise arrangements with the Franchisor.
'Premises' means the whole of the land described in Item 1 of the Reference Schedule and includes the Lessor's Structural Improvements, the Lessor's Fixtures and Fittings, all the Services to or in the Premises and any alterations, improvements or modifications made to the Premises from time to time (but does not include the Lessee's Fixtures and Fittings).
(Item 1 of the Reference Schedule described the Leased Land)
Clause 8.4 of the Selden Lease provided:
8.4Maintenance of Landscaped and Other Areas
Without limiting clauses 8.1 and 8.2, the Lessee will at its own cost and expense:
(a)keep and maintain at all times all lawns, shrubs, plants and gardens comprised in the Premises, neat, tidy, weeded, well trimmed and pruned; and
(b)keep and maintain in good and substantial repair, order and condition all paved or bituminised walkways, driveways or car park areas comprised in the Premises.
(Clauses 8.1 and 8.2 govern the lessee's obligations in respect of repair and maintenance and impose extensive obligations on the lessee in those respects.)
Clause 13 of the Selden Lease contained, among others, the following subclauses:
13.1Permitted Use
The Lessee must not use the Premises or permit the same to be used otherwise than for the Permitted Use.
13.3Signs
(a)The Lessee is entitled to erect signs in and on the Premises identifying the Lessee and the business name or names under which the Lessee's business is conducted and the lessee's usual drive through and menu signs and in addition the Lessee shall be entitled to erect a pylon sign on any part or parts of the boundaries or verges of the Premises and to run all necessary services from the Premises through to the sign, provided that all signs must have the prior written approval of all relevant Authorities and, if necessary, the Franchisor, and must comply with the relevant by‑laws of all relevant Authorities. Any damage or disturbance to any improvement on the Premises in the course of erection of the pylon sign and the installation of services thereto shall be made good by the Lessee to the reasonable satisfaction of the Lessor.
(b)The Lessee forthwith must remove all such signs, advertisements, names and notices referred to in paragraph (a) from the Premises upon the expiration or sooner determination of the Lease. Any damage or disturbance of any improvement on the Premises in the course of the removal of all such signs, advertisements, names or notices referred to in paragraph (a) shall be made good by the Lessee to the reasonable satisfaction of the Lessor.
13.8Public Address System and 'Drive Through'
The Lessor acknowledges that the Lessee proposes to operate, inter alia, a 'drive through' take‑away food service on the Premises and that for the purposes thereof the Lessee may erect and install upon the Premises canopies and a public address system including microphones, speakers and ancillary equipment and a menu board and directional signs to facilitate the operation of the 'drive through' take‑away food service and the Lessee may replace or relocate the public address system or any part thereof and the menu board and directional signs and the canopies within the Premises as and so often as is necessary. The Lessee will obtain all necessary approvals from all relevant Authorities and, if necessary, from the Franchisor, for the installation upon the Premises of any item installed in accordance with this clause and, on the Final Expiry Date or earlier termination of this Lease, all such work (excluding the Lessee's Fixtures and Fittings) will become the property of the Lessor.
The merits of TrustCo's construction
The judge observed that the provisions on which TrustCo relies are concerned with activities to be undertaken on the 'Premises', which is defined by the title particulars of the land that is the Leased Land. None of the provisions relied on by TrustCo refers to the land identified in the statement of claim as the Disputed Land. Further, none of the provisions on which TrustCo relies refers to Westpac.[46]
[46] Primary reasons [32].
The judge identified two difficulties presented by the text of the Selden Lease for the construction advanced by TrustCo:
(1)The defined term 'Premises' is unambiguous and susceptible of meaning only the land that is the Leased Land. The language used in the definition of 'Premises' and in the provisions in which the definition is inserted is not capable of being construed as if 'Premises' included the Disputed Land.
(2)The provisions of the Selden Lease on which TrustCo pleads reliance do not make any reference to Westpac. There is no textual warrant to be found in the Selden Lease for the plea in par 20(c) that the lease 'specifically contemplated that Westpac (as successor in title to the drive‑through) would have such obligations and rights'.
The judge found that TrustCo's attempts to overcome the obstacles presented by the text were unpersuasive. The judge found that, even when regard is had to the fact the drive through was on the Disputed Land, the construction for which TrustCo contended was so removed from the text of the Selden Lease that it was not open. The existence of a disconformity between the terms of the lease, conferring no rights over the Disputed Land, and the common intention of the parties as contended for by TrustCo was not capable of being rationalised by the process of contractual construction.[47]
[47] Primary reasons [35] - [36].
