Bankstown City Council v Alamdo Holdings Pty Ltd [2004] HCATrans 491 (30 November 2004)

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Bankstown City Council v Alamdo Holdings Pty Ltd [2004] HCATrans 491 (30 November 2004)

Last Updated: 16 December 2004

[2004] HCATrans 491

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S407 of 2004

B e t w e e n -

BANKSTOWN CITY COUNCIL

Applicant

and

ALAMDO HOLDINGS PTY LTD

(ACN 003 309 206)

Respondent

Application for special leave to appeal

McHUGH J
KIRBY J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON TUESDAY, 30 NOVEMBER 2004, AT 10.56 AM

Copyright in the High Court of Australia

MR B.W. WALKER, SC: May it please the Court, I appear with my learned friend, MR J.B. MASTON, for the applicant. (instructed by Marsdens Law Group)

MR C.J. BIRCH, SC: May it please the Court, I appear with my learned friend, MR J. STOLJAR, for the respondent. (instructed by Speed & Stracey)

McHUGH J: Yes, Mr Walker.

MR WALKER: Your Honours, the pleading of this case really provides the answer to the way in which the statute, uninstructed by Justice Hodgson’s reasons in Attrill, should have been applied. Could I take your Honours to the extract from that in the Chief Justice’s reasons, starting at page 46 in the application book. This is what makes this a short point, and the vehicle a convenient one for the correct interpretation in this Court of a plain language statute.

McHUGH J: Before you do, is not a strength, and perhaps also, a weakness of your case, order 2 made by Justice Gzell at page 31 of the book, “carry out works to abate the nuisance.” Now, the strength - - -

MR WALKER: Yes, the strength is obviously that anything abating is a remedy entirely for the past.

McHUGH J: Yes, and the weakness - - -

MR WALKER: Is that it requires a great deal of future expenditure.

McHUGH J: Well, not merely that. These cases will depend very much on the form orders takes. There seems to be a general agreement that you are protected in respect of the past.

MR WALKER: No.

McHUGH J: I am sorry, you are - - -

MR WALKER: No, there is not general agreement. In fact, my friends are here to say that - - -

KIRBY J: Dr Birch is very disagreeable.

MR WALKER: In the most urbane way possible he says – and perhaps that is the right word for this urban case – that order 2, an abatement order, is not to be characterised as liability in respect of anything done in the past, and I add “in the past” out of deference to the grammatical argument, which of course we accept. It is a good grammatical argument. It is a good literal interpretation. We just want the literal interpretation to continue.

We accept the jealousy of strictness of the interpretation of the enacted law in relation to taking away common law or other rights. However, when one looks at order 2, we submit that the strength of our case, as a matter of simply understanding, in the proper legal context and giving full weight to the jealousy required and interpreting these plain words, that an order to abate a nuisance is the paradigm liability, otherwise than in damages, for the past act or omission held to have constituted a nuisance.

McHUGH J: Well, the very term “abate” itself suggests an existing role requiring remedy.

MR WALKER: That is the semantic essentiality of that word. Something wrong has occurred - - -

McHUGH J: But the difficulty I have of the case is that assuming you are not protected for the future, in practical terms how do you work out a mandatory injunction which requires you to act in the future and yet somehow or other avoids what has happened in the past?

MR WALKER: You cannot, and (a) that is the reason why this is a real question, because you should not have pseudo or quasi-philosophical conundrums like this at the heart of a law as important regulating the expenditure of local governments, which are after all expenditure on behalf of ratepayers and they will burden future ratepayers with the financial servicing of borrowings. You should not have conundrums like this at the heart of such laws.

McHUGH J: In Attrill’s Case Justice Hodgson had four orders, but it is very difficult to see how two of them really related to the – did not relate to the past.

MR WALKER: Attrill was also, of course, an example of the pitfalls in that case, perhaps not realised in the instant litigation but come back to haunt us now, of preliminary questions and abstract matters. By the time the Court of Appeal, where your Honour Justice Kirby presided, dealt with the matter, the injunctive remedy was out of the picture and so it is not addressed in the Court of Appeal’s reasons. We, of course, as we have said, rely heavily on the reasoning of your Honour Justice Kirby, as President of the Court of Appeal.

