GOSFORD RSL CLUB LTD v GOSFORD RACE CLUB LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL BEAZLEY, STEIN JJA and SHEPPARD AJA 15 June 1998, 15 June 1998 [1998] NSWCA 96 Procedural fairness — Dismissal of summons by trial judge — Whether appellant denied opportunity of presenting case — Whether a reasonable expectation that case would be heard — Whether denial of natural justice justifying intervention. Beazley JA This appeal raises a single issue, namely, whether the appellant was denied procedural fairness in the trial judge's dismissal of its summons on 23 March 1998. The determination of that issue requires a short recounting of the history of the proceedings and an examination of what his Honour said in his three judgments in the matter. The proceedings related to two covenants which affected land at Gosford. The dominant tenement is a racecourse owned by the respondent. It has the benefit of two covenants which are lettered (b) and (c) in the transfer in which they are contained and are in the following terms: "(b) That the subject land should only be used as a Bowling and Recreation Club. (c) The transferees their executors administrators and assigns shall not carry on any business or trade on the subject land which will interfere with the running and conduct of racing on the adjoining land." In general terms, the appellant, by these proceedings, sought to have extinguished or modified the restriction arising under these covenants. The proceedings were heard by Bryson J over approximately 5 days. On 18 December 1997, his Honour delivered judgment which, had his Honour made final orders, would have resulted in the dismissal of the summons. The effect of his Honour's judgment was that the land, as affected by covenant (b) had in effect been sterilised. His Honour was not satisfied, however, that the proposal which had been made in respect of covenant (c) was anything "more than a concept". He found that he was "not able to come to a conclusion about a declaratory order or an order for modification of covenant (c) except in relation to a more specific proposal". His Honour further stated: "This part of the plaintiff's case requires consideration in detail so as to carry what the court is asked to approve beyond a bland and featureless concept to something which can be the subject of real appraisal. What has been put forward is replete with safeguards which seem to convey assurance that all will be well but the likelihood of their fulfilment depends on what at the core they actually deal with. The safeguards would give the Race Club a burdensome and expensive task of policing their fulfilment, observing, measuring, recording, calling for compliance, undertaking burdens of proof and being told to be reasonable. The list of uses put forward covers a very wide range of activities and some could involve much noise and movement. If I am to set this going and compel the Race Club to accept it I must know in detail what I am deciding that they have to accept." See also his Honour's comments at 56U-57B. 2 UNREPORTED JUDGMENTS His Honour was clearly concerned that the effect of his judgment was that the appellant had been left with land which was unusable because its use as an RSL and Bowling Club as required by covenant (c) was economically unviable. Notwithstanding the failure of the appellant's case as presented, rather than dismissing the proceedings at that point, his Honour "defer[red] doing so to enable parties to bring forward another modification to covenant (b)". His Honour listed the matter for directions at 10am on 9 February 1998. Before dealing with what occurred on that day, it is necessary to return to certain other aspects of his Honour's judgment. His Honour had stated that, in order to overcome the effect of the "sterilisation" of the appellant's land: "A just result would be to allow some other low-intensity open-air recreational activity which might be a pleasant and acceptable backdrop to the scene presented to a person attending the racecourse. But none has been put forward; extinguishment of Covenant (b) would be quite unjust and adopting a list of all or most of the commercial uses in the 3(b) zoning is only nominally different from extinguishment. There has been no proposed modification which will allow some other low-intensity open-air recreational use, or any other a fair equivalent of the protection stipulated for in 1967." The appellant places particular emphasis upon his Honour's concluding remark in this passage to demonstrate that his Honour left open the possibility of some activity other than the recreational type activity which he appeared to prefer. In particular, the appellant submitted that this clearly left open the possibility of commercial activity such as was here proposed. It appears that between 18 December 1997 and 9 February 1998, the parties were involved in negotiation in respect of the sale and purchase of the land. On 9 February 1998, the occasion that the matter was again before his Honour, the appellant's solicitor sought a further period of time to consider and bring forward other proposals for modification. Over the objections of the respondent his Honour provided the appellant's with "another and final opportunity to reframe the modification which is proposed" and stood the matter over for directions on 23 March 1998. In doing so his Honour stated: "T regard the further period of six weeks which I will allow as a final opportunity for the plaintiff to bring forward the proposed modification to some other open-air recreational use with fair analogies to the use provided for in the restrictive covenant. As the closing passages of my judgment show, I have not completely closed my mind to the possibility that some other use might be acceptable, although on the material put forward to date that does seem rather unlikely." His Honour further stated: "T do emphasise that I contemplate that unless there is a clear new proposal and a high state of preparation to advance it by the time of the next directions hearing, I will dispose of the proceedings with a final order." His Honour then stood the matter over to 10am on Monday 23 March 1998. On that date, the appellant came to the directions hearing armed with four affidavits in which it was submitted, there was contained its "new and detailed proposal", which, being the entirety of the