Rosebanner Pty Ltd & Anor v EnergyAustralia

THE COURT : In late 1982 or 1983 the then Sydney County Council erected a steel pole on land which later became lot 1234 in DP 822258. The land was generally between Captain Cook Drive to the south and Woolooware Bay to the north, with an unformed northward extension of Woolooware Road running from Captain Cook Drive to Woolooware Bay to its west. Large transmission towers and high voltage lines ran generally along the foreshore of Woolooware Bay, and the pole carried a feeder line from the transmission lines to another pole on the unformed Woolooware Road and onwards to a zone substation. Two stays, also on what later became lot 1234, supported the pole.

An easement for transmission line for the transmission towers and high voltage lines appears to have been created before or in 1985. Lot 1234 and an adjoining, smaller, lot 1235 came about on the registration of DP 822258 in 1994. No easement was created for the pole and stays and the feeder line (hereafter, "the pole").

In April 1998 the appellants, Rosebanner Pty Ltd and Twenty-First Properties Pty Ltd (then named Erolfind Pty Ltd), contracted to purchase lots 1234 and 1235 from the State of New South Wales as tenants in common in the shares nine-tenths and one-tenth. The two companies were controlled by Mr John Lyons. The purchase price was $150,000. The contract included, in special condition 33, that the purchaser took title "subject to the existing ... electricity ... and other installations and services if any and the existing rights (if any) to use the same". The contract was completed in June 1998, and the appellants duly became registered as proprietors of the lots.

In proceedings brought in 2004 the appellants claimed damages from the respondent, EnergyAustralia, the successor to the Sydney County Council as electricity provider, first on the ground that the pole was a trespass; secondly on the ground that the respondent was in breach of a contract made in June-July 2003 by which it agreed to remove the pole; and thirdly and alternatively on the ground that the respondent had engaged in misleading or deceptive conduct by representing in July 2003 that it would remove the pole. The appellants alleged that they purchased the lots for development and the presence of the pole prevented them from carrying out a development, and as to the representation that it diverted them from taking timely steps to obtain development approval and resell the land. They sold the lots in April 2004, undeveloped and without development approval, effectively under instructions from the mortgagee. The claimed damages were concerned with diminution in the value of the lots because of the presence of the pole, and a rental component under the trespass claim.

The primary judge, Ward J, held against the appellants on the trespass claim. Her Honour found that the erection of the pole had been authorised under s 14 of the Municipal Council of Sydney Electric Lighting Act 1896, alternatively under s 80 of the Public Works Act 1912, and that the Electricity Supply Act 1995 as the last of the respondent's "chain of title" to the assets of the Sydney County Council and its current enabling legislation authorised the respondent to keep in place the lawfully erected pole.

The primary judge also held against the appellants on the contract claim. Her Honour found that the contract propounded by the appellants had not been made.

The primary judge found, in relation to the misleading or deceptive conduct claim, that the respondent had represented that it intended to relocate the pole and it would be relocated in early September 2003. Her Honour found that the representation was made in trade or commerce, and that it was a representation as to future conduct as to which she was not satisfied as to the relevant intention or the existence of reasonable grounds for the representation. However, she found that the appellants had not suffered any loss by the infringing conduct, essentially because she was not satisfied that but for the representation the appellants would or could have so acted that the sale which occurred in 2004 would not have occurred.

There were numerous grounds of appeal, not all of which were expounded with clarity, and a notice of contention. The appellants complained that the primary judge was in error in her rejection of the trespass and contract claims, and in her finding as to the value of the lots without the pole in April 2004. They did not appeal from the rejection of the misleading or deceptive conduct claim. They sought judgment for $1,521,350, alternatively $1,193,640, or remission to the primary judge for assessment of damages. Apart from seeking to uphold the primary judge's findings in its favour, the respondent contended that the rejection of the trespass claim should be upheld simply because the Sydney County Council had been authorised to erect the pole, apart from reliance on the Electricity Supply Act for authority to keep it in place.

For the reasons which follow, in our opinion the appeal should be dismissed.

A copy of DP 822258 showing lots 1234 and 1235 is attached to these reasons as annexure A. (Blue 3/1163) The two lots together made a very roughly triangular parcel, lot 1234 as a larger western part and lot 1235 as a smaller eastern part. The land was bounded to the south by lot 1 in DP 226839 and (further east) by Captain Cook Drive; to the north by Woolooware Bay; and to the west by the unformed Woolwooware Road. The respective areas were 3452 sq metres and 204.5 sq metres.