That reasoning is, we submit, reason which gives full weight to the will of Parliament while acknowledging and giving full weight to the jealousy required of individual rights, but then says here it is a sphere of operation where Council will not be held liable, subject to the good faith requirement, upon which we won in the Court of Appeal, where there is an important matter of public finance involved, and the important matter, as your Honours have seen, of operational allocation of resources on behalf of local populations who will be paying the financial burden of this.

As it happens, in this case water nuisance is something that does not stop, does not start and finish all in the same municipality and so there is money to be spent by reason of literally upstream activities in order to prevent downstream consequences as well. This is a very good case as a vehicle to test whether the plain language – it should not require adaptation by Parliament to make the “intended to protect” plainer. Plain language really dictated an opposite result from that which was founded in the main, on Justice Hodgson’s reasons, which in our written submission we have sought to demolish one by one.

The best example really is the last of his obiter. In the last of those he says, “Perhaps it is less clear in the case of an order to abate something in the past.” In our submission, nothing could be clearer - - -

McHUGH J: Well, one of his orders was requiring works to fix the problem, was it not?

MR WALKER: Yes.

McHUGH J: It is not easy to see how - - -

MR WALKER: Now, if one then goes to the pleading, pages 46, 47 of the application book, one sees in Judicature Act style pleading that material facts, not mere evidence, material facts are all things done or omitted to be done in the past, however you read them. Now, the pleading was then, in the next page and a half, interpreted in the Court of Appeal, and we do not complain about this, as of course including a case of a fear of future operation, that is, continued operation. We accept that. But “continuance” itself is a word which describes something which has commenced and been completed in the past and is now threatened of repetition or of non-abatement.

It is for those reasons, particularly with a nuisance, where, as your Honours have seen, the watercourse may well have been entirely adequate when first constructed, but urbanisation, for which my client is scarcely responsible all on its own, has added to run-off in such a way that we can no longer rely upon the works, perhaps of the 30s, 40s or 50s to contain flood levels on predictive bases to an acceptable level.

KIRBY J: How did the Commonwealth become involved in the watercourse?

MR WALKER: They fund certain programs of urban improvement, your Honour. Downstream they own the drain, but there is also a funding question which is - - -

KIRBY J: Why does the Commonwealth own the drain? Is it on Commonwealth property, is it?

MR WALKER: It was defence land, your Honour.

KIRBY J: I see.

MR WALKER: That adds no different point given that it is my client, of course, who has been left with an extremely large financial burden. It is not to be - - -

KIRBY J: Would you just remind me of that? There was something in here about the amount that was at stake.

MR WALKER: That is still in the course of being worked out, your Honour.

KIRBY J: What sort of league are we talking about?

MR WALKER: It is going to be about – well, approaching $3 million, $2.5, $3 million.

KIRBY J: And the significance of the case for the local authorities?

MR WALKER: Is extremely large. This is an issue in relation to the building and maintenance of infrastructure; indeed, the decision whether to change infrastructure or natural contours at all where liability in nuisance - not only for water, but water is a very good case - is a very important issue all throughout urban catchments.

McHUGH J: About $2.7 million was the estimated cost - - -

MR WALKER: That is right. Now, there is essential uncertainty as to that because in a way there is something experimental about works which improve part of a watercourse, which may, of course, merely speed the delivery of even more water elsewhere. So these are very large and uncertain liabilities of a kind, we stress, that the ratepayers ultimately have to pay or other levels of government have to pay. Parliament has, after all, intended clearly to shift some of this burden away from the local government area.

