> Land and Environment Court of New South Wales CITATION : Halloran and Others v Minister Administering the National Parks and Wildlife Act 1974 [2003] NSWLEC 171 APPLICANTS Warren Halloran Sealark Pty Limited PARTIES : Companies in the Schedule of Ownership RESPONDENT Minister Administering the National Parks and Wildlife Act 1974 FILE NUMBER(S) : 30282 of 1998 CORAM: Talbot J KEY ISSUES: Res Judicata :- issue estoppel - application to re-litigate after interlocutory judgment Corporations Law s 411(4), s 413, s 576, s 1336 LEGISLATION CITED: Land Acquisition (Just Terms Compensation) Act 1991 s 37 Real Property Act 1900 s 43A Barry v Heider and Another (1914) 19 CLR 197; Bass and Another v Permanent Trustee Company Limited and Others (1999) 198 CLR 334; Blair and Others v Curran and Others (1939) 62 CLR 464; David Grant & Co Pty Limited (Receiver Appointed) v Westpac Banking Corporation (1995) 184 CLR 265; Fidelitas Shipping Co Ltd v V/O Exportchelb [1966] 1 QB 630; Halloran and Sealark Pty Ltd and Ors v Minister Administering National Parks and Wildlife Act 1974 [2003] NSWLEC 69, unreported; CASES CITED: Halloran and Sealark Pty Ltd and Ors v Minister Administering National Parks and Wildlife Act 1974 (1999) 105 LGERA 405; Henderson v Henderson (1843) 3 Hare 100; Hoystead v Commissioner of Taxation [1926] AC 155; Johnson v Gore Wood & Co [2001] 2 WLR 72; Kok Hoong v Leong Cheong Kweng Mines Ltd [1964]AC 993; Port of Melbourne Authority v Anshun Proprietary Limited (1981) 147 CLR 589; St Vincent City & Suburbs Pty Limited v The Corporations Law (Beaumont J, NG268/1997, unreported); Yat Tung Investment Co Ltd v Dao Heng Bank Ltd [1975] AC 581 DATES OF HEARING: 08/07/2003 DATE OF JUDGMENT: 07/17/2003 APPLICANTS Mr S D Rares SC with Mr J E Robson (Barrister) SOLICITORS Blake Dawson Waldron LEGAL REPRESENTATIVES: RESPONDENT Mr A H Slater QC with Mr H R Sorenson (Barrister) SOLICITORS Crown Solicitor JUDGMENT: IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 30282 of 1998 Talbot J 17 July 2003 Warren Halloran Sealark Pty Limited Companies in the Schedule of Ownership Applicants v Minister Administering the National Parks and Wildlife Act 1974 Respondent Judgment Introduction 1 On 9 December 1999 an interlocutory judgment was delivered in this matter ("the interlocutory judgment") (see Halloran and Sealark Pty Ltd and Ors v Minister Administering National Parks and Wildlife Act 1974 (1999) 105 LGERA 405) whereby I determined a separate question of law relating to whether the company, Pacinette Pty Ltd ("Pacinette"), was an owner of an interest in land the subject of a notice of acquisition published in the Government Gazette dated 19 June 1998, pursuant to the Land Acquisition (Just Terms Compensation) Act 1991 ("the Just Terms Act"). I was satisfied that Pacinette had established that it was an owner of an interest in land the subject of the notice and thereby entitled for the purpose of these proceedings to maintain its claim under s 37 of the Just Terms Act, at least in respect of the nominated lots the subject of evidence at the hearing. 2 At [10] of the interlocutory judgment the following observations were made:- 10. The answer to the Question of Law in so far as it relates to the land alleged to be held by Pacinette Pty Ltd will enable the parties to proceed to the final hearing with a proper understanding of the rights and interests held by those applicants who claim to be beneficiaries under the 770 trust deeds. 3 The critical findings which are relevant to the current matter before the Court were made at [33] and [139] to [146] as follows:- 33. At all relevant times prior to 9 May 1998 and up to the date of acquisition, Sealark, although not actually, appears to have been entitled to be registered as proprietor of five parcels of land. The facts and circumstances giving rise to Sealark's entitlement to be registered as proprietor of the land are dealt with in [139] to [146] under the heading The interest held by Sealark . … The interest held by Sealark 139. By order of the Federal Court of Australia in proceedings NG3269/1997 made on 12 December 1997, a Scheme of Arrangement was approved whereby the whole of the undertaking and the property and liabilities of Port Stephens Development Pty Ltd were directed to be transferred to Sealark. Similar orders were made in respect of companies Queanbeyan Investments Pty Ltd and St Vincent City & Suburbs and Pacific City Pty Ltd. The documentary evidence discloses that the lands dealt with by Sealark on 14 May 1998 were transferred to it by Port Stephens Development Pty Ltd under transfers executed on 5 March 1998, although the transfers do not appear to have been registered until 2 October 1998. In the meantime the lands had been acquired. 140. The inference is that Sealark received the transfers from the transferor on 5 March 1998 when the transfer was executed by it under seal as the transferee. 141. The transfers were executed to give effect to the Federal Court orders made on 12 December 1997. The land vested in Sealark when the orders were made by dint of s 413 of the Corporations Law. At that date it became the owner of the land. The formal steps of transfer followed to enable the Registrar General to issue new certificates of title. 142. Section 413(2) of the Corporations Law provides that, where an order is made under that section, property shall be transferred to and vest in the transferee by virtue of the order. 