Further, the judge found that TrustCo does not plead any facts that sustain the allegation that it was anticipated that Westpac would acquire the Disputed Land or that, by the Selden Lease, Westpac granted a licence or permission to Hungry Jack's to operate a drive‑through on the Disputed Land.[48]
[48] Primary reasons [37].
As we will explain, these conclusions, which were reached without reference to cl 23, are:
(1)fatal to TrustCo's amendment application;
(2)correct;
(3)not reasonably capable of being affected by any construction of cl 23; and
(4)not challenged by any ground of appeal.
The judge then referred to cl 23 which, as the judge noted, contains the only references in the Selden Lease to Westpac, but upon which clause, the judge also noted, TrustCo did not rely in its pleading or its submissions.[49] Clause 23 is in the following terms:
[49] Primary reasons [33](b), [38].
23.Acknowledgements
23.1Responsible Entity
Westpac Funds Management Limited ACN 085 352 405 ('the Responsible Entity') is the responsible entity of the Trust.
23.2Limitation of Responsible Entity's Liability
(a)The Responsible Entity enters into this deed only in its capacity as responsible entity and trustee of the Trust and in no other capacity. A liability of the Responsible Entity arising under or in connection with this deed is limited to the amount the Responsible Entity actually receives in the exercise of its right of indemnity from the property of the Trust. This limitation of the Responsible Entity's liability applies despite any other provision of this deed and extends to all liabilities and obligations of the Responsible Entity in any way connected with any representation, warranty, conduct, omission, agreement or transaction related to this deed.
(b)The parties other than the Responsible Entity may not sue the Responsible Entity in any capacity other than as the responsible entity and trustee of the Trust, including seeking the appointment of a receiver (except in relation to property of the Trust), a liquidator, an administrator or any similar person to the Responsible Entity or prove in any liquidation, administration or arrangement of or affecting the Responsible Entity (except in relation to property of the Trust).
(c)The provisions of this clause 23 shall not apply to any obligation or liability of the Responsible Entity to the extent that it is not satisfied because under the Trust Deed or by operation of law there is a reduction in the extent of the Responsible Entity's indemnification out of the assets of the Trust, as a result of the Responsible Entity's fraud, negligence or breach of trust.
(d)The Responsible Entity is not obliged to do or refrain from doing anything under this deed (including incur any liability) unless the Responsible Entity's liability is limited in the same manner as set out in paragraphs (a) to (c) of this clause 23.
23.3Override
This clause 23 applies despite any other provision of this Deed or any principle of equity or law to the contrary.
The judge observed that, by its express terms, cl 23 limits liability that Westpac might incur by entering the deed, yet the clause has no operative effect because Westpac did not enter the deed. Consequently, the judge inferred that cl 23 was introduced in the Selden Lease by use of a precedent that did not reflect the transaction it purported to record. The judge drew this inference because Westpac was not a party to the Selden Lease, it did not execute the deed and cl 23 is inexplicable by reference to any other provision of the lease.[50] Ground 1 complains that in so concluding, the judge failed to afford procedural fairness to the parties.
[50] Primary reasons [39].
The judge concluded that the proposition that the Selden Lease granted Hungry Jack's a licence or permission to operate a drive‑through on the Disputed Land was untenable.[51] The cumulative effect of the difficulties the judge had identified led him to conclude that the pleas in pars 20(b) and (c) should not be allowed.[52]
[51] Primary reasons [40].
[52] Primary reasons [41].
Because the amendments in pars 21(b) ‑ (e) depended on the pleas in pars 20(b) and (c), it followed that the amendments in pars 21(b) ‑ (e) should not be allowed.[53]
Kirk v Sutherland
[53] Primary reasons [42].
The judge then turned to consider the parties' competing contentions concerning the decision in Kirk v Sutherland.[54] That decision concerned the Victorian equivalent of s 41 of the Property Law Act 1969 (WA). The judge observed that TrustCo appeared to contend that the decision should not be followed or, at least, should be distinguished. The judge set out the relevant parts of s 41 of the Property Law Act as follows:[55]
41. General words implied in conveyances
(1)A conveyance of land shall be deemed to include and shall by virtue of this Act operate to convey, with the land, all buildings, erections, fixtures, commons, hedges, ditches, fences, ways, waters, watercourses, liberties, privileges, easements, rights and all advantages of whatsoever kind, appertaining or reputed to appertain to the land, or any part thereof, at the time of conveyance.