Now, in our submission, when one looks at the pleading, the notion that there is a distinction between mere evidence – as if in any event that would suffice to distinguish – that it was mere evidence to look at the past, must be rejected on the face of the plaintiff’s own presentation to court at trial. They pleaded, and they certainly will not be heard to say their pleading was artless, they pleaded exactly as one would expect in a.....sense. They pleaded accomplished nuisance. Their case from beginning to end has been of accomplished nuisance, and then they said by way of remedy, “We want two things.” They really amounted to the same, but they want two things. They want an abatement – now, that is a remedy for the past, that is a liability for the past – and they wanted what is called quia timet relief. But this was quia timet relief which certainly did not depend, only upon threats which had never materialised into legal wrongdoing in the past.

McHUGH J: In paragraph 17 I note the Chief Justice said:

it was, in my opinion, open to the Respondent to propound a case based on the past and future operation of the drainage system - - -

MR WALKER: Yes. That is what I drew to attention earlier, that this pleading was interpreted in the Court of Appeal – we do not protest it. It, therefore, provides a proper test of the extent of this immunity. The pleading clearly propounded on the part of the plaintiff - liability for past conduct, things done or omitted to be done, using the past participle, and of course there was a case quia timet, which was naturally substantially common ground between the parties. Unless there was a remedy the Council would be at liberty to continue as it had.

Now, that does not mean it would not have a program of works, but there is a difference between a voluntary program of works allocated as resources and competing demands require, according to local government considerations of the matter, and an order of court requiring something to be done on a timetable and to a standard that is, of course, not influenced by local government considerations, whether they are democratic or fiscal or whether they are responsive to the requirements of high levels of government, State or Commonwealth.

It is for those reasons, in our submission, that as a vehicle for the testing of the meaning of the plain words of paragraph 733(1)(b), which are materially the same as those that were dealt with in Attrill, we have here a case where the highest court in New South Wales has now said the law, as explained by Justice Hodgson in Attrill, is what will govern so that there will be a divergence illustrated in this very case between plaintiffs who want money for past nuisance and plaintiffs who want an injunction to abate a past nuisance - - -

McHUGH J: Well, Justice Gzell impliedly recognised that you are dealing with the past when he ordered damages, did he not?

MR WALKER: Yes. Now, there is an error in our paragraph 13, top of page 89 of the application book - - -

McHUGH J: So – and he refused to order damages.

MR WALKER: Yes.

McHUGH J: But the implication - - -

MR WALKER: Your Honour has got the point. My error is that I wrote the trial judge had found the respondent was entitled, but it is a slip – it was not entitled.

McHUGH J: No.

MR WALKER: Precisely because the damages were the damages to permit abatement. So put the plaintiff in funds in effect to abate, or force the defendant to abate, and that equivalence was why there was no entitlement to damages. However, if one considers the reasoning in the Court of Appeal itself, in particular – if I could take your Honours in the cross-appeal to page 75 of the application book. There was a cross-appeal for damages for loss of rent. It:

has to be based on conduct by the Council that occurred at the latest, before the conclusion of the proceedings, albeit as argued, before their commencement. The difference does not matter –

Paragraph 122 -

Neither on the pleadings, nor on the evidence –

no distinction is drawn there –

did the Cross-Appellant put forward a case of nuisance based on a failure to remedy a condition causing a nuisance. The case was directed to the nuisance constituted by actual inundation in the past and, for quia timet relief, by future inundation. In such a case loss of rent or profits involves, in my opinion, a “liability” for past acts. On this basis s733 applies.

Now that, in our submission, pulls the intellectual structure of the Chief Justice’s reasons apart, because there he has said, as to both past and future inundation, the loss of rents represented by those events, both actual events and feared events, those loss of rents are a liability for past acts, correctly. But that is reasoning which, of course, applies to the injunctive relief for abatement, to which your Honour Justice McHugh has drawn attention, and it certainly applies to the immaterial way of looking at that same relief; namely, that this is quia timet, because the same work is required either to fix up what was wrong in the past or to prevent that which presently exists – and we are now playing with words because what presently exists is a result of past conduct – make what presently exists safe for the future.

All of this, in our submission, stems from an elementary confusion of what might be called the “tense” of matters. Of course orders operate in the future. They prospectively re-order relations between the parties before the court so as to recognise and vindicate, on the one hand, the wrong committed and the right infringed.

