Carlene Randall v City of Canada Bay Council (No 4)

In these proceedings the plaintiff (“Ms Randall”) invokes Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) Pt 36, r 36.15 and the Court’s inherent jurisdiction to set aside judgments and orders made against Phoenix Commercial Enterprises Pty Ltd (“Phoenix”) by White J in 2009 and that were subsequently varied by the Court of Appeal in 2010. A liquidator was appointed to Phoenix on 25 November 2011 and it was deregistered on 6 January 2013.

Ms Randall and her husband, Mr Ferdinando Agresta, were shareholders and directors of Phoenix with other family members. Phoenix was the lessee from the Council of Concord under two relevantly identical leases of land (the “Leases”) on which Phoenix was entitled to erect large advertising structures. The defendant (the “Council”) is the successor to the Council of Concord.

In June 2003 the Council terminated the Leases for unpaid rent. Phoenix challenged the Council’s termination of the Leases in this Court. The Council cross-claimed for unpaid rent. In Phoenix Commercial Enterprises Pty Ltd v City of Canada Bay Council [2009] NSWSC 17; (2009) 14 BPR 27,565 (“White J’s Judgment”), White J held that the Council did owe Phoenix some money but that it was less than Council’s rent claim. After allowing for a set-off, White J entered judgment against Phoenix in favour of the Council for $948,671.55.

Phoenix appealed and the Council cross-appealed. In Phoenix Commercial Enterprises Pty Ltd v City of Canada Bay Council [2010] NSWCA 64 (the “CA Judgment”), the Court of Appeal dismissed Phoenix’s appeal and upheld the Council’s cross-appeal. The success of the cross-appeal eliminated the amount which White J had found the Council owed to Phoenix. The absence of this set-off meant that the Court of Appeal increased the Council’s judgment against Phoenix to $1,626,612.01.

Ms Randall’s case in these proceedings was argued for her by Mr Agresta. The Council did not oppose Mr Agresta being given leave to appear on her behalf. She contends that both the proceedings before White J and the Court of Appeal were tainted by two categories of misrepresentation made to both Courts by the Council so that the judgments and orders against Phoenix should be set aside. Ms Randall also seeks the reinstatement of Phoenix.

Mr P.T. Newton of Counsel appeared for the Council. The Council denied the misrepresentations, challenged Ms Randall’s standing to seek relief and submitted that the matters now sought to be relied upon would have made no difference to the outcome in any event.

The Court has determined that Ms Randall’s proceedings should be dismissed by reason of these conclusions:

When the dispute between Phoenix and the Council initially arose, Phoenix had solicitors who prepared its original statement of claim. At least Phoenix’s affidavit evidence in chief was prepared with legal assistance. Another firm of solicitors prepared Phoenix’s further amended statement of claim, which by leave of White J was filed on 26 March 2008, less than a month before the hearing. By the time of the hearing before White J, Phoenix no longer retained solicitors. However, it was represented at the hearing by Mr A.P. Cheshire of Counsel, who was only briefed on the Friday afternoon before the hearing was to commence on the following Monday. The Council was represented before White J by Mr B.A. Coles of Queen’s Counsel leading Mr J.E. Armfield of Counsel.

The issues before White J and the factual origins of the original dispute between Phoenix and the Council are set out in the introductory paragraphs of White J’s Judgment :

Because of its importance to the present proceedings, it is necessary to set out White J’s findings in relation to the termination of the Leases, in particular the question of what notices were given:

Because they feature in these reasons, the Council’s Notice of Breach of Covenant (the “Breach Notice”) is fully reproduced in Schedule One and the Notice of Termination (the “Termination Notice”) in Schedule Two to these reasons.

In considering whether clause 15(d) of the Leases had been triggered, White J came to the view (White J’s Judgment at [69]) that the three bus shelters in question were general advertising structures within the meaning of clause 15(d). His Honour then went on to consider whether the Council had approved the bus shelters in its capacity as a “consent authority”. His Honour held that while the Council did not give its approval in its capacity as the consent authority under the Environmental Planning and Assessment Act 1979 (NSW) (the “EPAA”), it had done so in its capacity as a consent authority under the Roads Act 1993 (NSW) (the “RA”).

Because of its importance to the present proceedings, it is also necessary to set out his Honour’s reasoning on this point in full:

Having decided that clause 15(d) of the Leases was triggered, White J then went on to determine the extent of the Council’s liability under that clause. His Honour concluded:

His Honour ultimately determined that there should be a set-off between the amount which he had found the Council owed Phoenix under clause 15(d) of the Leases and the rental owing by Phoenix to the Council (that unpaid rent being the subject of the Council’s cross-claim before White J):

His Honour concluded:

The final orders made by his Honour are set out in paragraph [51] below.

Phoenix appealed against White J’s Judgment. Its notice of appeal contained 19 grounds, the burden of which was to seek to reargue all of the matters which had been rejected by White J. For present purposes, those grounds which might be relevant are:

The Council cross-appealed. It propounded three grounds, only one of which is now relevant:

At the hearing of the appeal Mr A.P. Cheshire of Counsel again appeared for Phoenix, instructed by Mr Agresta as a director of that company. Mr B.A. Coles of Queen’s Counsel again lead Mr J.E. Armfield of Counsel for the Council. The Court of Appeal was constituted by Spigelman CJ, Campbell JA and Handley AJA. The principal judgment was delivered by Campbell JA. Spigelman CJ agreed with his Honour, subject to some additional observations which are not now relevant. Handley AJA agreed in the orders proposed by Campbell JA and briefly delivered his own reasons for that conclusion. Reference is made to Handley AJA’s reasons in paragraph [22] below. What occurred in the Court of Appeal was recorded by Campbell JA in his reasons in the CA Judgment:

Campbell JA disagreed with White J’s conclusion that the Council had approved the bus shelters “in its capacity as consent authority” for the purposes of clause 15(d) of the Leases. Again, because of its importance to these proceedings, it is necessary to set out his Honour’s reasoning in full:

On the same question, Handley AJA said:

The orders made to give effect to the CA Judgment are set out in paragraphs [52] and [53] below.

The CA Judgment was delivered on 1 April 2010. It was not the end of the matter.

On 25 May 2010 Phoenix, now represented by Mr Agresta without legal assistance, filed a motion to set aside the orders of the Court of Appeal of 1 April 2010 under UCPR Part 36, r 15(1), the same provision upon which Ms Randall now relies. That motion was dismissed by Young JA (Phoenix Commercial Enterprises Pty Ltd v City of Canada Bay Council; unreported; Young JA; 12 July 2010). Significantly for these proceedings, his Honour’s reasons for dismissing Phoenix’s application for review demonstrate that Mr Agresta relied on an identical, or at least very similar, proposition to that which he has advanced in the present hearing (that the Council misled the Court by suggesting that, contrary to the fact, it was not acting as a consent authority for the purposes of clause 15(d) of the Leases when it approved the bus shelters) (emphasis added):

Phoenix, through Mr Agresta, sought a review of Young JA’s decision (see paragraph [28] below).

On 3 August 2010 the Court of Appeal resolved by reference to further written submissions the question of the amount of the judgment to which the Council was entitled against Phoenix: Phoenix Commercial Enterprises Pty Ltd v City of Canada Bay Council (No 2) [2010] NSWCA 183. The relevant order made on that occasion is set out in paragraph [53] below.

On 16 August 2010 the Court of Appeal, on that occasion constituted by Beazley and Macfarlan JJA and Handley AJA, heard Phoenix’s application for review of Young AJA’s decision (see paragraph [25] above). Mr Agresta appeared for Phoenix on that occasion. The Court of Appeal dismissed the application for a review (Phoenix Commercial Enterprises Pty Ltd v City of Canada Bay Council [2010] NSWCA 205). Handley AJA delivered the leading judgment, with which the other judges agreed. It is necessary to set out his Honour’s reasoning on that occasion in full, because it demonstrates a matter relevant to the present application, being that by that stage Mr Agresta understood that if Phoenix was to demonstrate that the Council had approved the bus shelters as a “consent authority” for the purposes of clause 15(d) of the Leases, it would have to demonstrate that the bus shelters had been approved by the Council as the consent authority under the EPAA:

These proceedings were originally commenced by statement of claim filed on 7 January 2013. That document named Ms Randall as first plaintiff and Mr Agresta as second plaintiff. When the hearing commenced before me Mr Agresta informed me that he was bankrupt. Evidence was tendered that his trustee in bankruptcy did not wish to pursue any claim he might have against the Council. Accordingly, the claim which he purported to bring as second plaintiff was dismissed with the question of costs reserved. The case proceeded with Ms Randall as the sole plaintiff represented, with leave, by Mr Agresta.

The proceedings at the hearing before me were formally constituted by an amended statement of claim filed on 11 September 2013 (the “ASC”). The ASC was responded to by an amended defence filed on 24 April 2014.

