New Zealand Supreme Court Transcripts
Last Updated: 13 July 2012
IN THE SUPREME COURT OF NEW ZEALAND SC 64/2005
IN THE MATTER of a Civil Appeal
BETWEEN EASTERN SERVICES LIMITED
AND NO. 68 LIMITED
Hearing 28 March 2006
Coram Elias CJ Blanchard J Tipping J Anderson J Eichelbaum J
Counsel H C Keyte QC, D L Schnauer and C Latham for Appellant
R B Stewart QC and E St John for Respondent
Keyte Yes if Your Honours please I appear for the appellant and with me Mr
Schnauer and Miss Latham.
Elias CJ Thank you Mr Keyte, Mr Schnauer, Miss Latham.
Stewart Yes may it please Your Honours I appear with Mr St John for the respondent.
Elias CJ Thank you, thank you Mr Stewart and Mr St John. Yes Mr Keyte. Keyte If Your Honours please it might be useful to start by asking you to go
straight to the green folder which is the bundle of documents and look
at the clause in the agreement for sale and purchase which is the subject of this litigation. That the agreement for sale and purchase itself starts at page 1, there are a variety of numbers around these documents I regret but think I can say that throughout, apart from the notes of evidence, the number we’re looking for is a hand-written number in a bottom right hand corner of each page. The agreement for sale and purchase commences at that page 1 and the clause we are speaking about is on or starts on page 4, and you will have noted that there has been an additional part clipped on to that page and my instructions are that that was deliberately done that way in the record because that’s the way the agreement for sale and purchase actually finished up, so that rather than trying to photocopy in some other fancy way they did it in accordance with the agreement as it was signed. Clause 20 is the relevant clause. You will see that the vendor, which is the appellant in this case, undertook to take all steps reasonably necessary to obtain the consents from the Auckland City Council for authority for a right of way and it is that right of way over which this litigation has continued. The purchaser was to take all necessary steps to enable the building which they are purchasing to be used for parking purposes but that part of the arrangement is not really before this Court in this appeal. Then in Roman 2 there are some further details given and I particularly draw attention to subparagraph (b) the easement shall include the rights and powers implied by the Seventh Schedule of the Land Transfer Act in the normal way. Subparagraph (d) will figure in argument. It provides that after three years from the date of settlement but not earlier either the grantor or the grantee may call on the other party by six months notice in writing to proceed with construction of the right of way and each party shall pay one half of the cost of the construction of the complete right of way from the street to the boundary between the two lots. It’s common ground Your Honours that in spite of that three year period before which either party could call on the other to complete it, in fact the physical work was done earlier than that provision and there is evidence which I’ll come to I think later in the morning establishing that it was certainly completed by April 1979, probably earlier but that’s the best evidence one could find about the date of completion of the physical work. I’d like to bring the Court back to the opening words of paragraph 20, because in my submission the purpose for this right of way which the parties articulate here has some relevance. It is acknowledged by the vendor that the purchaser is entering into this agreement in the expectation that the purchaser will be able to use part of the building erected on the property for parking purposes and it then proceeds to talk about ‘to give the purchaser vehicular access to the rear of the property’. The intention couldn’t be plainer. There was to be constructed a right of way to give vehicular access over portion of the vendor’s property. That right of way would end up at what was a blank wall through which the purchaser intended to knock a hole and then develop that particular floor of the building the adjourning building which was purchased for vehicular parking in the way that’s stated there. Just to demonstrate a little further that point if I may ask you to go to the red
folder, pages, they start at 17, 18 and 19 there are some photographs which were appended to the evidence of Mr David Macdonald and there is one photograph in particular that, perhaps I should say two photographs in particular that I would like to draw your attention to on page 18. The top of the page, right hand side, that photograph shows portion of the rear of the appellant’s property and is looking towards the block wall, I’m sorry I should say brick wall, and it has certain pillars both horizontally and vertically which are in concrete, but the brick wall is the wall of the property to be purchased by the purchaser and this is taken in the area where the right of way was to end up at that wall and it was at that portion that there was to be a hole knocked through it and it is my understanding that the hole would have been in at that ground level to the right of the vertical concrete column one can see there.
Eichelbaum J Sorry, the right of which of the two concrete columns?
Keyte Yes I'm sorry there are two columns aren’t there? Not the one at the right hand edge of the photograph but the one that’s further towards the middle of the photograph. So it is my understanding that the column that’s further to the left would have been the left edge of the right of way and the hole would have gone through there and my learned friend points out that if you look to page 19 there’s a further photograph of the same area which someone has placed an arrow on which would appear to be pointing towards that at the left edge of the right of way. If I come back to the photograph that I was looking at with you on page
18, there are two other details of this photograph which I wish to draw your attention to. The first is that it will be obvious to you all that there are parking lots marked out in the very area where the right of way was to be and the second matter to which I refer is a door which you can see more clearly because there’s a shaft of sunlight striking it under the overhanging building of the vendor. Your Honours may be able to see there the bottom of a white door and that is a door which of course is not on the right of way area at all but well to one side of it and you will hear argument concerning evidence of an arrangement, an informal arrangement, whereby access was given to a boxing arena inside through that door. That door I guess shows up more clearly in the fourth photograph on that page, the one immediately below the one I was just referring to where the white doors can be seen quite clearly there. So that is a description of the clause in the agreement to which this relates and I’m sorry before leaving that clause if I may come back to it again in the green book the piece which has been stapled I should refer to you will see that clause 20 Roman 1, Roman A provides for the proviso that $10,000 of the purchase price was to be retained by the purchaser until application had been made, until the vendor bona fide had taken all steps to obtain approval from the Auckland City Council for the right of way.
Tipping J Can one reasonably infer from that, that that was the value to the parties of the right of way, in rough terms?
