Westfield Management Limited v Perpetual Trustee Company Limited
[2007] HCATrans 367
•1 August 2007
[2007] HCATrans 367
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S210 of 2007
B e t w e e n -
WESTFIELD MANAGEMENT LIMITED
Appellant
and
PERPETUAL TRUSTEE COMPANY LIMITED
Respondent
Office of the Registry
Sydney No S166 of 2007
B e t w e e n -
PERPETUAL TRUSTEE COMPANY LIMITED
Applicant
and
WESTFIELD MANAGEMENT LIMITED
First Respondent
CITY OF SYDNEY COUNCIL
Second Respondent
GLEESON CJ
GUMMOW J
KIRBY J
HAYNE J
HEYDON J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON WEDNESDAY, 1 AUGUST 2007, AT 10.19 AM
(Continued from 31/7/07)
Copyright in the High Court of Australia
__________________
GLEESON CJ: Yes, Mr Hutley.
MR HUTLEY: Thank you, your Honour. Yesterday in answering your Honour Justice Heydon’s question as to the reasoning of the trial judge on this question I neglected to draw your Honour’s attention to paragraph 72 – I stopped at 71 and I apologise – which is the summation of his Honour’s reasoning in relation to the question. In essence, his Honour came to a view that we advance in this Court, namely, having regard to the necessity for there to be negotiation to ascertain and determine reciprocal rights and due to the fact that it was practically unenforceable, it was either unreasonable or void.
HEYDON J: For uncertainty.
MR HUTLEY: For uncertainty. That leads me to address one further matter raised by your Honour Justice Gummow. True it is that the Court of Appeal did not deal with the question of invalidity on the basis it was void for uncertainty. That was, of course, because having regard to the meaning that they attributed to the condition, no question of uncertainty arose because, in effect, what they interpreted this condition to mean that the owners of Skygarden and Centrepoint and Imperial Arcade had a put option on specified terms which we were required to enter into as and when they came to agree to those terms.
GUMMOW J: Looking at your draft notice of appeal, page 118 of the application book, there seems to be no point there based upon section 91 when read with sections 122 and 123.
MR HUTLEY: Your Honour, in essence, I thought it was taken up by order 5, the grounds being needed in holding that the condition was valid.
GUMMOW J: Where is it in your written submissions?
MR HUTLEY: Your Honour will find it in our written submissions at the – I am sorry, your Honour, I will just get the – we said on its true construction that the condition was ‑ ‑ ‑
GUMMOW J: No, whereabouts is it in the written submissions?
MR HUTLEY: I am sorry. If your Honour goes to paragraph 51 and following at page 17 of our written submissions. It is not in the application book, your Honour. They are the submissions as on the appeal.
GUMMOW J: I am looking in the application book.
MR HUTLEY: Your Honour has our submissions which we filed in the – we were directed to bring in submissions as on an appeal and we did so.
GUMMOW J: Yes, that is right.
MR HUTLEY: If your Honour goes to page 17 and following.
GUMMOW J: Just a minute. Paragraph?
MR HUTLEY: Paragraph 51, page 17 and following, your Honour. Your Honour will see the heading.
GUMMOW J: “Because it is unreasonable and uncertain”?
MR HUTLEY: Yes, we put it ‑ ‑ ‑
GUMMOW J: Well, that is not the point ‑ ‑ ‑
MR HUTLEY: Yes, if your Honour goes to 52, we put it on this basis. We said for the same reasons – this is on page 18 – the obligation imposed on condition 56 was also uncertain in such a way as to invalidate the condition, in the sense that the indeterminate nature of the condition was such as to deprive the purported development consent of the necessary characteristics of a “consent” to the application.
GUMMOW J: Yes, I see.
MR HUTLEY: I apologise to your Honour. Your Honour, I had commenced a consideration of condition 56 yesterday, can I return to condition 56. As we observed yesterday, the condition is not expressed to be precedent to any development undertaken by the owners of the Glasshouse site whether through the erection of the building or its use and occupation.
This reflected the fact that practically nothing could or would be done until an indeterminate future date when it was in the interests of the owners of Imperial Arcade and Centrepoint to seek to take advantage of the opportunity to access via King Street. Secondly, the obligation, as was observed yesterday, is solely in terms an obligation to provide documentary evidence to the city solicitor of an event. The event was, firstly, that the right of way currently applicable to the subject property is extended to cover the right of way to the Imperial Arcade site and the Centrepoint site. The existing right of way, of course, is the right of way which has been the subject of the appeal.
There existed no right of way to the Imperial Arcade or Centrepoint sites. Of course, the phrase “right of way” is conventionally used with two different meanings, namely, the legal rights and, secondly, the physical structure or pathway. The first use in condition 56 is a reference to the former, the second, in our respectful submission, is best understood as referring to the putative physical structure or pathway which would have to proceed across Skygarden, across Centrepoint to the Imperial Arcade. Like the Court of Appeal, the meaning of the first phrase referred to the requirement to bring in evidence that there existed legal agreements or interests which had the effect of extending the right of way then in favour of Glasshouse to the two remoter sites.
To satisfy that requirement it would be necessary to produce evidence of agreements between at least Skygarden and Imperial Arcade, the owners, between Skygarden and Centrepoint and between Imperial Arcade and Centrepoint because those intermediate easements would be necessary to effect an extension of the relevant easement over the relevant properties. The condition does not specify any way the manner that that was to be done. That was to be left to the agreement of the relevant parties which, so far as they were the further easements, were wholly outside the control of Glasshouse. It would clearly require new registered instruments, or at least registrable instruments, establishing rights of way in the manner that is indicated.
GLEESON CJ: Is it unusual for a local authority that gives a consent to development of Blackacre, for example, to impose as a condition of the consent a requirement that in practice could only be satisfied by making some agreement, perhaps even making some acquisition of land from a third party?
MR HUTLEY: In the example I gave in answer to his Honour Justice Hayne yesterday, a condition such as a drainage easement ‑ ‑ ‑
GLEESON CJ: Or a buffer zone.
MR HUTLEY: Or a buffer zone or the like.
GLEESON CJ: Yes, and to provide a buffer zone you might have to just buy some land from somebody.
MR HUTLEY: Precisely, your Honour.
GLEESON CJ: Then it is a matter for you and the owner of the land to work out the terms and conditions on which you do it and if you cannot make an agreement, no buffer zone, no consent.
MR HUTLEY: Your Honour, those are usually cases where the consent is, for example, you shall not build until you have.
HAYNE J: That is, it is a condition of the development as understood in the extended sense, it must be, that is, you cannot either build, use or whatever the relevant form of development is. What sets this one apart is that it seems, at least as I understand it so far, unrelated to a development. It is in futuro; at some point you will, but is it a condition of the development?
MR HUTLEY: That is a different issue. The condition was sought to be imposed to advance the planning policy of the council to remove traffic from Pitt Street Mall into this subterranean pathway. That is what they were seeking to do. Our point is that the condition is a condition which requires to bring evidence of agreements where there is no specification of the terms of those agreements and it is left solely to us to negotiate them. That is the “reciprocal rights where necessary”. The Court of Appeal overcame the difficulties attendant on what we would submit of the easement on its proper construction by imposing a meaning saying, in effect, that if Skygarden, Imperial Arcade and Centrepoint came to us with a form of easement over our land in the precise terms identified by the Court of Appeal, we were obliged in law to accept it.