In addition to those two documents, the parties joined issue by reference to two additional documents. Pursuant to orders of the Court made on 28 October 2013, Ms Randall provided a document entitled “More And Better Particulars to paragraph [2(B)] to [2(H)] to the Amended Statement of Claim” (the “Particulars”). In response to various interlocutory matters pressed by Ms Randall the Council ultimately provided a document entitled “Statement of Admissions” (the “Admissions”) dated 31 March 2014. The Admissions were verified by an affidavit from the Council’s solicitor. In addition, Mr Newton made the following admission on behalf of the Council:

On the first day of the hearing before me (5 May 2014) Mr Agresta sought leave to amend the ASC. That application was refused: Carlene Randall v City of Canada Bay Council [2014] NSWSC 427.

After two days of hearing provision was made for the filing of written final submissions. These prompted Ms Randall to seek to reopen her case and file further evidence.

On the third day of the hearing (18 July 2014) Ms Randall appeared represented by a solicitor who sought to have the proceeding adjourned. The history of the proceedings to that date and the reasons for refusing that application (including Mr Agresta’s extraordinary and peremptory termination of the solicitor’s retainer during the course of the hearing on that day) are set out in Carlene Randall v City of Canada Bay Council (No 2) [2014] NSWSC 964. The hearing continued on that day and orders were made for further written submissions. Although not a matter on which the Court is now able to act because Mr Agresta again resumed the carriage of the proceedings, I should note that the solicitor who appeared for Ms Randall on that day did concede that Ms Randall did not have standing to bring these proceedings.

The final oral argument took place on 28 November 2014.

On 10 December 2014 Mr Agresta sought to reopen Ms Randall’s case to make further written submissions. This was allowed, but led to further submissions in response from the defendants dated 30 January 2015 and additional submissions in reply from Mr Agresta dated 6 March 2015.

Some six months later, while these reasons were being prepared, Mr Agresta again applied for leave to reopen Ms Randall’s case to provide further submissions. That application was refused: Carlene Randall v City of Canada Bay Council (No 3) [2015] NSWSC 1397.

The several sets of submissions in chief and in reply provided by Mr Agresta over the course of these proceedings total more than 160 closely typed pages. In drawing this to attention, no criticism is intended of Mr Agresta. He is not a legal practitioner and he has obviously done the best he can, based on his own research without legal assistance, to put everything he considers should be put in favour of Ms Randall’s position. Having said that, however, I must also observe that many of the things which Mr Agresta has included in his submissions are irrelevant to the legal arguments which he wishes to raise.

It would obscure the Court’s reasoning, and make this judgment much longer than it already has to be, if I sought to deal with every point raised by Mr Agresta in his written and oral submissions. I have read those written submissions and reviewed the transcript of oral argument several times. In these reasons I will endeavour to encapsulate what seem to me to be the key legal arguments which Mr Agresta has raised.

Again with no disrespect, the submissions repeat the same basic points in slightly different ways. To the extent that reference is not made in these reasons to each iteration of any particular argument raised by Mr Agresta, it is not to be assumed that any such variation has been overlooked. Rather, it is because these reasons are confined to recording and resolving those arguments put by Mr Agresta in what I understand to be their essential form and which I consider are arguably relevant to the disposition of these proceedings according to law.

It is also necessary to make two specific observations about Ms Randall’s submissions that are described as being in reply.

First, many of those submissions did no more than restate her submissions in chief. No criticism is intended of Ms Randall or Mr Agresta in making that observation. Experienced counsel can sometimes have difficulty with the discipline of being confined to what is properly in reply. However, in what follows I will record as such and deal with those submissions which, in my view, properly fall within the description of being in reply. I will not repeat those which have been recorded as submissions in chief.

Second, sections 11 and 12 of Ms Randall’s written submissions in reply dated 23 November 2014 (in the interests of brevity I will not seek to summarise their intricacies) fall into a separate class because while in a general sense they may be characterised as being in reply, they do not depend upon the alleged fraud that otherwise lies at the heart of Ms Randall’s case or the discovery of new, previously unavailable evidence. Instead, to the extent they do not repeat arguments raised elsewhere in these proceedings, they raise factual and legal arguments that do no more than take issue with the conclusions of the CA Judgment. They are of the same kind as Young JA identified as “challenging matters that go to the very heart of the determination of the Court [of Appeal]” (see paragraph [25] above). There is no suggestion that they raise anything that could not have been raised in that Court, before whom Phoenix was represented by undoubtedly competent counsel. It follows that those matters are insufficient to warrant the exercise of the extraordinary jurisdiction invoked by Ms Randall.

Ms Randall claims this relief in the ASC:

The last two prayers for relief deal with the winding up of Phoenix, with the case number there referred to being the proceedings in which Phoenix was wound up. This aspect of Ms Randall’s claim is dealt with in paragraphs [181] to [200] below.

The main burden of these proceedings relates to the judgments and orders of White J and the Court of Appeal. While this was not always stated by Mr Agresta with specificity, his various submissions on behalf of Ms Randall referred to misrepresentations made to both White J and the Court of Appeal. It was clear that both decisions were under attack.

Ms Randall relied on UCPR Part 36, r 36.15(1) and the Court’s inherent jurisdiction. The rule is:

The orders of White J and the Court of Appeal were final orders that had been duly entered. There is no inherent power in the Court to set such orders aside if they were regularly made and entered: see Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529 at 530. Proof of fraud can establish the necessary irregularity. Neither party submitted that in these proceedings anything turned on the source of the Court’s jurisdiction. In these reasons references to r 36.15 are to be understood as including the inherent jurisdiction (other than in paragraphs [60] to [64] and [74] to [87] below).

In Perpetual Trustees Australia Ltd v Heperu Pty Ltd & Ors (No 2) [2009] NSWCA 387; (2009) 78 NSWLR 190 the Court of Appeal said:

Bearing that observation in mind, it is necessary to identify the judgments and orders which appear to be the subject of these proceedings. In one of her written submissions Ms Randall identifies eight first instance and appellate judgments. However, it is clear that the operative orders which Ms Randall challenges are a subset of those eight and are set out in the following paragraphs.

The orders made to give effect to White J’s Judgment were:

The orders initially made by the Court of Appeal on 1 April 2010 were:

These were supplemented on 3 August 2010 (see paragraph [27] above) by this order:

It will be apparent from the preceding paragraphs that Ms Randall’s challenge is to orders made both at first instance and by the Court of Appeal. Insofar as the latter are concerned, it may seem counterintuitive for a judge at first instance to exercise a jurisdiction which may result in the setting aside of orders made by the Court of Appeal. This is particularly the case when it is recalled that the orthodox position must be that, even though only some aspects of White J’s orders were varied by the Court of Appeal, the operative decision is now that of the Court of Appeal which has replaced White J’s decision for all purposes: Forge v Australian Securities and Investments Commission (No 2) [2007] NSWCA 42 at [3]; (2007) 69 NSWLR 575. While that is the strictly correct position, the parties referred to “judgments and orders” and this judgment will also use that description.

The Council did not suggest that Mr Agresta should have brought these proceedings in the Court of Appeal. It was correct not to do so. In Fleet v Royal Society for the Prevention of Cruelty to Animals NSW [2008] NSWCA 227, Dr Fleet had filed a summons in the Court of Appeal (as it were by way of originating process) seeking relief concerning numerous decisions of judicial officers at first instance. In considering the various heads of power which might have supported Dr Fleet’s summons, Campbell JA, in delivering the judgment of the Court, eliminated UCPR Part 36, r 36.15(1) on the basis that it was reserved either to a first instance judge exercising original jurisdiction or to the Court of Appeal incidentally in the course of disposing of a properly instituted appeal (emphasis added):

In the circumstances of this case Ms Randall challenges both orders made by White J in their original form and as varied by the Court of Appeal. I am satisfied that, as a single judge exercising original jurisdiction, UCPR Part 36, r 36.15(1) provides the power for a judge at first instance, in appropriate circumstances, to set aside orders made by the Court of Appeal. This is because the expression “a judgment or order of the court in any proceedings” in the rule extends, as a matter of construction, to orders made in proceedings in the Court of Appeal.

Ms Randall’s fundamental complaint is set out in paragraph 1 of the ASC:

Quite apart from disputing the merits of Ms Randall’s claims, the Council submits that she does not have standing to seek the relief sought in the ASC, especially in relation to White J’s Judgment and the CA Judgment. It is logical for that submission to be considered first. The Court will then consider Ms Randall’s claim to have the judgments and orders set aside. Because the outcome of that issue will largely determine the utility of reinstating Phoenix, the Court will consider reinstatement and Ms Randall’s standing to seek that order at the end of these reasons.

The Court notes that in paragraph 8.2(3) of Mr Agresta’s submissions dated 30 August 2014, the claims in relation to a further misrepresentation (paragraph 56 of the ASC) and damages (paragraphs 57 to 64 of the ASC) have been withdrawn.

