Scharer v State of New South Wales [2005] HCATrans 37 (11 February 2005)

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Scharer v State of New South Wales [2005] HCATrans 37 (11 February 2005)

Last Updated: 22 February 2005

[2005] HCATrans 037

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S630 of 2003

B e t w e e n -

GEOFFREY FRANCIS SCHARER

Applicant

and

STATE OF NEW SOUTH WALES

Respondent

Application for special leave to appeal

GLEESON CJ
McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 11 FEBRUARY 2005, AT 9.59 AM

Copyright in the High Court of Australia

MR J.M. IRELAND, QC: If the Court pleases, I appear for the applicant. (instructed by Moloney Lawyers)

MR A. ROBERTSON, SC: I appear with MR M.J. LEEMING for the respondent. (instructed by Vivienne Ingram, Solicitor for the Department of Environment and Conservation)

GLEESON CJ: Yes, Mr Ireland.

MR IRELAND: Your Honours, this case, we submit, raises an important question as to the effect of section 6 of the Crown Lands Act 1913, now repealed. I should add that the principle which has been decided by the Court of Appeal of New South Wales in this case is still of enduring relevance, since section 6 of the current Crown Lands Act 1989 is a similar provision.

GLEESON CJ: Does that question of principle arise in the light of the finding of fact made on page 50, paragraph 56?

MR IRELAND: We have accepted, your Honour, that in order to succeed and then to get to that debate, one needs to reverse that finding.

GLEESON CJ: So, on the facts as found, the question of law you want to agitate does not arise.

MR IRELAND: I accept that, and therefore, as we have said in our submissions in reply, I have to persuade you now that what Justice Tobias said about what could be drawn from a document was clearly wrong. Your Honours, in aid of that, could I hand up a photostat of the actual file note, from which all of these things were deduced.

GLEESON CJ: Yes.

MR IRELAND: Your Honours might remember – just by way of background, to put it in context, the Water Board administered the catchment area. It was Crown land, the Department of Lands had the Crown responsibility for it. There were provisions in the Act, the Metropolitan Water Sewerage and Drainage Act and the Crown Lands Act, which gave the Board, as it were, a veto on use of Crown land within the catchment. The Water Board was created as a trustee, in effect, by the legislation, of that land. That meant that the - - -

GLEESON CJ: Was the Water Board itself the Crown?

MR IRELAND: No, no. The Water Board was. So that there were two bodies that were interested in all of this work that was going to be done on the land by Mr Miller. They were interested in the seven years he was about to spend in constructing a 20 kilometre road over precarious terrain to gain access to his land, which was otherwise landlocked.

He went along to the Water Board. The file note I have handed up is a file note of it prepared by the real estate officer on 26 March 1962, and your Honour sees it has gone through the system, it has been countersigned in that rather gorgeous public service way by all the people up the line, so it was a true record of the Board.

GLEESON CJ: I suppose it would be the Department of Lands that you would need to deal with, to deal directly with the Crown.

MR IRELAND: That is so, and what this file note does is to bear on that. Mr Miller, that was the landowner, my client’s predecessor in title:

called and saw me today re the access road to his property in the Upper Nattai area. He is at present negotiating with the Department of Lands re the necessary authority to traverse the Crown lands concerned and will advise the Board when arrangements have been made. Regarding the gate suggested by the Board, Mr Miller considers that the gate would be much more effective if the gate was fixed at the point marked in red on plan attached. I told Mr Miller that I would refer his request to you for consideration.

This was followed – this is uncontentious – by a letter issued by the Board itself, giving its assent to the construction of this considerable undertaking.

Now, your Honour has directed me to page 50 and I just wanted to place in context what Justice Tobias has decided. In order to do that, can I go back to page 48. The background is that the trial judge said that this was not admissible to prove any fact. The Court of Appeal disagreed with that. At page 48, paragraph 49, the Court of Appeal ruled that the file note was admissible. His Honour says:

The file note of 26 March 1962 clearly did constitute [a business record], as it formed part of the records of the Board . . . In those circumstances, s 69(2) [of the Evidence Act] provides that the hearsay rule does not apply –

So the question then became, what inferences should be drawn from this document as to Mr Miller’s direct contact and dealings with the Crown in the persona of the Department of Lands?

McHUGH J: Mr Ireland, do you rely on this document you have handed to us as creating some form of estoppel by the Department?

MR IRELAND: Yes, your Honour.

McHUGH J: Well, is not the difficulty that you face that neither that document nor any of the Board’s documents reveal what, if any, arrangements were made between Mr Miller and the Department, nor do they record any advice from Mr Miller to the Board as to what arrangements, if any, were made. That being so, how could you know what the estoppel is? An estoppel must be defined with precision. How do we know what the estoppel is?