Keyte With respect Sir, no, and the very point I was going to make is it was not dependent upon the right of way being granted, it was only dependent on the vendor taking all steps to clear the way for an approval but what is also clear is that if the City Council had refused permission for the right of way the $10,000 was still payable, so is not consideration for the right of way in my submission, it is simply an amount to make sure that the vendor did what it was supposed to do in terms of getting plans prepared and an application in.
Tipping J It must however mustn’t it be a possible inference at least that the purchaser has paid for this right of way within the $15,000 howsoever portion?
Keyte I think that has to be acknowledged in a more general way, you know putting to one side that $10,000, a term of the deal was that it was to have the right of way.
Tipping J And the consideration passed. Keyte Pardon Sir.
Tipping J The consideration passed. In other words this right of way that is now sought to be perfected has been paid for. Your client’s predecessor got the benefit in money terms.
Keyte In the sense that it was a term of the agreement I couldn’t argue otherwise, yes.
Tipping J That must be at least a relevant factor mustn’t it?
Keyte Yes, but also in my submission Sir is relevant that the cost of developing it, the actual construction was to be shared equally and the purchaser’s share of that was never paid.
Tipping J But is to be paid according to the Court of Appeal as a condition of
specific performance. Keyte True.
Tipping J So you can’t complain about that can you?
Keyte Well yes I do complain about that Sir. When I say complain about it, in my submission it’s not so much about complaining about it, it is a matter that I say the circumstances here scream silently that something else occurred in the 20 years and that is why the contribution to the physical creation was never paid.
Anderson J Your client is not prepared to have the right of way valued and to pay that money to the respondent.
Keyte Sorry Sir.
Anderson J Your client’s not prepared to I take it to have the present right of way valued as a right of way and to pay that money to the respondent seeing it’s been paid for that opportunity in the first place.
Keyte That’s the first time I’ve heard such a suggestion proposed Sir and I’ve not given consideration to it.
Anderson J I posed it really to be provocative and to emphasise the point that your client’s been paid. Whatever it was, whatever element it was, it’s been paid for and it wants to keep what it was paid and give nothing back.
Anderson J Because all it has to do is sign a transfer. Keyte Correct.
Tipping J Is that really the point you’ve just foreshadowed Mr Keyte, is that really your client’s essential complaint that had this been brought on earlier the party in your client’s present position, whether it was Beltons or now your client, would have been able to, or might have been able to find some evidence which suggested there’d been a major variation if you like, or abandonment on terms or something like that? Is that the real nub of your client’s complaint if I can use that word again?
Keyte Yes, yes, it is a very essential theme of it. Exactly Sir. The prejudice to our client, one of the prejudices is simply that over that long period of time the person who had been centrally involved all the way through, a Mr Scotch Macdonald, died, he died in 1999 and in the meantime various things had occurred which do not seem to be consistent with a continued acknowledgement by him and the company of which he was the 50% shareholder, or his family, do not seem consistent with acknowledgement that that right of way was still to proceed. I’ve pointed you to the parking but there were other things as well and I will come to this later in my submission though I could turn to it and deal with it now Your Honour if you would like me to.
Tipping J Oh no, no, no, I just wanted to make sure that I had that point as one of your main points.
Blanchard J Does the parking really indicate anything much? I mean it would have been pretty obvious that the Maritime Club wasn’t getting on with the business of putting the hole in its business. Any sensible businessman
in the position of Mr Macdonald would presumably use the back of their property for parking until such time as Maritime did something.
Keyte I can see that Sir and I don’t want to over-reach its importance. All I wish to say is that there are some factors which if you put them together do not seem to give any indication that Mr Macdonald believed that this right of way was ever going to continue.
Elias CJ But what does that have to do with anything really? It’s not as if this was a claim that might be brought, it was equitable property wasn’t it?
Keyte It was an equitable interest, yes, so when you say what does it have to do with anything, it has to do with the result to the appellant of being asked to face the claim 25 years later when two of its witnesses were no longer available, but in particular the one who knew everything that had gone on was no longer available and there seemed to be indications that some different arrangement had been made with Maritime and Maritime had just simply done nothing over that whole time.
Blanchard J That would have to be pretty strong to overcome your central difficulty which is the existence of the equitable interest.
Keyte Well with respect Sir let me deal with that head on because in my submission if the appellant as it can here, can show that the person who was centrally involved is no longer available because he had died, in my submission there always is going to have to be conjecture as to what he could have said. It is in my submission inequitable, unfair to the appellant to place on it an onus of establishing what he would have said. In my submission the prejudice is that he is no longer here to clear up this part of the case and the appellant should not as a matter of principle, should not have to go further than that. Now, there is one Australian case where the Court was prepared to put to one side the death of a witness, but the facts Sir were important because the witness they were talking about had written two letters and for the witness to then come along to Court and propose what the party thought he might have been able to do would have been in direct contradiction to letters he’d written, so
Elias CJ What sort of claim was it though? What case are you referring to? Keyte I’m sorry I don’t have the name of it in my mind at the moment but I
do come to it during my submission. Elias CJ Yes, I’m sorry, yes.
Keyte So may be if I put that to one side. But in this case my submission is that on principle it is wrong to expect an appellant to go further than saying well this isn’t just any Joe off the street, this is a witness who is directly involved in all the negotiations at the time but more importantly was also involved in the relationship with the purchaser
from thereon until he died and so he must have been able to give evidence to clear up these uncertainties, and in my submission that’s enough to show the prejudice.
Anderson J Mr Keyte, looking at the photographs at page 18 the white building is on the left you’ll find and they used the physical access-way to get underneath there?
Keyte Yes, and there was parking to the right of the photograph as well. Anderson J And about 9% of the cost of that physical access-way was contributed
by the respondent?
Keyte Yes, that was the finding of the trial Judge. Tipping J What was the percentage?