I will set the relevant rule out again for convenience:

Mr Agresta’s submissions did not always distinguish between “irregularly, illegally or against good faith”, although a fair reading of those submissions suggests that the main emphasis was on “against good faith”. The Court will approach the argument on the basis that Ms Randall’s case was that any one or more of the three was made out. However, that approach must be understood against what is recorded in the next paragraph.

Mr Agresta also said on several occasions that Ms Randall was not putting the matter as high as “fraud” and the ASC in several places had deleted the word “fraudulent” or “fraudulently”. However, the Court has no doubt (and Mr Agresta ultimately accepted) that, putting semantic sensitivity to one side, Ms Randall’s case invited the Court to find fraudulent conduct or conduct tantamount to fraud. So much is apparent from headings in the ASC such as “False representation made knowingly” or allegations that Council officers shut their eyes to material facts or were reckless in making representations and thereby knowingly alleged what was false. The ASC also pleads that Council made representations that were untrue and known to the Council to be untrue.

In paragraph 4.3 of his written submissions of 30 August 2014 Mr Agresta submitted, “in effect, the Plaintiff has to establish a form of deceit by Council to the Court – the essence of which is dishonesty. The relevant intention is that the false statement shall be acted upon by the person to whom it is addressed”. Paragraph 12.2 of his submissions in reply of 23 November 2014 acknowledged “the parties have conducted the proceedings based on a claim of fraud”. Finally, paragraph 2.1(2) of Ms Randall’s submissions in reply dated 6 March 2015 confirmed that she sought a finding from the Court that the “Council fraudulently procured the judgment and orders to the proceedings between Phoenix and Council”.

Before turning to the leading authority, some observations about r 36.15 can be made by reference to its text:

The leading summary of the principles relating to setting aside a judgment for fraud remains, in my respectful view, the judgment of Kirby P (as his Honour then was) and with whom Hope and Samuels JJA agreed in Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 538-539:

Insofar as Ms Randall relied upon the judgments and orders having been made or entered against good faith, I respectfully adopt what was said by Kirby P (as his Honour then was) about the equivalent District Court rule in Coles v Burke (1987) 10 NSWLR 429 at 437 (Samuels and McHugh JJA agreeing):

Finally in this summary of the applicable principles, the Court notes that Ms Randall’s submissions in reply of 23 November 2014 say that “notwithstanding that the matter to be proved involves fraud, the standard of proof required of the plaintiff is proof on the balance of probabilities”. The point which those submissions do not address is what Kirby P referred to above (see paragraph [65] above) as “the strict proof which such a charge [of fraud] requires”. In other words, while it is true to say fraud must be established on the balance of probabilities, the seriousness of an allegation of fraud means that the statutory manifestation of the Briginshaw standard (Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336) in s 140(2) of the Evidence Act 1995 (NSW) must be applied:

Bearing the principles in mind as set out in paragraphs [60] to [67] the Court now turns to consider Ms Randall’s case to set aside the judgments and orders against Phoenix. Mr Agresta put that case by reference to two basic complaints, which may be conveniently referred to as the “consent authority” point and the “no valid termination” point. The Court will consider each of these in turn after dealing with the question of Ms Randall’s standing and making a general observation about the utility of the relief sought in these proceedings. The Particulars also referred to a third complaint based on White J’s and the Court of Appeal’s conclusion as to the proper construction of clause 15(d) of the Leases. This complaint was not developed in argument. Had it been, it would have been rejected for essentially the same reasons for which the Court has rejected the other two complaints.

The Council made two submissions in support of its argument that Ms Randall lacked standing under r 36.15(1) (which the Court also understood to include the inherent jurisdiction).

First, relying on the ordinary principles of privity of contract, Council submitted that because the litigation arises out of the Leases, which were between the Council and Phoenix, Ms Randall did not have standing to sue on the Leases.

Second, Ms Randall does not have a sufficient interest to invoke r 36.15(1). She was not a party to the Leases nor to the proceedings before White J or the Court of Appeal. Nor could it be said that she was a person aggrieved by the judgments or orders of the Court of Appeal.

The Council also made an argument based on the principle of res judicata, which may be summarised as:

Ms Randall relied on the same matters which she said entitled her to seek to have Phoenix reinstated in support of the submission that she had standing to make the application under r 36.15(1) (see paragraph [182] to [184] below).

The question of who has standing to invoke r 36.15(1) must be resolved by determining the proper construction of the rule. The submissions of both parties bypassed the issue of construction and went straight to the question of what interest (if any) Ms Randall had that would give her standing. I have already set out the terms of r 36.15(1) in paragraphs [47] and [60] above. The point for present purposes is that the rule is silent on the question of who may invoke it.

A similar problem confronted Jenkyn J in Nicholson v Nicholson (1974) 2 NSWLR 59 at 64-65 sitting in what was then the Family Law Division of this Court (emphases added; citations omitted):

The precise issue before Jenkyn J was whether the rule could be relied upon by someone other than the party in default. His Honour held it could be because the rule contained no express limitation and, for the reasons set out in the preceding paragraph, he did not think that such a limitation could be implied. Applying the same approach to r 36.15(1) means that, in the absence of an express limitation, any person can apply under the rule. However, as I shall develop in the next paragraphs, the nature of the applicant’s interest and the extent to which it has been affected by the judgment which is sought to be set aside remains highly relevant as one of the matters which the Court must consider in determining whether “sufficient cause” has been shown for the purposes of the rule.

In JPMorgan Chase Bank, National Association v Fletcher; Grant Samuel Corporate Finance Pty Ltd v Fletcher [2014] NSWCA 31; (2014) 85 NSWLR 644 (“JPMorgan”) the Court of Appeal considered the meaning of “party” in r 36.16(2)(b). The issue was whether it was confined to a party joined to the proceedings or whether it could extend to a person not being a party formally joined to the proceedings. In adopting the latter construction, Beazley P (with whom Macfarlan and Gleeson JJA relevantly agreed) said (at 671) “The meaning of a word in a legislative provision depends upon its text, context and purpose”. Applying that approach to the present case yields the following reasoning.

The text of r 36.15(1) does not specify who may apply. If there is to be a limitation, it must be implied. This may be contrasted, for example, with r 40.9 of the English Civil Procedure Rules which provides that “a person who is not a party but who is directly affected by a judgment or order may apply to have the judgment or order set aside or varied”. The requirement to be “directly affected” was most recently considered in Abdelmamoud v The Egyptian Association in Great Britain Ltd [2015] EWHC 1013 (Ch); [2015] Bus LR 928. However, it is of no assistance in this case because to speak of being directly affected as the relevant criterion for standing is to assume the answer to the question being asked.

Two aspects of the context of the rule are relevant.

First, it appears among other provisions relating to varying or setting aside judgments or orders, some of which specify by whom such an application can be made, for example r 36.17 which refers to “the application of any party or of [the Court’s] own motion”. However, as the parties in JPMorgan themselves accepted (at [104]), the meaning of the word “party” varies depending upon the context in which it appears. The specification of who can apply under other rules suggests that if the legislature had intended to specify the class of persons who could invoke r 35.15(1), it could easily have done so.

Second, r 36.15(1) itself contains a precondition or gateway to the exercise of the rule, being “on sufficient cause being shown”.

The purpose of the provision is facultative and deals with a matter going to the integrity of the administration of justice itself, namely judgments or orders that may have been entered “irregularly, illegally or against good faith”.

The matters set out in paragraphs [78] to [82] point firmly against the implication of any limitation as to who can make an application under the rule. There are four reasons for this conclusion.

First, in contradistinction to other provisions dealing with a similar subject matter, the legislature has made no express limitation when it could have done so. This may, for example, be immediately contrasted with r 36.15(2) where an alternative basis for the setting aside of an order is provided “if the parties to the proceedings consent”.

Second, insofar as a gateway directed to the applicant’s interest is concerned, the implication is unnecessary. This is because the question of the applicant’s interest is a matter which can readily be dealt with as part of the inquiry into whether sufficient cause has been shown. This requirement is in addition to and distinct from the requirement to show that the judgment or order was given or entered irregularly, illegally or against good faith.

Third, the potentially serious subject matter of the rule and its close connection to the propriety of the administration of justice point toward a liberal rather than restrictive interpretation.

Fourth, the impact of s 56 of the Act of the CPA must be taken into account (see paragraph [64] above). In that regard I respectfully adopt and apply what was said by Macfarlan JA in JPMorgan, where in agreeing with Beazley P his Honour said:

The Court has therefore concluded that Ms Randall has standing to make this application under r 36.15(1). Insofar as the inherent jurisdiction of the Court is concerned, where the application is based on a matter as serious as fraud there is no reason why the inherent jurisdiction would be any more limited on the question of standing than the Court’s jurisdiction under the r 36.15(1). The Court therefore records for completeness its conclusion that Ms Randall also has standing under the inherent jurisdiction to make her application insofar as it depends upon making out an allegation of fraud. It is unnecessary to, and the Court does not, express any view about the scope of the inherent jurisdiction to set aside judgments and orders on other bases, bearing in mind the fundamental principle Bailey v Marinoff referred to in paragraph [48] above.