(2)…
(3)This section applies only if and as far as a contrary intention is not expressed in the conveyance, and has effect subject to the terms of the conveyance and to the provisions thereof.
(4)This section shall not be construed as giving to a person a better title to any property, right or thing in this section mentioned, than the title which the conveyance gives to him to the land expressed to be conveyed, or as conveying to him any property, right or thing in this section mentioned, further or otherwise than the property, right or thing could have been conveyed to him by the conveying parties.
(5)…
[54] Kirk v Sutherland [1949] VLR 33.
[55] Primary reasons [44].
The judge observed that his Honour's understanding of the transfer plea, as explained in TrustCo's written submissions, was that the pleaded defence does not depend on any transfer of possessory title implied by operation of s 41 of the Property Law Act. Rather, the defence is founded on the objectively ascertained intention of the parties as a matter of construction of the overall commercial transaction, the pleaded intention being to transfer any interest held by Selden in the Disputed Land to Westpac. Consequently, reliance on s 41 of the Property Law Act would appear to be unnecessary.[56]
[56] Primary reasons [45].
Secondly, the judge observed that to the extent that TrustCo contended that Kirk v Sutherland was wrongly decided or should not be followed, the judge did not accept any such contention.[57] The judge agreed with the reasoning in Kirk v Sutherland and considered that it applies with equal force to s 41 of the Property Law Act. Absent a contrary intention, the judge considered that possessory title in adjoining land is not deemed to be included in a conveyance of land by reason of s 41 of the Property Law Act. In other words, the possessory title in adjoining land does not constitute any of the following matters, as expressed in s 41: 'rights and … advantages of whatsoever kind, appertaining or reputed to appertain to the land, or any part thereof, at the time of conveyance'.[58]
[57] Primary reasons [46].
[58] Primary reasons [53].
Thirdly, the judge said, even if by virtue of the Selden Lease Hungry Jack's had a licence to use the Disputed Land, it was not readily clear to his Honour why such licence would have the effect of rendering the possessory title of the adjoining land ‑ as distinct from, at best, the licence ‑ a right or advantage appertaining or reputed to appertain to the land.[59]
Case management considerations
[59] Primary reasons [55].
The judge then turned to case management considerations. He observed that had he concluded that the impugned amendments disclosed a reasonable cause of defence, he would have refused leave to amend for the discretionary reasons set out in [57] ‑ [63] of the primary reasons. By ground 3, TrustCo contended that had there not been a breach of procedural fairness, the judge would not have found that case management considerations justified the refusal of the impugned amendments.
First, the judge observed that the amendments were first proposed less than two working days before the trial began and that no adequate explanation for the lateness of the proposed amendment had been provided. The judge did not consider the reasons advanced in TrustCo's submissions for the late amendment to be persuasive. The first of those reasons was said to be the 'new challenge posed by the pleading of the Northern Sliver'. The judge considered that, having regard to the minimal area of the Northern Sliver, it lacks any practical significance. Further, the judge considered that there is no logical or other rational connection between the Northern Sliver and the matters alleged in the impugned amendments so that there was an element of forensic opportunism to the position adopted by TrustCo.[60] The second reason advanced for the lateness of the amendments was the contention that the plaintiffs had been guilty of providing discovery very late. The judge considered this unconvincing.[61]
[60] Primary reasons [57].
[61] Primary reasons [58] - [62].
The judge's second discretionary reason for refusing leave to amend was that the impugned amendments raised issues that are, at best, of marginal significance, but have the capacity to expand the evidence by an exploration of transactions involving a third party, namely Westpac, that occurred some 18 years ago. The judge considered that, having had the documents upon which the impugned amendments are based for more than two years, TrustCo had had ample opportunity to plead its case. The judge considered that Hungry Jack's should not be put to the inconvenience and expense of investigating a new defence at the late stage at which it had been raised. However, had the defence had the capacity to be of decisive significance, different considerations may have been engaged.[62]
[62] Primary reasons [63].
