Westfield Management Limited v Perpetual Trustee Company Limited
[2007] HCATrans 336
•31 July 2007
[2007] HCATrans 336
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 TUESDAY, 31 JULY 2007, AT 10.17 AM
Copyright in the High Court of Australia
__________________
MR B.W. WALKER, SC: May it please the Court, I appear with my learned friends, MR R.G. McHUGH, SC and MR N.J. OWENS, for the appellant in the first case, the respondent to the application in the second case. (instructed by Speed and Stracey)
MR N.C. HUTLEY, SC: If your Honours please, I appear with my learned friends, MR S. FLANIGAN, MR J.C. GILES and MR S.J. FREE, for the respondent in the appeal and the applicant in the special leave application. (instructed by Deacons)
MR E. KONDILIOS: May it please the Court, I appear for the second respondent in the second matter. (instructed by Maddocks)
GLEESON CJ: Mr Walker, is it convenient to hear the argument on the appeal first and then the response to that and the application from Mr Hutley and then you on the application?
MR WALKER: Yes, your Honours. My friend, Mr Hutley, and I have devised this proposal for your Honours’ consideration, namely, that we argue the appeal with the intention that we will finish just before the luncheon adjournment, that is, the whole of the argument on the appeal, that the application which, as your Honours appreciate, involve an application for extension of time which is contested. The special leave application will then be argued as your Honours require us to argue it the written submissions having been prepared, as your Honours have seen, so as to encompass full appellate argument if that is the course the Court wishes us to follow.
GLEESON CJ: Thank you.
MR WALKER: Against that last possibility in particular we have divided the time between the two cases so that there will be a virtually equal allotment of time.
GLEESON CJ: Yes, thank you, Mr Walker.
MR WALKER: Your Honours, the first of the cases, the appeal, concerns the interpretation of an easement which, as your Honours have seen, is contained in its text as granted in volume 2 of the appeal book at page 738. There is a deal of common ground on a number of the issues and arguments in this case and just the first of them is that, of course, these are the words the meaning of which will determine the outcome of the appeal, that is, no other words, these words.
HAYNE J: Now, the significant of the easement is to be found at pages 823 and 831, is it not, 823 and 831 being the relevant certificates of title?
MR WALKER: Yes, your Honour.
HAYNE J: This is Torrens land?
MR WALKER: Yes, your Honour.
HAYNE J: And therefore we are concerned with an easement that is an interest in land and is a qualification to - - -
MR WALKER: To title by registration, yes. Those considerations, which are not fundamentally different from what would be true in relation to the old system but which are the more starkly apparent in a system of title by registration, those - - -
HAYNE J: It is a public register in which successors in title work out what they get and what they are burdened by by looking at the register and the register only, do they not?
MR WALKER: Yes, that is hence my opening remarks. The text at page 738 is what people concern to do that many years down the track, if you will forgive that expression, that is the text that will tell them on the one hand what they are entitled to, on the other hand what they are obliged to suffer.
KIRBY J: Remind me, did Justice Hodgson give any weight to the Torrens element?
MR WALKER: I think it is fair to say that all judges did but without dwelling on it, it never having been the subject of any difference between the parties.
GUMMOW J: It is not a question of exploring communings between the parties, is it, which surrounded this easement?
MR WALKER: No, it is not. That is why I start as I do. These are the words to be construed, these are the words to be found on a register, these are the words which by registration in the appropriate instruments creates the right and imposes the burden. The purpose of my earlier comment to Justice Hayne concerning not a radical difference from that, an old system, is, of course, by reference to the fact that under old system there are searches and registers which will throw up the instruments that similarly contain for successors perhaps many years hence, to ascertain ‑ ‑ ‑
HAYNE J: Registration of title, not title by registration and that is the radical difference which is at the forefront of consideration.
MR WALKER: That is a radical difference but, in our submission, as to the proposition that this is the text to be construed and the care with which one eschews reference to things which are not so permanent as the terms of the registered text, in our submission, they are in similar case. Certainly we accept entirely the importance of title by registration, the importance therefore, the paramountcy and the entire sufficiency of the text to be construed.
KIRBY J: In a sense this is another instance of the importance which the Court has been emphasising over recent years of construing problems and seeing the problem in the statutory context which is relevant and the statutory context here is the Real Property Act (NSW).
MR WALKER: Yes, it is.
KIRBY J: That is why I ask about Justice Hodgson. I am not conscious that his Honour, as it were, started from that point and he propounded a proposition about the approach to construing easements which he favoured and then backed off from that by reference to authority, but the authority which he then looked to, really, was to a large extent founded in English authority, the 19th Century, which was not authority in the context of Torrens Title system which was pioneered in Australia and which was really the starting point, as Justice Hayne was suggesting to you.
MR WALKER: Yes. There are, of course, two points and, to be fair to his Honour Justice Hodgson, most of the authorities that we understand Justice Kirby has just referred to were on what I will the “accommodate point” which I will be dealing with second, not first. They are matters which we accept have a continued currency in considering the requirements for the creation of an easement. This is not a case where there is a challenge to the fundamental requirements which include the proposition that the easement must be such as accommodates the well‑known tenement.
GUMMOW J: We need to know, Mr Walker, what the New South Wales statutory framework is that gets this instrument on the title. It starts in the Conveyancing Act, does it not?
MR WALKER: Yes, it starts under section 88.
GUMMOW J: 88B, is it?
MR WALKER: Section 88B, which is referred to in the respondent’s submissions. Your Honours will find that at page 77 of the extracted print from the Conveyancing Act 1919. It is of significance that the provisions of section 88B involve the term of art “easement.” There are, of course, in answer to Justice Gummow’s questions the provisions of the Real Property Act as to the registration of instruments, including the instruments that create an easement, and there are the suite of provisions, sections 42 and 43 in particular, which relate to the title by registration, including so‑called indefeasibility.
KIRBY J: Do we have those provisions of the Real Property Act before us or not?
MR WALKER: No, your Honours do not.
KIRBY J: See, this is the problem. People are not starting at the right place. I mean, I do not know how often the Court has to say it, but if there is statute that speaks, that is the place where you start, not in the common law cases.
MR WALKER: Your Honours, we will provide those provisions. As to the first point, what I will call the evidentiary point as to the interpretation of these registered instruments, again those provisions in the Real Property Act do not in terms or by any implication hitherto the subject of authoritative statement in this Court say anything to the contrary of the principles which were argued and not contested both at trial and in the Court of Appeal on the basis of authorities in this Court, namely, that the instruments fall to be interpreted in accordance with the approach to the construction of documents inter partes that this Court has referred to frequently in the last 25 years. I do not say only in the last 25 years, but the authorities that your Honours see quoted in both sets of written submissions are also those which are referred to in the reasons for judgment both at trial and in the Court of Appeal.