The Council made two submissions, either of which may have constituted a complete answer to Ms Randall’s claim. The first such submission is correct; the second is not.

The Council submitted that Ms Randall had failed to demonstrate that even if the judgments and orders were set aside and Phoenix was reinstated, Phoenix would have been able to repay the very large debt it undeniably owed to the Council of $1,626,612.01 in respect of the rent it was bound to pay. In the absence of such proof, there was not “sufficient cause” under r 36.15 to grant relief even if the balance of the rule were satisfied. That submission is correct and is the first reason why the Court concludes that Ms Randall’s claim must fail. The Court notes that Council gave Phoenix a “second chance” to pay the rent (see paragraph [135] below) which it did not do at the time. There is no evidence Phoenix or anyone on its behalf could do so today. The Court will, in the alternative, now consider the other arguments raised.

The Council also submitted that Ms Randall’s claims, insofar as they arose from the issue of the Termination Notice on 25 June 2003, were statute barred, these proceedings having been commenced in 2013. The Court accepts Mr Agresta’s submission that the proceedings are not statute barred. The cause of action, such as it is, arises from the decisions of White J (2009) and the Court of Appeal (2010). Phoenix’s causes of action will not be statute barred because if the judgments and orders were set aside, the proceedings which gave rise to those matters would be reheard by reference to the pleadings as they were before White J and which had been filed in time.

Ms Randall’s central allegation in relation to the consent authority point is made in paragraph 9 of the ASC:

The ASC goes on to set out, among other things, Council’s submissions before White J and the Court of Appeal to the effect that it did not act in its capacity as a consent authority under the heading in the ASC of “false representation made knowingly”.

Paragraphs 21 to 27 of the ASC restate the argument that erecting a “general advertising structure” was a “prescribed activity” under the Environmental Planning and Assessment (Savings and Transitional) Regulation 1998 (NSW) (the “Regulation”), clause 29(8) of which expressly provided that “the consent authority for the purpose to erect any structure or part of a structure is the Council”. (Although drawn to attention by the Council, nothing turns on the incorrect reproduction of the definition of “prescribed activity” in paragraph 21 of the ASC.) This part of the pleading then culminates in this allegation:

Paragraphs 28 to 34 of the ASC are devoted to demonstrating that the Council knew or ought to have known that it was the consent authority for the purpose of the erection of the bus shelters. Paragraphs 35 to 50 of the ASC set out a case that the Council’s General Manager (Mr Sawyer) and Director of Corporate Services (Mr Cook) knew or ought to have known (and their knowledge was to be imputed to Council) that Council was the consent authority for the purpose of the erection of the bus shelters. The allegations include that neither Mr Sawyer nor Mr Cook had an honest belief in or that they recklessly made the various representations constituted by, among other things, submissions made by the Council to White J and the Court of Appeal. It was submitted for Ms Randall that a Jones v Dunkel inference (Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298) should be drawn against the Council for its failure to call Mr Sawyer and Mr Cook.

As part of her case at this point, Ms Randall submitted that there had been non-disclosure to White J of:

The Tie in Deed was an agreement made on 18 February 1998 between the Council, Phoenix and Phoenix’s mortgagee. It set out the terms on which the Council consented to Phoenix mortgaging the Leases and what was to occur if Phoenix defaulted under the Leases or its mortgage. Ms Randall argued that the importance of the Tie in Deed was that by not disclosing it, Council was to be understood as suggesting that there were no other agreements between the parties other than the Leases. The Tie in Deed defined “Lease” as comprising the Leases (as varied) and contained an acknowledgement that “the whole of the terms of the agreement between the [Council] and [Phoenix] are set out in the Leases”.

Ms Randall alleged that the failure to draw these matters to the Court’s attention meant that White J and the Court of Appeal interpreted the capping provision in clause 15(d) in a way that they could not have if they had been made aware of the acknowledgement in the Tie in Deed. It was said that this acknowledgement prevented the implication of any terms into the Leases.

The Council submitted that the basis of Ms Randall’s claims and the allegation of misrepresentation was a refusal to accept the final decision of the Court of Appeal. The alleged misrepresentations did not give rise to the relief sought for these reasons:

Council submitted that there was no evidence that any of the statements or submissions made by or on behalf of the Council to the Court were made with the knowledge that they were false or misleading or with careless disregard for their truth. There was no evidence to suggest that those statements and submissions were not genuinely held or put. The Council submitted that the basis of the allegation of fraud was no more than that Ms Randall disagreed with the relevant statements and submissions.

Ms Randall’s arguments fail for the following six reasons.

First, no misrepresentation was made. Insofar as any representation was made (as to which see the next paragraph) to the effect that in approving the bus shelters it was not acting as the consent authority under the Leases, the result before the Court of Appeal demonstrates that “representation” was correct as a matter of law.

Second, Ms Randall’s allegation relies on the Council’s submissions to White J and the Court of Appeal that it was not acting as the consent authority under the Leases being treated as “representations”, in particular as to the truth of the subject matter of the “representations”. That allegation misunderstands the nature of the submission made on the consent authority point. The Council’s submissions that it was not acting as consent authority were not representations as to the objective truth of the state of affairs.

Where, as here, a submission concerns a mixed proposition or conclusion of fact or law, it is not a representation as to the objective truth of something. Rather, it is a proposition which a party urges the Court to accept as the correct conclusion as a matter of fact and law. It does not involve a representation by the propounding party or, in particular, its legal advisers that they personally know or believe it to be objectively true. In all the circumstances of litigation, particularly in the context of the ethical and other rules binding counsel, solicitors and parties, the only representation that might be implied in a submission is that the lawyers on behalf of their client and on the basis of their instructions consider that the submission has sufficient basis in fact and law that it can properly be put to the Court. For example, a client can instruct its lawyers to put an argument which the lawyers have advised their client is arguable but likely to fail. Many such arguments have nevertheless succeeded at first instance or appeal.

Even on a pure matter of fact a submission by a lawyer will (unless the lawyer was personally a witness, in which case ethical rules generally prevent the lawyer acting) carry no more than a representation that it represents the lawyer’s instructions that something is true. On the other hand, witnesses swear or affirm their evidence is true, but in the course of a trial it can be shown their memory is faulty. It certainly does not always follow that they have deliberately misled the Court. However, it is important to note that even in those cases where it can be shown that a witness has committed perjury (making on oath any false statement knowing the statement to be false or not believing it to be true: s330, Crimes Act 1900 (NSW)), that will generally in and of itself be insufficient to set aside a judgment or order based on such testimony (see paragraph [65] above).

Third, there are two reasons why Ms Randall’s argument concerning the Regulations cannot succeed:

Fourth, the “non-disclosure” referred to in paragraph [96] above is not of a kind which invites correction by the Court for three reasons:

Fifth, Ms Randall’s reasoning in relation to Messrs Sawyer’s and Cook’s knowledge is contrived and flawed. That reasoning assumes the conclusion (Council was acting as the consent authority), identifies a series of factual and legal matters said to support that conclusion and then invites the Court to infer that Messrs Sawyer and Cook knew those matters. It is then contended that because they knew those matters, they could not have had an honest belief that was contrary to the assumed conclusion. This last conclusion is sought to be fortified by a Jones v Dunkel inference because neither gentleman gave evidence.

This type of argument fails for four reasons:

Sixth, quite apart from the fact that Ms Randall’s legal arguments were fully considered by either or both of White J and in the Court of Appeal, the way Ms Randall’s case has been put seems, with respect, to have ignored the fact that the words “consent authority” do not appear in isolation in clause 15(d) of the Leases. The relevant language is “should the Lessor in its capacity as consent authority approve” (emphasis added). Ms Randall’s submissions ignore the words “in its capacity”.

There can be no doubt (and it is clear that both White J and the Court of Appeal understood this) that the Council was a consent authority under the EPAA in respect of decisions made under that legislation. The difficulty for Ms Randall is that, as both White J’s Judgment and the CA Judgment recognise, the approval of the bus shelters was not under the EPAA but under the RA. The effect of Ms Randall’s argument is that, because Council was a consent authority under the EPAA, whatever decisions Council made were made in that capacity. With respect, that cannot be correct. To give a different example, a person may be a licensed electrician. However, when that person comes home after a day at work and turns on their light switch, they are not doing so in their capacity as a licensed electrician.

The arguments relied upon by Ms Randall were fully considered by White J and the Court of Appeal. Phoenix did not seek special leave to appeal to the High Court. Ms Randall’s disagreement with the Court of Appeal’s conclusion is not a basis for that Court’s orders to be set aside.

The “no valid termination” point was introduced into the proceedings by paragraphs 2A – 2L of the ASC. The key allegations are:

However, the pleading in the ASC did not set out the facts, matters and circumstances relied upon for the conclusion that the Breach Notice and the Termination Notice were false and known to be false by the Council and its solicitor. For this one has to turn to the Particulars.