Grounds of appeal
TrustCo advanced three grounds of appeal, in the following terms:
1.The Court below erred in law by making an affirmative finding that the words of the lease between the first respondent (as tenant) and the second respondent (as landlord) (Selden Lease) were to be disregarded as irrelevant errors, where:
(a)the contention that the words were irrelevant errors had not been advanced, or addressed, by any party;
(b)the Court declined to hear oral argument, despite repeated written request[s], and instead decided the question with only the parties' outlines of argument, a matter communicated only after they had been filed; and
(c)no party advanced the position that the words of the Selden Lease were mere irrelevant errors, and the Court did not give notice of that issue upon which it decided the question to the appellant, who therefore had no opportunity to respond;
and thereby failed to afford procedural fairness to the appellant.
2.The Court erred in that, had procedural fairness been afforded to the Appellant, it would have:
(a)found as a matter of law and fact that the references to Westpac in the Selden Lease were not errors but deliberate, and reflected that expressed intention of Selden, Hungry Jack[']s and Westpac that Westpac would assume all the rights and burdens of the Selden Lease, or at least that such an argument was viable;
(b)held as a matter of law that there was a viable argument that on the proper construction of PLA s. 41 it could operate to convey an adverse possessory interest or title held by the transferor to which appertained or appeared to appertain to the transferred land to the transferee;
(c)found as a matter of law and fact that on its proper construction the Selden Lease purported to grant rights and burdens to Hungry Jack[']s not only in relation to the Leased Land but also the Disputed Land, or at least that such an argument was viable;
(d)found as a matter of law and fact that there was viable argument that the missing sale agreement between Selden and Westpac (i) had existed, and (ii) its terms were consistent with the coincident understanding of each of Selden, Hungry Jack[']s and Westpac that it provided for a sale of the Leased Land and the Disputed Land to Westpac;
(e)found that, including by reason of the foregoing, that there was at least a viable argument on the proper construction of the conveyance from Selden to Westpac, that it conveyed any adverse possessory interest or title in the Disputed Land held by Selden to Westpac;
and thereby held that the impugned amendments should not be disallowed or struck out on any ground that they failed to disclose a viable contention or cause of action.
3.The Court erred in that, had procedural fairness been afforded to the Appellant, it would have found that there was a sufficient explanation for the first defendant's delay in seeking leave to amend and that, having regard to the relative conduct of the parties, prejudice to the parties from the disallowance, and the fact that the case was adjourned indefinitely for Covid‑19 reasons outside the control of any party, that leave to amend should not be refused by reason of case management considerations.
Leave to appeal
As the primary judge's orders the subject of the appeal are interlocutory in nature, TrustCo required leave to appeal. On 19 January 2021, Buss P referred the question of leave to appeal to the hearing of the appeal.
TrustCo's application to adduce further evidence
TrustCo made an application to adduce further evidence in the appeal, that evidence being an affidavit of Katja Jane Levy, sworn 21 January 2021. In large part, the affidavit attaches a number of documents that are part of the procedural history of the primary proceedings. Otherwise the affidavit is directed to identify the evidence TrustCo would have adduced had the judge's proposed construction of cl 23 been brought to its attention.
We ordered that leave to rely on this affidavit be granted. We made that order because receipt of the affidavit enables the court to evaluate the contentions adduced by TrustCo's grounds of appeal.
No extension of time is required
The respondents asserted in written submissions that TrustCo required an extension of time to appeal. For the reasons that follow, that contention is misconceived. Essentially, the respondents overlooked the fact that the time within which to appeal starts to run when the order or judgment to be appealed is made or pronounced, not upon publication of the reasons.
The judge published his reasons for decision on 25 November 2020. The reasons were evidently published administratively, without any hearing in court.
On 7 December 2020, the judge made orders giving effect to the decision. Upon the judge's pronouncement of orders at the hearing, the time within which to commence an appeal for the purposes of r 26 of the Supreme Court (Court of Appeal) Rules 2005 (WA) began to run.
The appeal was commenced on 21 December 2020, and thus within 14 days after the date of the decision.
Preliminary observations on the appellant's submissions
The appellant's written submissions are not framed by reference to the grounds. To state the obvious, appellate courts decide appeals by reference to grounds of appeal. Consequently, it is helpful (if not essential) and conventional for written submissions to deal distinctly with each ground (or group of grounds, if grounds are conveniently grouped), so that it is clear what ground each particular submission addresses.