GUMMOW J: What are those authorities?
MR WALKER: In particular the one that we rely upon is the contractual authority Toll v Alphapharm.
GUMMOW J: Exactly. This is a world away from Toll v Alphapharm, I would have thought.
MR WALKER: I am sorry, your Honour?
GUMMOW J: I would have thought this is a world away from Toll v Alphapharm.
MR WALKER: Your Honour, there is no question that none of the contract cases present that which is to the - - -
GUMMOW J: It is not a contract. It is not a contract.
MR WALKER: That is what I am saying. None of the contract cases - - -
GUMMOW J: It is a registered instrument.
MR WALKER: - - - present that which is to the forefront of this case - - -
GUMMOW J: It may or may not be contractual, but it is a registered instrument.
MR WALKER: What is to the forefront of this case is what I started with. The text to be construed is part of the title by registration affecting persons who are not parties to a contract affecting persons indefinitely into the future.
HAYNE J: Well, the moment you say it is at the forefront you suggest there is something in the background to which reference can be made and it is at that point which it has to be exposed and dealt with and the moment you say that you can look off into the contract cases you are suggesting at once the resort of counsel in the commercial list, it is all part of the matrix of facts, your Honour. How someone searching a register is meant to know this matrix of facts so beloved of counsel is perhaps a question that needs to be confronted.
MR WALKER: Yes, it does. May I seek to confront it by use of the authority that we have cited in paragraph 34 of our written submissions in‑chief, namely, The Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17. The first of the passages to which we refer is that passage that refers to a lease. This was an unregistered lease of Torrens system land. The fact that it is unregistered, of course, does not mean that it was not an instrument in a form which could be registered. It was in registrable form.
At page 29 about point 8 of the page there is a proposition which was relied upon as being the law in this country concerning the application to the extent they are capable of being applied of the contract authorities concerning interpretation to instruments of title such as in this case the registrable lease. Picking it up simply at the conclusion your Honours see that Justice Mason referred to:
the balance of authority here as well as overseas, and the reasons on which it is based, support the proposition that the ordinary principles of contract law, including that of termination for repudiation or fundamental breach, apply to leases.
I need to stress that that is not in terms a reference to the resort with proprietary of not to material called surrounding circumstances in interpretation, but it is, in my submission, an important start to what we seek to urge as an assimilation.
A similar reference is found in Mr Justice Brennan’s reasons at the ‑ ‑ ‑
GUMMOW J: That is the Lord Wensleydale case?
MR WALKER: Ultimately, yes, your Honour. At the foot of page 40 Justice Brennan referred to the “ordinary contractual principles” and then at page 53 ‑ ‑ ‑
GUMMOW J: The question was whether there had been repudiations.
MR WALKER: Yes, that is right, your Honour.
KIRBY J: This was an unregistered lease, was it not?
MR WALKER: Unregistered, but registrable, yes.
HAYNE J: You seek to read the case as saying that because there is reference to the ordinary principles of contract that means you take the whole of the bookmarked principles of contract and apply it to a registered instrument under the Torrens system?
MR WALKER: I think the proper answer to that question is yes, we do, your Honour, that is, there is no indication there in the reasoning supplied ‑ ‑ ‑
HAYNE J: Because their Honours did not have to confront the question. That is why their Honours did not consider it.
MR WALKER: It is the completeness of the statement concerning the ordinary principles to which I make reference. Can I then come to, in this Court, in Gallagher v Rainbow 179 CLR 624 concerning easements. In the reasons of Justice McHugh, starting at 639 under the heading “The construction of a grant conferring an easement”, refers in the last three lines of the text to the analogy between deed and a document registered under the Torrens system and goes on to say:
The principles of construction that have been adopted in respect of the grant of an easement at common law, therefore, are equally applicable to the grant of an easement in respect of land under the Torrens System.
In relation to the principles that his Honour located of that kind, may I first go ‑ ‑ ‑
GUMMOW J: This is about deeds, not contracts.
MR WALKER: Yes, your Honour, but the matter ‑ ‑ ‑
GUMMOW J: This is not in the world of simple contracts.
MR WALKER: No. The matter continues, however, your Honour, if I may. The deed in question here, of course, pursuant to which the registered instrument was executed is itself found at 649 and following with the terms of the easement proposed to be created set out on page 659.
KIRBY J: But presumably it was a deed with a view to registration.
MR WALKER: It was a deed with a view to eventually an instrument to be registered under the Real Property Act being executed and lodged for registration.
KIRBY J: The question really is one of principle and policy, it seems to me, whether you pick up all the old law of deeds and contracts without modification once it is known that the deed is expected to be and is, in fact, later registered under the Real Property Act with its very high public purposes of title by registration.
MR WALKER: Yes.
KIRBY J: That does not seem to have had enough attention in the courts below, with respect to their Honours.
MR WALKER: Yes, your Honour.
HAYNE J: These are proceedings not between the immediate parties to the deed, but between successors in title, the title each of which holds is marked out within the four corners of the Real Property Act.
MR WALKER: Yes. No part of our argument seeks to qualify that proposition at all. It is a matter then of how do you interpret those words. To go back to page 639 in Gallagher v Rainbow, the approach of common law that his Honour opines is applicable under an instrument to be registered under the Torrens system is there explained or described by the passage from Lord Wensleydale’s speech in Waterpark v Fennell as follows:
in order to apply its –
that is the deed’s –
provisions, evidence is in every case admissible of all material facts existing at the time of the execution of the deed, so as to place the Court in the situation of the grantor.”
That, in our submission, answers exactly without any difference to what is in the law of contract interpretation described as the objective circumstances, circumstances being, that is ‑ ‑ ‑
GUMMOW J: Who is going to know these?
MR WALKER: I am sorry, your Honour?
GUMMOW J: Who, 30 or 40 years later, is going to know of these when this person, 30 or 40 years later, wants to deal with the register.
MR WALKER: The pre-emptory answer to that is it will be the Court. The more accommodating answer to it is that 30, 40, 50 or 100 years later there may be a paucity of evidence, in which case there will be a paucity of those facts.
GUMMOW J: That is right. There is a whole lot of the law evidence dealing with the problems that arose in litigation arising from old system title by reason of these very circumstances of lapse of time. One of the great policies of the Torrens system is to avoid that.That is why we do not get worried about lost deeds and so on and what the ancient inhabitant of the village thought.