In effect, there was a put option by those remoter properties to require us to enter into an easement. That was the only way in which one could avoid, and we submit, not by process of construction but by a process of, in effect, legislation, determination by the Court, to make this system work because otherwise one is confronted by the fact, which your Honour the Chief Justice observed, that it is left to us to negotiate. Our obligation is only to bring evidence of the outcome of those negotiations. The words in the condition which says “with reciprocal rights where necessary” were words which were intended and referred to the conditions which would apply not only to our easement – that is, the easement granted pursuant to, as the Court found, the put option – but all the other intermediate easements. They could regulate their affairs as and how they thought fit.
The words “reciprocal rights where necessary” mean rights in return for the grant of the easement which the parties have come to the view, as a process of commercial negotiation, are unnecessary. But the Court in respect of our easement has said, no, that does not have that content, it does not mean that. It means you will enter into an easement at the demand of the three properties on the following terms and the terms are precise and they cannot be departed from. For example, if the other side came to us and offered us better terms, it would be illegal for us to accept them.
GUMMOW J: Am I right in thinking you would be upset by it but you would have no legal quarrel with 56 if it were framed specifically in the terms the Court of Appeal said it could carry it as a matter of construction?
MR HUTLEY: Condition is you shall, if approached by the owners of the following three properties, enter into an easement on the following terms. That would be certain. It would be capable of enforcement. My clients would know when they are in breach or not in breach of the condition.
GLEESON CJ: They would also know whether it was worthwhile going ahead with the development.
MR HUTLEY: Precisely.
GLEESON CJ: Presumably one of the ideas of a condition is you can take it or leave it.
MR HUTLEY: Yes, the circumstances in which this occurred is that the development is fully along ‑ ‑ ‑
GLEESON CJ: Yes, with the extra bonus.
MR HUTLEY: With the extra, I accept that. That is the nature of an easement but that goes to the general importance of easements having a certain defined content. But our first point is that the Court of Appeal, the content they gave to this quoad us, my clients, simply finds no textual basis.
GLEESON CJ: One of the practical problems that everybody faced here was that this was a rather messy or it was not a straightforward development proposal.
MR HUTLEY: No.
GLEESON CJ: It was not like going onto greenfields land and building a shopping centre. Mr Hutley, a small matter, and you may have mentioned this yesterday and I may have simply forgotten it, but condition 56 uses the definite article, “is extended to cover the right-of-way” to the Imperial Arcade and Centrepoint.
MR HUTLEY: It did not exist.
GLEESON CJ: Is that just a misprint? Should it mean a right-of-way?
MR HUTLEY: No. In the appeal books there is the council minute where this was considered and those terms appeared in that council minute. So that seemed to have been the form which was considered and approved and later led to the actual issue of the condition. There was no suggestion that there was an error in that regard. That is why we think it is best understood as to cover the right-of-way ‑ ‑ ‑
GLEESON CJ: But the easement is 1990, is it not?
MR HUTLEY: The easement is February 1988. It was registered in April 1988. The condition was imposed in December 1988.
GLEESON CJ: That is right. I am just puzzled by this concept of covering the right-of-way.
MR HUTLEY: It is not felicitous to say the least, your Honour, but if one concedes that this dual meaning of right-of-way – and what they were considering in effect was a pathway, what the council appears to have had in mind is that we would bring in evidence that rights had been extended over continuing the pathway, but that in felicity is simply intractable.
KIRBY J: Mr Hutley, whilst we are getting out of the way of things that have been concerning us overnight I have got three little things that I would be grateful if you would address. Number one, you say in paragraph 31 of your submissions that we should re-examine the application of the Upper Hunter principles in a case such as the present and certainly I think that is a very persuasive point, but you did not raise that before the Court of Appeal and therefore we do not have the advantage of the Court of Appeal’s consideration of that matter and at least arguably this is not an unimportant issue. Why would we, as it were, permit you without ever having raised it below to advance it in this Court?
MR HUTLEY: Well, your Honour, the Upper Hunter approach, when one says we did not raise it, it was not raised at first instance. It came in at the instigation of my learned friend in the Court of Appeal for the first time and it was debated and we submitted one has really got to deal with the language of this matter. In effect, what the construction was, but no disrespect to my learned friend, which the Court of Appeal adopted, was not one really which was ever in terms advanced by anybody. In effect, it popped out in the terms it finally took in the judgment.
My learned friend’s approach was to give it a meaning, whatever meaning it has – I do not want to minimise it – and whatever the meaning it is certain and therefore it is all right. Our position is look at the text. The text says reciprocal rights, there has got to be negotiation. So the debate took place ‑ ‑ ‑
GUMMOW J: But who started talking about Upper Hunter?
MR HUTLEY: My learned friends.
GUMMOW J: There is some distancing going on, I think.
KIRBY J: Horrible denials at the Bar table. Looks of anguish. Let the record show.
MR HUTLEY: Can I say, his Honour Justice Hodgson blames my learned friend.
HEYDON J: Paragraph 40, pages 63 and 64.
MR HUTLEY: We have the transcript, your Honour.
KIRBY J: Yes, all right.
GUMMOW J: Paragraph 40 seems to say that there were principles referred to by Mr Walker, Meehan v Jones and Upper Hunter.
MR HUTLEY: Yes.
GUMMOW J: The question you have to grapple with, did you vociferously oppose that suggestion?
MR HUTLEY: Your Honour, when I say “vociferously oppose” our submission was this is a case concerning the construction and administration instrument and the principles are relatively clear. You start with the text and there is a whole series of aids to construction in relation to it and that is how you approach it. The so‑called principles in Upper Hunter were principles imposed upon us. We were not embracing ‑ ‑ ‑
GLEESON CJ: They were in aid of saving bargains.
MR HUTLEY: Yes.
GLEESON CJ: They were in aid of saving commercial bargains. All those war time cases where people used to attack the validity of regulations, amongst other things, on the ground of uncertainty, was there ever any indication of some principle that you had to save the regulation?
MR HUTLEY: No. Those cases actually are referred to, coincidentally, by Chief Justice Barwick immediately before the statement of pages 438 and 439 which are ‑ ‑ ‑
GLEESON CJ: .....would have spent a good part of his life doing, going around and getting regulations declared void.
GUMMOW J: Yes, inflaming Sir Frederick Jordan.
KIRBY J: Saving the regulation would smack of a Chevron doctrine in the United States which this Court has denied. We do not defer to the Executive and give them a special status just because they are the executive branch.
MR HUTLEY: His Honour distinguishes those cases in relation to regulations immediately before his consideration of the principles in relation to contract.
HAYNE J: The two chief authorities are both in 71 CLR, are they not? King Gee 71 CLR 184 at 194 to 195, Cann’s 71 CLR 210 at 227 to 228, both judgments of Justice Dixon in which his Honour denies that there is any principle that subordinate legislation may be void for uncertainty. The question is one of power.
MR HUTLEY: Quite.
HAYNE J: Is the regulation that is made within power, without power?
MR HUTLEY: Your Honour, we set out in paragraph 36 of our submissions on the appeal the reference to the passages from Upper Hunter where Sir Garfield Barwick referred to those cases to which your Honours referred.
GUMMOW J: Which paragraph, Mr Hutley?
MR HUTLEY: Paragraph 36 on page 10, your Honour.