We have marked on Annexure A the approximate location of the pole. The roughly rectangular area shown on the annexure within which it is marked, bounded by parallel lines one to the north and one to the south as the boundary with lot 1 in DP 226859, was referred to at trial as the unformed Bate Bay Road.

The primary judge said - "13 The status of the subject land (in particular, whether the unformed Bate Bay Road was a public road) is relevant when determining the source of any statutory power to install electricity infrastructure thereon. There is nothing to suggest that the status of the subject land changed between 1954 and 1982/1983. Both parties submitted at various times in the hearing that by 1982/83 the land constituting the unformed Bate Bay Road was a public road (EnergyAustralia's closing written submissions, para 4, the Lyons entities opening submissions para 7). Certainly, as at the time the road was formally closed in 1992, the logical inference to be drawn was that the road had at some stage before then been opened as a public road."

Her Honour found at [31] that, by reason of the then acceptance by Sutherland Shire Council of its dedication to public use, from the time of its resumption by that Council in 1954 the unformed Bate Bay Road was a public road. The status as a public road was then material to her Honour's reasoning to authority to erect the pole under the Municipal Council of Sydney Electric Lighting Act or the Public Works Act .

Ground 1A of the grounds of appeal was - "1A. The Trial Judge erred in finding that, on the evidence before the Court, the unformed "Bate Bay Road" was a public road (at [31], [39], [76], [86]".

Ground of appeal 1A was added at the hearing of the appeal in the following circumstances.

The appellants' statement of claim was silent as to the status of lot 1234. The respondent's defence pleaded statutory authority for erection of the pole, including that lots 1234 and 1235 were "owned by the Crown by the Department of Lands at the time the electricity infrastructure was installed on the land" (para 10(a)). In their reply the appellants said that the land on which the electricity infrastructure was placed included a dedicated but unmade road, dedicated in 1973 and thereafter known as Bate Bay Road.

In his opening counsel for the respondent said that the pole was "located on the street, Bates [sic] Bay Road unformed but a public road dedicated for public purposes". Counsel for the appellants did not then dissent, and this accorded with the appellant's pleaded reply.

In the course of the hearing it was recognised that the reply, founded on a March 1973 dedication to which we will late refer, was incorrect. The primary judge recorded at [29] that the appellants did not pursue their original submissions referring to the 1973 dedication as a dedication of Bate Bay Road.

The appellants' final submissions included that the land was Crown land and that there was no evidence that the part of lot 1234 on which the pole stood was ever a public road; but, it was submitted, if it was, the erection of the pole was nonetheless unlawful. The respondent maintained in final submissions that Bate Bay Road became a public road no later than 1954 when "part of Bate Bay Road, together with land immediately to its north, was resumed and became a widened Captain Cook Drive". It referred to the resumption in 1954. This was the position accepted by the primary judge.

The appellants departed from their pleading by reliance on a dedication other than the 1973 dedication. The respondent did not seek to hold them to it, but sought to meet their submission that there was no evidence that the part of lot 1234 on which the pole stood was a public road by reliance on a dedication other than the 1973 dedication.

In these circumstances the Court permitted ground of appeal 1A, but refused the appellants' application to rely on further evidence.

There was no direct evidence of the status of the land, more particularly that part of what became lot 1234 on which the pole was erected, prior to the notice of resumption next mentioned.

By a notice of resumption gazetted on 18 August 1954 Sutherland Shire Council resumed land "for the purpose of widening and extending a public road". Three parcels of land were each given a metes and bounds description. The metes and bounds description of one of the parcels corresponded to part of the land depicted in a plan bearing the Council's seal "in pursuance of a resolution of the Council dated 22nd February 1954 to denote the acceptance of the road shown on this plan as a public roadway". The plan in evidence bears the manuscript notation DP 109853, although the evidence did not include a registered DP 109853.

DP 109853 showed a road identified as Bate Bay Road, running from Elouera Road some distance to the east of the relevant land in a generally westerly direction. From the metes and bounds description, the resumed land was to widen an existing Bate Bay Road for part of the distance from Elouera Road, and to extend the road further to the west. The extension was initially as a straight-line prolongation of the existing road, then curving south and crossing Woolooware Road and intersecting at an angle with another east-west road the name of which was off the edge of the plan.