MR WALKER: Quite so, your Honour. However, the common law - the common law, I stress – though recognising the difficulties and grappling with the difficulties in particular cases, still set about finding out what the instrument meant by reference to evidence of all material facts existing at the time of its execution to the extent that that was available. If it was not available, there was no such evidence.
HAYNE J: Does that not commit the cardinal sin put to rest in Breskvar v Wall? Does that not begin analysis of a Torrens system problem by seeing it as a system of registration of title rather than a system of title by registration? That is, the moment you say we may resort to something outside the register described as objective circumstances, you are trying to define the title that a party has or is subject to by reference to things extraneous to the register.
MR WALKER: If our argument goes so far as to supplement the words of the registered text, then the fallacy, heresy or error that your Honour has identified and raised for my consideration would have been committed. We do not do that, which is why I started my argument as I did. That which creates the rights and imposes the burdens is a registered text, no more, no less. The meaning of a text, notwithstanding it has the status of being registered, has been held by this Court to be a meaning ascertained in accordance with what I will call a contextual reading. In other words, it is not the case that you may know nothing about the land which becomes the servient tenement and the land which becomes the dominant tenement because those facts are not recited in the registered text.
GUMMOW J: Justice McHugh was dissenting in Gallagher, was he not?
MR WALKER: Yes, but not on this point, your Honour.
GUMMOW J: What do the majority say on this point?
MR WALKER: They, in fact, did not need to consider – can I go to “Construction of the easements” at page 631.
GUMMOW J: The passage at page 631 is where I had hoped this case would be starting.
MR WALKER: That is halfway down under Real Property Act, your Honour.
GUMMOW J: With the reference to the New South Wales Act, yes.
MR WALKER: But that passage says nothing, with respect, about the question of resort to other material.
GUMMOW J: I realise that, but it at least starts in the right place.
MR WALKER: Yes, your Honour, but it does not say anything about resort to other material. That is not something that has hitherto been seen as to be found stipulated in the terms of the statutes. We certainly go this far, that this Court could not find in the text of those statutes a prohibition on an approach to interpretation that requires, for example, you to take into account what can be known, after or the remove of time it may occur, about the servient tenement and the dominant tenement at the time of the grant.
KIRBY J: That, in a sense, is the reason for the questions you have been asked, whether or not implied in the whole theory and purpose of the Real Property Act is an exclusion of searches into all the minutiae of the dealings of the parties, because once the instrument is intended to be and is, in fact, registered, at least arguably it picks up the purpose of speaking on its own face, according to its own terms, and that alone.
MR WALKER: Your Honour, it is only the last three words which are the difficulty I am presently confronting.
GUMMOW J: I am not sure Gallagher v Rainbow is entirely on the rails actually. If you look at Mr Fraser’s argument on 625, I tried to remain calm as I looked footnote (2).
MR WALKER: I do not have to embrace arguments, your Honour, that were not dealt with and that one was not dealt with.
GUMMOW J: No, but then one looks at Mr Keane’s argument and we are back in the English cases.
MR WALKER: It is the words “of the grant”, fourth line. words “of the grant”. Now, the passage in the reasons of Justices Brennan, Dawson and Toohey, to which I have just taken your Honours, include on page 632, the unremarkable but critical proposition that:
Whether the owners of subdivided lots of a dominant tenement are entitled to the benefit of an easement –
and here come the crucial words –
is a question of construction of the grant.
Immediately their Honours then refer to 19th century English authority concerning the construction of the grant, not in a way that says anything about a matter which, as Justice Gummow has observed, was clearly not to the forefront of the argument in the case before their Honours in the High Court. In our submission, it would be most unusual to understand that reference to an aspect of the 19th century interpretation of easements without appreciating, for the purposes of the law in this Court ‑ ‑ ‑
KIRBY J: Their Honours also refer to a decision of the Supreme Court of Rhode Island and the American law property text, but I do not know whether that is written in the context of a Real Property Act system, a Torrens system.
MR WALKER: I think your Honour should not assume it does.
KIRBY J: No, exactly.
MR WALKER: I am not talking about the registration at the moment. I am saying that when they refer passingly to the question of construction of the grant, there is not only no suggestion that their Honours are differing from what the English cases say about the construction of an easement, they are actually, albeit for another purpose, citing one of them. It would be odd to do that if there were a fundamental point of difference between English and Australian law, namely, that because the English law was pronounced at the time Newcomen v Coulson was decided, not in relation to title by registration but rather registration of title where available, that their Honours were failing to point out that there was this fundamental difference, namely, that in Australia you could not know anything other than what appeared from the printed, registered instrument.
GLEESON CJ: Mr Walker, this may be a very awkward question or problem. It is a principle, as I understand it, of the law of easements that what goes with an easement is the right to do whatever is reasonably necessary to take advantage of the easement. If you looked at this title, this register, how would you know what was reasonably necessary to take advantage of the easement? The register would not even tell you that there was a big shopping centre on this site.
MR WALKER: There is nothing remarkable about the practical and hitherto authoritative answer to the Chief Justice’s question because it transcends the difference between old system, registration of title, and Torrens, title by registration.
HAYNE J: What more would you need to know than is in document DP641047 at pages 737 and following which is the instrument to which the register refers, the content of the easement granted and burdened?
MR WALKER: In many cases, including the present one, you need to know what the present configuration of improvements on the land is. This is an easement which one would have to strive manfully to avoid understanding involves entirely artificial works. It is essentially subterranean. This is not the track trodden by feet or wagon wheels over a paddock. So you would need to know that. You would need to know, furthermore, “whether at common law or under the Torrens system”, to quote from Justice McHugh in Gallagher v Rainbow at the top of page 640, what the old law concerning the interpretation of deeds regarded as uncontroversial but important, uncontroversial because thoroughly well accepted and not the subject of contest, namely:
“the court will consider (1) the locus in quo over which the way is granted; (2) the nature of the terminus ad quem; and (3) the purpose for which the way is to be used.”
Under the third heading it is common ground between these parties at all levels that this case has now been argued that that does not include what in contractual parlance is called the subjective or the uncommunicated subjective intentions of a party. Not least that can have nothing to do with the matter when there is no contractual privity between the actual parties to the litigation.
HAYNE J: You said that in order to understand what this easement was all about you would need to know something about the state of development of the premises, is that right?
MR WALKER: Yes, your Honour.
HAYNE J: Why, in light of what appears between 737 and 742 of the appeal book, and why, in light of particularly condition 10 appearing at 740 about redevelopment, do you need to know more than that it is to appear at the point indicated on the plan at 742 and to be treated in the fashion described in the conditions? What more do you need to know?