As foreshadowed by the court at the hearing of the appeal, we have not dealt with those of the appellant's written submissions that do not evidently relate to one of the grounds of appeal.[63]
[63] Appeal ts 3.
Because, as TrustCo accepted, grounds 2 and 3 are each premised on the success of ground 1, we commence with that ground.
Ground 1: procedural fairness
TrustCo's submissions
As developed in oral argument, TrustCo advanced two contentions under the rubric of ground 1.
First, TrustCo submitted that the judge made an affirmative finding that cl 23 was an erroneous inclusion from a precedent document,[64] in circumstances where no party contended that cl 23 was a mere error and the court did not give notice of its proposed conclusion to any party.[65] It submitted that a finding to that effect 'gravely weakened' TrustCo's argument as to the effect of the Selden Lease.[66]
[64] Appellant's submissions [16]; appeal ts 4, 9, 23.
[65] Appellant's submissions [19]; appeal ts 4, 9.
[66] Appellant's submissions [18].
Secondly, the court breached the requirements of procedural fairness by determining the application without an oral hearing, despite two requests from TrustCo for a hearing. The court did not advise the parties that it was deciding the matter on the papers until after their submissions had been filed.[67]
[67] Appellant's submissions [20]; appeal ts 4 ‑ 6.
In support of the second contention, TrustCo pointed to the provision in the Consolidated Practice Directions for written submissions to be in the form of an outline. It submitted that that carries with it a presumption that there will be an oral hearing at which submissions can be fully developed.[68]
Disposition
[68] Appeal ts 4 ‑ 5.
In our opinion, both limbs of ground 1 are without merit. We begin with the second limb, the complaint of the absence of an oral hearing.
Procedural fairness did not require an oral hearing
In Defendi v Szigligeti,[69] this court outlined the following well‑established principles:
It is axiomatic that a court is obliged to accord procedural fairness to a litigant.
However, to say that a court is obliged to afford procedural fairness is only the first step of analysis. The second step is to identify the content of the requirements of procedural fairness. The second step is what is critical in most cases.
Although sometimes expressed in terms referring to a necessity for a hearing, the fundamental requirement of procedural fairness is (relevantly for present purposes) that a party is given a reasonable opportunity to be heard, in other words, to present their case by evidence, information and submissions.
The requirements of procedural fairness are not fixed or immutable. Procedural fairness is directed to avoid practical injustice, and what is necessary to avoid practical injustice will depend upon the circumstances. The application of the requirements of procedural fairness to a court requires analysis of the procedures of the court, and the legislation and rules which govern them. (footnotes omitted)
[69] Defendi v Szigligeti [2019] WASCA 115 [45] ‑ [48].
The Rules of the Supreme Court 1971 (WA) expressly empower the case manager to deal with an interlocutory application on the papers. Order 4A r 4A provides that an interlocutory application and a request by a party are to be dealt with by a case management conference unless the case manager directs otherwise, or unless a decision is made in relation to the application or request on the papers, without requiring the parties to attend the hearing. In exercising the power under O 4A r 4A, including to determine whether an interlocutory application is to be dealt with on the papers, the case manager would seek to advance the objects in O 1 r 4A and O 1 r 4B, including promoting the just determination of the litigation, disposing efficiently of the business of the court and reducing delay to the parties and to the court.
To state the obvious, the judge was determining an interlocutory application, namely an application to amend the defence. What was in issue between the parties concerned two paragraphs of a very extensive pleading.
Nothing in the nature and subject matter of the application establishes or suggests any compelling need for an oral hearing, or gives rise to any reasonable expectation that there would be an oral hearing.
Paragraph 8 of Practice Direction 2.1, relied on by TrustCo, provides that an outline of submission is to be in point or summary form, rather than being a complete exposition of the contentions advanced, and should not normally exceed five pages in the case of an interlocutory hearing. The practice direction also provides, by par 9, that the outline does not limit oral argument and may be departed from if a new point emerges in the course of argument.
These aspects of Practice Direction 2.1 fall well short of giving rise to a reasonable expectation that, where there is an order for submissions, an interlocutory application in the Commercial and Managed Cases (CMC) list will be dealt with by an oral hearing.
Practice Direction 4.1.2 relating to the CMC list contemplates determination of interlocutory applications on the papers as an ordinary procedure, not requiring any special justification. It provides, in par 22, that where an interlocutory dispute cannot be avoided, the dispute is 'wherever possible determined by the Case Manager after the exchange of written submissions, either on the papers or following a short case management conference'.