The basis of this part of Ms Randall’s claim is the Council’s cross-claim before White J for unpaid rent. Phoenix’s defence to cross-claim put the validity of the Breach Notice and the Termination Notice in issue. Paragraph 7 of the Particulars drew attention to that cross-claim (emphases in original):

After referring to the outcome before White J, the Particulars also refer to a representation to the Court of Appeal (emphases in original):

Ms Randall’s argument as set out in the Particulars as to “the falsity to Council’s representations” may then be summarised as:

In support of her construction of the lease referred to in paragraphs [117(1) – (3)] above, Ms Randall sought to rely on a conversation which was in evidence before White J deposed to by Mr Stephen Nixon. Mr Nixon was formerly an officer of the Council who reported to Mr Cook but who gave evidence before White J in Phoenix’s case. Mr Nixon deposed to a conversation with Council’s then solicitor in January 2000 to the following effect:

Subsequently, by letter dated 2 February 2000 Mr Carson informed Council’s General Manager that in regard to the Leases “as the Council may only act pursuant to resolutions … the formal request by Mr Agresta that the leases be assigned … should be the subject of a resolution of the Council”.

Ms Randall submitted that statements set out in paragraphs [118] and [119] above constituted admissions in relation to the construction of the Leases.

The Council’s submissions relied upon the fact that the decision to terminate the Leases for non-payment of rent had been taken by the Mayor, Mr Tsirekas, who then instructed Ms Rosser to put that decision into effect. The undisputed evidence was that in early June 2003, Ms Rosser had a conversation with Mayor Tsirekas in words to the following effect:

There was also undisputed evidence from Ms Rosser saying:

Against that background, the Council made two submissions.

First, the decision to terminate the Leases was within both the Mayor’s and the General Manager’s delegated authority.

Second, at a meeting of the Council held on 15 July 2003, the Council resolved to endorse the action taken by the General Manager in relation to the Leases. To the extent it was required, this constituted a ratification by the Council of the termination of the Leases.

The Council developed the submission relying upon the delegated power of the Mayor as follows.

The Council submitted that Ms Randall’s approach assumed, and would have the result, that every single decision of the Council was invalid unless it was preceded by a resolution of the Council to make the decision in question “supported by a majority of the votes at a meeting of the Council at which a quorum is present”. That approach, it was submitted, misunderstood the legislative framework of how a council carries out its functions and make decisions.

Section 355 of the LGA provides:

Section 371 of the LGA provides:

Section 377 of the LGA provides:

Council submitted that Ms Randall’s reliance on s 377 of the LGA was misconceived. None of the qualifications limiting the power of delegation were enlivened. Sections 21 and 22 of the LGA did not in any way qualify or limit the application of s 377. Nor was there any need to rely upon the terms of s 50(4) of the IA, which in any event supported Council’s powers:

On 20 November 2001 the Council had reviewed its delegations and made the following delegations to the Mayor and the General Manager respectively (the “2001 Delegation”):

The Breach Notice was signed on behalf of Council by the General Manager and fell within her delegation.

The Termination Notice was signed on behalf of Council by the General Manager and fell within her delegation.

On 15 July 2003 at a meeting of the Council at which a quorum was present, Mr Agresta for Phoenix addressed the Council in relation to the Leases. After Mr Agresta’s address, the Council resolved that the action taken by the General Manager be endorsed. So much appears from the Minutes of the meeting, which were in evidence (emphasis added):

Where a public official or authority purports to exercise power or to do an act in the course of his or her duties, a presumption arises that all conditions necessary to exercise that power or the doing of that act have been fulfilled: Minister for Natural Resources v New South Wales Aboriginal Land Council & Anor (1987) 9 NSWLR 154 at 165. Ms Randall had not adduced any evidence to rebut the presumption of regularity. The delegations of authority in evidence in any event demonstrated that the act of termination of the Leases was within the relevant delegations.

Even if the General Manager’s actions in terminating the Leases were not initially authorised, the endorsement of the General Manager’s conduct by Council on 15 July 2003 ratified her actions to terminate the Leases: Leybourne v Permanent Custodians Ltd [2010] NSWCA 78 at [131]-[134]; McHugh & Anor v Eastern Star Gas Ltd & Ors [2012] NSWCA 169 at [58]-[59].

In answer to Ms Randall’s reliance on Mr Carson’s alleged admissions, Council submitted:

Insofar as Ms Randall submitted that ratification had to occur before 16 June 2003, the Council submitted that it was not possible to have ratified the decision before it was implemented. Ratification would be unnecessary if a decision by resolution was expressly made before termination.

The Council relied on the analysis of the powers of statutory corporations and the means by which a corporation acts set out by Vickery J in Rail Signalling Services Pty Ltd v Victoria Rail Track [2012] VSC 452 (“Rail Signalling”) (citations omitted):

Furthermore, the Council relied upon the principles relating to the application of the common law principle of ratification by statutory corporations set out in Rail Signalling:

The Council also relied upon this statement by Barrett JA in 2 Elizabeth Bay Road Pty Ltd v The Owners – Strata Plan No 73943 [2014] NSWCA 409:

Relying on the dictum of Viscount Haldane LC referred to in Rail Signalling at [50], the Council submitted that the Mayor and the General Manager supplied the Council with the corporate mind and the physical capacity to undertake its functions and exercise its powers and duties. In this regard the 2001 Delegation delegated various powers to the Mayor and General Manager which included the power to terminate the Leases. The Mayor had the power to terminate the Leases and to direct the General Manager to terminate the Leases. The General Manager had the power to sign and effect service of the Breach Notice and the Termination Notice.

The Council as a statutory corporation, being a legal person, continued to enjoy the benefits and was subject to the duties and incurred the liabilities imposed by the common law, unless by statute or subordinate legislation those benefits, duties and liabilities were modified in some way or abrogated entirely: Rail Signalling at [57]. There was nothing in the LGA or any other provision which expressly or impliedly limited the application of the common law principles of agency and ratification.

Insofar as Ms Randall sought to rely on clause 4.25 of the Practice Note, the Council submitted that the note was made in August 2009. The Leases were terminated on 25 June 2003 with the ratifying resolution being made on 15 July 2003. The Practice Note was not in place at the time and was irrelevant. In any event, clause 4.26 of the Practice Note did not apply because no resolution to terminate the Leases was made by the Council at a meeting. The decision to terminate the Leases was made by the Mayor under his delegated authority. It was the termination of the Leases effected by the General Manager on behalf of the Council that was ratified by the Council.

Finally, in answer to Ms Randall’s submission that the Council could not ratify the act of terminating the Leases after the termination had occurred and Council had re-entered the premises, the Council submitted that the LGA did not modify the common law right of ratification. Ratification has a retrospective effect to validate conduct and the outcome of that conduct which occurred or arose prior to the act of ratification. Council relied, by analogy, with the conclusion of McHugh JA (with whom Hope and Priestley JJA agreed) in Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1987) 8 NSWLR 270 at 280-281 that a contract of insurance could be ratified after the occurrence of the loss.

The Council submitted that provided the principal itself had the power to engage in the relevant conduct at the time of its unauthorised performance by another person, once the act of the other person is adopted by the principal, the effect of the adoption will be governed by the maxim omnis ratihabitio retrotrahitur et mandato priori aequiparatur (every consent given to what has already been done has retrospective effect and is equivalent to a command at the outset): Davison v Vickery’s Motors Ltd (In liq) [1925] HCA 47; (1925) 37 CLR 1 at 19 per Isaacs J; Union Bank of Australia Ltd v Rudder [1911] HCA 39; (1911) 13 CLR 152 at 162 per Griffith CJ.

In answer to a number of matters raised by the Council, Ms Randall’s submissions in reply squarely assert that fraud undoes everything.

In answer to the Council’s defence based on res judicata and issue estoppel, Ms Randall submitted the public interest in finality of litigation will not preclude the exceptional step of a court reviewing or rehearing an issue when it has good reason to consider that it has proceeded on a misapprehension of the facts or the law: Autodesk Inc v Dyason (No 2) [1993] HCA 6; (1993) 176 CLR 300 per Mason CJ at 302.

In section 7 of her submissions in reply of 23 November 2014 Ms Randall expanded upon why she submitted a Jones v Dunkel inference should be drawn against the Council in relation to its failure to call Ms Rosser, Mr Tsirekas and Mr Cook.

In relation to s 377 of the LGA, Ms Randall submitted the power to terminate the Leases could not be delegated because it fell within s 377(1)(h) (“Compulsory acquisition, purchase, sale, exchange or surrender of any land and or other property”). This argument had two parts:

Ms Randall also submitted that the power to terminate the Leases could not be delegated because it fell within s 377(1)(i) (“the acceptance of tenders which are required under this Act to be invited by the Council”). That argument called in aid s 55(1)(h) of the LGA (as to when Council had to invite tenders) and r 5(2) of the Local Government (Tendering) Regulation 1999 (contracts including the variation or discharge of which were required to be in writing and executed by or on behalf of Council). It was submitted that because the Leases were the product of tenders the acceptance of which could not be delegated and the discharge of which had to be in writing executed by or on behalf of Council, the discharge (which included “termination” as a matter of ordinary meaning) could also not be delegated. Furthermore, because the power had to be exercised by the Council’s governing body, it could not be done indirectly by the Mayor or General Manager.