HAYNE J: Those were taken up by the Court of Appeal of New South Wales in Winn 130 LGERA 508, particularly 514.
MR HUTLEY: Particularly 514. We have referred to that also in the written – I was not proposing to take your Honour to those authorities because of the time constraints that we are under.
KIRBY J: You have said everything you want to say on that first point? I said I had three.
MR HUTLEY: Yes.
KIRBY J: The second point is this. In the application book there are two affidavits, one by Mr Stephen Klotz sworn 30 March 2007 and one by Mr Andrew Robertson sworn 28 May 2007. We have another affidavit of Mr Andrew Robertson sworn 27 July 2007. We have not actually gone through the procedure of formally reading them and seeing whether you object and whether you wish to cross‑examine and whether you wish to put any evidence in reply, but I have assumed that you do not object, you do not wish to cross‑examine and you do not have evidence in reply.
MR HUTLEY: I had one objection to one paragraph of my learned friend’s ‑ ‑ ‑
KIRBY J: You have not mentioned it.
MR HUTLEY: I was not sure if my learned friend had even filed that because we received it on Friday night.
KIRBY J: We had better get it clear because we have to know whether these matters are – because I want you to know that, as far as I am concerned, the issue of delay and prejudice is not a moot question. It is a matter that you appear not to have answered. You have not, as it were, filed even an affidavit which in the Court of Appeal we quite often saw of a solicitor or somebody throwing themselves on the mercy of the Court and saying, “Well, I did not appreciate it at that time”, or things of that kind. There is nothing at all that is put before us.
MR HUTLEY: Your Honour, I think in Brisbane when I appeared before, inter alia, your Honour I said we have no explanation after the ‑ ‑ ‑
KIRBY J: But there must be some explanation.
MR HUTLEY: No, your Honour. I cannot put forward an explanation to this Court which I could put before the Court and say that there is ‑ ‑ ‑
KIRBY J: Do you accept the principle – at least the one I have always thought applies – that in order to overcome a significant delay and, in this case, to have the Court waive the non‑compliance with the rules that you have to show an explanation for the delay and that there is no prejudice or that the balance of justice requires that the Court provide the relief?
MR HUTLEY: As I understand the practice decisions in this Court, it is not mandatory to show an explanation; we can be frank and say we have just delayed.
KIRBY J: But is that not relevant to where the balance of justice lies?
MR HUTLEY: I was just dealing with your Honour’s first point. On the second point as to prejudice, yes, one has to deal with prejudice. Our position in relation to prejudice, as I advanced before your Honours in Brisbane and I did not want to repeat here because of time, is that these two cases, when one looks at the temporal sequence of the appeals, would have been heard together in this Court. They are appropriate to be heard together; they would have been.
KIRBY J: If they are so appropriate to be dealt with together, why did not well-lawyered clients see that that was appropriate? There must be some explanation; somebody was sick or somebody did not consult counsel or “I acknowledge that I should have consulted counsel but I did not and did not see the relevance”.
MR HUTLEY: Your Honour, I can put nothing before you. My client simply dropped the ball.
KIRBY J: The only inference that one begins to draw is that there were consultations and discussions and a view was taken that the point was not worth challenging.
MR HUTLEY: I am not in a position to say any more. I have said what I can say, your Honour. I simply cannot say any more.
KIRBY J: All right. You better clear up with Mr Walker what is the evidentiary foundation of the application we have before us. The third inquiry was this. As to the condition, would it not be the case that you would have access if you were truly in doubt as to its terms to the Land and Environment Court to raise before that court and to challenge before that court the terms of it so as to secure the determination by that court stepping into the shoes of the council a properly constructed condition which you have not done? You just latched on to the condition and challenged it by its terms.
MR HUTLEY: I am a successor in title, your Honour. The time in which one can appeal against a decision ‑ ‑ ‑
KIRBY J: Do not let us go into that. The condition was laid down in 1988 and you did not challenge until 2004.
MR HUTLEY: When your Honour says we did not challenge it, my client bought it, that is, the permanent trustee at some time removed from that point in time when it was imposed.
KIRBY J: Would not the permanent trustee be in a position to apply to the Land and Environment Court for declaratory relief or orders in relation to the terms of the condition that could clarify any matter that was truly in doubt or dispute?
MR HUTLEY: Your Honour, the question is, in a sense, that is really what has happened. We are seeking to find out firstly what the meaning of this condition is. That has been central before Justice Talbot and central before the Court of Appeal, it is central here. We say that the condition has a certain meaning and that has certain legal consequences.
KIRBY J: It is a question of assessing the genuineness of the dispute and particularly when you are seeking an extension of time which is quite considerable for very well lawyered litigants who do not give any explanation.
MR HUTLEY: Your Honour can take it from the fact that we are all here and it has been fought up hill and down dale by my learned friends and us to get here that there is a genuine dispute.
GUMMOW J: Paragraph 5 of Justice Hodgson’s reasons explain what happened in 2004. Westfield made the first strike and you put on a cross‑claim.
MR HUTLEY: Quite. Thank you, your Honour. Yes, that is how it came about. Westfield, in effect, sought to invoke the condition and say that we were required to enter into an agreement in a particular form.
KIRBY J: That does not really explain the delay though, given that you knew it was hovering in the background.
MR HUTLEY: Your Honour appreciates ‑ ‑ ‑
KIRBY J: At least, as I said yesterday, on the theory of looking at this matter in the large it is the correct resolution that you do not tamper with the terms of the easement but you acknowledge that for the large purposes of traffic flow and the movement of vehicular and pedestrian traffic in the city of Sydney the local government authority with a responsibility to deal with such matters in the public interest has the power to make a condition which requires you to do what you say you do not have to do under the easement. You may be right about the easement but why is that a wrong theory of the whole way in which this area of the law should and does operate?
MR HUTLEY: Your Honour, to take the example which was raised by Justice Gummow, had the condition imposed an obligation in terms in the form that the Court of Appeal has imposed upon us, then that condition would satisfy the requirements as to certainty. The condition that the counsel chose to impose upon us, which was their form, and issues as to the rule of law, in our respectful submission, at the heart of it, it is their condition, their text. The courts interpret their text. What we say is that we come to the court to have that text interpreted.
The Court of Appeal, we say, misinterpreted the text because they were informed by what they refer to these Upper Hunter principles. All we seek is to have it determined what its meaning is properly according to law. If that meaning leads to the consequences that we advance, so be it. If it does not lead to those consequences, so be it. We put our position no further than that and no higher. We expect no more and certainly we are out of time and we have delayed. Can I deal with the third point, prejudice. Have I dealt with that satisfactorily to your Honour?
KIRBY J: I am not here to answer questions.
MR HUTLEY: I am not suggesting your Honour accepts it. Have I addressed your Honour’s question?
KIRBY J: You have said things that are on the record. Could I just ask one last question?
MR HUTLEY: Certainly, your Honour.
KIRBY J: I think you said yesterday that one argument is that the Court of Appeal’s approach to the condition question was contaminated by its view of the meaning and effect of the easement. As Justice Heydon pointed out, that seems to be out of joint with the sequence of the decisions.
MR HUTLEY: I had not got to that. Can I make that point good. Can I take your Honour to that point in the reasoning. It is at paragraph 46 of Justice Hodgson’s reasons which is at page 66 of the application book.