The parties accepted that the resumed land included the length of Captain Cook Drive shown on DP 822258 (Annexure A) curving south and crossing Woolaware Road North. It seems that Bate Bay Road at some later time became Captain Cook Drive.

On 2 March 1973 there was gazetted pursuant to s 18 of the Public Roads Act that a described road "is hereby declared to be public road and dedicated to the public accordingly". The description of the road was - "Parish Sutherland, County Cumberland, Woolooware Road between Captain Cook Drive and Woolooware Bay. (Council reference DC 779/Lot 1/CRSL) (Rds 73-202.[sic] NOTE: Declaration is restricted to the surface and to a depth of 20 metres below the surface."

This was the basis of the appellants' pleaded reply. It became accepted that the dedication was of Woolooware Road north of what had by then become Captain Cook Drive, shown on the later DP 109853 as an unformed Woolaware Road North.

Cronulla Sutherland Rugby League Club ("the Club") owned, and had its club premises on, land to the north of Captain Cook Drive and west of the unformed Woolooware Road. In the late 1980s the Club was interested in acquiring land to the east of its premises for a car park. In a manner not clearly revealed, this became an interest in acquiring the land for development in joint venture with Mr Lyons.

As a result of representations, a road closure was gazetted in anticipation of a sale of land to the Club. It did not include closure, as might have been expected, of Woolooware Road north of Captain Cook Drive. Rather, it was a closure of part of what became lots 1234 and 1235.

In the Gazette for 23 March 1990 the Minister gave notice that he "propos[ed] to consider the closing of" a number of roads, including - "Road 20.115 metres wide generally north of Lot 1, DP 226839 between Woolooware Road and Captain Cook Drive at Woolooware, Parish Sutherland (Sheet NE), County Cumberland. MH90H106."

On 6 March 1992 there was gazetted notice of the closing of a number of roads, including - "Cronulla Sutherland Rugby Leagues [sic] Club, part Bate Bay Road between Woolooware Road North and Captain Cook Drive and being generally north of Lot 1, DP 226839, at Woolooware, Parish Sutherland, County Cumberland, not being land under the Real Property Act. MH 901H06."

The symbols MH901H06 referred to a plan in the Department of Lands ("the Department", including any change of name) showing a road "20.115 wide" as an approximate continuation of Captain Cook Drive had it not curved south as shown on DP 109853; that is, it corresponded to the roughly rectangular area in DP 822258 (Annexure A) within which the pole is marked on the annexure.

It may be inferred that DP 822258, which was dated 27 February 1992 although registered on 15 June 1994, was prepared and registered to enable the land to be brought under the Real Property Act 1900. Why there were two lots, lot 1234 and lot 1235, is not clear. However, once the March 1973 dedication is excluded there was no evidence of dedication of the land the subject of the road closure as a public road whereby closure was necessary prior to sale to the Club.

The Sydney County Council had been given notice of the proposal to close the road shown on plan MN 90H106. It had objected because it "has overhead mains construction in the area to be closed", but had said that the objection would be withdrawn "upon the granting of an easement and right-of-way for electricity purposes providing for this Council's construction and access for plant and equipment". The Department had responded that it had no objection to the creation of an easement, but was not prepared to grant an easement prior to disposal of the land to the Club.

There were extended dealings between the Sydney County Council and the Club with a view to the grant of an easement by the Club. In the result, the Club did not acquire the land and no easement was created.

When the Club's interest fell away, the Department continued negotiations with Mr Lyons with a view to sale of lots 1234 and 1235 to his companies. In due course an offer was made by Mr Lyons, and was accepted subject to the Minister advertising his intention to sell Crown land. After advertisement, the contract of 28 April 1998 was entered into.

The appellants submitted that the primary judge had wrongly seen the August 1954 resumption as a resumption of land extending Bate Bay Road as a straight-line prolongation of the existing road to meet Woolooware Road, and had thus wrongly concluded that the part of what became lot 1234 on which the pole was erected (and which was later subject to a road closure gazettal) was within the resumption. The respondent agreed that the land resumed for the widening and extension of Bate Bay Road did not include the land on which the pole was erected.

In summary, the position so far as revealed by the evidence is - 07 March 2011 - To delete part of the text. Amended paragraphs: 28