Blanchard J And it never got that back?
Keyte No, one needs to realise though that that was effort in the form of physical labour put in by Maritime Club members, it wasn’t actually a payment of money, but correct.
Blanchard J But it was in fulfilment of a contractual obligation by Maritime. One might have expected that if the right of way arrangement was being given up by the Club, it might have been looking to get its money back.
Keyte Exactly, and with respect that is a point that I wish to hone in on. His Honour Justice Baragwanath talked about uncertainty about the basis of the work being done as well as its value. There was great difficulty in assessing from either side of the fence just what the right of way cost because all the records had gone, and he used that key phrase of uncertainty as to the basis upon which it was done and just taking further the point you raised Your Honour, another possibility might well be that Maritime did decide that either they didn’t wish to or couldn’t afford the 50% they were due to pay and it may well be that Mr Macdonald said well we’ll do this and I’ll let you off the hook.
Anderson J It’s more likely that he said ‘you contribute the labour, you get your members to contribute the labour and we’re going to get a very valuable benefit ourselves because we’re going to be able to park underneath our building’, so if there was a variation at all it was probably that.
Keyte Well with respect Sir, I would not use the word probably, I would challenge you on the word probably but there are a variety of possibilities of which I acknowledge that could be one.
Anderson J That’s why the money was never asked for.
Keyte But another equally as the money was never asked for because they came to a different arrangement.
Anderson J Like what? What conceivably could it have been?
Keyte Like no longer wished to go ahead with the right of way, yes acknowledge that the agreement provides that we have to pay you half the cost when it’s done, so can we come to this arrangement instead and you’ll let us off the hook.
Anderson J This must have been after they contributed their 9%.
Keyte No, no, no Sir, in my submission it was more likely to be at the time. Blanchard J But on the trial Judge’s analysis they weren’t going to get the right of
way unless they paid the money were they? Keyte That’s true, yes that was also true.
Blanchard J And you’re saying that they nevertheless had to pay the money and so therefore they were on some kind of hook.
Keyte Yes in my submission
Tipping J Are there cases Mr Keyte, I’m sorry, I’m sorry you were going to add something, are there cases which demonstrate that you can forfeit an equitable estate by laches.
Keyte Oh yes. There are cases which.
Tipping J Well that would be quite interesting to me when you get to that point because the case cited by Justice Baragwanath in his judgment, that Irish case, would tend to suggest the contrary.
Keyte Well there is certainly in the cases that I will be coming to statements to the effect that if one hasn’t an equitable interest and goes into possession then it may be very difficult to apply laches with anything short of clear evidence of abandonment or an agreement to abandon I think they go so far as to say.
Anderson J I’m sorry, I’m sorry, I thought you had finished but here you have the analogy of going into position because you have an actual yes.
Keyte Well with the submission no I don’t accept that Sir on the facts. I know my learned friend has made a submission to that effect and I have a response I wish to make to that in due course because in my submission that’s not what happened and it’s not what the Judge found.
Now I’ve not yet opened my submission at page 3 but should I do so now Your Honours?
Elias CJ Could I just, I’m sorry and you may want to develop this later, but what I’m puzzling about is if you acknowledge that there was an equitable interest the only, you say that it was lost through abandonment?
Keyte No. Elias CJ No?
Tipping J That’s what they would have wished to show if there evidence hadn’t been lost.
Elias CJ Yes, but what you’re saying is because you might have been able to show an abandonment, that’s a very contingent basis upon which to defeat an equitable interest it seems to me.
Keyte Well with respect to Your Honour the cases I’ll be coming to make it clear that laches can be applied to an equitable interest though much harder if a person’s gone into possession, so it can be applied and the normal rule is that if evidence is lost which would be relevant to the issue of what had happened during the interval, during the delay, then that is a matter of clear prejudice which counts very strongly in favour of the person claiming laches. So I think the simple direct answer to your question is that laches certainly applies to equitable interest.
Elias CJ Well like Justice Tipping, I would like to be taken to those cases when it suits you.
Keyte Yes, alright. On page 3 of my written outline of argument I have placed the usual summary, the appellant’s argument really has three layers to it. The first layer is to submit that, and this is paragraph 2 of the summary, is to submit that a delay of this length in the paragraph I’ve said 22 or 25 years, I’ll explain that in a moment, but delay of this length when there’s been no intermediate acknowledgement of the relevant right, should be sufficient for laches to be applied even if there’s no evidence of specific detriment or prejudice. Now in that I appreciate that I am challenging some text writers in particular and one or two statements in some cases as well, but my submission will be that that is open and that that is the position which should be adopted for New Zealand over the question of laches.
Tipping J That would involve a complete inversion wouldn’t it of the conventional onus that the respondent or defendant must show that he has an equity which outweighs the plaintiff’s right and you say that equity can be derived solely by the fluxion of time?
Keyte Yes. Tipping J Yes.
Keyte Yes, I am saying that.
Tipping J Yes, but you have to put it that high don’t you to sustain that argument?
Keyte With respect Sir I don’t see it as a reversal of any onus. I simply. Tipping J No, it’s probably not but it can be satisfied purely by the fluxion of
time which is contrary to traditional thinking.
Keyte Well Sir I challenge whether it’s traditional thinking even but we’ll come to that, yes.
Eichelbaum J Can you nominate any period like this though that has overall application? Doesn’t it depend on the circumstances of each case?
Keyte I acknowledge that and perhaps the way I’ve articulated here isn’t completely fair to the proposition that I’m putting forward. I accept that what is a period of time which is so long that it should be sufficient will depend on the circumstances of each case and the bottom line of my submission in this case is that for the circumstances we have here,
25 years is enough.