MR WALKER: When one looks at 742, particularly by reference to the section, one knows that this involves what I described earlier as artificial works, works to be done to make this, in effect, the tunnel. This easement was granted pursuant to matters which are equally on the public record, namely, the in rem as it has sometimes been called, creation of planning permission affecting the land which became the servient tenement. One knows that the dealings which produced this easement, and that is, in our submission, all material facts in this case of an uncontested kind, that fits the third category of that which in the 19th century for deeds was regarded as uncontroversial admissible material, namely, evidence as to the purpose for which the way is to be used.
In this case the controversy is whether the expression “all purposes” is comprehensive enough – and this is on the interpretation rather than the accommodation argument – to include the purpose of being able to traverse the dominant tenement so that the way may be used by the owner for the time being of the dominant tenement, among other things, for the purposes of access over the dominant tenement to neighbouring land. That is the issue as to whether the registered words “for all purposes” go so far.
We start, of course, with the proposition that your Honours have seen in the written submissions, that “for all purposes” is not a phrase easily or likely to be cut down and that the very clarity and plainness of the expression “for all purposes” places a very severe onus of persuasion on a later owner of the servient tenement, who says “but not for that purpose” because the literal or ordinary English meaning of “for all purposes” is that you will not be able to identify, name any purpose not included within that class.
That is only the beginning of the case and, again, keeping separate the notion of the accommodation point – that is, the argument that says that even with words which expressly said for all purposes including accessing Imperial Arcade and Centrepoint – leave aside for the moment my friend’s argument that says that would have been a monstrosity at law, could not have been done even if the words were intractable in their meaning to that effect. I will come back to that accommodation argument later.
As to the interpretation argument, we start with the proposition – and as Justice Kirby says, the more one focuses only on the printed text, the stronger the proposition gets – that “for all purposes” means exactly what those words say and if there can be no context to cut them back, including by reference to what has hitherto been regarded as uncontroversial law of interpretation of easements, then that is the end of the case, but in our favour because “for all purposes” prohibits an objection by a successor entitled to the servient tenement, but you are using this for a purpose outside the terms of the grant.
GLEESON CJ: But the purposes of the owner of the dominant tenement expanded, did they not? At the time of the creation of the easement, the registered proprietor of Skygarden was not the registered proprietor of Imperial Arcade and Centrepoint.
MR WALKER: Imperial Arcade or Centrepoint, no. We should say, your Honour, that the fact that they have come into common ownership is not a circumstance that we call in aid for interpretation and is not material in the sense that they might as well have been cooperative neighbours. Cooperative neighbours can equally develop a massive integrated development, that is, massive in the sense that it physically spans and presents as a united or unitary redevelopment of a number of different pieces of land. They do not have to be in the same ownership for that to happen, of course. They happen to be in this case, but that is only a happenstance.
GUMMOW J: Mr Walker, we have to construe this instrument sooner or later. At page 737 the “Right of way” is identified as “wide and variable”. Do you see that?
MR WALKER: Yes, your Honour .
GUMMOW J: “Limited in height to the strata delineated on the plan.”
MR WALKER: Yes, your Honour.
GUMMOW J: I need to understand how the plan at 742 works. I think it makes it clear that this was subterranean?
MR WALKER: Yes. Well, I am not quite sure I can assert that because one needs to know - your Honours will see that, in the left-hand column for the section, the second-bottom row is titled “lower level (exist” – existing, I think that means – “ramp surface)”.
HAYNE J: It gives reference levels by reference to the AHD, which I think is the Australian Height Datum, is it not?
MR WALKER: Yes.
HAYNE J: Which is a point of universal reference.
MR WALKER: Yes, it is, but you need to go outside to find – I was about to say where the natural levels in King Street were. There are no natural levels in King Street, that is, it is a long time since there was anything natural about that part of King Street, which is something that you cannot tell from the registered text but which can be known.
In answer to Justice Gummow’s question, I do not think one can tell without going to material dehors this page or this document that it involves digging.
GUMMOW J: I doubt that. Mr Hutley will explain it to us, I would imagine.
MR WALKER: He probably will, but he will do so, no doubt, by assertions concerning where these relative levels see you or saw you at the time in relation to the excavation. That of course can only be demonstrated by going to material outside this page.
GUMMOW J: There were various abbreviations that surveyors used that are used here. I am sure that can be discovered.
MR WALKER: Your Honour appreciates I am not saying you should not. Of course you should go to that other material in order to understand. For example, if a hundred years from now usage in the surveying profession has changed, there can be no doubt that one would be able to give evidence as to what RL meant and what gave it meaning in a relation to actual topography, AHD, as Justice Hayne has pointed out. That would all be dehors. It would be a little bit of intellectual history that the Court would then be receiving, but it would be none the worst for that. Indeed, in our submission, it would be nothing other than the ordinary resort by the Court to all the tools available for interpretation of an instrument, such as a deed, or a registered instrument, when there are references that require explication. The Court does not give up.
HAYNE J: And we know from condition (10) at 740 that the plan is prepared by reference to or having regard to the fact that there is something known as the buildings erected upon the lots burdened and that the plan is intended to be engaged until the event of the redevelopment of the buildings erected on the land indicated as the lots burdened.
MR WALKER: And thereafter there will be a regrant, a proviso to (10), that there will be:
at no cost and expense to the grantee an alternative right of carriageway by the shortest practicable route and on the same terms as hereinbefore contained from the King Street alignment to that part of the site of this carriageway immediately adjoining the lots benefited.
HAYNE J: Yes, there will be a new instrument.
MR WALKER: In other words, the same connection to the lots benefited will be guaranteed, the same connection. Not a different connection but a different part, the same connection. Very critical of course if Glasshouse redevelops but Skygarden does not, which is absolutely on the cards.
GLEESON CJ: Justice Hodgson thought it was an argument against you and in favour of your opponent, construction of the easement, that condition (3) on page 379 provided for the cost of maintenance and repair to be borne equally.
MR WALKER: Yes.
GLEESON CJ: How would you know whether that was an argument for or against a particular construction of the easement unless you knew more about the commercial circumstances of the parties?
MR WALKER: You would not. You would have no concept, for example, as to whether in the near prospect, which is what this instrument was created for, that is, it was not describing something that happened there and then. It is describing something which required to be built – in that near prospect, unless you had material dehors the instrument and quite a detailed kind, you would not know anything about what I will call traffic generation, that is, the need for people to come on foot or by wheeled vehicles to either of the properties, Glasshouse or Skygarden. You would know nothing about that.
KIRBY J: Yes, but the register itself reveals where this is, it is in the centre of the centre of the city of Sydney.
