UTA Pty Ltd v Celenza & Anor [2004] HCATrans 261 (6 August 2004)

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UTA Pty Ltd v Celenza & Anor [2004] HCATrans 261 (6 August 2004)

Last Updated: 17 August 2004

[2004] HCATrans 261

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Perth No P8 of 2003

B e t w e e n -

UTA PTY LTD

Applicant

and

MARK PETER CELENZA

First Respondent

PETER CLEMENT MOORE

Second Respondent

Application for special leave to appeal

McHUGH J
HAYNE J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

FROM PERTH BY VIDEO LINK TO CANBERRA

ON FRIDAY, 6 AUGUST 2004, AT 10.23 AM

Copyright in the High Court of Australia

MR I.A. MORISON: May it please the Court, I appear for the applicant. (instructed by Martella & Co)

MR A.J.N. ARISTEI: May it please the Court, I appear for the respondents. (instructed by Conal O’Toole)

McHUGH J: Yes, Mr Morison.

MR MORISON: I have proposed three special leave questions, but the one that I am going to focus on is the causation question. There are nevertheless three errors that have been made by the Full Court, and that is one of them. The High Court - - -

CALLINAN J: Mr Morison, I am sorry to interrupt you, but assume that you were to succeed on the causation question. The issue then became, did it not, whether there was significant detriment. Is that right?

MR MORISON: Yes, correct.

CALLINAN J: I think that the proof of absence of significant detriment lies upon the respondent, is that right, under the Act?

MR MORISON: That is correct.

CALLINAN J: But is it not a fact that there was no evidence at all before the tribunal, or, indeed, before the court, as to any financial detriment arising from the loss of what, 2.3 per cent of floor area?

MR MORISON: That is correct.

CALLINAN J: Well, might there not have been an evidentiary onus upon you to demonstrate some significant financial detriment?

MR MORISON: No, not in the circumstances because the case remained that we lost 40m² of development.

CALLINAN J: Does not the Act refer to significant detriment? Am I wrong about that?

MR MORISON: It does.

CALLINAN J: Well, why should anybody infer that a loss of 2.3 per cent was a significant detriment, which also had to be balanced against the provision of two extra car parks? It may well have been significant. It might depend upon where it was and the nature of the tenancies and matters of that kind. But there is no necessary reason why any court or tribunal should infer that 2.3 per cent of floor space, to be weighed with the provision of two extra car parks, constituted a significant detriment.

MR MORISON: We do not rely on inference.

CALLINAN J: Why should anybody infer that it was a significant detriment?

MR MORISON: We do not need inference. The loss, or the curtailment of the development by 40m², meaning, as the Full Court found, that the building area that we were going to have available to us would be curtailed by 40m² to provide for these extra two car bays, was - - -

CALLINAN J: Why is Justice Templeman wrong, at paragraph 41 at appeal book 52?

MR MORISON: Because he has, despite his disavowal of this, reversed the onus and - - -

CALLINAN J: Well, there may be an evidentiary onus upon you.

MR MORISON: I say it is not, because once you have found that a proprietor is going to suffer a detriment such as this, such as being unable to build upon and develop any part of the land, then that is a significant detriment – particularly against the background of Hamilton v Thompson, which his Honour approved, and was a case in which her Honour Judge Yeats of the District Court of Western Australia found that there was a significant detriment merely because there was going to be a lack of uniformity in the caravan park and because the proprietors had an interest in maintaining the corporate governance in the strata company.

McHUGH J: Yes, but in that case her Honour held that the erection of the pergola would inevitably lead to a lowering of property values. That is different from this case.

MR MORISON: I am not sure, with great respect, that she said that directly. What I understand she said was that it was important that corporate governance be maintained, that without - - -

McHUGH J: What she said was:

In the circumstances as established by the evidence the respondent has erected the pergola in flagrant and knowing breach of the Act and bylaws. I am satisfied the erection of the pergola has undermined the corporate governance in the Park and will inevitably lead to a lowering of property values.

MR MORISON: Yes.

McHUGH J: Well, this case is different, is it not, because you have this small percentage effect, but, on the other hand, there will now be two additional parking bays in the development which will be available for use by all unit holders.

MR MORISON: They will be common property.

McHUGH J: Yes. The view was taken that in the absence of any evidence as to the financial consequences of the restriction – the court thought the detriment could only be financial – there was no significant detriment.

MR MORISON: It is a question whether one must show financial detriment. If one must show financial detriment, then we should have put up valuation evidence. But we do not have to show financial detriment, we have to show significant detriment. I say that - - -

HAYNE J: What is the significant detriment that you suffered?