One of the submissions we made, your Honours, was that this was an ambulatory condition. It had to confront circumstances which might arise from time to time depending upon the plans or otherwise with respect to Imperial Arcade and, for that matter, Skygarden. Your Honours appreciate that physically the easement could not be extended to Imperial Arcade and Centrepoint because of the physical configuration of those buildings at the time. What we submitted to the Court of Appeal was the character of what we are confronting in relation to usage and the like in respect of those easement at the posited time of approach was unknown and unknowable and its extent was completely unpredictable.
GLEESON CJ: Is it not the case that the willingness of Glasshouse’s owners to permit this to happen in the future if the other three parties, Skygarden, Imperial and Centrepoint, got their own acts together in such a way as to enable it to happen was the basis on which the owner of Glasshouse was permitted to build to the height to which it built?
MR HUTLEY: That, with respect, subsumes a number of issues because, for example, if you go to the evidence, if one talks about surrounding circumstances evidence, the council’s letter of 30 June 1988, which is at paragraph 51 of the appeal book, referred to the fact that to extend these easements would require:
a practical proposal, for Council approval, which will achieve the aims, and provide also for allocation of responsibility for supervision, lighting, cleaning, maintenance and like factors of operation.
Now, the council when they put the term in “with reciprocal rights where necessary” appreciated, in our respectful submission, as they had to appreciate, that there could have to be complex adjustments of risk allocation, control and the like, depending upon what might develop in the future. Those terms seem to apply to all the intermediate easements, there is no debate about that and the Court of Appeal so found, and they are at liberty to control their distribution in such fashion as they think fit and, of course, if they distribute matters such as flows and the like, that could impact, of course, upon the servient tenement. But the term “with reciprocal rights where necessary” the Court of Appeal held for us meant X without, in our respectful submission, any textual basis and certainly no textual basis for distinguishing the content of that phrase with respect to all the other intermediate easements.
GLEESON CJ: What was the basis on which your client got the bonus floor space?
MR HUTLEY: My client got the bonus floor space on this basis. It approached the council and said to the council, “We have done what we can and we have given an easement over to Skygarden and it is such and such a value”, worth $3 million or thereabouts. The council, in effect, said, “On that basis we are entitled to give them a bonus floor space allocation”. The council without consulting us – we made no complaint about that, but there is no evidence that there was any discussion about the condition – imposed this condition in the form it took.
GUMMOW J: The owner then being?
MR HUTLEY: Jamino, our predecessor in title. The name Carringbush, your Honour, is equivalent to Jamino, Jamino being a development company and a group. They were entitled to impose a condition to advance the policy which was a legitimate planning policy. We do not take dispute about that. All we say is we are entitled to have it given a meaning in accordance with law, that is all. It was their condition and that is all we seek. In great part there seems to be sort of a mood, as.....that this is, in effect, departing from a bargain in some way. We have not sought to depart from any bargain. We merely seek to have this condition determined. The Court of Appeal, by reference to what they call the Upper Hunter approach at paragraph 40 in Justice Hodgson’s judgment, says ‑ ‑ ‑
GUMMOW J: The trouble is though, Mr Hutley, in a way your client bought into this project with this benefit the Chief Justice has referred to and a debatable burden, clause 56.
MR HUTLEY: Yes, I accept that, your Honour.
GUMMOW J: And from that this trouble flows.
MR HUTLEY: Yes, your Honour. But, in our respectful submission, to concede in these terms of it being estopped or approbating and reprobating, in our respectful submission simply deflects attention from what we say is the rule of law, namely, they chose these words, what do they mean? They do not have to be given a content irrespective of their text, and that is what we submit at the end of the day the Court of Appeal did. With respect, no argument has been advanced in any of my learned friend written submissions which identify the real textual basis for this content because, we submit, frankly there is none.
One asks rhetorically, do exactly the same terms and conditions mutatis mutandis have to apply to the intermediate easements over Centrepoint and Imperial Arcade? Let it be assumed, for example, that Skygarden would only go along with this deal instead of bearing 25 per cent of the costs of maintenance it required 10 per cent and the balance was to be taken by Centrepoint and Imperial Arcade of the 75 per cent other than our 25 per cent. Was it really intended that we were obliged to reject such an easement because that is the effect of the Court of Appeal’s judgment. Any departure from these specified terms, no matter how remote from reality they may be in the real world, we are obliged to reject them.
Your Honour, to return to Justice Kirby’s – the practice in this Court, as we understand it is, if the strict adherence to time requirements would work an injustice ‑ ‑ ‑
KIRBY J: That is usually in refugee cases and cases of people whose predicament and lack of legal advice ‑ ‑ ‑
MR HUTLEY: The rule of law, in our respectful submission is, in this context, an injustice. If we have this condition, this condition means what we say ‑ ‑ ‑
KIRBY J: I do understand your argument that the two cases are intimately intertwined, but I am concerned about the balance of justice that lies where you cannot even put on an affidavit by a solicitor who says, “Well, I made a mistake.”
MR HUTLEY: I do not advance that case, your Honour. I simply do not advance that case. My client got it wrong, changed its mind. That is simply all there is to it. If that dooms my client, that dooms my client. I cannot put forward anything other than the facts.
We have referred in our written submissions to cases where the word “necessary” has been considered in other legislative contexts. “Necessary” in those cases is referred to in paragraph – your Honour will find it at paragraph 42 of our written submissions as on the appeal. They are the cases that regularly found that “necessity” does not mean “totally essential” but “reasonably required in the circumstances”. Here mutatis mutandis because of the concept of negotiation which is implicit in it, what one is dealing here is that which is necessary is that which is the outcome of the negotiation by the parties whereby they adjust their mutual rights and interests to achieve a consent.
KIRBY J: Could you just help me? Did the sequence of events follow this course, that once the respondent to this application got special leave, that suddenly focused attention back on the previous decision and then that was followed up reasonably promptly with the application?
MR HUTLEY: No, we provide for special leave before, but shortly before, the special leave application was heard in the other case.
KIRBY J: So the inference is that it was that which triggered somebody saying, “Look here, these two things are interrelated and the Court should be dealing with both together?”
MR HUTLEY: Your Honour, I can only tell your Honour that that is the temporal sequence. I can give your Honour the precise temporal sequence but for the moment I will just give your Honours the dates. But that is what happened. My learned friend’s judgment was handed down in the easement case in early December. My learned friends then applied for special leave in late December. Our application for special leave was put on, I think, in April, before this special leave application was heard and then we moved for expedition of our special leave application before Justice Gummow, who granted it, and that led to an appearance before your Honours, Justice Gummow and Justice Heydon in Brisbane on 24 June, and that is how we are here.
HAYNE J: Can I just take you back to wrestle with clause 56?
MR HUTLEY: If your Honour pleases.
HAYNE J: And could I give you, in effect, the end point of the struggle before indicating the way in which ‑ ‑ ‑
MR HUTLEY: Is it good news or bad, your Honour?
GLEESON CJ: Mixed.
HAYNE J: Well, are you buying or selling, Mr Hutley?
MR HUTLEY: Thank you, your Honour.
HAYNE J: The end point of the struggle is you read clause 56 in effect in the fashion indicated by the Chief Justice. You, Glasshouse, may conduct your development on terms that. If Imperial and Centrepoint jointly ask you for rights, let us come back and work out what the rights are. You will grant them. Step one is the premise for that understanding is that there is such a commercial imperative that it is expected that Imperial and Centrepoint will do it. The unstated premise is there is such evident sense for this, of course they will ask you.