MR WALKER: Of course, but that is true of both buildings, your Honour. In answer to the Chief Justice’s question, how would you know that equality might lead to some unequal burden that is equal cost would not be reflective of the actual distribution of use; the answer is, of course you would not know. Now, in fact, the material which we submit is plainly available and seems to have been used by all the judges – I say seems because of some doubts about how Justice Hodgson ruled on this matter – includes the fact that there are large buildings with commercial rental space to be or being erected, or having been erected, on these two sites, Glasshouse and Skygarden.
In fact, there was no attempt to show that there was a need for traffic generated in such disparate terms, disparate amounts, as between Glasshouse and Skygarden, which after all only happen to be the first developments of those sites after this easement was granted, in order to throw any light on what the Chief Justice has asked about. In our submission, the suggestion that you cannot look to anything other than the text of the instrument first of all has the result that for the first time this Court would be saying that you may not in interpreting an easement go even so far as under the English law one could go in relation to a deed in the 19th century.
There may be policy, particularly when one looks 100, 150 years ahead after registration, that would require that to be a form of the law to be considered on its merits. In our submission, it is the kind of policy that would require legislation. When the New South Wales Parliament, talked about an easement in 88B it was using a legal term of art and there was no indication that in understanding what the grant of an easement was the Parliament was saying that there was any departure, let alone a radical departure, from the reading of the terms of the grant which remained the exclusive source of knowledge as to what is the right of a burden. There is no sign that there is a radical departure so as to cut back the capacity to know about the locus in quo, the nature of the locus in quo, the nature of the terminus ad quem, and the purpose for which the way it is to be used.
Your Honours are aware that the law of the interpretation of easements which was treated as common ground in argument, but more to the point, upheld by all the judges at both levels in this case so far, was that it is a cardinal principle that the user may not accede the scope which was contemplated at the time of the grant, a formula which has been repeated so many times that there is an obvious risk that it becomes nothing other than a formalist mantra, but the notion of ascertaining what was the use contemplated at the time is precisely where, for example, Lord Wensleydale was speaking when he referred to the admissibility of all material facts existing at the time of the execution of the deed so as to place the Court in the situation of the grantor.
That is precisely where the old courts were placing themselves when they said they would of course look at material evidence as to the purpose for which the way is to be used. Each of the authorities that we deploy and are deployed against us illustrate to greater or lesser degree the Court doing just that. There is not a single one of them where the reasons ostentatiously confine themselves to a reading of the registered or unregistered text as the case may be, saying we are not to know anything apart from what the actual printed words reveal.
The reason for that, your Honours, is a reason which is a bearable or tolerable analogy with the law of the interpretation of contractual documents as well, that is, that the meaning of words has never been seen in any serious instrument or document, be it contractual or of title, be it registered or not, it is has never been as a matter which is shorn of the context in which the instrument came into existence. Now, clearly enough, as Justice Hayne has raised with me, that leads in the contractual context to, if I may call it this, the “let it all hang out” approach of simply waving the banner commercial matrix or genesis and getting practically everything, including material which either comes perilously close to simply being a recitation of subjective intention or, on any view of it, is just that.
HAYNE J: The problem that I think you have to confront directly is how that proposition sits with sections 42 and 43 of the RPA and, in particular, how the proposition you advance fits with the words that the registered proprietor of an estate or interest shall hold the same subject to, amongst other things, such other interests and such entries as are recorded.
MR WALKER: Yes.
HAYNE J: You seek to expand the interest or expand the purview of what constitutes the interest beyond the register.
MR WALKER: No, not at all, your Honour.
HAYNE J: No?
MR WALKER: No. That is how I start and I hope it is how I will finish, that we seek no more than what this text gives. There is nothing that is contrary to the central provision of section 42 of the Real Property Act in what we are putting. We are not claiming any estate or interest burdening Glasshouse beyond that which this text does. But the search for what the text does is a matter of interpretation.
KIRBY J: The text is limited to Glasshouse.
MR WALKER: It applies to both, that is, it is a right ‑ ‑ ‑
KIRBY J: Yes, but it does not in its terms apply to Imperial Arcade or ‑ ‑ ‑
MR WALKER: Your Honour means Skygarden. It burdens Glasshouse in favour of Skygarden. The only dominant tenement is Skygarden. This is not a case of a dominant tenement being Imperial Arcade or Centrepoint. Quite so, your Honour.
GLEESON CJ: The question of construction being the question of the meaning of the expression “for all purposes”.
MR WALKER: Yes, quite. In our submission, but perhaps I have been protesting too much on behalf of our friends, for this reason; that in order to use that canon of interpretation which one finds quoted for the umpteenth time in the authorities by Justice McHugh in the middle of page 640 of Gallagher v Rainbow, then you need to be able to resort to something outside the printed text. Now, what is that canon of interpretation? It is the one that says that:
the Court will not construe the grant in a way that would enable an easement to be used in a manner that goes beyond the use contemplated by the parties at the time of the grant.
Now, that obviously raises the question, are we not confined in our search for the contemplation of the parties just as if one is looking for the so‑called intention of parties or the intention of Parliament to the text which is the occasion for the interpretation exercise on hand? The answer is; no, not in relation to a statute, not in relation to a contract and not in relation to a deed or registered instrument are you confined so that you may not know and take into account any matter, fact, or information not contained, that is conveyed by, the words of the text.
GLEESON CJ: But the essence of the problem is this, is it not, Mr Walker? The registered proprietor of Blackacre grants a right of way to the registered proprietor of Whiteacre. Years later, the registered proprietor of Whiteacre acquires Greenacre and Brownacre. Question: does the grant “for all purposes” include use of the right of way to serve the expanded purposes that have resulted from the acquisition of the two later properties?
MR WALKER: Yes. Your Honour puts into that question the notion of expanded use. The difference between the nature of the right and what I will call the practical burden or effect – the authorities have discussed that. Your Honours have seen that in the authorities that both sides have referred to in this case. The question the Chief Justice has asked does not raise matters about, as it were, doubling the number of wagons from 10 to 20, although of course that will almost certainly be the practical grievance that usually leads to litigation, not least because you might double the wagons from 10 to 20 without ever Brownacre or Greenacre. You may simply have a better crop one year.
GLEESON CJ: Blackacre and Whiteacre might be farms and then coal might be discovered on Greenacre and when it comes into the ownership of the owner at Whiteacre, the purpose will become quite different.
MR WALKER: The wagons will be less bucolic, yes, quite.
GLEESON CJ: But the question of construction is that of the expression “for all purposes” and the question is whether the purposes that your client now has by reason of its acquisition of the two further properties, are covered by that expression?