143. Pursuant to s 43A of the Real Property Act 1900 for the purpose only of protection against notice, the estate or interest taken by a person under a registrable transfer before registration of that dealing is deemed to be a legal estate. 144. The High Court confirmed in Meriton Apartments Pty Ltd v McLaurin & Tait (Developments) Pty Ltd (1976) 133 CLR 671 that s 43A confers upon a purchaser the same protection against notice as that achieved by a purchaser who acquires a legal estate at common law rather than the larger degree of protection the purchaser would achieve following registration. 145. The Court is satisfied that in the circumstances set out above, Sealark was, at 14 May 1998, in a position to deal with the legal estate in the land and that accordingly, at the date of acquisition, had dealt with that interest so that Pacinette had become the holder of an equitable interest in the land. 146. Accordingly, at the date of acquisition Port Stephens Development Pty Ltd was the registered proprietor of the land, Sealark held the legal estate as trustee and Pacinette held the whole of the equitable interest in the land. 4 In a notice of motion filed by the applicant on 7 August 2002 the following questions are raised:- (a) is any, and if so which, applicant (other than Pacinette Pty Limited) an owner of an interest in land the respective subject of one or both of the notices of acquisition published in the Government Gazette dated 19 June 1998 and 18 September 1998? (b) if yes to question (a) is the interest in land of each such applicant that identified in respect of it in the schedule being exhibit AWD1 to the affidavit of Alexander William Dwyer sworn 2 August 2002 and filed herein? (c) if no to question (b), in respect of each such applicant what is its respective interest in land? (d) if yes to question (a) is that applicant entitled, for the purposes of these proceedings, to maintain its claim under section 37 of the Land Acquisition (Just Terms Compensation) Act 1991? 5 Following discussions between the parties in December 2002, the issues to be determined in respect of the claims of the beneficial owners were agreed to be as follows:- (a) Whether each or any (and if so which) of the Beneficial Owners has established on the admissible evidence tendered at the hearing of the Motion is an owner of an interest in the Land entitled for the purposes of these proceedings to maintain its claim under section 37 of the Land Acquisition (Just Terms Compensation) Act 1991. (b) Whether in respect of any document pleaded or given in evidence, or admitted to be good, useful, or available in law or equity for the purpose of proving that a change in beneficial ownership to which the Transaction relates occurred, (i) any instrument to effect that transaction and which is not stamped, is an instrument upon which stamp duty is payable in New South Wales; or (ii) a statement is required to be lodged under section 44A of the Stamp Duties Act 1920 in respect of the Transaction or any part of the Transaction. 6 The notice of motion was argued before Cowdroy J earlier this year and His Honour delivered a judgment on 30 April 2003 (Halloran and Sealark Pty Ltd and Ors v Minister Administering National Parks and Wildlife Act 1974 [2003] NSWLEC 69, unreported). Cowdroy J came to the conclusion, for the reasons explained in his judgment, that I was the appropriate judge to determine the new questions of law. I have no reason to cavil with that determination. The new questions of law 7 Although the notice of motion was filed on behalf of the applicants on 7 August 2002, it is the respondent that seeks to re-agitate the questions determined by me on 9 December 1999, at least insofar as the parallel or simultaneous transactions involved companies other than Pacinette. 8 It is claimed by the respondent that certain matters in respect of the orders made in the Federal Court on 12 December 1997 made pursuant to s 413 of the Corporations Law ("the Federal Court orders") (refer to [139] of the interlocutory judgment) were not in evidence before the Court although the material was available at the time of the hearing on 27 and 28 October 1999. Not in evidence before the Court at the earlier hearing was the fact that the Federal Court orders were lodged with the Australian Securities Commission ("the Commission") on 23 December 1997. 9 Put in the broadest of terms it will be the respondents case that as the Federal Court orders were lodged with the Commission on 23 December 1997 the legal estate in the land vested in the Commission pursuant to s 576 of the Corporations Law as then in force. When the Federal Court orders were made the companies, in respect of which those orders were made, were thereupon dissolved. This position contrasts with the evidence accepted in the earlier proceedings to the effect that the land was transferred to Sealark Pty Limited ("Sealark") by transfers executed by the transferee (pursuant to the Real Property Act 1900 ("the Real Property Act")) on 5 March 1998, although not registered until 2 October 1998. In those circumstances, the Court was satisfied that Sealark was in a position to deal with the legal estate in the land as the transferee nominated in an unregistered transfer. 