MR HUTLEY: Could I interrupt, if your Honour wishes me - I think practically because of the structure of the easement over Skygarden, Skygarden has to participate in that deal, too.
HAYNE J: Well, then B, C and D will.
MR HUTLEY: Yes.
HAYNE J: All want to be in on this because there are evident commercial reasons to do so. That is step one. Step two then takes you to the words of 56. It fastens particularly on the expression, “the right-of-way” where twice used. In line 2 of clause 56 the first appearance of the expression, “the right-of-way”. You understand that perhaps as referring not only to a physical structure and set of structures, but also the rights attaching to it.
MR HUTLEY: Yes.
HAYNE J: The explanation for the unhappy choice of words in line 4 “to cover the right-of-way to”, et cetera, is perhaps that that is referring to giving rights, rights of way, over the physical structure earlier identified, but is extended to cover awkward word - some boffin in the planning department has come up with this rather than a lawyer, to extend the rights to B, C and D. The last point, which is the other element of struggle that you have to make, is this, “with reciprocal rights” and the reciprocity – “reciprocal” is perhaps not the happiest expression, but where you have at least three coins on the board, maybe four, what the drafter is trying to convey is, well, everybody has got to be in on the game, it is not just a one‑way street from A to B, A to C, A to D, but it is as between A, B, C and D all together. Now, that is the best struggle I can offer you, Mr Hutley, and you will break the grip.
MR HUTLEY: Your Honour, reciprocal rights becomes a difficulty if one tries to take it as incorporating what I might call the necessary intermediate easements which are contemplated, namely, Skygarden in favour of – Skygarden is the servient tenement granting an easement in favour of respectively Imperial Arcade and Centrepoint. Similarly, Imperial Arcade granting an intermediate easement in favour of Centrepoint, because it is hard to see what they are in return for quoad us.
The reciprocal rights is clearly referring to, in our respectful submission, rights governing care, management, security, anything else which the commercial dictates of the circumstances at the time. The Court of Appeal accepted that it at least covered those because strictly speaking one of course could extend the right-of-way with no attendant rights to deal with maintenance, repair, insurance, security, anything. A right-of-way can be a bare right-of-way and then there is some implied rights as to the obligation of law as to the obligations of care and maintenance.
So reciprocal rights, in our respectful submission, must be a reference to what might be called the negotiated management risk allocation, security and attendant rights which the circumstances dictate at the time that the condition – the approach on behalf of these intermediate parties takes place, and they have to have settled those. Now, how they settle them is a matter between themselves, and the reciprocal rights they obtain between themselves is a matter totally left at large.
In fact, the only right which is specified as being required in any of these easements is one which embodies a right that they remain in perpetuity in favour of the council, and that of course reflects the requirements of section 88(1)(c) and (d) of the Conveyancing Act that an easement must specify who has the power – any person has the power to release if there be one. That would, of course, require an alteration of the right-of-way granted currently in place because your Honours would observe that that power at the moment is left with Mastwood, namely, relevantly now Westfield.
So, in other words, what your Honour puts to me so far as it goes is right, but one has to confront, as we submit the trial judge did, that reciprocal rights had to deal with the circumstances maintaining at the time. Take an example, let it be assumed when they approach us, Centrepoint and Imperial Arcade are two giant holes in the ground with proposed massive new developments of a completely different variety with potentially vast increases in traffic flow risks and the like.
That simply, we say, was contemplated to be something the subject of negotiation. One of the strange things about the Court of Appeal is that the content given by the Court of Appeal was given in a total vacuum. There is no evidence as to what is going to be there. Why one asks rhetorically is the universe of rights which are necessary in the context which maintain with respect to this development those which are to be
found and divined from the easement entered into in 1988 between two parties. We say that there are no grounds.
If our construction is right and this, in effect, is a condition which contemplates a negotiation, we submit that that is invalid as being uncertain because it sets no standard by reference to which my client can determine whether it is acting lawfully or unlawfully at any given moment. To the extent that it leaves a complete discretion to my client whether it does or does not agree, it is also devoid of compulsory content. We have set out in our written submissions what we say in relation to that. Those are our submissions, if the Court pleases.
GLEESON CJ: Thank you, Mr Hutley. Yes, Mr Walker.
MR WALKER: Your Honours, in our submission, the application for an extension of time should be refused. Alternatively, the application for special leave to appeal should be refused. Alternatively, an appeal should be dismissed. May I start with our arguments on the third of those possibilities. It is to be recalled that the history, much of which has been the subject of reference by my learned friend, was set out without contest and is informative of a number of issues in the case, not least of which was the unreasonableness point informed by an uncertainty allegation which formed the thrust both at first instance and on appeal of the present applicant’s position.
Could I take your Honours briefly to the milestones in that history, because they put in an appropriate context the sense of grievance that your Honours have heard conveyed and have read conveyed by our opponents concerning the deprivation their client suffers of a valuable commercial opportunity to drive a bargain to extract a price for these easements. On page 47 of the application book at paragraph 11 one sees that the size, that is, the lucrative scope of the Glasshouse development which my learned friend’s client acquired, was originally to be permitted only at the price of the developer acquiring what is called transferable areas in order to achieve what is called bonus floor space; bonuses over and above what I will call a prima facie limit, the limit being applied for town planning purposes and other town planning purposes permitting in certain circumstances at the discretion of the consent authority an excedence.
Another town planning consideration is that the owners of heritage buildings in inner city should be encouraged not to pull down the modest seven-storey structure and should be encouraged to do so by, as it were, others sharing the cost of that lost commercial opportunity. The lost commercial opportunity equates to the air space in which they could otherwise build a modern building. The system was devised of being able to conceptualise that as transferable floor space. The lost potential of, in the public interest, certain heritage items being at what would otherwise be individual private expense preserved for the public interest.
The system is interlocked whereby for excedences which could otherwise be justified, the price would be struck on the basis that eventually, in a market – I stress in a market – which is commercial and driven by money prices ultimately driven by developers’ assessments of what profit they can make on their investments, they would be forced, in effect, to pay money to those otherwise stymied heritage owners. That is what at page 47 in paragraph 11 was the position when it became apparent that the Glasshouse ambition exceeded the then current limits. That was going to cost them money, we know, about $2.86 million. We will come to that in a moment.
On page 48, the developer – this is my learned friend’s client’s predecessor – about line 30 refers to the fact that they had already enabled the neighbour, Skygarden, to be able to eliminate a Castlereagh Street entrance by using a King Street entrance through their property. “What good boys are we” is the message of the whole of this letter quoted in paragraph 13. But against the background, of course, as you will see on page 47 in paragraph 13 of what I stressed in the appeal yesterday, namely, condition 19 already requiring Glasshouse to build physically a way so as to eventually accommodate the traffic through to Imperial Arcade and Centrepoint by name. So the next step in this commercial setting is found at page 48 about line 30 where there has been a reference to the so‑called ramifications of the ramp:
significant to the point that it would eliminate any vehicular access requirements that would have been necessary from Castlereagh Street for –
Skygarden claiming virtue. Then they present another possible virtue. I stress another one, a different one:
The opportunity is now presented for this vehicular access/egress to be extended –
I interpolate to emphasise that is where you see the word “extended” first in this history. Perhaps that is where the boffin in the planning department got it. The developer says we can extend this vehicular access/egress “to ultimately incorporate Imperial Arcade and Centrepoint.” What did ultimately mean? It meant exactly what has been suggested by your Honours the Chief Justice and Justice Hayne in argument with my learned friend this morning, that when the necessarily mutual or bilateral nature of an easement – you cannot inflict it on someone as a dominant tenement – comes to fruition under the joint spur of a desire to redevelop and a requirement to comply with a council condition to get an easement to get the traffic off Pitt Street Mall, then in that happy juncture, from the council’s point of view, from a planning point of view, there will be no capacity for someone then controlling Glasshouse to say, “I do not care how much you offer me. I simply do not want any more traffic,” because they could not be compelled.