Elias CJ See I would question in paragraph 2 your characterisation of the need to put an end to stale claims because really here you’re saying there’s a need to put an end to stale interests. This isn’t a claim for undue influence or unconscionable bargaining or anything of that sort, it’s an actual existing interest which you say becomes stale by a fluxion of time.
Keyte It is a claim at least in the sense that while it remains executory rather than performed in the sense of a person going into possession, it in my submission then remains a claim in that sense and then you claim in the sense that if there is argument then the specific performance needs to be sought.
Elias CJ Why do you say that the plaintiff didn’t go into possession? Because on one view the plaintiff went into possession when it took possession of the building as purchaser. This is just a question, I don’t have any particular view, but I just want to ask you why you’re saying that?
Keyte That is the phrase that was used by His Honour Justice Baragwanath in the trial judgment, first instance judgment. I have considered the issue of executing the agreement in the sense of settling the sale and going into possession of the building. My submission is two-fold. The first is that possession of the right of way may not be 100% the right way to
talk about it. One doesn’t possess, yet one uses it, and to that extent I would acknowledge what my learned friend is saying in his submission. In my second submission is that the trial Judge appears to have used that in the sense that they never executed that part of the agreement by paying their $25,000 and using the right of way and so I actually think that where he used the word ‘possession’ it is to be equated in the case of a right of way with ‘use of’.
Elias CJ But it’s quite a material characterisation if your going to be submitting to us that someone who has an equity but who hasn’t entered into possession is in a less strong position and I’m just flagging with you that I’m not at all persuaded at the moment that this plaintiff hadn’t entered into possession in the material sense.
Keyte Yes I don’t think I can take that issue any further. I acknowledge they went into possession of the building but they neither paid their share of the cost or perfected the title to the right of way or used it and it is in that sense, and I can’t put it higher than that. Coming back to my page
3 then and I was talking about three layers. The second layer in my submission is this that if you find against my submission in relation to time alone is sufficient, then what we have in this case is time plus acquiescence and I use the word ‘acquiescence’ in a general way which I’ll come back to later and the first point is that again that was a finding of Justice Baragwanath that the plaintiff, the respondent now had acquiesced in this delay and later I will be taking you to some writing and to one case in which it is said well inordinate delay plus acquiescence is sufficient without more. So that the second layer as it were of the appellant’s position here is just that.
Elias CJ Is there more that you point to by way of acquiescence and the delay?
I mean it just seems to me to be the same point really. If you’re putting everything on delay I wonder whether there is anything additional because you say the delay is because the respondent didn’t press completion delayed. Is there something additional?
Keyte The additional factor in my submission is the finding by His Honour that there was at least uncertainty as to whether Maritime ever intended to proceed.
Tipping J What did His Honour mean by the word ‘acquiescence’ in this context, because it’s a word of some potential difficulty itself. Are you going to come to this or would it be convenient to take us straight to it because it’s obviously the significant part of your argument.
Keyte My submission is that the word is used here in the normal semantic sense rather than fulfilment of what equity regards as a separate defensive acquiescence.
Tipping J But what were they acquiescing in?
Keyte It is probably easiest if I take you to the Judge’s finding. If you take up the yellow folder the judgment of Justice Baragwanath commences at page 41 and I should start I think at the foot of page 70, para.102.
Eichelbaum J Would you mind possibly starting in the previous paragraph because that’s where the word first crops up and Professor Worthington seems to use the word in the sense of acquiescence in the defendant’s conduct.
Eichelbaum J Four lines down in the quotation. Keyte Yes indeed.
Eichelbaum What was the conduct in which the defendant here, in which Maritime here was supposed to be?
Keyte Well that is just what I was going to come to in paragraphs 102 and
103 Your Honour but taking up it first of all with Professor Worthington’s quote, and incidentally while I’m on that I should say we’ve not been able to locate this text so I’ve not been able to look around this particular quote to see anything further and I have put the quote into my submission purely from His Honour’s judgment, I can’t help any further but in the second paragraph she says doesn’t she
‘acquiescence under the first limb of this two-pronged test is inferred if the claimant knows her rights, or the means of knowing them, and does nothing to enforce them’.
Blanchard J As against what? It has to be as against some conduct by the defendant.
Tipping J This concept is that the defendant is acting contrary to the plaintiff’s presumptive right and the plaintiff does nothing to put up the flag. I think that’s the essence of it.
Tipping J But what was the Belton’s doing all the while that should have required
Maritime to put up the flag?
Keyte Well in terms of what Maritime knew about, which I think is important. They were doing other things but I can’t say that Maritime knew about their plans for development, but as far as what Maritime knew about I don’t think I can take it further than the development of parking in that area and I’ve already pointed you to the photograph that shows the parking layout and I can’t take it further than that.
Blanchard J As I’ve already said it seems to me anyway that that doesn’t really indicate anything much.
Tipping J That wouldn’t require you to put up a flag surely. It’s a sensible use in the meantime. It wasn’t in any sense a quasi abandonment which is really what we're talking about here by acquiescence. Acquiescing is the defendant in effect snubbing his nose at you.
Keyte Well with respect a parking layout is not consistent with it and
Blanchard J Mr Keyte the cost involved was the cost of painting a few lines. The cars could be removed instantaneously if Maritime put the hole in its wall and showed an indication of using the right of way.
Keyte I can’t take it any further and you’re clearly against me on it so I’ll pass on.
Anderson J Just another point Mr Keyte. The easement shall include the rights and powers implied by the Seventh Schedule which is now being repealed but at the time it would have been expressed in terms of allowing people to pass on foot no doubt?
Anderson J At which people did. They went on foot down through this door into the boxing arena so it was actually used.
Keyte Well that’s a position that I, that’s why I referred you to the positioning of that door. The finding of the trial Judge was that that use was not in accordance with the right of way and in respect he was right. Now with respect Sir.
Anderson J No but they had to go down the right of way, may be going into the building was going off the right of way, but they went down the right of way to then deflect to the left and go through the door.