McHUGH J: Well, what do you say when the future referable and the past referable aspects cannot be separated? What do you say - - -

MR WALKER: In this case they cannot be separated, and it - - -

McHUGH J: So what do you say, that the plaintiff goes without relief?

MR WALKER: Goes without relief for this reason, that the so-called future cannot be separated because it is in truth liability for past acts and omissions. It is a continuation of a state of affairs brought about, and perhaps simply by dint of time and other circumstances getting worse, as in urbanisation without a stormwater channel being refurbished. In other words, the future in such cases is inseparable from the past because it is simply the result of time passing without circumstances materially altering. They are simply two aspects of exactly the same set of consequences as time moves on.

For those reasons there is no injustice threatened by Parliament in saying those who sue for the past cannot, those who sue for the future can if they do not sue for the past, but cannot if they also sue for the past. However they phrase it, in substance the question has to be, “Is your claim liability in respect of past acts or omissions, or things done or omitted to be done in the past?” In our submission, this is a case which is typical of all the kinds of cases that your Honours could imagine threatening fiscal, operational and engineering disruption to local government in this State, if not this country.

For those reasons, in our submission, this is an ideal matter for the Court to look at. This is a case which is short to argue. The facts have been clearly found and, with respect, the issues are now laid out in such a way that it really is in the nature of a half-day exercise of statutory interpretation. May it please the Court.

KIRBY J: If I can ask this, in Attrill in the Court of Appeal I set out what appeared to me then to be some arguments for narrow and/or a larger interpretation of the section. Just comparing the sections, they appear to be exactly the same word for word.

MR WALKER: They are the same.

KIRBY J: Certainly the first two subsections.

MR WALKER: Your Honour will recall there was wholesale reform of the local government legislation, but in that wholesale reform oldies but goodies were preserved, and this is one of them. The language of the present section is commendably plain, ordinary English, and it was preserved.

KIRBY J: I understand that, but what concerns me is, given as Justice McHugh has said in a number of recent cases that ultimately questions of interpretation where there are arguments pulling in both directions, in this case the narrowing interpretation, which you have acknowledged, and the wider interpretation, which I see it was necessary because of the intractable language of the section - - -

MR WALKER: Yes.

KIRBY J: What is it that lifts this case up into a High Court case on statutory interpretation, given that there are always arguments on both sides from the time they get here?

MR WALKER: We would respectfully counsel against despair. These are not matters of mere impression. This is plain language, and this Court is where the judicial technique of obeying Parliamentary admonition, expressed in plain language on a socially important issue, such as the present one, ought to be the subject of clear decision.

McHUGH J: Yes, but - - -

MR WALKER: This is not a finely balanced decision, with respect. This had to do with characterising a claim as to whether it involved – in respect of liability for things done or omitted to be done, meaning in the past.

McHUGH J: But what I put to you earlier when you commenced your submissions is relevant, is it not? How do you separate these – it must depend on the order in each case.

MR WALKER: No, it depends upon the nature of the claim first and, finally, the relief. Obviously it is the relief responding to the claim which will tell you what the liability is in respect of, to use the words of the statute, and in each case techniques such as the one we started with mainly look at the Judicature Act pleadings, see the material facts upon which this relief was claimed, an injunction regulating future conduct to abate the consequences of past conduct. That is clearly liability in respect of something done or omitted to be done - - -

McHUGH J: But it only means, at best from your point of view, that the decision in this particular case is wrong, does it not?

MR WALKER: No – well, it means - - -

McHUGH J: What general principle is involved here?

MR WALKER: The general principle is that it seeks to characterise the nature of claims for injunctive relief where abatement is the gist of the relief, or quia timet against the continuation of something already existing is the gist of the relief. That will cover nearly every case of water nuisance. That is far more than this case. So, in our submission, as special leave, this threatens to prevent the need, for example, for the quite difficult, even ingenious, Parliamentary intervention. These words are plain. We should have concepts like things in the past, things in the future. The word “done” is an admirably simple English word, which ought to be the criterion of the immunity. May it please the Court.