That would frustrate a project which might take decades to bring to fruition and none the worse for taking decades to bring to fruition, particularly bearing in mind something to which I will come later in terms of prejudice, particularly bearing in mind that the longer the time between the imposition of a condition and the time when you have to comply with it, the more scope there will be, not least because of the change in conditions my learned friend has called in aid, to modify it by court order in an appropriate application to the Land and Environment Court, to modify it not least because circumstances now make it unreasonable. Meantime, of course, the developer having for that potential burden which will always remain subject to the possibility of modification, a possibility enhancing with succeeding years, meantime will have banked or spent the $2.86 million no longer necessary to buy the transferable floor space for the access, will have sold or derived the rent from the extra floor space which will have been built, so money up front for a possible but not certain burden sometime in the future.
Now, against that background, in our submission, much of what has appeared as the grievance concerning the loss of an opportunity now to require whatever price in a negotiation the landowner can require is, in our submission, entirely without substance and, for the reasons I am about to come to in relation to the rest of the history, cannot possibly inform the interpretation of this condition 56.
Now, your Honours will see that there is no question that the town planning ambition known to be firmly held by the council of removing all vehicular traffic from the pedestrian mall in Pitt Street, which includes, of course, Imperial Arcade and Centrepoint, was that which the developer of Glasshouse was putting forward as capable of being realised by what they were now offering. You see that in the next paragraph, lines 35 to 38 on page 48 of the application book. They say:
ultimately a major reduction in goods service vehicles currently traversing the Pitt Street Mall between Market and King Streets.
Then they go on, again bruiting the virtue of what they are proposing from the town planning point of view:
this facility is of significant benefit to the mid-town hub of the City and, as such, we request that Council consider a bonus provision of 1:1 be applied to this development.
Then you see what I told your Honours about yesterday in the other case about line 42 “Bonus element No. 7”. That No. 7 is specifically for extending sufficient access to Imperial Arcade and Centrepoint, not just to Skygarden, Imperial Arcade and Centrepoint so as to get the vehicles off the mall. That is exactly what the developer understood when proposing to council what eventually was manifested in the imposition of condition 56. They do not have to embark 56 let alone consent to it in order for it to be seen, as this material clearly demonstrates and it was held by that Court of Appeal, to be the outcome of an approach they made to save themselves money and to gain the commercial benefit then and there of a larger, more lucrative development.
Your Honours then see in Justice Hodgon’s reasons in paragraph 14 the easement which was the subject of argument yesterday is set out. In our respectful submission, there is no substance of any argument your Honours have heard that that easement was construed for the purposes of this decision. It simply was not. In particular, it was not construed as to the point which was in contest yesterday. Paragraph 15, page 50, the developer writes another letter, and this is a letter you have seen in the earlier case. It has a poignant counterblast, if you like, to the grievance that has been expressed by my learned friend. See at the foot of page 50, about line 50, the developer says:
the revised Development Application submitted by Mastwood –
that is for Skygarden, eliminating Castlereagh Street access and focussing in on King Street –
was a result of this Company advising that Company access to the basement of their development was able to be secured over our property.
That is the accepted or common ground as to the minimum meaning of the easement which was granted.
This in turn will allow –
not may allow subject to a price negotiation –
access to Imperial Arcade and Centrepoint basements at some future date –
futurity did not trouble that developer –
thus ensuring –
not thus potentiating subject to a price negotiation –
all vehicular traffic being removed from Pitt Street Mall.
All traffic, not just the traffic special to Skygarden. The context of all of this in terms of the administrative act which resulted in condition 56 being imposed can then be seen on page 51 about line 15 or so:
In consideration of our efforts –
we want a reward for what we have done for your public interest, town planning ends –
we requested an additional Floor Space Bonus for the creation of the Right of Carriageway and now seek an early decision –
That is in May 1988. Sufficiently confident to go ahead to have granted the easement so as to be able to wave it at the council to get a benefit. But the story continues. The council’s reply, that is, the response by the administrative authority, the consent authority, at page 51, paragraph 16, about line 25 or so, describes the connection, that is the physical capacity that had been built or was going to be built as:
an acceptable initial part of a future basement connection to the Imperial Arcade and Centrepoint buildings, as required by the condition of consent.
That is condition 19 that is being referred to there. It is “acceptable initial part” because it is understood that without the cooperation to be driven by their desire to redevelop and their need to comply with future conditions imposed by the council of Imperial Arcade and Centrepoint. It has to be staged and futurity did not trouble anyone. It was in the nature of things. About line 30 on page 51 the council also points out, which the developer scarcely needed emphasising to it, that it was getting rid of all vehicular traffic which was the aim of this exercise. Then they say:
Thus full compliance requires the submission of a practical proposal –
I will not read the rest of the words. My friend took you to it. Those are words all of which refer to matters which are covered by the way in which the parties have already attended to such matters in the then granted easement, the privately negotiated easement, which was granted, I stress to your Honours, in return for $100,000. Not only did they get the commercial benefit of eventually being able to eliminate the need to pay $2.86 million for transferable floor space, they got $100,000 from Skygarden as well.
There is then a foreshadowing by council at the professional staff level that that is likely to be attractive to council, at least in their recommendation, for realisation of the longer term town planning, which was entirely gelling with the explicit approach which had been made by the developer. Paragraph 17, foot of page 51, “the Skygarden development.” Why I refer to that is it is an example of what was unremarkable then and is equally unremarkable now. A condition of consent being imposed which requires for compliance persuading somebody else not bound by any town planning requirement to give something to the developer.
The Chief Justice gave the example of buffer, very common in coal mining consents in New South Wales. But before you can start – now, start may either mean the initial excavation of the overburden or it may mean before you can actually do anything by way of winning coal, usually the former – you must takeover those dairy farms or whatever else they are by making them an offer in the market. It is not a resumption. You do not get the force of State to force people to lower their price or to meet a market price. You have just got to take your risks. In other words, it is a commercial opportunity. The nuisance element of it is so great that you are not to do it if there are residents within a certain radius. Therefore, you must buy.