Blanchard J So that’s not a valid use of the right of way. You can’t deflect.
Keyte Yes, that’s exactly my point and I think that’s exactly what the learned
Judge had in mind when he made that finding. Anderson J I see, thank you.
Eichelbaum J Mr Keyte do you mind if we come back to the question of acquiesce? Keyte Yes.
Eichelbaum J Can I ask you do you accept that laches is a personal infliction for want of a better word?
Keyte The cases say so Sir.
Eichelbaum J Yes, yes, it’s a pity we haven’t got the whole of Professor Worthington’s text because it occurred to me that she might have been talking about the position of a subsequent purchaser who would not
Keyte It’s in the Auckland University Law Library Sir and it’s been out when we’ve been trying to get it but my learned friend’s was just saying that he does have it here. Sorry!
Tipping J Maybe the trial Judge still has it.
Elias I just emailed my clerk to see if it can be procured in Wellington. Keyte I have it if you wish to read this article. I found it this morning
Perhaps it would be helpful if we dealt with this at the next adjournment because I’m pleased that my learned friend has found it and I would really like to have a look at it myself for exactly the reason Your Honour is saying, the context in which this is said would be interesting. May I go on from where I was, having referred to Professor Worthington’s, the quote in para.101 of His Honour’s judgment and then in 102, para.102 at the foot of page 70, we says
‘delay does not matter where the parties have acted on the basis that there is no real doubt about the entitlement as in those two cases, in such the cases the expectation of the plaintiff is being kept alive and there’s no acquiescence’ and then in 103 in my submission, it is an important finding, but this is not such a case. Here the status quo has been an absence of any expectation held by Beltons or communicated by Maritime that Maritime should receive a registered easement. Any expectation on the part of Maritime has slumbered for many years without there being any prospect of it waking. So much so that Maritime did not mention the topic to Mr McNichol as relevant to the price and then he makes a finding that Maritime acquiesced in the delay. Can I just explain that the reference to Mr McNichol is this that Maritime entered an agreement to sell their property to this Mr McNichol and that indeed is when the whole thing blew up.
Blanchard J I’m sorry I don’t understand the sentence “Maritime acquiesced in the delay”.
Tipping J It’s an erroneous analysis. Keyte Yes I see what you’re saying.
Eichelbaum J It’s of interest isn’t it that in para.106 where the Judge summarises the reasons for holding laches to be established, it doesn’t refer to acquiescence?
Keyte Not per se Sir but with respect the way he’s putting it there is not markedly different from what he’s been saying in para.103.
Blanchard J But that’s not really the sort of acquiescence that has to be established.
It’s quite obvious that Maritime put up with the delay. It was the cause of the delay. It wasn’t acquiescing in anything. The acquiescence, if it’s to be significant, has to be in the loss of its equitable interest – the fact that it is not going to be granted and there’s no manifestation of an unwillingness to grant it that I am so far being made aware of.
Keyte True Sir. This case. I have an important rider. This case is in my submission neither one where there is acceptance being demonstrated throughout the period of delay nor is it one where there was opposition being demonstrated. There is in my submission a third category into which it falls, and the third category, or what has happened here is a mixture of two things. First, we don’t actually know whether Mr Macdonald objected or opposed them being given the right of way or not because he’s not here, but I.
Elias CJ But, I’m sorry I just don’t understand that because what do you mean opposed them getting the right of way?
Keyte Simply that, that well perhaps I should first explain another part of the facts that in 1995 he had plans prepared for a quite major redevelopment of the site. In my submission those plans were clearly inconsistent with the right of way. That is again one of these other tell- tale pointers in my submission that if he had been available he is likely to have given evidence that something else occurred which meant that his expectation was that the right of way was never going to happen. Now why else would one spend money on getting a major commercial building designed where there were columns all the way down through where the right of way was to be. I know that it’s been suggested by the respondent, well there was vehicular access and that’s true, if provided for vehicular access from Anzac Avenue into the building but in a completely different position and in a way that you would need to go down through two floors in the usual circle one does in parking areas before you get to the point where this right of way would have ended up. Now I can’t take it further than that but that’s another part of the facts which indicate that well Mr Scotch Macdonald’s position seems to have been that the right of way was not going to happen.
Elias CJ Well it may
Keyte But we don’t know why.
Elias Well it may be and it just shows how speculative all this is, it may have been that he would have paid for the right of way to be relinquished if he’d proceeded with those plans. But what it seems is that on the critical issue of whether there was an equitable interest, dulling of memory is irrelevant because it appears on the face of the contract and you accept that there was an equitable interest, so the only suggested impact of this dulling memory that the Judge refers to is on the wholly speculative point of whether there might have been an abandonment
and you point to as suggestive of that the fact that plans were drawn up. Is there anything else you point to on that?
Keyte Well Madam in combination with those plans, and I come back to the parking and although you appear to be agin me on it but certainly there are those too.
Elias CJ Alright and the parking and is there anything else?
Keyte Not that occurs to me. I was in the middle of suggesting that this was a halfway house in this respect that we’ve got the position where we don’t know whether the central player, because he died, was going to oppose it or was going to acknowledge it. The other facet of that is that because of his death the control of the vendor’s building had passed to a new generation and they simply didn’t even know of it’s existence at all until it was called for at the 25 year mark and they immediately opposed it, but one starts from a proposition that we don’t know what the player of the time would have said and the new generation simply didn’t even know of its existence.
Elias CJ Was that until the caveat was entered effectively?
Keyte Yes, I think it might of started with an exchange of correspondence even before the caveat, but it all happened at the same time.
Anderson J What happened to the caveat? Is it still on the title? Keyte I think that’s so Sir, yes, I don’t
Anderson J And entitled to remain there forever.