Further in relation to delegation, Ms Randall submitted that the “decision making function” of the Council under s 371 of the LGA could not be delegated to the Mayor or the General Manager. Alternatively, all functions had been delegated to the General Manager. Therefore, the Mayor had not been delegated the function of “decision making” and had no power to make a decision to terminate the Leases.

Insofar as Council submitted the Mayor directed the General Manager to terminate the Leases, Ms Randall answered this with the argument that the Mayor had no authority to direct the General Manager. This was put in two ways:

Ms Randall next submitted that Rail Signalling was distinguishable, including because:

Finally, Ms Randall submitted that what she referred to as “the principles of “estoppel”” applied in the circumstances regarding the Council’s “fresh” reliance on the purported delegations of authority. Those principles, it was said, meant that the Council’s reliance on the delegations should not be accepted.

In resolving this part of Ms Randall’s claim it is necessary to make five preliminary observations.

First, Ms Randall’s contentions (see paragraph [117] above) raise two distinct arguments. The first is a question of the proper construction of the Leases as to whether “Lessor” included its servants and agents. The second, which built on the first but was also apparently put as an independent point, was that there had been no “decision of the Council” pursuant to s 371 of the LGA. This was known by Ms Rosser and Mr Cook so that their involvement on behalf of the Council in advancing the submission that the Council had validly terminated the Leases meant those submissions were fraudulent to their (and the Council’s) knowledge. The fraud was said to be that the Termination Notice, in particular, represented that there had been a decision of the Council to terminate the Leases, which they knew to be false.

Second, because, unlike her submissions about the Council as consent authority, Ms Randall’s “no valid termination” argument is new, it was not considered by either White J or the Court of Appeal. However, for the purposes of the Court’s primary reasoning set out in the following paragraphs, it is not necessary to determine the correctness of the argument. However, the Court will go on to do so as an alternative.

Third, while Ms Randall’s “no valid termination” argument may be new, the validity of the Council’s termination of the Leases and subsequent re-entry was very much in issue in the earlier proceedings. By paragraphs 26 to 30 of its further amended statement of claim, Phoenix alleged the Breach Notice was invalid because:

The Council denied these allegations made in Phoenix’s further amended statement of claim. By its cross claim, the Council pleaded the Breach Notice and the Termination Notice. Those allegations were denied by Phoenix. Phoenix also denied the Council’s claim for a declaration that the Council’s determination of the Leases in June 2003 was valid.

Fourth, while Ms Randall’s argument included the assertion that the Breach Notice was false to the knowledge of the Council, the burden of her argument fell on the Termination Notice. The Breach Notice can be immediately dismissed from consideration in these proceedings for two reasons:

Fifth, the facts surrounding the giving of the Termination Notice and the purported ratification by Council were in narrow compass and not in dispute (see paragraphs [121], [122] and [135] above). In particular, Council accepted that there had been no “decision of the Council” within the meaning of s 371 of the LGA before the Termination Notice was served.

Even without determining the correctness of Ms Randall’s submission about “a decision of the Council”, her arguments (see paragraph [117] above) fail for the following three reasons.

First, no misrepresentation was made to either White J or the Court of Appeal by the submission that Council had validly terminated the Leases. There are three reasons for this:

Second, the reasons given in paragraphs [108] to [109] above apply equally to Ms Randall’s reasoning in relation to Ms Rosser’s and Mr Cook’s knowledge of the matters referred to in paragraph [117(10)-(11)] above. Again, that reasoning is contrived and flawed. It assumes the conclusion (Council had not validly terminated the Leases), identifies a series of factual and legal matters that support that conclusion and then invites the Court to infer that Ms Rosser and Mr Cook knew those matters. It is then contended because those knew those matters, they could not have had an honest belief that it was contrary to the assumed conclusion. This last conclusion is sought to be fortified by a Jones v Dunkel inference because neither of them gave evidence.

This type of argument fails for two reasons:

Third, Ms Randall submitted that she only discovered the facts relied upon (see paragraphs [121], [122] and [135] above), but essentially the absence of a “decision of the Council”, after the White J judgment and the Court of Appeal judgment. However, that is not to the point. At various times Phoenix was legally represented, including before White J and the Court of Appeal. Moreover, it is clear from the material referred to at paragraphs [223] to 225] below that Phoenix’s lawyers were alive to questions of authority and how any decision to terminate the Leases had been made. The facts which Ms Randall now relies upon are not “new” facts of the kind that would warrant the extraordinary remedy of setting aside the relevant judgments and orders, especially in the absence of any fraud having been made out.

As has already been noted, the Court has found against Ms Randall without having to determine the merits of the “no valid termination” argument. Because the matter may go further and out of deference to the extensive arguments of the parties, I set out, as briefly as possible, my views on the merits of the argument in paragraphs [170] to [180] below.

The Leases are relevantly identical so in what follows relates to each of them, including in their amended form by reason of the deeds of variation.

Ms Randall’s argument based on the change in definition of “Lessor”, with respect, misses the point because the right upon which the Council relied under the Amended Leases was a right at common law and not a right vested in the Council under the express terms of the Leases.

The amendment of the Leases by deleting so much of the definition of “Lessor” as included its servants or agents needs to be understand in the light of the fact that the totality of the relevant deleted words were ““The Lessor” means and includes the Lessor…and where not repugnant to the context the Lessor’s servants or agents” (emphasis added). The emphasised words demonstrate that the deletion was more illusory than real in its legal effect because there is little in the unamended Leases where the inclusion was not repugnant to the context. For example, some clauses in the unamended Leases which survived into the amended Leases were quite specific to include servants or agents so the inclusion was otiose e.g. “it is hereby agreed that it should be lawful for the Lessor and its agents” (clause 9) and “the Lessor and its servants and agents may … enter” (clause 11).

On the other hand, the unamended clause 15 which dealt with default and termination gave the “Lessor” rights in terms which it would have been repugnant to read as including the Lessor’s servants and agents in any event. However, clause 15 in the Amended Leases was, in any case, in entirely different terms. This was noted in White J’s judgment:

In the amended Leases there was no express right in the Lessor to terminate for breach for non-payment of rent. However, as White J, with respect correctly, found, the Council was entitled to terminate or forfeit the Leases for non-payment of rent under the common law:

The only question, therefore, is whether the termination of the Leases purportedly effected by the Termination Notice was, in law, an act of the Lessor, i.e. the Council?

Ms Randall’s quest for, and reliance upon the absence of, a decision of the Council under s 371 of the LGA was, with respect, misdirected. The relevant question is whether Ms Rosser was authorised to sign a document on behalf of the Council whereby the Council exercised a legal right available to it, namely to terminate the Leases. If there was any doubt about Council’s right to exercise that right, such doubt would be eliminated by s 50(1)(d) and (e) and (4) of the IA (see paragraph [131] above).

Ms Rosser’s power to sign the Termination Notice on behalf of the Council came from the delegation to her set out in paragraph [132] above. Ms Rosser’s subjective view that she had not made the decision to terminate the Leases is not to the point. That power was to sign documents whereby the Council exercised its power under “all other Acts or statutes whatsoever pursuant to which Council has functions, powers, duties and authorities conferred upon it”, being in this case its power to lease property under s 50(1)(d) of the IA and to do something incidental to that power (s 50(1)(e) of IA) being the termination of a lease.

That delegation to Ms Rosser was authorised by s 377 of the LGA. Ms Randall’s attempts to demonstrate that the delegation of the power to terminate the Leases was prohibited by describing it as a “financial matter” (relying on the Explanatory Note to the LGA) or sub-sections 55(1)(h) or (i) were, with respect, completely misconceived. The constructions for which Ms Randall contended of sub-sections 377(1)(h) and (i) sought to give the words in those sub-sections meanings which they just do not have and relied on ingenious but legally impermissible appeals to other parts of the statute in an endeavour to broaden the plain meaning of the relevant words. The other parts relied upon simply had nothing to say about the construction of the words in s 377 under consideration.

If there were any doubt about the validity of the Termination Notice, it was dispelled by the Council’s ratification in its meeting on 15 July 2003. As an act which the Council could have done itself by a decision at a meeting, in accordance with the statement of Barrett JA set out in paragraph [142] above, the Council was entitled to ratify the termination of the Leases purportedly effected on its behalf by the Termination Notice signed by Ms Rosser. That ratification could occur either before or after the Termination Notice came into effect.

On the approach set out in paragraphs [170] to [179] above it is not necessary for there to have been a decision by the Mayor to terminate the Leases. It was within Ms Rosser’s delegated authority to terminate the Leases. If this conclusion is wrong, there was also a decision by the Mayor which the Court is satisfied fell within his delegated authority under clause C1 of the 2001 Delegation (see paragraph [132] above). There is no reason under any statute relied on by Ms Randall or common law principle why one mind of the Council (the Mayor) could not direct another mind (Ms Rosser) to give effect to the Mayor’s decision. Ultimately these were all acts of the Council.