No one has ever suggested, subject to Mr Rares’ argument before Acting Chief Justice Talbot, that that was impossible. That argument was not reput in the Court of Appeal, it is not put here, and Skygarden had just such a condition imposed upon it, it ended up paying $100,000 in order to achieve compliance with it. That is the easement which is in question in this case. Page 52, paragraph 19, line 20, there is then the developer writing to Centrepoint and Imperial Arcade and describing what had been done as being:
the first stage of the carriageway for access to loading vehicles has been agreed for construction which is proposed to alleviate future use of the mall for goods delivery
Then at about line 31 or so there is a reference to Skygarden having established “right of carriage” over Glasshouse and the:
access facility will be available to AMP and the head lessee of the Imperial Arcade –
That is Centrepoint owned by AMP and the head lessee being then Stockland with AMP as lessor for Imperial Arcade. The reference to it obviously being subject to agreement is precisely the reference in the somewhat artless phrase of the planner of the reciprocal rights to which I will come in a moment. Then the buildings which it was understood the council desired to so use the carriageway are all the buildings that are in question which are the very buildings which my learned friend’s argument now for which they seek an extension of time and special leave, those are the very ones which the developer, predecessor of our friend’s client, was saying that they well and truly understood was the intent of what they had been offering to do.
Page 53, paragraph 20 records that element of futurity which is understandable and which was accepted by everybody, including the planners who imposed the condition and the developer who in effect invited some such response, albeit not by drawing condition 56. That is, not surprisingly, Imperial Arcade said that that will be of interest in the future as has proved to be the case and as to Centrepoint, we do not need to worry about it. Of course, that is precisely why there is no biting of condition 56 until that position changes and they are both inspired by desire to redevelop and spurred by conditions of their own consents sometime in the future to turn up to the owner of Glasshouse, whoever it may then be, and not be met by saying, “That’ll be nice for you. I’d like to share in the lucrative effect that will give you, I’d like a very high price”. Or, much more seriously for Council, frustrate entirely by saying, “No price at all, I simply don’t want to sell and you can’t resume as you, the developer can’t resume”.
Page 53, paragraph 21, about line 35 you will see that Carringbush managed to get Raine & Horne to value the exercise that they say they had already suffered in potential in order to make good an argument to council that the whole of the $2.86 million worth of transferable floor space otherwise required to build their building as high as they wanted was no longer necessary and could be returned by a modification of their consent. When they came to do that, Raine & Horne did not say, “Imperial Arcade and Centrepoint, don’t worry about that because there can be a veto imposed by somebody saying no, or somebody saying no except for an uncommercial price”. So it was all valued in and you see that at about line 35.
Page 54, about line 18 one sees exactly the same reference to the substantial “difficulties and additional costs” being extended by reason of the “other properties”. “$3,000,000” appears at about line 28 on page 54 and then armed with that valuation from Raine & Horne, off go the developers, paragraph 22 on page 54, to say to the council in November 1988, “Look, this is what it’s cost us”. The response by the council, triggered by the recommendation of its planning committee is found at page 55, paragraph 23 and your Honours see in particular about line 35 or so, the way in which the quid pro quo comes out:
In return for the imposition of a right-of-way over this site and the completion of access arrangements to the adjoining site, and progressing, as far as possible, extension –
and again one sees that word –
of access to the other two sites, the applicant seeks the award of floor space bonus.
So far as possible, as the context shows in the very next passage quoted at line 50 on page 55, as far as possible referred to the fact that neither the council nor Glasshouse could force Imperial Arcade and Centrepoint to the dance floor. It would take, in relation to each pair of dominant and servient tenement two to tango and until they wanted to dance you could not do anything about it, but so far as possible meaning they would bind themselves, not leave open the possibility of future negotiation involving the possibility of veto.
One sees that – I will not read the passage – on page 55, it starts about line 45, and the explanation continues over the top of page 56. Significantly at the top of page 56 one sees that what everybody understood was inspiring those who looks at the proposed text of the condition, it all turned upon when development would take place. True it is it is not certain that anything will happen but redevelopment in that block in Sydney ought to be seen, with respect, your Honours, as certain as night following day.
On page 56 at about line 22 or so one sees that council was sufficiently amenable to the approach made by my friend’s client’s predecessor to characterise as “a substantial encumbrance” worth $3 million, see line 35, justifying the return of the $2.86 million, see line 32. That, of course, was swallowing hook, line and sinker the developers saying, “We’ve done everything we can, we’re on the hook now for anything that happens in the future when redevelopment be proposed by Imperial Arcade and Centrepoint. We are on the hook. Furthermore, that has a value which we can presently estimate to you, justifying us getting back something which, of course, we can then make further commercial use of.” The recommendation therefore culminated at line 50 on page 56:
further extension of a vehicular movement system to properties to the south has been made possible in the future –
Not possible subject to veto, possible subject to negotiation, but possible if and when those owners form an interest to cooperate; cooperate in the sense of desiring to become dominant tenements. Page 57, paragraph 24, you will see that the attitude of the developer continued to the extent of a couple of years later offering to enter into special arrangements making it quite clear that they are absolutely bound come what may to do that which my learned friend now says is meaningless and they do not know what the content is in condition 56.
Your Honours, against that background one evaluates then the argument for which an extension of time of special leave is sought that says that the Court of Appeal did nothing with any textual foundation to construe condition 56. Now, the first thing of course is that it cannot possibly be the case that in order to satisfy whatever test lies behind that submission you have to, as it were, gloss or interlineate the text in question. Many of the words of condition 56 were not the subject of argument or agony in the Court of Appeal for the simple reason they do not present any difficulties.
In my submission, it is clear that Justice Hodgson does attend to each of the cruces so-called that were advanced in support of Acting Chief Justice Talbot’s decision. Now, I stress the nature of the argument had moved on somewhat from first instance to the Court of Appeal. During the course of that argument the issue of negotiation, that is, the capacity for Glasshouse to seek to get a price for these rights was to the forefront. Justice Hodgson understandably, paragraph 43, page 65 of the application book, resolved that difficulty by saying, well, do not worry about the uncertainties of who will agree to a price or not, there is no price to be paid at all, which, of course, is exactly the same as one would expect when the council’s whole endeavour was to ensure the willingness or cooperation of the Glasshouse owner at the time when the others were prepared to go on to the dance floor.
No argument has been expressed by my learned friend in writing or in address as to what it is in the text of condition 56 that leaves open getting a price. There is no phrasing, making it subject to the willingness of the developer, or the developer’s successor in title, to transfer for a certain price. No reasonable rate or third party arbitration or valuation of a right is suggested. Rather, it is that you will extend a right, not in return for a price, you will simply extend the right. Now, if that is good English, it does not have to be the good legal English of an equity decree. If it is capable of being given meaning it ought to be. I will come back to that rather important part of the case in a moment. What then was otherwise left in condition 56 that could attract the ‑ ‑ ‑
KIRBY J: In the federal sphere that might well be an acquisition of property without just compensation.
MR WALKER: Yes, unquestionably.
KIRBY J: One can understand ‑ ‑ ‑
MR WALKER: I was going to say unquestionably so. That question would arise. It probably would not be in an appropriate circumstance of planning give and take, but there is no difficulty here at all. Your Honours, the next phrasing, which was the subject of argument below and has been repeated here, concerns the supposed ambiguity, although the two or more possibilities have not been identified very clearly, of the expression “right‑of‑way” where it appears in condition 56.
As it happens, as to the matter raised by the Chief Justice with my friend as to the definite article where one might have thought contextually an indefinite article would read better, it would appear that the original report which is found in the appeal book in the first case, volume 2, page 797, line 33, was the source of the text which eventually became condition 56. In the recommendation there, there is no article at all, that is:
the right‑of‑way currently applicable . . . is extended to cover right‑of‑way to the “Imperial Arcade” site and the “Centrepoint” site -
By the time it comes to the resolution of council, which you will find in the supplementary application book in this case at page 114, line 35, the wording of condition 56 recommended by the officers has inserted, without there being any explanation otherwise in the record, an article, and furthermore the definite article, before the expression “right‑of‑way”.