There is no substance in TrustCo's complaint that the judge's decision to determine the application on the papers came after TrustCo's submissions had been filed. While it is true that the judge decided to determine the application on the papers after the submissions had been completed, almost two weeks before TrustCo filed its reply submissions (in which the substance of its argument was contained), the judge's associate had informed the parties that the judge would consider the plaintiff's request to have the matter determined on the papers. Thus, by the time TrustCo's reply submissions were prepared and filed, it was aware of the prospect that the judge would decide not to have an oral hearing. TrustCo's reply submissions were 18 pages long. No unfairness arose from the course adopted by the judge.
In its request of 1 July 2020 for an oral hearing, or for further elaboration in writing, TrustCo identified three matters which 'may be of significance' as matters which it contended would benefit from elaboration. These were: (i) principles concerning stare decisis as concerns construction of legislation; (ii) application of a statute importing provisions into an otherwise private conveyance (and the construction of a conveyance affected by such importation); and (iii) the legislative history of s 41 of the Property Law Act.
As the judge found, the critical issue was whether TrustCo's asserted construction of the Selden Lease was viable. These matters do not bear in any significant respect upon that issue. Consequently, TrustCo's stated desire to elaborate these matters provides no support for a conclusion that procedural fairness required an oral hearing.
There is no reasonable expectation, and procedural fairness does not require, that a contested application to amend pleadings in a case in the CMC list will be determined only after an oral hearing. To the contrary, it is well within the discretion of a case manager to determine that the efficient, timely and just determination of the application is by determination on the papers, and the parties' reasonable expectations must be consistent with that position. That was so in the present case.
For these reasons, the first limb of TrustCo's complaint of breach of procedural fairness failed.
We turn to the second limb of ground 1.
Clause 23 of the Selden Lease was not material to the critical issues
It is unnecessary to determine whether, in observing that cl 23 was evidently inserted as the result of the mistaken use of a precedent document, the judge breached the requirements of procedural fairness. Among other things, relevant to that question would be whether the judge's questioning of counsel for TrustCo, in the course of his opening submissions at the trial,[70] sufficiently put TrustCo on notice of such a view of cl 23.
[70] ts 227 - 229.
It is unnecessary to so decide because, as explained below, in our opinion the manner in which cl 23 is construed is immaterial to the disposition of TrustCo's application.
For convenience, we repeat the terms of the impugned amendments. Paragraphs 20 and 21 of the proposed amended defence were in the following terms:[71]
[71] The amendments the subject of the application are underlined or otherwise tracked.
20.TrustCo:
(a)admits that the Selden Lease commenced on 30 June 2002 for a term of 12 years, admits that it operated as between plaintiffs in the period on or about 26 June to 1 July 2002, and denies
makes no admission as toany prior lease;(b)says that from on or about 26 June 2002 Selden agreed that Hungry Jack[']s may and must use and maintain a drive‑through on the Disputed Land and the Northern Sliver: Selden Lease cll. 1.1 'Permitted Use', 8.4, 13.3(a) & 13.8;
(c)says that such provision did not grant enforceable rights over the Disputed Land or the Northern Sliver whilst Selden did not own the such land [sic], but specifically contemplated that Westpac (as successor in title to the drive‑through) would have such obligations and rights; and
(d)otherwise does not admit paragraph 20.
21.TrustCo:
(a)admits that Westpac became registered proprietor of the Leased Land on 1 July 2002 and transferred proprietorship of the Leased Land to Selden in accordance with the applicable provisions of the TLA on 17 April 2009;
(b)says that by transferring title of the Leased Land to Westpac, encumbered by the agreement pleaded at paragraph 20 herein and without reservation, Selden conveyed whatever interest it held in the Disputed Land and the Northern Sliver to Westpac (whether accrued or unaccrued): PLA s 41;
(c)says that Selden thereby ceased to be in any possession of, and alienated any interest in, the Leased Land, the Disputed Land and the Northern Sliver to Westpac from at least 1 July 2002;
(d)says Westpac, by the Selden Lease, granted a licence or permission to Hungry Jack[']s to operate a drive‑through on the Disputed Land, although during the period Westpac was not the registered proprietor of the Disputed Land, such licence was not effectual;
(e)says that from 19 December 2003, when Westpac became the proprietor of the Disputed Land and the Northern Sliver as pleaded at paragraph 61A herein, the grant of licence or permission was effectual until 17 April 2009, when Westpac sold the Leased Land as pleaded at paragraph 6 herein; and
(f)otherwise does not admit paragraph 21.