Ms Randall relied on s 601AH(2) of the Corporations Act 2001 (Cth):

To establish that she was “a person aggrieved” Ms Randall relied on the judgment of Young CJ in Equity (as this Honour then was) in Casali v Crisp [2001] NSWSC 860 (“Casali”) in which his Honour said:

Ms Randall submitted that in addition to being a shareholder and director, she was a creditor of Phoenix to the amount of $550,000. The evidence tendered by her in support of this was a series of undated invoices signed by Ms Randall addressed to Phoenix for annual “Director and Secretary fees” of $33,000 per annum and a “statement” referring to those invoices and loans (presumably by Ms Randall to Phoenix) of $187,000.

Ms Randall also submitted in reply that she had been the source of $103,000 which Master McLaughlin (as his Honour then was) had accepted in an earlier security for costs judgment in the proceedings that Phoenix had spent on legal fees. Such financial assistance was apparently to be repaid out of the damages payable to Phoenix by the Council for wrongful termination of the Leases.

Insofar as Ms Randall sought to establish “that there might be a surplus of assets if the company was reinstated and certain events occurred”, she relied on the damages which it was said Phoenix would receive for suing the Council in relation to matters being agitated in the present proceedings. This appeared to contemplate Phoenix suing on the same bases as Ms Randall relied on in these proceedings. In the schedule to her submissions setting out how the alleged damages were calculated it was said that these would have included substantial annual licence fees that would have been payable to Phoenix by Boyer over a number of years which Phoenix had lost by reason of the termination of the Leases. In other words, the possibility of there being a surplus if Phoenix was reinstated depended upon Phoenix succeeding in the same arguments being propounded by Ms Randall in these proceedings.

Finally, in the submissions made on her behalf, Ms Randall relied on the power in s 601AH(3(d) of the Corporations Act that “the Court may make any other order it considers appropriate” to invite the Court to make orders to the effect of:

The orders referred to in the preceding paragraph were sought on the basis that she was a person aggrieved, Council had fraudulently procured the judgments and orders and had wrongfully terminated the Leases.

The Council made two submissions as to why Ms Randall did not have standing as a person aggrieved by Phoenix’s deregistration.

First, relying upon Casali (at [27] and [28]), the mere fact that a person is a shareholder or director of a deregistered company is insufficient to establish that the person is aggrieved within the meaning of s 601AH.

Second, if a company is insolvent and in liquidation then ordinarily shareholders and directors are not aggrieved by the deregistration. Phoenix was at the time of deregistration hopelessly insolvent. If a company is insolvent and in liquidation before deregistration then ordinarily a shareholder and director are not aggrieved by the deregistration.

Alternatively, the Council submitted that even if Ms Randall had standing to bring the application to reinstate Phoenix, it was not just for Phoenix to be reinstated for these reasons:

In later submissions the Council restated these submissions by reference to the proposition that the two conditions in s 601AH2(a) and (b) are conjunctive, not disjunctive: Millbrook Finance Pty Ltd v Australian Securities Investments Commission, in the matter of Kekpek Pty Ltd [2014] FCA 620 at [6].

Insofar as Ms Randall is a former director of Phoenix, she is not aggrieved by Phoenix having been deregistered. Directors generally do not have standing to apply as they would have ceased to exercise their functions as directors on liquidation: In the matter of Peter Conyers Pty Ltd (In liq) (1996) 14 ACLC 1835. The deregistration of Phoenix did not affect her “questionable” claim for directors’ fees for a period of seventeen years. There is no evidence that she ever demanded payment (other than invoices) or actually commenced proceedings to recover the fees. The deregistration of Phoenix did not affect her claim because the Court should infer that she never pursued it and Phoenix was insolvent and therefore unable to meet the claim.

Similarly, Ms Randall’s status as a former shareholder did not make her aggrieved by reason of Phoenix’s deregistration because the company was hopelessly insolvent at the time at the time of that deregistration. It had failed to pay directors’ fees (if they were due), failed to pay rent and was unable to meet the judgment in favour of the Council.

Insofar as Ms Randall suggests a surplus of assets if Phoenix was reinstated and certain events occurred, this depended on Phoenix succeeding in the cause of action which was substantially identical to that sought to be advanced by Ms Randall in these proceedings. The Council relied on its other submissions in relation to the bases of Ms Randall’s claim to submit that just as Ms Randall’s claim was hopeless, so for the same reasons would any similar claim brought by Phoenix.

The Council drew attention to the decision of Austin J in Australian Competition and Consumer Commission v Australian Securities Investment Commission [2000] NSWSC 316; (2000) 174 ALR 688, where his Honour said:

The claim sought to be made by Phoenix vests in the liquidator. Neither Ms Randall nor Mr Agresta could fund the liquidator to bring the claim. Any claim by the liquidator would be met with an application for security for costs which could not be provided by Ms Randall or Mr Agresta. The company would therefore have no capacity to pursue any claims. Therefore to reinstate it would be futile.

Insofar as Ms Randall claims that she is a creditor of Phoenix, she is not aggrieved by Phoenix having been deregistered because she does not have a claim against the Council.

Insofar as Ms Randall sought the judgments referred to in paragraph [186] above the Council submitted that a claim for those judgments could not be asserted in these proceedings because Phoenix was not a party to these proceedings.

The Court accepts the Council’s submissions as to why reinstatement of Phoenix and the additional orders sought in reliance on s 601AH ought not be made. The Court’s principal reasons may be summarised as:

Ms Randall made a number of submissions which, with no disrespect intended, I have described as “miscellaneous”. That is because they do not appear to fall within Ms Randall’s primary case based in fraud. The miscellaneous matters are further examples of additional arguments which she sought to raise. They are no more than additional arguments which Phoenix could have, but apparently did not, raise in the earlier proceedings. Because Phoenix was legally represented, none of these additional arguments, taken individually or together, would, even if correct, warrant the Court setting aside the judgments and orders. For completeness I will deal with those miscellaneous arguments.

Ms Randall submitted that because the Leases in their original form included the right of re-entry implied by s 85(1)(d) of the Conveyancing Act, which was removed when the Leases were amended, there was no right to re-entry on the part of Council.

The Council submitted in response that Ms Randall’s argument gave rise to the absurd conclusion that even if there was non-payment of rent for protracted periods by Phoenix, the Council could never seek to re-enter and take possession of the premises. The Council drew attention to the fact that in none of the earlier proceedings had Phoenix sought relief against forfeiture (on any ground) or to rely on the alleged exclusion of the implied power under s 85(1)(d) of the CA. The Council submitted that Phoenix’s conduct and failure to pay rent was repudiatory and the Council was therefore entitled to accept that repudiation by terminating the Leases at common law.

The Court accepts the Council’s submissions. They accord with the conclusion reached by White J which, with respect, was plainly correct (see paragraph [15] above). Although nothing turns it, the Court notes that the premise of Ms Randall’s argument is not quite correct because the right of re-entry was expressly set out in clause 15 of the unamended Leases, which was removed by the Deeds of Variation.

Ms Randall submitted that, for the various reasons she had advanced which have been dealt with in other sections of these reasons, the termination of the Leases was invalid and Council wrongfully re-entered and took possession of Phoenix’s fixtures.

Council submitted that, for the reasons which it had given in relation to Ms Randall’s various submissions, its re-entry by taking possession of the relevant premises and fixtures was not contrary to law.

Council relied on clause 10 of the Leases:

The Council submitted that clause 10 of the Leases drew a distinction between expiration and determination (i.e. termination) of the Leases. The Leases were determined (terminated) thereby enlivening the Council’s rights under clauses 10(b) and (c) in favour of the Council. The Council had a contractual right upon termination of the Leases to title and ownership of the advertising signs (being fixtures) erected by Phoenix on its land.

Ms Randall has failed to demonstrate that there is any basis on which it could be said that the Council’s re-entry and taking of possession was wrongful. The Councils’ submissions to its right to the fixtures are correct.

Ms Randall submitted that in May 2003 (by which time Phoenix was in default for non-payment of rent) the ANZ Bank approved a loan to Phoenix that was intended to provide it with funds to pay the outstanding rental to the Council. It was a condition of that loan that the Council provide its consent to Phoenix securing the Leases by entering into a deed with Phoenix and the ANZ Bank. Council declined to enter into such a deed. Ms Randall submitted that in failing to enter into the deed, the Council was in breach of clause 17(a) of the Leases which provided that “in any case where pursuant to these presents the doing or execution of any act matter or thing by the Lessee is dependent upon the consent or approval of the Lessor such consent or approval shall not be unreasonably withheld”.

Council made three submissions, which the Court accepts as correct, to demonstrate why Ms Randall’s reliance on this argument failed.