Now, that obviously was not a matter that deterred the Court of Appeal. I cannot remember, frankly your Honours, but I do not think it was the subject of any argument in the Court of Appeal. It certainly is not a special leave point because, in our submission, whether it be seen as a glitch or simply as inelegant language, there is no doubt about the meaning intended to be achieved.
The more my learned friend protests the obvious – namely that there was no right of way – and I stress it was neither built physically nor granted legally – the more one eliminates any doubt as to what was meant, “extend” meaning make present in existence that which is presently not in existence by making it go further than it presently is. That it is not physical is clearly dealt with by the terms of condition 56 which require that documentation be produced. You do not produce documentation, such as from a quantity surveyor, to the city solicitor simply to prove something has been built which conveys no right.
It is true, as my learned friend says, in ordinary colloquial English “right of way” often describes simply a path, physically. But the reason it does that is because it is very often a path – consider the prescription cases that were mentioned from time to time yesterday – because people, and sometimes even the public, have rights to use it as a way.
KIRBY J: Could you answer this question? If you succeed in resisting this application for special leave to appeal, does that not render the first appeal moot in the sense that you stand the beneficiary of an unchallenged order of the Court of Appeal giving you the benefit of the condition and does that not then render the argument as to what the position at common law was, or under the statute was, a moot question?
MR WALKER: No, your Honour. The time has not come yet to see accomplishment of the fulfilment of condition 56. Perhaps here I can interpolate so as to put that in ‑ ‑ ‑
GUMMOW J: Perhaps one can only read 56 if one knows what the relevant right of way is?
MR WALKER: Your Honour, yes, is the short answer, however ‑ ‑ ‑
GUMMOW J: So the two are yoked in that way.
MR WALKER: However, and with respect, Justice Kirby’s question raises this matter, this would not be the first planning condition which could be seen as for more abundant caution lest private rights were not as people were protesting to the council. This would not be the first time when somebody has said, “I’ve already done X” and that, after all, is what the developer was saying and the council says, in effect, “Well, in that case you will not mind a condition making sure it really is X”.
That does not mean that you would read the condition in some self‑defeating way such as to say you can’t extend that which is already fully extended. Neither, of course, does condition 56 cast any light on the proper meaning of the easement. It is of course correct that there needs to be some understanding of the existing right of way because that is a condition used in condition 56 but it does not have to be interpreted as to, for example, the land to which, to use the language of condition 56, it extends, and it is not to be forgotten that everybody knew there was only one dominant tenement of that easement, Skygarden, which of course is one of the matters that we had to deal with yesterday.
The next thing I need to say in answer to Justice Kirby’s question is this, it is, as I think it was Justice Gummow pointed out, or the Chief Justice, as was cited in the Court of Appeal, see paragraph 5, application book 46. This was all brought to a head because the prospect of redevelopment and council conditions requiring easements led to the developers of Centrepoint, Imperial Arcade and Skygarden coming to
Glasshouse and saying, “Well, now is the time for performance.” That which was put forward by them at that stage was found wanting. That is not the subject of any complaint in this Court. It is recorded in the Court of Appeal.
There has been another attempt and that attempt is part heard and is the subject of evidence before this Court on the prejudice aspects and at that point, I am sorry to interpolate yet again into the course of argument, I need to refer to and seek to have read the two affidavits of Andrew David Robertson. The second of those is the one referred to by my learned friend sworn on 27 July 2007 which is in the nature of updating material and in that, after discussion with my learned friend, I make it clear that I do not read on page 6 paragraph 21.
GLEESON CJ: Mr Walker, we think it would be convenient to hear from Mr Kondilios now.
MR WALKER: Yes, your Honour.
GLEESON CJ: Mr Kondilios, is there anything you wanted to add to what Mr Walker has been saying?
MR KONDILIOS: I understood that Mr Walker, your Honour, was dealing with the three points in the summary of the outline, no easy answer to the appeal proper and to the.....appeal proper. We adopt the summary of arguments that have been put by the second respondent.....However, there was an inquiry made by Justice Kirby of Mr Hutley as to the factual matrix going to the extension of time.
GLEESON CJ: Come around to the microphone.
MR KONDILIOS: It is only a very short point and I will not trouble your Honours for more than a few minutes on this point. What the Court should be informed in that matrix is this, your Honours. Immediately following the decision of the New South Wales Court of Appeal – when I say immediately I mean by a few months on the 20th day - for the purpose of an appeal had lapsed, an appeal which sat in the Land and Environment Court, being an appeal against a deemed refusal for an application made by Perpetual to modify its development consent to delete condition 56, which laid there pending the outcome of the New South Wales Court of Appeal, was discontinued with the consent of the parties.
More than that, immediately following the decision of the New South Wales Court of Appeal my client has proceeded to determine applications received by Westfield and impose conditions about the right of
way and the like, understanding the law to be as it was held by the New South Wales Court of Appeal at the time.
KIRBY J: That is helpful to know, but it still leaves the two matters that have been presented to this Court very closely interrelated.
MR KONDILIOS: And your Honour was careful to qualify that submission going only to the extension of time point, not at all to the latter.
GLEESON CJ: Thank you, Mr Kondilios. Yes, Mr Hutley, anything you want to say in reply?
MR HUTLEY: Yes, your Honour. At the end of the day my learned friends have not addressed the question of the meaning of “reciprocal rights where necessary”. That has yet to be addressed. My learned friends – the Court of Appeal accepted that it was in the – in those words were to be found the source of the imposition of the content of the obligation which the Court of Appeal found. In our respectful submission, and nothing said by my learned friend ‑ ‑ ‑
GUMMOW J: I thought your opponent adopted what had been put in the course of argument you.
MR HUTLEY: Yes, well ‑ ‑ ‑
GUMMOW J: And being conscious of the time he did not want to bang on about it.
MR HUTLEY: If your Honour pleases. Well, your Honour, I have answered what was said in relation to that and I do not think there is anything further I can usefully add.
GLEESON CJ: Thank you, Mr Hutley.
In matter No S210 of 2007 we will reserve our decision.
We are in a position to give judgment now in matter S166 of 2007, which is the application for special leave to appeal. There are insufficient prospects of success in disturbing the outcome in the New South Wales Court of Appeal to warrant a grant of special leave. Special condition 56 is to be construed and its validity assessed in accordance with the principles explained by Justice Dixon in King Gee Clothing Company Proprietary Limited v The Commonwealth (1945) 71 CLR 184 at 194 to 195, and Cann’s Proprietary Limited v The Commonwealth (1946) 71 CLR 210 at 227 to 228, and not by recourse to those principles directed to saving bargains between consensual parties and stated by Chief Justice Barwick in Upper Hunter County District Council v Australian Chilling and Freezing Company Limited (1968) 118 CLR 429 at 436 to 437.
However, if the correct principles be applied there are insufficient prospects of an outcome differing from the construction of special condition 56 put to counsel for the applicant in the course of argument in this Court and adopted by counsel for the respondent. The Court dispenses with the requirement that the applicant comply with rule 41.2.1 of the High Court Rules but special leave to appeal is refused with costs.
We will adjourn for a short time to reconstitute.
AT 11.51 AM THE MATTER WAS ADJOURNED
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