McHUGH J: Time is up. Yes, Dr Birch.

MR BIRCH: Your Honours, it is important to keep in mind that this does not immunise the Council’s conduct in any absolute terms. If section 733 is capable of applying, the Council still has to establish that it acted in good faith. When we pleaded our claim and brought it before the trial judge - - -

KIRBY J: That is not in dispute here, good faith, before this Court.

MR BIRCH: Well, it is an important ingredient in the argument. There is not an appeal on the good faith finding. We will be raising good faith if the Court was to grant leave for this reason. When we pleaded the case we could seek damage for past conduct if we could defeat any defence of good faith the Council might raise, and the parties met on that issue, and we considered that we were also entitled to injunctive relief for future harms, in accordance with the principles that had been discussed in Attrill.

What happened before Justice Gzell was that we won, in effect, on both grounds. He found there was a lack of good faith. So the Council had no immunity under section 733, but his Honour in turn found that because we were a reversioner not in possession, the only damage which we were suffering was the damage which was going to be cured as a result of the mandatory injunction that his Honour granted, is for preventing future floods.

McHUGH J: Well, his Honour specifically found that section 733 was not available to the defendant, and he said that you were entitled to damages. However, he says the damages are limited to diminution in the value of the reversion, which should be rectified by the abatement of the nuisance. He did not propose to order an inquiry as to damages.

MR BIRCH: Yes. But what happened was when we came to the Court of Appeal the court concluded that the finding on good faith that had been made by Justice Gzell was not an appropriate finding and, therefore, section 733 was going to have application. Then they had to determine how far it applied, and they adopted the reasoning of Justice Hodgson from Attrill. Then the determination had to be made, how much of the case that we had pleaded originally was concerned with future matters, how much of it was concerned with past matters. That resulted in the Chief Justice analysing our pleadings, and on page 48 of the appeal book he there says in paragraph 16 – I should perhaps commence on page 47. At the bottom he says:

In my opinion, the continued operation of the existing system by the Council is sufficiently raised on the plaintiff’s pleadings by the reference to the fact that stormwater pipes were not only constructed by the Council, but also that the Council “owned” them. This is made clear by the injunctive relief sought in the pleadings. The Respondent sought an order restraining the Council from causing or permitting water to be discharged . . .

17 On the pleadings it was, in my opinion, open to the Respondent to propound a case based on the past and future operation of the drainage system owned by the Council.

What we complained of was this. “You flooded our property two or three years ago, or four years ago, and we can make a claim for that, but we have to meet the statute there if you establish good faith blocks us. But we also complain that on the evidence there is a likelihood you will flood our land in 2006 or 2008 or 2010 and in that regard we want a remedy to prevent you flooding our land in the future.”

Now, this is not an abstruse philosophical distinction that we are seeking to make. It is a simple matter that when one arrives at the hearing you can distinguish easily what is past and what is future so far as what is complained of. The fact that a flood will occur after the proceedings are determined, or may occur after the proceedings are determined, and that is what the relief is addressed to, is a simple and comprehensible distinction.

Your Honours, the passage in the statute, which we say makes it right to look at it that way, is the reference to good faith. If I bring a case to court and say, “Well, the Council had this system in place which flooded my land three years ago” the Council can come along and say, “Well, we hadn’t appreciated the danger” or, “For whatever reason we acted in good faith, we acted bona fide, we didn’t do anything unreasonable and, therefore, even though you suffered substantial loss we don’t have to pay you damages.” But that logic does not seem to apply naturally, when one looks at something that is going to occur in the future, and this is the point that was picked up by his Honour the Chief Justice when he grappled with the proper construction of the statutory immunity.