Keyte Yes it will depending upon the decision though one would be entitled to apply to have it removed.
Anderson J Why, you can’t extinguish the equitable interest by laches?
Keyte With respect if the decision of this case, if the decision of Justice Baragwanath had been confirmed I submit that they would have been entitled to have it removed as they would have lost their right.
Anderson J No they may have lost their right to call for a legal estate, but why would they lose their right to the equitable interest?
Blanchard J Because it’s commensurate with the right to call for the legal estate. Tipping J You lose your right to specific performance if you can’t maintain your
Anderson J Could they be prevented from using it?
Keyte I think for the same reasons the answer must be yes because they couldn’t call for specific performance.
Blanchard J It would be gone at that point as an interest in land. Anderson J Laches can extinguish.
Tipping J It’s conceptually capable of doing so but in my experience it’s extraordinarily rare, but we’re going to hear some cases about later in the morning.
Keyte I come to the third layer of the plaintiff’s position and plaintiff’s argument which is this, this is not a case of pure delay or delay plus acquiescence, it is delay which does include prejudice to the defendant. The primary prejudice on which I rely is the lack of evidence, but in my submission that is sufficient.
Elias CJ Is there any other prejudice you point to?
Keyte May I come back to that when I get to that position, as you ask the question I’m trying to remember but I have certainly got it set out in my submission later on.
Elias CJ Yes, I’m just trying to work out where you’re heading and the lack of evidence is lack of evidence on the point whether the plaintiff abandoned the right of way.
Elias CJ Yes alright, we’ll take the morning adjournment now.
Keyte I understand that during the interval a copy of some further pages of Professor Worthington’s text have been distributed to Your Honours. There’s nothing more I consider I can say about the context having read what came before and after but it is there for your consideration and I’m grateful to my learned friend for making it available. The other matter is this that you asked me what I could point to as indicating acquiescence and my learned juniors during the interval suggested that there are two other matters that I should have mentioned and I mention them now. The first is the evidence that members of the Maritime Club who used the right of way area and parked either on it or in its vicinity were towed away and did not object to being towed away.
Blanchard J How could they?
Keyte Yes, I acknowledge that a right of way is to pass and re-pass and not to stay on it other than perhaps for loading and unloading and certainly not for parking and nor is the evidence clear as to exactly whether anyway they were parked on it or off the road away from the area, so
Blanchard J It could be argued against you. It’s an indication that Maritime Club members thought they had some kind of rights in relation to that area of land, but I wouldn’t press that, it just seemed to me that the point you were making had no substance.
Keyte The second is this that the evidence by the son, David Macdonald, at one stage relatively recently, I think only a few years before the proceedings were commenced said that bollards were put across that driveway to prevent people using it. That evidence appears at page 69 of the notes of evidence, line 10.
Blanchard J Sorry what was the reference? Keyte Page 69 of the notes of evidence. Blanchard J 69?
Keyte Yes, which is the blue folder, line 10.
Elias CJ You said this was comparatively recently? Keyte Yes.
Elias CJ What, post 2002?
Keyte The actual timing is not made clear. The statement from Mr Macdonald is this. He was under cross-examination and the question to him was ‘the defendant to your knowledge at least until recent times has never denied access to Maritime has it’, and his answer was ‘we’d have little reason to really, no we haven’t apart from one occasion when we put bollards down the driveway some years ago’, so I can’t be more specific as to timing than that.
Blanchard J What did he mean by bollards in the driveway? I must say discern that Beltons would have been continuing to use that driveway to get access to the back of its property where it was parking.
Keyte In the end it became vacant and was not being used and the context of this that I take it was that they got sick of the driveway being used inappropriately. A bit further down he says ‘we put two bollards in the driveway because there was some issue as to inappropriate use of the property’ and sitting here right now I’m not exactly clear what those issues were.
Anderson J Or used by whom even?
Keyte Yes, but the central point is they put bollards down to stop the driveway being used.
Blanchard J And he doesn’t indicate what some years ago means?
Keyte No. I’m minded to go now to the authorities but just before I do so and along the way there are a couple of errors in our written submission which I would like to correct. The first of them is on page 9 of the written submission towards the bottom of that page. It is part of the sub-paragraph 22.4.3 and I made a number of references and the final one of them is to the green book bundle and I would be grateful if you could go to that, page 61 of that bundle, there is a numbering error here which I need tidy up. This occurred because the photocopying hasn’t correctly picked up the numbering on the left edge of the page. If Your Honours will have that open the clause, this is part I should say of the agreement whereby Maritime sold to Reef Properties Ltd. The first topic would appear to be .0, the paragraph number is 14.0 due diligence and underneath that what appears to be a .1 is 14.1 and so on down to
14.2, the condition is 14.1 and the next one appears to
Eichelbaum J Sorry you’ve lost me Mr Keyte. Keyte I’ve lost you already, I’m sorry Sir. Tipping J Where do we look for page 60? Keyte 61?
Tipping J Yes, it’s a written number in the bottom right hand corner, 61, right.
Anderson J I wonder whether these corrections have all been written in by hand actually, they are in my copy.
Keyte Are they?
Blanchard J I’ve got them written in too.
Keyte Oh thank you then I’m wasting your time if you have them all there. Elias CJ What do you want to take us to?
Keyte I didn’t want to I just wanted to make sure that you had it because it appears gobbly gook with the numbering that appears there. I didn’t
Tipping J It should be 14 rather than just 4.