10 It is informative to have regard to the respective sections of the former Corporations Law relevant to the debate. They are as follows:- Section 413 Provisions for facilitating reconstruction and amalgamation of Part 5.1 bodies 413(1) Where an application is made to the Court under this Part for the approval of a compromise or arrangement and it is shown to the Court that the compromise or arrangement has been proposed for the purposes of, or in connection with, a scheme for the reconstruction of a Part 5.1 body or Part 5.1 bodies or the amalgamation of 2 or more Part 5.1 bodies and that, under the scheme, the whole or any part of the undertaking or of the property of a body concerned in the scheme (in this section called the transferor body ) is to be transferred to a company (in this section called the transferee company ), the Court may, either by the order approving the compromise or arrangement or by a later order, provide for all or any of the following matters: (a) the transfer to the transferee company of the whole or a part of the undertaking and of the property or liabilities of the transferor body; (b) the allotting or appropriation by the transferee company of shares, debentures, policies or other interests in that company that, under the compromise or arrangement, are to be allotted or appropriated by that company to or for any person; (c) the continuation by or against the transferee company of any legal proceedings pending by or against the transferor body; (d) if the transferor body is a company—the deregistration by ASIC, without winding up, of the transferor body; (e) the provision to be made for any persons who, within such time and in such manner as the Court directs, dissent from the compromise or arrangement; (f) the transfer or allotment of any interest in property to any person concerned in the compromise or arrangement; (g) such incidental, consequential and supplemental matters as are necessary to ensure that the reconstruction or amalgamation is fully and effectively carried out. 413(2) Where an order made under this section provides for the transfer of property or liabilities, then, by virtue of the order, that property shall be transferred to and vest in, and those liabilities shall be transferred to and become the liabilities of, the transferee company, free, in the case of any particular property if the order so directs, from any charge that is, by virtue of the compromise or arrangement, to cease to have effect. 413(3) Where an order is made under this section, each body to which the order relates shall, within 14 days after the making of the order, lodge with the Commission an office copy of the order. … Section 576 Outstanding Property of Defunct Company to Vest in Commission 576(1) Where, after a company has been dissolved, there remains in this jurisdiction or elsewhere outstanding property of the company, the estate and interest in the property, at law or in equity, of the company or its liquidator at the time when the company was dissolved, together with all claims, rights and remedies that the company or its liquidator then had in respect of the property vests by force of this section in the Commission. 576(2) Where any claim, right or remedy of the liquidator may under this Law be made, exercised or availed of only with the approval or concurrence of the Court or some other person, the Commission may, for the purpose of this section, make, exercise or avail itself of that claim, right or remedy without such approval or concurrence. 576(3) Where a company is dissolved, then, notwithstanding that the books of the company vest in the Commission by reason of subsection (1), the person who was the last director of the company or the persons who were the last directors of the company before the company was dissolved shall retain the books of the company (other than any books of the company that any liquidator of the company is required to retain under subsection 542(2)) for a period of 3 years after the date on which the company was dissolved. … Section 1336 Vesting of property 1336 (1)Where an order is made by a court under this Law vesting property in a person: (a) subject to subsection (2), the property forthwith vests in the person named in the order without any conveyance, transfer or assignment; and (b) the person who applied for the order shall, within 7 days after the passing and entering of the order, lodge an office copy of the order with such person (if any) as is specified for the purpose in the order. 1336(2) Where: (a) the property to which an order referred to in subsection (1) relates is property the transfer or transmission of which may be registered under a law of the Commonwealth, of a State or of a Territory; and (b) that law enables the registration of such an order; the property, notwithstanding that it vests in equity in the person named in the order, does not vest in that person at law until the requirements of the law referred to in paragraph (a) have been complied with. 1336(3) Where: (a) property vests in a person by force of this Law; (b) the property is property the transfer or transmission of which may be registered under a law of the Commonwealth, of a State or of a Territory; and (c) that law enables the person to be registered as the owner of that property; that property, notwithstanding that it vests in equity in that person by force of this Law, does not vest in that person at law until the requirements of the law referred to in paragraph (b) have been complied with. 11 The evidence now produced shows the following sequence of events relevant to the proceedings:- (1) 19 December 1997 Federal Court Order made in the matter of St Vincent City & Suburbs Pty Limited v The Corporations Law (Beaumont J, NG268/1997, unreported) :- (a) approving a Scheme of Arrangement pursuant to s 411(4) of the Corporations Law; (b) transferring the whole of the undertaking and the property and liabilities to Sealark pursuant to s 413(1) of the Corporations Law; and (c) dissolving the company pursuant to s 413(1)(d) of the Corporations Law. (2) 19 December 1997 Copy of the Order as an order sanctioning a compromise or arrangement lodged with the Commission. (3) 23 December 1997 Copy of the Order as an order facilitating a reconstruction or an amalgamation lodged with the Commission. (4) 23 December 1997 Copy of the Order as an order for dissolution of a company under s 413(1)(d) lodged with the Commission. 