When I arrive and say, “Here is evidence to show that Council’s conduct, if it continues without any change into the future, may result in my land being flooded in 2006 or 2008 or whatever”, it is odd for Council to say, “Well, yes, we accept that that might happen. We accept that there is, on all the evidence, a reasonable solution to it. We accept the evidence shows that we have no present intention of implementing that reasonable solution, and yet we’re acting in good faith.” That, we say, is such a puzzling result of seeking to apply the immunity - - -

KIRBY J: I am not so sure about that, because the good faith may be founded on the limited resources of the Council and the fact that they have to deploy them in an economical, prudent way. They measure, as all those who expend public money have to do, money on account of risk and make their judgments, and they could be good faith judgments. The pattern of flooding is pretty well established since colonial times in Australia. You might say, “Well, we’re not going to get a flood for another 20 years.”

McHUGH J: Dr Birch, let me raise with you a point that troubles me, and it is what I raised at the beginning, the form of order 2. Now, Justice Hodgson in Attrill spoke about prohibitory or mandatory injunctions based solely on the probability of future events, and Justice Gzell also spoke about an immunity from liability for prospective action or inaction. Both judgments seem to accept that matters have to relate to the future, and yet when you see the form of the order that Justice Gzell made, it clearly seems to go to the past. The Chief Justice, in his judgment, really does not seem to deal with the form of the order at all in any detailed way.

MR BIRCH: Well, your Honour, we would say - - -

McHUGH J: I mean if this judgment stands, then an order to abate a nuisance will be just a standard order.

MR BIRCH: Well, your Honour, two points I suppose. There is discussion about the form of the order in the Court of Appeal’s decision, and the very general terms and the formularistic way in which it was adopted. There were competing orders that were brought into court by the parties. In fact, it was the form that was brought into court by our opponents that was ultimately adopted by his Honour Justice Gzell. Now, I do not want to suggest that the form we proposed would necessarily have made the point that your Honour now raises, but it was a form of order that was proposed by the now applicant in order to give effect to Justice Gzell’s judgment.

The evidence before Justice Gzell included not just historical evidence but evidence from expert hydrologists, which made predictions about the likelihood of flooding in the years to come, the extent of the flooding and the like. It was that evidence, those predictions about what the future held for the property that were the wrong that was being answered by the orders that were being made by Justice Gzell, however he may have formally expressed it. It is clear, we say, when one looks at all the facts that he relied upon that what he was addressing was the possible future flooding events and the avoidance of those future flooding events.

It was not an attempt to deal with whatever might have happened in the past, because so far as the flooding, for example, of tenants’ properties was concerned, the tenants had suffered the loss. They may have had a damages claim, and in light of the Court of Appeal’s finding regarding good faith, they could not sustain that damages claim. We would say that however one reads those orders, properly understood in the particular controversy that Justice Gzell was resolving, they were very much future directed orders.

Your Honours, can I just return to a question that was posed to me by Justice Kirby. Your Honour said even if one looks at it in this future regarding fashion, one could make some sense of the notion of good faith because one could ask whether they have addressed the problem, whether they have resources and the like. Firstly, of course, when one is concerned with discretionary injunctive remedies, the court is in any event able to take all those matters into account, as it did here. So while, in an action for damages, where a liability will be absolute in a general sense, and the Council having caused damage through a common law wrong will simply have to compensate, it cannot appeal to discretionary considerations.

When the court considers whether or not to grant a mandatory injunction it can take into account proportionality, it can take into account hardship. So when one construes the statute in such fashion as to leave the Council without statutory immunity for actions for a prohibitory or mandatory injunction, it does not leave the Council without any protections. It will have all of those discretionary protections, which in one sense may reflect the content that good faith would have.

Can I just say something about why this case is not the perfect vehicle that Mr Walker suggests, because we won on the good faith issue before Justice Gzell, although not in a fashion that is perhaps directed to exactly how the case is now being brought. We lost the benefit of that good faith finding in the Court of Appeal, but in part that was because the Chief Justice says, “Well, I have so much trouble making sense of the concept of good faith in regard to someone who intends to knowingly commit a wrong in the future, that that is for me a persuasive reason for concluding it doesn’t protect the Council from prohibitory or mandatory injunctive relief.”