further case it now wished to put, was in a "high state of preparation". URJ | GOSFORD RSL CLUB LTD v GOSFORD RACE CLUB LTD (Beazley JA) 3 His Honour, however, on that occasion dismissed the appellant's application with costs. In doing so, his Honour took the somewhat unusual course of hearing submissions on costs before dismissing the summons. There was however, nothing irregular in his Honour's having done so, as he had already determined the summons against the appellant. After hearing the submissions on costs, his Honour heard senior counsel for the appellant outline the "new proposal" which it then sought to bring forward. In brief, and on one view, the "new proposal" was a more detailed proposal of that presented at the original hearing, but which took account of his Honour's aesthetic and amenity based concerns. Subject to that, it remained a proposal for the use of the land for the construction of a commercial "warehouse type" building. At a broader level, the affidavit material filed on this day proposed a wide range of uses for the land as diverse as "clubs, commercial premises, community buildings and residential buildings". These proposed uses, which if included in any modification to covenant (b), were more extensive than those contained in the original proposal put to the court. These affidavits upon which the appellant proposed to rely to advance its case of a "clear new proposal" as contemplated by the trial judge had only been served on the respondent in draft form on the previous Friday afternoon. The appellant had not filed any amended summons nor notice of motion to amend the summons. His Honour dismissed the summons, stating: "Today I am told that an application to amend the summons to advance a further modification could be prepared in a short time but has not yet been prepared. No application for any amendment has been made by notice of motion. There well could be. The defendant has been given no notice of any use or value of what is proposed, although it seems that those representing the defendants were told on Friday the terms of some affidavits which have since been sworn and these appear to reopen the application." The appellant complains that in so dismissing the summons it was denied the opportunity of presenting the case which his Honour had invited it to present on 18 December 1997 and again on 9 February 1998. It submitted that it had complied with everything the trial judge had required it to do and had expended considerable monies in doing so. To put the matter another way and to adopt the language of administrative law, the appellant had a reasonable expectation that its case would be heard, given that it had complied with his Honour's requirements specified on 9 February. It was submitted that to deny it that opportunity on the basis that there was no amended summons or notice of motion to amend the summons and no service of its affidavits was a denial of natural justice because the trial judge had made no such direction, nor specified any such requirement. At one level there is force in this complaint. However, it is not every denial of natural justice which requires the Court to intervene: see Stead v State Government Insurance Commission (1986) 161 CLR 141, especially at 145. It is not necessarily clear to me however, that there was in fact a denial of natural justice. His Honour, after referring to the appellant's failure to file or serve the affidavit evidence, or any summons or notice of motion, said in respect of the new affidavits: "... and these appear to reopen the application". 4 UNREPORTED JUDGMENTS His Honour had not, at any stage, indicated he would permit the application to be reopened. Rather, he was prepared, on limited terms, to permit the appellants an opportunity to put forward a "clear new proposal". In my opinion, the proposal contained in the four affidavits filed on 23 March 1998 was not a clear proposal and probably was not new. If I am wrong, and his Honour did deny the appellant natural justice because the law never required it to file and serve documents, I do not consider it is a breach which this Court should remedy. There are essentially two reasons for this. The first is that to which I have already referred. Namely, that the appellant had not sought to advance a "clear new proposal". Secondly, this is not a case where the appellant is left without a remedy. Not only can it bring another application for modification, it could seek to invoke the provisions of the Environmental Planning and Assessment Act 1979 (NSW) which may enable a local environment plan to override covenants such as here. For these reasons I consider the appeal should be dismissed with costs. Stein JA I agree with the judgment of Beazley JA. And the orders she proposes. His Honour was clearly concerned with the list of uses put forward by the RSL Club because he lacked detail of them. His Honour made this concern abundantly plain in several passages in his judgment of 18 December 1997. His Honour repeated this concern about the content of a "clear new proposal " in granting a six week adjournment to the appellant on 9 February 1998. The proposal put to the Court on 23 March 1998 was for the same commercial use as previously proposed. In addition, Mr Fox, the appellant's planning consultant, proposed a number of other appropriate uses for the land, including, for example, a club, motels, plant nurseries, refreshment rooms (ie a restaurant) and residential flat buildings. Obviously, this did nothing to allay his Honour's concerns about the proposed uses of the land and their likely effect on the race club. For my part, I do not see that his Honour denied procedural fairness to the appellant. Even if he did, I do not believe that this Court should intervene and send the matter back for a new trial for the reasons indicated by Beazley JA. I agree that the appeal should be dismissed with costs. Steppard AJA I am in agreement with what the presiding judge has said and also with the remarks made by Stein JA. I agree that the appeal should be dismissed. Beazley JA The order of the Court will be that the appeal is dismissed with costs. Appeal dismissed with costs. Counsel for the appellant: P Biscoe QC/A S Bell Solicitors for the appellant: McCarthy Associates Counsel for the respondent: J Cummins QC/R E Dubler Solicitors for the respondent: Taperell Rutledge