12 Mr Slater QC, who appears for the respondent with Mr Sorensen, concedes that even if the argument succeeds, Sealark would have been entitled to become the registered proprietor but not until the requirements referred to in s 1336(2) had been satisfied. Until that occurred, notwithstanding that the land vested in equity in Sealark it did not vest in law. Furthermore, the documents purporting to be transfers were incapable of being "transfers in registrable form" for the purposes of s 43A of the Real Property Act as they could not have been executed by companies which did not exist. Therefore, at the time the relevant events and transactions took place in May 1998 Sealark had no more than a right to have the Commission deal with the land for its benefit. The transactions in May 1998 were not in respect of that interest and accordingly had no effect in law. Whereas the steps taken by the applicants in May did not purport to be dealings with an "equitable estate" but dealings with the land, then nothing happened. 13 If the respondent is allowed to re-litigate the issues determined on 9 December 1999 the applicant will argue the following:- (a) The Federal Court orders were clear that the whole of the undertaking and the property of the applicant be transferred to Sealark pursuant to s 413(1) of the Corporations Law; (b) Section 413 is specific to the circumstances and accordingly s 576 and s 1336 of the Corporations Law have no application ( David Grant & Co Pty Limited (Receiver Appointed) v Westpac Banking Corporation (1995) 184 CLR 265); (c) Irrespective of the method used to register Sealark as proprietor, the company was nevertheless entitled to be registered as the registered proprietor of the land. Even if the Commission was the appropriate transferor it makes no difference to the entitlement of Sealark. The principle that limits estoppels where statutes are infringed has no application in the circumstances. The Commission is interposed in order to facilitate the transfer to a relevant party such as Sealark. (d) A court of competent jurisdiction would not set aside the registration of the transfer merely because the incorrect procedure was followed; (e) The ultimate fact decided was always that Sealark held the beneficial interest at the relevant date. The other matters decided in respect of the process were only evidentiary and not ultimate fact; and (f) The Real Property Act contains express recognition of an equitable claim or title to land as existing before and irrespective of registration of a transfer to the person entitled ( Barry v Heider and Another (1914) 19 CLR 197 at 206). Issue Estoppel 14 The hearing on 27 October 1999 and 28 October 1999 which gave rise to the interlocutory judgment was in response to a notice of motion dated 11 March 1999 whereby the applicants were seeking declarations and orders that they were owners within the meaning of that term in s 37 of the Just Terms Act. The Court was in effect being asked to determine the separate issue as a preliminary question of law at an interlocutory stage of the proceedings. 15 The following passage from the judgment by Diplock LJ in Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630 at 642 is cited with approval by His Honour Mr Justice Handley of the New South Wales Court of Appeal in The Doctrine of Res Judicata, 3rd ed, Butterworths,1996, at [169]:- "Where the issue separately determined is not decisive of the suit the judgment upon that issue is an interlocutory judgment and the suit continues. Yet I take it to be too clear to need citation of authority that the parties to the suit are bound by the determination of the issue. They cannot subsequently in the same suit advance an argument or adduce further evidence directed to showing that the issue was wrongly determined". 16 Subsequently, the same passage was expressly approved by the majority in Bass and Another v Permanent Trustee Company Limited and Others (1999) 198 CLR 334 at 360. 17 I do not think that the Just Terms Act is a law which can be seen in the present context to represent the social policy identified by the Privy Council in Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993 at 1016. No infringement of the statute has been alleged. In any event, in the present case the respondent positively argued on the basis that it did and should be refused the opportunity to start again (Kok Hoong at p 108). 18 The force of the determination made by the Court on 9 December 1999 is best explained by reference to the judgment of Dixon J in Blair and Others v Curran and Others (1939) 62 CLR 464 at 531-3 as follows:- A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared. The distinction between res judicata and issue-estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order. Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue-estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established. Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived. But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order. In the phraseology of Coleridge J. in R. v Inhabitants of the Township of Hartington Middle Quarter , the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous. In the phraseology of Lord Shaw , "a fact fundamental to the decision arrived at" in the former proceedings and "the legal quality of the fact" must be taken as finally and conclusively established (Hoystead v. Commissioner of Taxation). But matters of law or fact which are subsidiary or collateral are not covered by the estoppel. Finding, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very title to rights give rise to no preclusion. Decisions upon matters of law which amount to no more than steps in a process of reasoning tending to establish or support the proposition upon which the rights depend do not estop the parties if the same matters of law arise in subsequent litigation. 19 Not only does a cause of action estoppel bar the re-agitation of the issues expressly litigated and decided but, as Wigram VC said in his frequently approved passage in Henderson v Henderson (1843) 3 Hare 100, it also bars the litigation of matters that were not decided but might have been brought forward at the time. Vice Chancellor Wigram said at 115 as follows:- The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time. 20 The High Court in Port of Melbourne Authority v Anshun Proprietary Limited (1981) 147 CLR 589 has rejected the approach to Henderson taken by Lord Kilbrandon in Yat Tung Investment Co Ltd v Dao Heng Bank Ltd [1975] AC 581 where his Lordship referred to it being "an abuse of process to raise in subsequent proceedings matters which could and therefore should have been litigated in earlier proceedings". Gibbs CJ, Mason and Aickin JJ preferred to say at p 602:- …that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. 21 The Kilbrandon approach has also subsequently been rejected by the House of Lords in Johnson v Gore Wood & Co [2001] 2 WLR 72. Conclusion 22 Insofar as the question of the interest of Pacinette was determined in the earlier hearing the parties are bound by the determination of that issue. It is made clear by Bass and Fidelitas Shipping that they cannot subsequently in the same suit advance an argument or adduce evidence to show it was determined wrongly. 23 The decision in the interlocutory judgment was that Pacinette held a relevant interest in land for the purposes of the Just Terms Act. The determination of that issue relied upon the evidence of the making of the Federal Court orders and the execution of the Real Property Act transfers. 24 The prior judgment necessarily established the effect of the orders and the transfers. It was a legal foundation for the conclusion that Pacinette held a relevant interest. The respondent, for the purpose of the claim by companies other than Pacinette, now seeks to deny the consequences of the facts established in the case of Pacinette. The respondent is therefore now seeking to change the evidentiary base in an attempt to overturn the determination of the same issue already decided in relation to Pacinette. These facts were decided beyond recall by the prior judgment. The parties accepted that the decision in respect of the Pacinette interest would decide the same questions that arise in respect of the other applicant companies. If the respondent is allowed to argue the case for the other companies separately there is a risk there could be conflicting judgments in respect of identical transactions in the one proceeding. That is because it is necessary to assert that the former decision was erroneous. In those circumstances, the fundamental facts already decided must be taken as finally and conclusively established (Hoystead v Commissioner of Taxation [1926] AC 155). The effect given to the orders and the transfers by the interlocutory judgment was fundamental to the determination of the material issue of whether Pacinette held a relevant interest and accordingly "is the evidential groundwork of the decision which it embodies" (Blair at p 533). Having regard to the nature of the applicant's claim, it was reasonable to expect that the respondent would raise the matters upon which it now wishes to rely at the earlier hearing (Anshun). 25 The respondent is precluded from denying the state of facts and the law decided by the prior judgment irrespective of whether the Court is being asked to determine the interest of Pacinette or the other companies. 26 The issues raised by the respondent are reflected in the notice of motion dated 2 August 2002 as modified by the agreement reached by the parties in December 2002. It is not open for the respondent to have the opportunity to re-litigate the issues already decided by the Court on 9 December 1999. 27 The notice of motion is dismissed. 28 The matter will be re-listed before the nominated trial judge, Cowdroy J, for directions in relation to the future conduct of the matter at 9:30am on 18 July 2003. 29 The exhibits may be returned. 30 Any question of costs is reserved. 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