MR IRELAND: In answer to that, your Honour, may I give your Honour the inferences I have in my favour from this generous judgment of the Court of Appeal. First, at page 48, line 54:

the primary Judge ought to have found that Miller was, as at March 1962, negotiating with the Department for the necessary authority to traverse the Crown lands with the road.

We would say that is clearly right. Then at line 52 – these are all in my favour, these inferences, from the document you are looking at:

that the Department was aware of Mr Miller’s proposal to construct the road and that the Board had approved its construction. In this respect, there is no reason to believe other than that Mr Miller would have brought to the Department’s notice, in the course of negotiations, the contents of the Board’s letter to him of 20 March 1962.

That was the permission letter. At the foot of the same page, line 46:

The highest inference that can be drawn is that the Department contemplated that the road would be constructed and used.

GLEESON CJ: And it is consistent with that, is it not? Used in the capacity of a licensee.

MR IRELAND: Used for permanent access.

GLEESON CJ: But without a proprietary interest in the user.

MR IRELAND: That could be so, I accept that, but that is equivocal.

GLEESON CJ: That is the key to the finding on page 50 in paragraph 56, is it not, the difference between knowing that somebody is going to go across your land to get access to his own land, and creating a proprietary interest in him.

MR IRELAND: Your Honour, if I can just finish this, answering, I hope, your Honour’s question. Over the page on 49, at line 29, again:

the inference is easily drawn that the Department had knowledge of Mr Miller’s proposal to construct and use the road.

Then the next inference:

Relevantly, the inference is available that the Department in all probability considered that the issue was one for the Board, as the latter had the care and management of the catchment area through which the road was to be located.

And then the final inference that the Court of Appeal makes – on which I have found myself before we come to page 50 – page 49, line 42:

it should nonetheless be inferred –

and this is crucial for me, this is really the culmination of the inferences –

it should nonetheless be inferred that the Department stood by and permitted Mr Miller to construct and maintain the road at his expense and to use the road for access without objection to either him or the Board.

So that when we come to page 50, to the difficulty I have, factually, to overcome before we get into what, in my submission, is undoubtedly an important general question as to the exclusion of the doctrine of proprietary estoppel in the case of Crown lands, what his Honour Justice Tobias says, on page 50 at line 19, is this – and this is the reasoning which loses me the case on the facts:

However, the file note of 26 March 1962 referred to in [8] above makes it clear that both Mr Miller and the Board’s officers were fully aware that authority to traverse the road, once it was constructed, lay exclusively with the Department.

Now, in my respectful submission, the file note in front of you does not bear that reading. In other words, what the judge is saying in the Court of Appeal is that if you look at the file note now in front of you, you should infer from it that Miller was going to spend seven years building a road at
the risk of being refused permission at the end of it to use it. And that is just not a fair reading, in my respectful submission, of that file note.

What the file note means, as the other inferences which I have sought to identify in the judgment lead inexorably to, is that the Crown knew that the road would be built and used. In fact, his Honour Justice Tobias has found that at the passage at 49, line 42. Therefore, the judge in the Court of Appeal, Justice Tobias, has said the reason that you do not have a proprietary estoppel here on the facts is that there was no legitimate expectation in Miller that he could use the road. Rather, there was a legitimate expectation that he could spend seven years building it, then take the risk that he could not use the road. In my respectful submission, that is a wrong reading of the document.

If I overcome that factual conclusion – and your Honours will have noticed, from the trial judge’s position, we got a lot further on the facts here, because the trial judge said nothing could be inferred about any dialogue between Miller and the Crown/Department directly – then, in my respectful submission, this is a case which then raises acutely two decisions of the New South Wales Court, almost a century apart, which have said that where one has Crown land, section 6 prohibits the operation of the doctrine of proprietary estoppel, the Ramsden v Dyson kind of interest.

In my respectful submission, for the reasons we have put out in our written submissions, that is a highly debatable and significant point, which has enduring relevance under the current legislation and also in some of the other States. I face up to the fact, your Honour, that I have to turn your Honours around on what Justice Tobias said as a matter of inference should flow from the file note, but I submit that we have a strong case on that, and that the general importance of the case otherwise exists. Those are my submissions.

GLEESON CJ: Thank you, Mr Ireland. We do not need to hear you, Mr Robertson.

We are of the view that having regard to the findings of fact made by the Court of Appeal the case is not a suitable vehicle for consideration of the question of statutory construction that the appellant seeks to raise and we are not persuaded that the interests of justice require a grant of special leave to appeal.

The application is dismissed with costs.

AT 10.12 AM THE MATTER WAS CONCLUDED