Now, if special leave was granted, if this Court says, “Well, we disagree with the Chief Justice. We conclude that it can apply to prohibitory and mandatory injunctions”, the Council will then have to establish that it acted in good faith, in such fashion as it ought not to now be subjected to a prohibitory or mandatory injunction. In other words, if it wins the construction argument, if it persuades the court that 733 will immunise against a prohibitory or mandatory injunction, that does not mean it wins the case. It then has to establish the defence of good faith, and that - - -

KIRBY J: Well, it is in front on that point at the moment.

MR BIRCH: It is in front in part because when the Court of Appeal rejected Justice Gzell’s finding that was because they held the concept could not be viewed in regard to future events, and what we - - -

KIRBY J: Well, that seems distinctly arguable to me.

MR BIRCH: Well, what we want to do is we want to say to the Court, if it granted special leave, “Well, you now have to look afresh at whether the Council has acted in good faith. Did they - - -

KIRBY J: But are these not important questions for the liability of local authorities in one State of the Commonwealth? I mean we are the Supreme Court of the Commonwealth. The States are local government authorities and public authorities.

MR BIRCH: Well, the applicant does not honestly say that there is a large number of cases that could ride through on this - - -

KIRBY J: No, but it is 3-odd million in your case, and one can imagine that the type of claim here is going to be quite considerable, at least potentially.

MR BIRCH: Your Honour, what was held by the Court of Appeal, in effect, was in conformity with what had been pronounced by Justice Hodgson in 1993, upheld by the Court of Appeal in that case in 1995.

McHUGH J: A very experienced former Chief Judge in the Land and Environment Court took a different view.

MR BIRCH: But there have not been a large - - -

KIRBY J: The Court of Appeal in that case was not really dealing with this issue, was it? Such utterances as were provided rather suggested that the immunity is an intractable one.

MR BIRCH: Your Honour, there has been the odd case since - Bonnici is referred to, and there is the decision of Melaleuca, which is referred to in the applicant’s documents, but given - - -

McHUGH J: That is against you, is it not?

MR BIRCH: It is against us in one sense, but in the nine-odd years since the Court of Appeal pronounced – the 11-odd years since Justice Hodgson pronounced, the profession must have generally thought that the principle governing the application of 733 was as the Court of Appeal pronounced in our case. This was not an instance of the Court of Appeal coming down with the surprising finding or one which confounded the expectations of the profession. We would suggest that this Court of Appeal finding is simply a further projection of a view of the law uttered by Justice Hodgson in 1993, and there is nothing in the Law Reports to suggest there has been much controversy or many cases, nor is there any evidence brought forward by the Council saying that from its knowledge and its resources it is able to tell this Court that there are a substantial number of instances where these principles apply and, therefore, there are substantial imposts on councils. We accept this case does not involve a small amount of money, but there is nothing - - -

KIRBY J: When the droughts are over the floods will come, Dr Birch.

MR BIRCH: Yes, well I was warned not to make a floodgates comment in the course of my submission. But, honestly, there is nothing to suggest to the Court that there is going to be, if this case is left standing, a heavy impost upon local government. One would have thought that would have been evident in the decade since Attrill if that was going to be the case.

The other point is this. In a case in which either one seeks past damage where good faith is in issue, or where one seeks to bring an action – and if one assumes for the moment that the Court does not grant leave, the Court of Appeal judgment stands and, therefore Council do not enjoy a statutory immunity in regard to prohibitory and mandatory injunctions, that does not mean that they still will not be able to bring forth discretionary material. In this case they did not bring that forth. On page 67 of the appeal book in paragraph 84 the Chief Justice said:

I should note, as did Gzell J, that the Appellant made no attempt to put on any evidence concerning the effect upon it and its ratepayers of the Court determining that expenditure of the order required to abate the nuisance should be incurred.

I will not read the rest of the paragraph; it merely confirms that.