On its face, as TrustCo accepted,[72] the plea in par 20(c) is founded on the plea in par 20(b).
[72] Appeal ts 11.
The judge found that the amendments in par 21(b) ‑ (e) depends on the pleas in pars 20(b) and (c).[73] That finding is not challenged. To the contrary, on appeal, TrustCo accepted that the pleas in par 21 depended on the pleas in pars 20(b) and (c).[74] Moreover, in our view, that is clear on the face of the pleading.
[73] Primary reasons [42].
[74] Appeal ts 12, 19 ‑ 20.
Thus, if the plea in par 20(b) as to the construction of the Selden Lease were found not to be arguable, the impugned amendments must be rejected in their entirety.
The impugned amendments do not plead any extrinsic facts, said to be known to the parties to the Selden Lease, as bearing on the construction of the Selden Lease. Counsel for TrustCo accepted that this was so.[75] Thus, the viability of the plea in par 20(b) depends upon whether the express terms of the Selden Lease upon which TrustCo relies - namely, cl 1.1 'permitted use', cl 8.4, cl 13.3(a) and cl 13.8, set out at [49] ‑ [51] above - arguably give rise to the term pleaded in par 20(b).
[75] Appeal ts 11, 32.
In [32] ‑ [37] of the primary reasons, summarised in [52] ‑ [55] above, the judge identified fatal flaws in TrustCo's construction pleaded in par 20(b) and par 20(c). His Honour reached those conclusions without reference to cl 23 and before turning to consider that provision.
In summary, his Honour found that:
(1)All of the provisions on which TrustCo relies are concerned with activities 'on the Premises'. The Premises is defined by reference to specified title particulars to mean the Leased Land. That definition is unambiguous. The language of the definition, and of the relevant provisions with the definition inserted, is not capable of meaning or encompassing the Disputed Land.[76]
(2)No provision of the Lease refers to the Disputed Land.[77]
(3)No provision of the Lease on which TrustCo relies refers to Westpac.[78]
(4)Even having regard to the facts to which TrustCo points, namely: (i) the drive‑through was in fact located partially on the Disputed Land; and (ii) it was anticipated that Westpac would acquire the Leased Land and the Disputed Land,[79] TrustCo's construction is so removed from the text of the Selden Lease that it is a construction that is not open.[80] In other words, the absence of a textual foothold for TrustCo's construction means that TrustCo's construction involves a meaning that cannot be attributed to the relevant provisions of the Selden Lease, and the facts to which TrustCo points cannot alter that conclusion.
(5)Further, TrustCo does not plead any facts that sustain the allegation that it was anticipated that Westpac would acquire the Disputed Land or that, by the Selden Lease, Westpac granted a licence or permission to Hungry Jack's to operate a drive‑through on the Disputed Land.[81]
In our respectful opinion, all of the steps of this reasoning are undoubtedly correct, and, together, they compel his Honour's conclusion ‑ that the plea in par 20(b) as to the construction of the Selden Lease is wholly untenable.
[76] Primary reasons [32], [33].
[77] Primary reasons [32].
[78] Primary reasons [32], [33].
[79] Primary reasons [35].
[80] Primary reasons [36].
[81] Primary reasons [37].
As already noted, this conclusion is not challenged by any ground of appeal.
Further, his Honour's conclusions in this respect are not capable, by any sensible possibility, of being influenced by a different construction of cl 23.
Clause 23 limits, or purports to limit, the liability of Westpac to liability in its capacity as responsible entity and trustee of the 'Trust', a term not defined in the Selden Lease. For present purposes, it may be assumed, favourably to TrustCo, that the clause was deliberately inserted in circumstances where, by the time Selden and Hungry Jack's entered the Selden Lease, it was contemplated that Westpac would become the owner of the Leased Land.
Making those assumptions does not assist TrustCo's construction advanced in par 20(b). In that regard, it is to be remembered that, as already noted, the impugned amendments rely solely on identified express terms of the Selden Lease as giving rise to the critical term. TrustCo does not plead any extrinsic fact, said to be known to both parties, as bearing upon the proper construction of the Selden Lease. Further, as the judge observed,[82] TrustCo does not plead any facts capable of sustaining the allegation that it was anticipated that Westpac would acquire the Disputed Land.