MR WALKER: Your Honour, that is not the only way in which the question arises. That is, of course, how the parties now present in dispute. The question of access being taken from Skygarden to Imperial Arcade and Centrepoint was a question which was intended by the parties to the grant regardless of the then different ownership at the time of the grant. Of course, the nature of the objective circumstance, the planning regime – which I stress is a matter of public record and is not contestable – made that clear from the very outset in relation to those matters available to public examination with respect to the nature of the way in which the owner of Glasshouse could enjoy that land.
Could I take your Honours in particular in the reasons of the learned trial judge which, in our submission, proceeded in orthodox and painstaking fashion to observe the limitations on extraneous material. Could I take you, therefore, in volume 3 of the appeal book to page 884 for these matters. As a matter of planning regime there was what his Honour notes in paragraph 26 – it is the first of these not disputed matters – and I need to draw to your Honours’ attention in particular what is called a floor space bonus element number 7, second last line on that page, the:
“Elective Pedestrian Circulation Improvements” – provided for the award of bonus floor space to encourage developers to undertake the provisions of elements of the pedestrian network –
Those words all translate to this; they wanted Pitt Street to be pedestrians without trucks and cars. Trucks and cars were necessary, are still necessary, for deliveries to commercial properties fronting Pitt Street in what is otherwise a pedestrian mall. Then halfway down paragraph 26 on page 885 at about line 22 this public document stated that:
“One of the most significant tools for implementing the system is through the floor space ratio control code.
It is all about carrots, my interpolation –
A development is granted a floor space bonus –
that is, you can improve your land more lucratively –
if it provides those public facilities which offset the undesirable effects of greater intensity of development on the existing transportation systems, pedestrian movement, street congestion and the environment”.
Then in paragraph 27 we come now to that which is again incontestably undisputed on the record concerning the Glasshouse site before the grant of this easement or the deed requiring it to be granted. February 1985, a second development application prepared by Donald Crone & Associates, who turn out in history to be the architects for Skygarden as well. There is an approval of both the first and second application, both of which contained what is called condition 19. Your Honours will see there not a reference to an easement but a reference to a physical connection. The significance of course is that the easement eventually granted also contains a reference to physical connection, (a) by the terms stipulated by, for the easement itself, the right of way, and (b) for that which will be required in the event of a redevelopment and surrender of the original easement, that is, still an easement with a physical connection.
One sees, therefore, that when one comes to consider the purpose for which the way was to be used or to understand the parties contemplation of the use to be made, the relevant history starts with the requirement imposed upon the owner of Glasshouse physically to provide for connection of what is called the basement service parking levels with the Imperial Arcade and Centrepoint. Your Honours will know that Imperial Arcade and Centrepoint do not abut Glasshouse. Skygarden intervenes. That was achieved by making sure that there was constructed the appropriate hole which would allow for connection through to Imperial Arcade and Centrepoint that Glasshouse could construct, that is, the hole on the northern boundary of Skygarden, the southern boundary of Glasshouse.
GLEESON CJ: That raises a difficulty. I have no idea what the resolution of the difficulty is. It is one thing physically to provide for the future and it is another thing to contract for the future.
MR WALKER: Yes, and another thing to have imposed on you the legal burden to permit that physical access and egress to be used. We entirely accept that.
GUMMOW J: In looking at that, what is the significance of condition (11) on page 740 about disputes? That seems to be limited to grantor and grantee, which I can understand. That is spent, is it not, once there is a transfer of title?
MR WALKER: No, read appropriately so as to apply to their successors, your Honour, that is likely to be related to costs in particular and damage.
GUMMOW J: Why does it apply to successors? How? By what legal mechanism apart from aspiration?
MR WALKER: Yes, I am bound to ‑ ‑ ‑
GUMMOW J: We start running into the Torrens system again, do we not?
MR WALKER: Yes, and the fact that that appears to be an arbitration agreement.
GUMMOW J: Yes. Pretty strange state of affairs to start registering arbitration agreements under the Torrens system.
MR WALKER: I am pausing, your Honour, before I utter the notion of an in rem arbitration agreement.
GUMMOW J: Something odd is going on here.
HAYNE J: Not least the use of the expression “in rem” in this context.
MR WALKER: Yes, your Honour. Your Honour knows why I use it, because it is used in ‑ ‑ ‑
HAYNE J: Yes, and that is why I say what I say.
MR WALKER: I am content simply to say this is an easement with the well-known attribute of an easement, that it will bind successors and will benefit successors respectively of the servient and dominant tenements. Justice Gummow has raised 11 - - -
GUMMOW J: Anyhow, this litigation in the Supreme Court was not met by any reliance on condition 11.
MR WALKER: No.
GUMMOW J: I am not surprised.
MR WALKER: Not even by the reservation of rights to legal representation thereto. No, your Honour. Could I then, as I say, go to those things which are known on the public record about the prospective servient and dominant tenements and, with respect, there is not a word my learned friend’s written submissions – his address of course may differ – to suggest that you may not know about them, and neither in the Court of Appeal was that the position taken.
Paragraphs 28 and 29 record the fact that there were, in fact, designs made to achieve condition 19 which the servient tenement representative describes to the counsel as, “to provide possible vehicular connection to adjoining properties along the southern boundary”. Adjoining properties in the plural is presumably intended to mean that which actually abuts Skygarden plus the two others being those which were referred to in the condition, namely, Imperial Arcade and Centrepoint.
Then in paragraph 29 his Honour uses, with respect, the language that the authorities both permitted and required him to use, namely, the search for what was the contemplation concerning the use at this point of the physical ramp. It is a relevant matter because that ramp becomes the way over which the granted right was given. In paragraph 30 then comes again on the public record and undisputed the setting in which one then describes the use contemplated by the parties to the grant of the way granted using the common phrase “for all purposes”.
One sees there that they understood that in their own consideration of their business prospects for development of their Glasshouse site they would need to obtain at cost, considerable cost, millions of dollars, what are called transferable floor space, which is another of these policies by which planning authorities and local government ensure that there is enlisted the desire for profit on the part of developers in this case to protect so-called heritage items by permitting owners of heritage items to sell their unused air space, to sell it in effect as transferable floor space that somebody who wants to overdevelop by reference to permitted floor space ratios to do so.
Now, that was going to cost money and that is what was contemplated then in paragraphs 30 and 31. In 31 your Honours see that the state of affairs was still as the council perceived to be a mischief, namely, in the long-term to be solved by removing vehicles from the pedestrian mall. Then Skygarden gets into the act in February 1987, paragraph 32, and your Honours see that Skygarden were not playing with Glasshouse when it started. They were going to get their vehicular access from Castlereagh Street. Now, one needs to know about that and though it not be referred to on the plans King Street is and one surely must be entitled to know that King Street and Castlereagh Street intersect.