MR MORISON: The curtailment of development. The loss of 40m² upon which we could build.

HAYNE J: And that would be significant detriment if, but only if, it had some economic consequence. To what other consequence could it possibly refer, in the context of this case?

MR MORISON: The context of this case is important, because the applicant is a developer, developed the site, had planned a certain mode of developing the balance lot. That involved building upon the lot in a certain way, and that was no longer possible because of the mezzanine floor that created the need for new car bays. Now, that, in this context, is significant. A developer being unable to build as it planned, in effect, having 40m², or, indeed, any area of its developable land, sterilised by this act is a significant detriment. It would be, with respect, to place a gloss upon the statute to hold that we needed to show an economic detriment or to quantify our detriment. It is enough that we can say there is a significant detriment, and in this context there was.

McHUGH J: But this is hardly a special leave point in any event, Mr Morison.

MR MORISON: With respect, your Honour, it is, because the High Court needs to make it clear that the commonsense principles for determining causation that it laid down in March v Stramare apply generally to all cases in which causation is in issue, unless, of course, the principles are modified or excluded by the particular circumstances of the case. This case is an example of, with respect, the High Court’s omission to do that and the consequence of it, because the Full Court has made no attempt to address the March v Stramare principles, has adopted a special test – purportedly by reference to the statute, but, of course, it was not by reference to the statute, as there is nothing in the statute that compels the adoption of a special test.

The need for this case to be ventilated, apart from the fact that on all points we are good, is that the law of causation is nascent. It was developed in the context of negligence. March v Stramare was a negligence case and was a case in which much of what was laid down was based upon considerations of the - - -

McHUGH J: Well, it was hardly developed in negligence cases. Causation has been an issue in the law for a great many years. It was constantly applied in shipping cases and contract cases.

MR MORISON: And that is the point that I make, that in many cases causation arises, but in the case in which the principles for causation were laid down reasonably clearly and emphatically, it was a negligence case, and there appears to have been, I think we can infer from this decision, some question as to the generality of the principles that must be applied. One of the concerns is that, of course, in developing the new approach, the commonsense approach, attention was given to the abolition of the defence of contributory negligence and to the availability of apportionment between tortfeasors, and these matters were taken into account.

Now, one could be forgiven, reading the judgments in March v Stramare, particularly the judgment of his Honour Sir Anthony Mason, for thinking that these commonsense principles were special and arose from the circumstances in which, in negligence, there was now a special factor applying, and that was the removal of the need to show one cause. There have been cases in which this Court itself has referred in contexts other than negligence to causation. I have given an example of Allan, in which his Honour Justice Kirby very fleetingly referred to the principles, but only by way of saying that if those commonsense principles apply, then a certain result would follow.

Even in Henville v Walker and Wardley, the commonsense principles were applied not as though they ought to be considered in any event or were the law, but on the basis that they ought to be usefully considered, in effect, by analogy, but always, of course, on the basis – as your Honour
Justice McHugh stressed – that they must give way to the statute if the statute indicated some other approach should be taken.

Now, one can see, as a result of this, that is, the context in which it was born and the way in which it has been adopted, not as a principle of generality, but one that may be usefully brought in aid, that there is opportunity given to Australian courts to ignore the principles and invent their own.

The other two matters, that is, the question of whether there was a detriment and whether it was a significant detriment, are, in my submission, errors – perhaps not questions, but errors. The issue of the inability to build in accordance with the “latest plans”, that his Honour referred to, which he said was not a detriment, was an unfortunate expression because “latest plans” suggested that there was some last-minute change conceived by the developer. In fact, it suggests that what the applicant lost, really, was just flexibility. The applicant did not just lose flexibility, it lost 40m² of its development. The Full Court added that the two car bays, as they were for general use, must be regarded as a benefit. But what is that benefit compared to the loss of, in effect, private land?

The other error concerned this issue of whether it was a significant detriment in that financial detriment followed, and the Court has already elicited from me my response to that. So if it please the Court, those are my submissions.

McHUGH J: Thank you, Mr Morison. We need not hear from you, Mr Aristei.

Given the lack of evidence from the applicant concerning any financial detriment to it, we are not persuaded that there has been any miscarriage of justice in the particular circumstances of the case, or that there is any other point in the case that calls for the grant of special leave. Accordingly, the application is refused with costs.

The Court will now adjourn to reconstitute.

AT 10.39 AM THE MATTER WAS CONCLUDED