Supreme Court New South Wales Medium Neutral Citation: Willoughby City Council (in its capacity as Manager of Talus Street (R73306) Reserve Trust) [2016] NSWSC 127 Hearing dates: Wednesday, 3 February 2016 Date of orders: 03 February 2016 Decision date: 03 February 2016 Jurisdiction: Equity Before: Brereton J Decision: Notice of motion dismissed with costs Catchwords: EQUITY – trusts and trustees – judicial advice – procedure – where applicant seeks leave to intervene and file additional evidence in substantive proceedings in which judgment reserved – where applicant contends that current material before court is misleading and incomplete – role of trustee to decide what material is put before the court under (NSW) Trustee Act 1925, s 63 – held, evidence said to be misleading or incomplete not relevant to issues requiring decision – application dismissed. Legislation Cited: (NSW) Trustee Act 1925, s 23, s 63 (NSW) Crown Lands Act 1989, s 102 Category: Procedural and other rulings Parties: Willoughby City Council (first plaintiff) Talus St Reserve (second plaintiff) Representation: Counsel: Cr John Hooper (applicant) A C Harding (plaintiffs) JB Owens (contradictor) T L Wong (for Minister )(intervener) Solicitors: Pikes & Verekers Lawyers (plaintiffs) Crown Solicitor (for Minister) File Number(s): 2015/46210 Judgment 1. HIS HONOUR: Before the Court is an application made by notice of motion filed on 21 December 2015 by John Hooper, a Councillor of the first plaintiff Willoughby City Council, whereby he seeks leave to file an affidavit as evidence in the substantive proceedings and to be heard and to give evidence in the substantive proceedings, which are an application by the Council and the Talus Street Reserve Trust (of which the Council is the manager) for judicial advice under (NSW) Trustee Act 1925, s 23 to the effect that they would be justified in consenting to a proposed sublease of the Talus Reserve between the head lessee Northern Suburbs Tennis Association and Love 'N Deuce Pty Ltd, and a proposed licence of part of the reserve between Love 'N Deuce and Humpty Dumpty Foundation Limited. That application was heard on 23 November 2015, when judgment was reserved. 2. As I presently understand it, the issues that arise on the application for judicial advice – at least until this point – concern the legal capacity of the plaintiffs to consent to the proposed transactions to which I have referred. There are arguments – which to date have been presented by Mr Owens – to the effect that the head lease is invalid, so that it could not be the subject of a sublease – in particular first because, so it is said, there was no proper decision made under (NSW) Crown Lands Act 1989, s 102, and secondly (and perhaps more importantly), that the purpose of the lease was incompatible with the reserved purpose of the trust – a question which, it seems to me, will ultimately largely depend upon whether amendments made to the Crown Lands Act in 2013, which permit secondary interests to be created in respect of Crown Reserves, have the effect of validating retrospectively a purported demise of the whole reserve to a private tennis club. Thirdly, it is suggested that there is no power to sublease. 3. The application does not pertain to the commercial or political merits of the proposed transactions, but is concerned with their legality, and if I decide to give advice it will be limited to the questions of legality. I say "if I decide to give advice" because, as indicated on the last occasion, there is an anterior issue as to whether the case is one appropriate for judicial advice under (NSW) Trustee Act 1925, s 63, at all, having regard to the pendency of other contested litigation, which raises the same issues, and to the political and public nature of the controversy. 4. The material which Mr Hooper wishes to adduce, while it traverses a number of matters, falls broadly into two main categories. First, he contends that the material put before the Court by the plaintiffs is misleading and incomplete, and he wishes to rectify those matters. However, on an application for judicial advice, it is essentially for the trustee to decide what material is to be put before the Court. By reason of (NSW) Trustee Act 1925, s 63(2), the trustee is protected by the advice only if the trustee has not been guilty of any fraud or wilful concealment or misrepresentation in obtaining the opinion, advice or direction. Given the way in which the matter has proceeded, and the fact that the plaintiffs are on notice of the material that Mr Hooper says should be put before the Court, they must be regarded as having deliberately decided that that material should not be before the Court. If it turns out that that results in the Court acting on an incorrect basis, then there would be a strong case for saying that the trustee was guilty of wilful concealment or misrepresentation. I am not suggesting for a moment that that is the case; but if it turns out that the trustee has deliberately decided that material should not be put before the Court, which would have affected the advice given, then that would provide a strong basis for an argument that there was wilful concealment or misrepresentation. Thus, in opposing receipt of material such as this – as I think the plaintiffs are entitled to do – they do so at their own peril as to the consequences under s 63(2). 