Then in paragraph 33 the Glasshouse developers perceived a commercial advantage, there is no possible argument about that, in proposing that they could remove the Castlereagh Street necessity of access for Skygarden by using the King Street one. Furthermore, they realised that may give them the element 7 bonus floor space, a highly critical matter because then they would not have to use their purchased heritage air space bonus in order to justify the extent of development that they were determined to carry out. That is what his Honour is referring to in paragraph 33, and in particular at the foot of paragraph 33 at the top of page 888 refers to the beginning of the coincidence of the physical provision and that which would be required as a matter of legal right.
GUMMOW J: Mr Walker, these words of grant at page 738 were not devised by this draftsman. They have a very long history.
MR WALKER: Yes, it is a common form.
GUMMOW J: The common form is exemplified in schedule 4A, Part 1 of the Conveyancing Act.
MR WALKER: Indeed it is.
GUMMOW J: On page 232 of Reprint No 14:
Full and free right for the body in whose favour the easement is created, and every person authorised by it, to go, pass and repass at all times and for all purposes with or without animals or vehicles –
et cetera.
MR WALKER: Yes.
GUMMOW J: There must be a lot of authority on what the expression “for all purposes” means.
MR WALKER: But there is not. Every authority that matters ‑ ‑ ‑
GUMMOW J: In particular whether it includes a purpose of passing beyond the servient tenement.
MR WALKER: I think all of those have been drawn to attention in these arguments.
GUMMOW J: Sorry, passing beyond the dominant tenement.
MR WALKER: Yes. I think all of those have been drawn to attention in the written arguments.
HAYNE J: A useful contrast may perhaps lie in section 98 of the Transfer of Land Act (Vic), which is “Easements arising from plan of subdivision. The easement of way you get is:
all such easements of way and drainage and [other things] . . . as may be necessary for the reasonable enjoyment of the allotment or the lot and of any building or part of a building at any time thereon –
So enjoyment of the particular lot. Is there a contrast to be drawn?
MR WALKER: Perhaps not, your Honour. This verges into the accommodation argument as well. We submit there is no authority that says the expression “for all purposes” cannot in any grant – and perhaps one should not be promulgating rules of law in that fashion – or cannot in this grant, or a grant indistinguishable from this grant, include the purpose of using the dominant tenement in common with adjoining properties not themselves dominant tenements and thus involving passing from the dominant tenement on to those adjoining properties.
The use of Skygarden most valuably includes its capacity to be part of what is called an integrated development; integrated only in the sense that different parcels of land are brought together for an overall built development with overall commercial qualities which are different from and obviously the market from time to time, or parts of it, perceives them to be superior to what would result from individual separated development on each of the separate parcels.
This is not a case where we are trying to sneak in, as it were, by later land ownership changes further dominant tenements. That is wrong and could not be done. It is not a case where the character of the actions that we are permitted to authorise will be altered. It is not a case where you can say that there is even necessarily going to be more such traffic than may have been brought about by a separate redevelopment of Skygarden as a dominant tenement without any regard to Imperial Arcade or Centrepoint.
GLEESON CJ: Mr Walker, is the problem a problem connected only with delivery vehicles or is it customer parking?
MR WALKER: No. In relation to the easement, it is not limited to either of those. That, however, will be subject to controls from time to time imposed by town planning.
GLEESON CJ: Both of those are included in it?
MR WALKER: Yes, they could be included in it.
GLEESON CJ: Apart from commercial considerations, what would there be to stop your client turning Skygarden into a large car park to serve customers of Centrepoint and the Imperial Arcade?
MR WALKER: Only the considerable necessity to obtain planning permission.
GLEESON CJ: That is what I mean, apart from commercial consideration, but as far as the word “purposes” in this easement?
MR WALKER: No, there could be no protest by Glasshouse if vehicles and people came on to Skygarden and stopped there and then came back through Glasshouse, it being a property which had as its commercial use something which was rendered valuable by its proximity to other sites altogether.
GLEESON CJ: How does the practical problem manifest itself now?
MR WALKER: There is no practical problem, your Honour.
GLEESON CJ: Well, the complaint is that - - -
MR WALKER: The complaint is that we propose, which is true, that this easement be available for the use subject to council permission of those that we can authorise under the easement to use it - customers and delivery people are obvious classes, so are tenants - to go over the easement to Skygarden and in some cases to go on to Imperial Arcade and on to Centrepoint and then back again.
GLEESON CJ: To drive through?
MR WALKER: Yes.
GLEESON CJ: What about the ones who just want to come and park in the Skygarden area and then go and shop in the Imperial Arcade?
MR WALKER: We do not understand how it is argued, and, with respect, I am not sure that it is argued, that that would be not permitted by the easement.
GLEESON CJ: What is the difference between permitting people to come and park their cars in Skygarden and go shopping in the Imperial Arcade?
MR WALKER: It may be only a question as to how they get into the shops, in other words, whether it is said that a person who parks in Skygarden must walk back along the vehicular way rather than take a lift up to a street level floor of Skygarden and exit there to Castlereagh Street or Pitt Street. We do not think it is seriously suggested that this is an easement that lends itself to interpretation that that use is unlawful because what that person would be doing would still be going to and from Skygarden over Glasshouse. They would be doing something in between as one tends to do when one comes to town, that is, you do not just park and leave. That is commonsense context about what people do in town, which, in our submission, has hitherto never been suggested as unavailable in the reading of these words.
GLEESON CJ: But you could charge people, could you not, to come and park in Skygarden and then go to Wentworth Chambers?
MR WALKER: Yes.
MR GLEESON: It is a question of what constitutes excessive user.
MR WALKER: It is a question of what is beyond the use contemplated by the grant, by the parties at the time of grant.
MR GLEESON: That which is beyond the use is that you are going to ‑ ‑ ‑
MR WALKER: Encourage people to traverse Skygarden.
MR GLEESON: Well, permit people, insofar as you know what they are doing, to drive over the right of way into your land, and in some cases park there, where they are not confining their proposed activities to your land.
MR WALKER: I think that may well be the nub of the matter, but there is also a more direct one which is obvious and bearing in mind what I get from the background or try to get from the background I cannot obscure this, we want delivery people who are people in particular the council wants off the mall. Private traffic is not allowed in the mall, delivery traffic is. We want to be able to permit – the council wants us to require delivery people to keep off the mall and therefore one of the possibilities is this subterranean central spine access. So it is not just the case of people bringing a vehicle across Glasshouse on to Skygarden, taking a lift, walking off to David Jones, walking down to the Queen Victoria Building, walking up to Wentworth Chambers, then walking back, getting in the car and driving back from Skygarden over Glasshouse, which we would submit is perfectly possible and lawful under this right of way.