Keyte Down as far as 4, yes, but then the paragraph below that one ‘the agreement is subject to the vendor entering a lease’ is actually paragraph or clause 15 and the one, the large one at the bottom of the page is 16, and there is some relevance to clause 16 in the appellant’s submission which we will return to. That error is apparent then in the text of our submission and at page 9 I referred to where it says ‘bundle green book, page 61, paragraph 4 the reference really is paragraphs 15
and 16, and to like effect on the following page of our submission, page 10, near the bottom of the page our subclause is 22.4.10 where again I’ve referred to the same page of the green bundle and the errors there. It should be 15 and 16, not clause 4. Now with those minor things if I may ask you to turn to our submission page 12 where we look at the law. The first case that we refer to is Lindsay Petroleum and there is an interesting error when you look at it because the decision of the Court as far as the report is concerned appears to have been given by Sir Barnes Peacock but in fact that was an error and you have to look at the beginning of the volume to see that the error has been recorded. This is actually a decision of Lord Selborne and I’ve so recorded that
Blanchard J I do hope we don’t have similar mistakes in the Law Reports in this country.
Keyte Says with a smile from the back of the room Sir. So in the middle of page 12 I’ve set out an extensive quote from what is the decision of Lord Selborne from the Lindsay Petroleum case. The facts of this case were these that there was a person who was involved with a company but unbeknown to the company he was also involved with some others with an interest in land. Not revealing his conflict of interest he made a recommendation to the company to purchase that land and in consequence the company did. Eventually the conflict was discovered and the company applied to rescind the contract and the issue of laches was raised and that is what led Lord Selborne to make the statement of principle that he did as set out in page 12 of my submission and is in pages 239-240 of the report itself. It speaks for itself. I don’t think I need go through it just bearing in mind the question you’ve asked of me, this was a contract case not an equitable interest case as such but has been referred back too many times as a central statement of principle. The second case that we refer to is Nelson and Rye and I must apologise as there is another error here in our written text. If you have page 12 of our submission open it is para.25 where we refer to Nelson and Rye and the page reference for the quote is wrong. It comes from the judgment of Justice Laddie not at page 1382 but 1392 and similarly at the top of the next page where we say three lines down
‘Justice Laddie continued’ and it’s the same error page 1392 not 82. Elias CJ This was a claim for account for breach of fiduciary duty in this case?
Keyte Yes, that’s correct. I acknowledge that the statement of principle that is there in Lindsay doesn’t really assist me in my first layer of submission because in the middle of it you will see he says ‘but in every case if an argument against relief which would otherwise be just is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances always important are the length of the delay and the nature of the acts done’. In my submission the important part of the excerpts from
Justice Laddie appear in our submission in the middle of page 13. ‘So here the defences are not technical or arbitrary. The Courts have indicated over the years some of the factors which must taken into consideration in deciding whether the defence runs. Those factors include the period of delay, the extent to which the defendant’s position has been prejudiced and the extent to which that prejudice was caused by the actions of the plaintiff. I accept that mere delay alone will almost never suffice’. The door isn’t quite locked shut Your Honours by that statement, ‘almost never suffice, but the court has to look at all the circumstances, including in particular those factors set out above’.
Blanchard J Almost never suffice is in a case where there’s no equitable interest. Keyte Yes.
Anderson J What would be the rationale of allowing the defence if there was mere delay without prejudice?
Keyte In my submission as I said I think in the original, in my original outline, there is a public interest in allowing stale claims, not allowing I should say, in putting stale claims, and I use that in a broad sense even to include equitable interest, putting them to bed one way or another, not allowing uncertainty to run on forever.
Tipping J How does that coincide with the fact that Parliaments around the world have never subjected equitable claims, purely equitable claims to any statutory period of limitation?
Keyte In my submission all that indicates is that there is a need for more flexibility in that situation when equity is being used and I’m not just applying this to equitable interest and we’re talking here about an equitable doctrine and in my submission that’s the rationale for not subjecting it to an absolute statute of limitation,
Tipping J It may be arguable that the rationale is that you can never say that mere delay of itself, you’d have to look at something else, but anyway I doubt that this case will turn on this issue.
Keyte Well I go on to then come to the two Court of Appeal decisions in New Zealand, both of them of Justice Cooke. The first one is Neylon and Dickens and the second Wellington City Council against the New Zealand Law Society. The important fact that I bring out of the two decisions of Justice Cooke is this that he refused to say that there always had to be something more than mere delay. If I pick it up first of all in Neylon at the foot of my page 13 ‘the only opinion we would venture is that it may be unwise to depart from the classic exposition of the doctrine by Lord Selborne delivering the judgment of the Privy Council in Lindsay which treats the length of the delay and the nature of the acts done during the interval as always important in arriving at a
balance of justice or injustice between the parties, but stops short of laying down that detriment is always essential’. And then he returned to it again in the Wellington City Council and Law Society case. ‘As to laches it has been accepted by this Court in Neylon and Dickens that the length of the delay and the nature of the acts done during the interval are always important in laying down a balance of justice or injustice and that in some cases an inference may be drawn as a matter of common sense’, and in my submission that last phraseology comes very close to saying well there will be some cases where a length of delay is such that you infer it as a matter of common sense.
Tipping J Infer what as a matter of common sense I’m sorry? Anderson J Prejudice.
Tipping J Prejudice. Well if you don’t have to look for prejudice why are you inferring it?
Keyte It is probably broader than just prejudice with respect. He says it’s
‘always important laying down a balance of justice or injustice’.
Tipping J I would agree entirely that in some cases you can infer prejudice from their delay but that’s far from saying that you have to infer prejudice. I don’t think it helps us one way or the other frankly.
Anderson J I could envisage a situation where the equities were finely balanced and then the public interest in finality might become determinant. It’s difficult otherwise to see how a public interest aspect would bear on the equity. I am just indicating that as a possible scene where mere delay might be determinative in a particular case.