5. However, it is far from clear to me that the matters in respect of which the evidence is said to be misleading or incomplete in fact are relevant to any of the issues that I have to decide which – as explained above – are fundamentally questions of law, not of fact. The possible exception is the second category of Mr Hooper's material – material that might show that the head lease is voidable for material misrepresentation. Mr Hooper's material suggests that, prior to the grant, head lessee represented to the Council that its licensee, Humpty Dumpty, was paying no rent, in truth it was paying a substantial rent. If that proves to be so, then the head lease might well be voidable for misrepresentation. There would then be a decision for the Council to make as to whether it elected to rescind on account of that misrepresentation or not. 6. True it is that by consenting to a sublease, the Council would probably be taken to have elected to affirm, or at least to have acted in a manner which made it thereafter impossible for it to rescind. However, as I understand it, the advice I am asked to give will not address that issue, but only the question of legal capacity. It would remain for the Council to decide, unprotected by any advice, whether or not it should rescind on that account, or whether it should go ahead and consent to the proposed sublease with knowledge of the (alleged) misrepresentation. 7. For those reasons, it seems to me that the materials sought to be put before the Court by Mr Hooper will not assist in the resolution of the particular issues which this application raises for determination. 8. As I have indicated, it is at least one possibility that I will decide that the case is not an appropriate one for the giving of judicial advice. On the one hand, if I come to the view that the advice the plaintiffs seek is not correct as a matter of law, then it might well be possible to address that question by giving them contrary advice without further proceedings. On the other hand, if at least prima facie I incline to the view that the advice they seek is correct, but that s 63 is not an appropriate vehicle for resolving the issues in all the circumstances, it may be appropriate to reconstitute the proceedings as an originating summons for declaratory relief with proper contradictors, so that the issues can be resolved. However, although that course might have been taken now, had the Council been able to agree to it, the plaintiffs say that they are unable to do so without a full meeting of the Council to consider it. 9. In those circumstances, I propose to dismiss Mr Hooper's motion, and to proceed to determine the issues raised by the summons, including whether the advice sought should be given. 10. The plaintiffs have proposed, in the light of some contention, that pages 113 to 116 of exhibit MT-1 be removed from the evidence. As I have said, on an application of this kind, it is essentially for the trustee to determine what should and should not be put before the Court. I will accede to that proposal, and accordingly, pages 113 to 116 of MT-1 will not be regarded as being in evidence. 11. The notice of motion filed on 21 December 2015 is dismissed. Costs 1. Prima facie, the applicant having brought the notice of motion and, having failed on it, should be required to pay the costs of the respondents to the motion. One matter tends to mitigate against that, and that is the public interest nature of the proceedings. On the other hand, another matter tends to reinforce the prima facie position, namely the belated timing of the application, in circumstances where Councillor Hooper was provided with a copy of the summons and statement of facts in February 2015, and of the supplementary statement of facts on 14 October 2015. The hearing also took place on 23 November 2015, and he did not seek to see the exhibits to the statement of facts, which apparently provoked the present application, until after the hearing. 2. I do not think there is sufficient reason to depart from the prima facie position, that the unsuccessful applicant should pay the respondent's costs. 3. The Court orders that the notice of motion be dismissed with costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 February 2016