Now, that is an important point because it is not a case where this Council came to court and said, “Look, this really is a very heavy impost upon us” and the court said, “Well, reluctantly we’re obliged to order you to do this anyway because that’s the law and we recognise this is an unfair impost on the ratepayers at Bankstown.” They did not come to court and say there was any impost that ought to be taken into account in the exercise by the court of its discretion. What they said was, “Well, it’s a lot of money.” They suggested that there might have been some cheaper options, which we said were not sufficient and that is what the trial judge found. There was no attempt to bring forth evidence of the list of priorities and say this is going to force us to postpone other works which should be properly done.

McHUGH J: Thank you. Yes, Mr - - -

MR BIRCH: I know I have used my time, your Honours. Could I just say one - - -

McHUGH J: No, not quite.

MR BIRCH: - - - very small comment. We put a submission regarding the approach the Court should take on costs if it granted leave, and if the Court was - - -

McHUGH J: Yes, I noted that. That is in paragraphs 32 and 33.

MR BIRCH: Yes. No undertaking has been proffered by my opponent and we say that should weigh in the balance as well.

KIRBY J: I am just getting a bit nervous about a notice of contention on issues of good faith. Is that purely a statutory interpretation point of the - - -

MR WALKER: Yes, it is. As my friend has put it, it is. There is no foreshadowing of contention, and really could not be because good faith is dealt with in the Court of Appeal by saying the way - - -

KIRBY J: You cannot deny the statute. The statute has provided that that has to be contemplated.

MR WALKER: But on the actual – the issue is joined by these parties. Good faith was in contention based upon conduct subsequent to the creation and operation of the nuisance and, for the reasons the Court of Appeal held, that that simply did not meet the statutory requirements. Now, good faith would, therefore, come up only as, as my friend has raised this morning, an argument in relation to the proper interpretation of 733. That, of course, does not either amount to a contention point or any further complication.

KIRBY J: We would not be ploughing through large reams of evidence about what local government authority officers were thinking - - -

MR WALKER: No, no. No, absolutely not. That is the first thing. The second thing is that the case would finish in the High Court. If we lose on an appeal were special leave granted, that is the end of the case. If we win in the High Court were special leave granted, that would be the end of the case. They do not get to relitigate second time around with a differently pleaded and differently argued good faith point. That is the end of the case. We have the benefit of a finding of good faith. So if the case finishes in the High Court that is a neat one, one way or the other. The next point - - -

KIRBY J: It is a finding of good faith, and it seems a bit curious as elaborated - - -

MR WALKER: The good faith has to do, your Honour, with the bringing into existence and the operation of this part of the collection and channelling of stormwater, and your Honour will not be surprised to know that there was
no case put that, as it were, there was extravagant indifference to particular people or that there was shockingly undiligent engineering or anything of that kind. That then leads into another of my friend’s points concerning the lack of evidence of what I will call a fiscal effect, the discretionary matter. That is quite distinct from good faith. That has to do with an ad misericordiam plea by somebody who is liable and is faced with a claim to an injunction that says, in effect, hardship should prevent you, the Court, from granting this injunction because it will cost a lot of money, but your Honours know how substantial my client is. It would be idle for us to say that we could not go to our bankers or could not organise funding, and we should not be clogging up court’s records with absolutely irrelevant political speeches about this costing money. Rather, that is something that Parliament has thrown into the balance by the way in which they have framed the immunity.

McHUGH J: What do you say about paragraphs 32 and 33 of the respondent’s summary of argument dealing with the question of costs?

MR WALKER: That we have - - -

McHUGH J: They want you to pay the costs here and not to disturb the costs orders by way of - - -

MR WALKER: We have those instructions. No, I do not have anything I want to say.

McHUGH J: Yes, thank you. Yes, there will be a grant of special leave in this matter upon the applicant giving an undertaking that it will pay the respondent’s costs of the appeal, regardless of the outcome, and that it will not disturb any cost orders in favour of the respondent in the courts below. Do you give that undertaking, Mr Walker?

MR WALKER: I do, may it please your Honour.

McHUGH J: That being so, there will be a grant of special leave in this case.

AT 11.40 AM THE MATTER WAS CONCLUDED