[82] Primary reasons [37].
Making the assumptions in [108] above does not affect any of the findings in (1) ‑ (5) of [105] above, nor the conclusion compelled by those findings ‑ that the plea in par 20(b) is wholly untenable. Far from 'gravely weaken[ing]'[83] TrustCo's construction, the judge's treatment of cl 23 made no difference to it. For these reasons, any breach of procedural fairness in the judge's construction of cl 23 was immaterial: it did not deprive TrustCo of the possibility of a successful outcome.[84]
Conclusion on ground 1
[83] Appellant's submissions [18].
[84] Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141, 147; Nobarani v Mariconte [2018] HCA 36; (2018) 265 CLR 236 [38]; Mijatovic v Legal Practitioners Complaints Committee [2008] WASCA 115; (2008) 37 WAR 149 [15], [73], [250].
Consequently, ground 1 fails.
Ground 2
Ground 1 having failed, ground 2 ‑ which is premised on the success of ground 1 ‑ fails accordingly.
We would add the following observations as to the five limbs of ground 2 in pars (a) ‑ (e) of the ground.
For reasons already given, ground 2(a) goes nowhere. As explained in the context of ground 1, whether the references to Westpac in cl 23 of the Selden Lease were errors or were deliberate was and is immaterial to the critical question of construction.
Ground 2(b) asserts that there was a viable argument that on the proper construction of s 41 of the Property Law Act, that provision operates to convey the adverse possessory interest or title held by the transferor, here Selden, which 'appertained or appeared to appertain' to the Leased Land, to the transferee, namely Westpac. TrustCo's written submissions advanced elaborate submissions concerning s 41,[85] asserting that it operated independently of (alternatively, in conjunction with) the term pleaded in par 20(b) to transmit any possessory interest or title from Selden to Westpac.[86]
[85] Appellant's submissions [24] - [51].
[86] Appellant's submissions [24], [76], [83].
That is not the case pleaded by TrustCo in the impugned amendments. As already noted, TrustCo's case pleaded in the impugned amendments is founded critically upon its plea in par 20(b) of an agreement by Selden giving rights to Hungry Jack's over the Disputed Land. While there is, at the end of par 21(b), a reference to s 41 of the Property Law Act, that proposed pleading is about the effect of 'transferring title of the Leased Land to Westpac, encumbered by the agreement pleaded in paragraph 20'. The impugned amendments do not assert a case founded on s 41 operating independently of the term of the Selden Lease asserted in par 20(b). To state the obvious, the judge's task was only to evaluate the viability of the case pleaded in the impugned amendments. Consequently, we need not deal with the multiple reasons for doubting the viability of a case to the effect stated in ground 2(b).
Ground 2(c) asserts TrustCo's construction of the Selden Lease. For the reasons given in [105] above, in our view, that construction is plainly untenable.
Ground 2(d) asserts that there is a viable argument that the missing sale agreement between Selden and Westpac had terms 'consistent with the coincident understanding of each of Selden, Hungry Jack[']s and Westpac that it provided for a sale of the Leased Land and the Disputed Land to Westpac'.
Again, apart from anything else, no case to that effect was pleaded by TrustCo in the impugned amendments. On appeal, counsel for TrustCo properly accepted that this was so.[87] Thus the point made in [116] above applies again here.
[87] Appeal ts 33 ‑ 34.
Ground 2(e) relies upon the preceding subparagraphs of ground 2.
For these reasons, ground 2 fails.
Ground 3
Ground 3 fails for two reasons.
First, in its terms, and as was accepted by TrustCo on appeal,[88] the ground only arises if ground 1 succeeds.
[88] Appeal ts 34.
Secondly, ground 3 relates to the judge's findings that there were discretionary reasons to refuse the application. Those findings were not the basis for the judge's decision, but were only a fall‑back position. The basis for the judge's decision lay in his finding that the construction asserted in par 20(b) was wholly untenable. That finding not having been challenged, even if error were established in the judge's reasoning concerning discretionary matters, any such error would be immaterial.
Conclusion
For the above reasons, each ground of appeal was without merit. Consequently, we made the orders in [7] above.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
RC
Associate to the Honourable Justice Beech
25 FEBRUARY 2021
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