First, the claim had never been raised before White J or the Court of Appeal, notwithstanding that all the relevant facts must have been known to Phoenix through Mr Agresta and Ms Randall. Moreover, it was no part of any pleading or particulars in the present proceedings. This last point was sufficient for the Court to disregard this part of Ms Randall’s claim.

Second, the only entity that could advance this claim was Phoenix. It was not and could not be suggested that there had been any misrepresentation to White J or the Court of Appeal about this claim.

Third, even if it were to be considered, the claim was bad in law. Clause 17(a) related to “where pursuant to these presents the doing or execution of any act matter or thing by the Lessee is dependent upon the consent or approval of the Lessor”. There was no relevant “doing or execution of any act or thing by the Lessee” which the Leases (in either their original or amended form) made dependent upon the Council’s consent. For example, the Leases were silent on what was to occur if Phoenix wanted to grant security over the Leases and the obligation to pay rent was certainly not dependent upon the Council consenting to anything. Similarly, entering into the deed did not fall into that category.

On 20 February 2003 (rental under the Leases having been due and payable on 1 February 2003) Phoenix wrote to Ms Rosser proposing to buy the freehold of the land on which the advertising structures were built “for an agreed amount on execution of documents” or to enter into a 21 year lease commencing at a rate of $20,600 per month. On 28 February 2003 the Council’s solicitors wrote to Phoenix and responded to the proposals in its letter of 20 February 2003 by saying “your proposals therein are unacceptable to our client”.

Ms Randall submitted that by the solicitors’ letter Ms Rosser and thereby the Council fraudulently misrepresented to Phoenix that Phoenix’s proposal was unacceptable to the Council. The basis of this allegation was that s 377(1)(h) of the LGA (relating to compulsory acquisition etc – see paragraph [130] above) required there to have been a decision of Council – which there had not been. Ms Rosser had gone off “on a frolic of her own” by instructing the Council’s solicitors to reject Phoenix’s proposal.

Like the previous issue, this matter is not pleaded or particularised in the present proceedings. That is a sufficient basis for the Court to disregard it and the Court does so. However, in any event, the argument is wrong.

The Court accepts the Council’s submission that s 377 of the LGA does not require every decision to be considered by Council. Rather, it sets out what decisions Council can delegate and what it cannot.

The Court concludes that there was no obligation on Ms Rosser to submit Phoenix’s proposal to a meeting of the Council. Refusal of the offer and instructing the solicitors to communicate that refusal was within Ms Rosser’s delegation under clause E4K of the 2001 Delegation to “engage … legal counsel” and Clause E4U of the 2001 Delegation to “negotiate and settle matters in the best interests of the Council, taking legal advice as deemed necessary by the General Manager”. Furthermore, there is no evidence that could support a serious finding such as fraud against Ms Rosser in relation to the rejection of Phoenix’s offer.

Again, the matters Ms Randall raises under this heading are not pleaded or particularised in the present proceedings. That is a sufficient basis for the Court to disregard them and the Court does so. However, in any event, the matters raised do not assist Ms Randall’s case.

Under this heading Ms Randall raises, as I understand it, two points. The first is a criticism that before both White J and the Court of Appeal the Council did not rely on any delegation of authority or purported ratification or call any person to support the Council’s contention that it had validly terminated the Leases by the Termination Notice. The answer to this argument is that the Council did not have to. Unless and until something was raised by Phoenix, the Council discharged its onus of proof to establish the termination of the Leases by tendering the Termination Notice (recognising that it also had to prove – which it did - the basis upon which the Council said it was entitled to issue the Termination Notice). Phoenix did not raise any matter, for example by way of defence to the Council’s cross‑claim, that would have required the Council to reply by putting the delegation or the ratification into evidence. Therefore, this criticism goes nowhere.

Ms Randall’s second complaint is that the Council was in contempt of court for failing to produce documents in answer to a subpoena. The background is as follows.

On 13 December 2004, Phoenix’s then solicitors issued a subpoena to the Council seeking, among other things, the following documents:

No documents were produced in answer to those paragraphs. The non-production in answer to paragraphs 2 and 3 is consistent with the evidence in these proceedings as to how Council dealt with the Leases, in particular with their termination. Ms Randall’s complaint is more pointed in relation to the non-production in answer to paragraph 1 of the subpoena.

The subpoena was returnable on 8 February 2005. On 15 February 2005 Phoenix’s then solicitors wrote to the Council’s solicitors and noted that there had been no production in relation to paragraph 1 of the subpoena. Their letter goes on to say “we therefore take it that no documents exist evidencing the General Manager’s delegated authority to terminate the relevant leases. Please confirm our assumption this regard is correct.” Later in the same letter Phoenix’s solicitors say:

Any reply to that letter from the Council’s solicitors was not in evidence in these proceedings.

Ms Randall submits that the document that was in evidence in these proceedings comprising the 2001 Delegation should have been produced in answer to the subpoena. By not producing that document the Council was in contempt of court and, to quote Ms Randall’s written submissions, “Council should not now be rewarded for its contempt of court”.

The Council’s written submissions dated 13 October 2014 respond to Ms Randall’s submissions:

Amid the plethora of issues that were raised before the Court in oral submissions, this particular complaint was not given much emphasis. A finding of contempt of court is a serious matter and should not be made, as it were, by a side wind in other proceedings as opposed to by the formalities of a separate motion containing a statement of charge. Were it necessary for the Court to come to a conclusion on this question, I would have relisted the matter for further, focused argument. No doubt the Council would have contended, and such a contention is clearly arguable, that in the context of the other paragraphs of the subpoena it had understood the documents that were sought by, for example, paragraph 1 to be confined to documents dealing with a specific delegation to the General Manager to terminate the Leases. So understood, Council’s non-production is entirely consistent with the evidence in these proceedings that there was no specific delegation of an authority to terminate the Leases.

As it happens, it is not necessary for the Court to come to a final view on whether the Council failed to comply with the subpoena and whether such non-compliance constitutes a contempt of court. Approaching the matter very broadly, the issue in these proceedings is whether something happened in the conduct of the earlier proceedings which was the fault of the Council and which makes it unjust for the earlier judgments and orders to stand. Ms Randall’s present complaint does not constitute such a ground. It may be tested in this way. There was no injustice done to Phoenix by reason of the non-production of the 2001 Delegation because if it had been produced and points taken that would have raised the issue of the validity of the Termination Notice, Ms Rosser’s authority and the Council’s ratification, then for the reasons given in paragraphs [170] to [180] above the outcome for Phoenix would have been no different. In other words, any challenge by Phoenix based on those matters would have failed. The non-production of the 2001 Delegation, (assuming, without deciding, that it was required to be produced in answer to the subpoena) would have made no difference and, therefore, that non-production has not resulted in any injustice that would entitle Ms Randall to the relief which she seeks in these proceedings.

Ms Randall criticised the Council for not calling any witnesses in these proceedings. That was a forensic decision properly open to the Council. Nothing raised by Ms Randall in these proceedings would engage the principles in Jones v Dunkel to draw an inference adverse to the Council for not calling the Mayor and various Council officers who have had an involvement in the dispute with Phoenix.

Ms Randall put a number of submissions designed to show that the Mayor (or anyone else) did not rely on the 2001 Delegation in relation to the Termination Notice. There are at least three answers to these submissions.

First, given the Court’s conclusions set out in paragraphs [170] to [180] above, the Mayor’s role, while no doubt prudent and appropriate from the point of view of good management, was legally irrelevant to the question of the validity of the Termination Notice. The Court has concluded that executing the Termination Notice was in any event within Ms Rosser’s authority under the 2001 Delegation.

Second, even if it were an act of the Mayor acting under delegation (which, as an alternative, the Court has found was the case), Ms Randall’s submission that, to be valid, an exercise of delegated power by the Mayor had to be reported back to the Council by reason of sub-clause 5 of the 2001 Delegation is incorrect. There is no express or implied term in the 2001 Delegation that would have that result.

Third, reliance upon or even cognisance of the 2001 Delegation is unnecessary for the purpose of determining whether an act was validly done on behalf of the Council. So, for example, if Ms Rosser did something on behalf of the Council that was within her authority under the 2001 Delegation, that act was validly done on behalf of the Council whether or not Ms Rosser relied upon or even knew of the 2001 Delegation. The converse is also true: the fact that she might have thought she was doing something authorised by the 2001 Delegation would not make it valid if as a matter of the relevant statutes and the proper construction of the 2001 Delegation it was not authorised.

Ms Randall in her written submissions invited the Court to reconsider rulings made excluding certain evidence. The Court accepts the Council’s submission that no new basis has been demonstrated by Ms Randall that warrants those rulings being revisited either as a whole or individually. The evidence remains rejected.

The result is that the Amended Statement of Claim will be dismissed. The Council has foreshadowed that it will seek an order that, in addition to Ms Randall, Mr Agresta pay its costs of the proceedings. In the light of that application it will be necessary for the Court to fix a date for argument. SCHEDULE ONE - 2013-5606 (5.88 KB, pdf) , SCHEDULE TWO - 2013-5606 (5.62 KB, pdf)