The Court goes through things and then, your Honour – and I do not mean with any disrespect to the Court of Appeal – we are told at paragraph 51:
Applying the Upper Hunter approach, in my opinion what condition 56 contemplates is that where cls 3 and 4 of the existing easement (set out in par [14] above) provide for equal division of costs between one grantor and one grantee, such costs should be divided four ways between the grantor and three grantees. In my opinion, no change would be required –
et cetera and that is it.
HEYDON J: Is there some passage in the Acting Chief Justice’s judgment in the Land and Environment Court that sets out a model approach to solving this problem which corresponds with your predecessor’s submissions?
MR HUTLEY: If I could just take your Honours to the approach of the Acting Chief Justice. Your Honour will find that at page 29 of the application book at 66. It says:
The omission by the council to consistently provide for a viable and reasonable mechanism for the implementation of its grand scheme reinforces the conclusion that compliance with condition 56 was not feasible. Critical questions remain unanswered even at the present time. These include important matters such as the amount of consideration to be paid for the grant of the further right of way and the undefined “reciprocal rights.” The prospect of the achievement of a consensual outcome is left to speculation. It is not reasonable to require a developer to do that which is impossible without the co‑operation of third parties. Particularly where the third parties have no commensurate interest in the subject property.
Could I then take your Honours over to what the chief judge has said at paragraph 71. I do apologise your Honour, I forgot to take your Honour to paragraph 54, beforehand. He says:
It must be assumed that the council was aware of condition 19 when it granted building approval to the Glasshouse including the structure that provided the opening between the two buildings. By reference to the terms of condition 56 it is reasonable to construe condition 19 as requiring no more than the provision of a formal and permanent opening and a built carriageway –
That was the context in which it came, condition 19 dealt with physical then one came to paragraph 66. Can I then take your Honours to paragraph 71 at page 31. It says:
Having regard to the whole of the circumstances applying at the time and the surrounding relevant facts and difficulties of enforcement I determine that the decision of the council to impose condition 56 was so unreasonable –
So his Honour, in effect, construed condition 56 as was submitted at first instance, that it really left a whole lot of matters to be debated because it had to because, once one understood that this was an ambulatory condition taking the best practical approach to it, it would be dealing with circumstances at a time remote from the imposition of the condition. What would be reciprocal rights necessary at that time would be a matter potentially likely to be of differing views between differing people with different commercial aims in a different context, for example, the debate is here happing in 2007, questions associated with security and the like which are vital one would have thought in relation to matters such as easements of this variety, a completely different social environment in real terms to that which maintained in 1988.
One had to come to terms in the construction of this condition with the words “with reciprocal rights where necessary”. We submit, and submitted, that “where necessary” was clearly referring to necessary in the context that maintained at the time that compliance with this condition was called for and that necessity would depend upon the differing commercial aims and objects potentially of up to four parties, namely, what was Centrepoint, how did it want to develop, over what period did it want to develop, how did it want to use these easements during construction periods, what was Imperial Arcade proposing to do, what was its future use? In other words, the parties would have to deal with the differing circumstances concerned with the extension of this easement at a time removed and what, we submit, the Court of Appeal did is that they did not construe those words. I have taken your Honours through the paragraphs.
HAYNE J: Can I take you back to what may be a logically anterior point. The condition with which we are concerned is a condition enforceable by the mechanisms described in sections 122 and 123, is it not?
MR HUTLEY: Enforceable, yes, your Honour.
HAYNE J: It is, therefore, a condition that must be capable of construction as having compulsive effect, that is compelling the person who is the subject of the condition, the beneficiary of the development consent.
MR HUTLEY: Accepted, your Honour.
HAYNE J: Can there be a condition of a development consent which depends for its effectuation upon the agreement or consent of some party outside the development consent, that is, a third party?
MR HUTLEY: Yes, for example, your Honour, there may be a condition imposed upon a development, “The development shall not take place unless one obtains an easement for drainage from the third party”. Therefore, one can impose a condition which says, “Thou shalt not develop unless one obtains an easement to allow drainage to take place”.
HAYNE J: It is not said, is it, that this condition is of that kind?
MR HUTLEY: No, we submit it is of a completely different kind because the condition, in effect, is a condition which calls us - firstly, it is ambulatory, it does not prevent, it allows development, it allows use, it requires us at some indeterminate time in the future to enter into negotiations which we may not be able to reasonably conclude ‑ ‑ ‑
HAYNE J: But it is that indeterminacy which, if you are right, is perhaps of critical importance in determining whether that which is imposed meets the statutory description “condition”.
MR HUTLEY: Precisely.
HAYNE J: And if it does not meet statutory description as a condition, then ‑ ‑ ‑
GUMMOW J: In that sense, Wednesbury unreasonableness is a red herring really because you start at the beginning. The question is, “What is the content of the condition imposing power in the light of these penal provisions in 122 and 123?”
MR HUTLEY: We accept that, your Honour. Firstly, one has to give a content to it and then one has to say, “What’s that content? Firstly, does it have the character of being a condition?” Another way of putting it, your Honour, is, a consent to which it is attached, is it capable of describing as a consent to development within the meaning?
HAYNE J: Can it be given content which can be compelled? The condition precedent you earlier described of no use until you have obtained drainage, et cetera, can be compelled, you can restrain the use.
MR HUTLEY: Yes. The conclusion the Court of Appeal came to did have that content but it had that content by saying, “If the other sides come to us with an instrument in this form, you must accept” because in effect they said ‑ ‑ ‑
GUMMOW J: In fairness to the Court of Appeal, Mr Hutley, I do not know what course the argument took though, I doubt if the argument commenced by focusing on sections 91 and 122 and 123 and hence, it lifted from Wednesbury unreasonableness which is a great buzz word to the Bar into Upper Hunter and so on.
MR HUTLEY: It was also put on the basis of uncertainty and it simply was an impermissible condition.
HAYNE J: Without routing it into the Act.
MR HUTLEY: With respect, one was there dealing with – where it had the first instance judgment where in effect this was dealt with ‑ ‑ ‑
GLEESON CJ: Mr Hutley, how long do you think you will require to complete your argument?
MR HUTLEY: Twenty minutes.
GLEESON CJ: And Mr Walker?
MR WALKER: About 40, I think, your Honour.
GLEESON CJ: All right. Well, we will adjourn until 10.15 tomorrow and we will say that the next matter will be not before 11.
AT 4.17 PM THE MATTER WAS ADJOURNED
UNTIL WEDNESDAY, 1 AUGUST 2007
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