Keyte I don’t think I can pick up any particular facet of that. The submission of the appellant is that this period of delay is so long it was called
‘extraordinary’ by the Court of Appeal, it was called an outstanding feature of the case by the trial Judge and in my submission it is a very substantial period of time indeed and that is to be taken into account on each of the passages I’ve read and also one of the features to be taken into account is the length of the delay. I then have in my submission a reference to a passage in Civil Remedies in New Zealand. That’s in the bundle if you wish to see it and then I came to Professor Worthington which we’ve already dealt with.
Tipping J There is quite a substantial discussion in the Privy Council case referred to in O’Conner and Hart about the position when successors in title are involved. Is there anything there Mr Keyte that you wish to draw to our attention?
Keyte That’s the
Tipping J Nwakobi.
Keyte Nwakobi case. It didn’t strike me that there was anything in Nwakobi which I could submit should be applied directly here. Yes we have successors in title here but in my submission in this case the important issue is the lack of knowledge. The successor in title has absolutely no knowledge of what went on. Didn’t know it existed. It all comes back to that central key witness again and that’s the basis upon which this case has been fought.
Tipping J What prejudice can your present client assert other than what it’s inherited?
Keyte The prejudice is that which I’ve mentioned earlier, of not being able to defend the case fully by being able to bring two witnesses. I’ve talked about the central one; there is another one as well. Two witnesses to state what the position actually was during that long delay.
Tipping J But you presumably took from your predecessor with knowledge of the dispute and the difficulties that were
Keyte No no, not at all. Tipping J No?
Keyte No no, Mr Scotch Macdonald died in 1999 and his family, or a portion of his family, became the owner of the property and the point I’m making is the present owner or interest associated is a son who gave evidence and both he and his brother had to say well we simply have no knowledge of this at all. Our father never mentioned it and others in the company interestingly said the same thing, others who were helping the father administer that very property said well the concept of there being a right of way claim is news to us, and that’s the only witnesses that were available to us.
Tipping J If I noted our prejudice, that’s your client’s prejudice, is the lack of evidence that it would have wished to have, that’s the nub of it?
Keyte Yes, yes that’s right and I repeat my submission from earlier this morning that it is wrong and unfair to say that that’s highly speculative. Of course it’s speculative because the evidence is lost, we don’t know what was said, but once in my submission the test should be this isn’t any Joe off the street, this is the person who was centrally involved, not just at the time of the agreement but right through until he died in 1999, which is 12, no more than that
Tipping J I didn’t really want to cause you to repeat yourself Mr Keyte, I’m sorry, my purpose was slightly different.
Keyte And I was, I’m sorry. Tipping J No it’s my fault, thank you.
Keyte Yes on page 15 of our outline, para.31 I suggest that Professor Worthington’s statement does get some support from the decision of the Court of Appeal Justice McMullin in O’Connor and Hart and he there refers to and includes a quote from that Erlanger case and in particular the part ‘this is one aspect of delay, but delay may also imply acquiescence, and in this aspect it equally bars the Plaintiff’s right, for such a contract as is now under consideration is only voidable and not void’. And then Justice McMullin wrapped that little bit up by saying
‘there can be no dispute about these statements of principle’. Your Honours there are some additions that I’d like to include here with reference to cases. One is a decision I thought I should bring to your attention although I don’t think it helps me from the Supreme Court of the United States. Just last year in a case of City of Sherrill, New York against the Oneida Indian Nation of New York. The decision of the Court was given by Justice Ginsburg. The facts are pretty bizarre.
Tipping J Is there a citation for it somewhere?
Keyte I have a copy of it and I’m sorry I’m not sure. It’s easier if I simply give you the copy I think. The facts are set out pretty briefly on that front page at the bottom of the left-hand column. The subject property was unlawfully sold to a non-Indian without federal government approval, and the property remained in non-Indian hands for almost
200 years and then the tribe purchased the property back as I understand it as an ordinary commercial deal. They purchased back small portions of the land that had earlier been taken. The tribe contended that its purchase of the property revived its sovereignty over the historic reservation land and precluded the city from exercising sovereign taxing authority with regard to the property and that’s really what the litigation was about, the issue of whether or not the city could tax them or whether or not they had exemption from taxes because it was their ancestral land. And the only reason why I thought I should mention it is because they do touch on the subject of laches at page 13, commencing in the left hand column right at the bottom paragraph there ‘the principle that the passage of time can preclude relief has deep roots in our law and they refer to an 1865 case of Badger and Badger, then at the top of the right hand column there’s a reference to an 1843 case of Bowman The doctrine of an equitable bar by lapse of time so distinctly announced by the chancellors of England and Ireland should now be regarded as settled law in this land and then the case of Felix laches bars the heirs of an Indian from establishing a constructive trust over their Indian ancestor. In the nearly three decades between the conveyance and the lawsuit a large part of the tract had been platted. I don’t profess to know what platted means, but platted and recorded as an addition to the City of Omaha and sold to purchasers. And then further down a little below half way down ‘the sort of
changes to the value and character of the land noted in the Felix Court are present in even greater magnitude in this suit and they then mention Galliher and Cadwell in 1892 case. Laches is not a mere matter of time but principally a question of the inequity of permitting the claim to be enforced – an inequity founded upon some change in the conditions or relations of the property or the parties’. I don’t see that as helping my case but I thought I should bring it to your attention that that was all we found of any interest from that jurisdiction. In my learned friend’s bundle of authorities, the respondent’s bundle, he refers to the case of Baburin and Baburin which commences at page 76 of his bundle. This was in Queensland of a full Court in 1991. It was a case where a lady whose native tongue was Russian and there seemed to be some dispute as to how well she understood things, essentially handed over in an informal way control of a company to two sons and from thereon they ran the company, the developed it, she continued to receive the proceeds of their effort in the sense that she received a share of the profits and then at a much later stage she claimed that the transaction whereby the control had been handed to the sons should be set aside because she hadn’t correctly understood it and the Court found against her on the ground of laches. I particularly wanted to refer Your Honours to the judgment of Justice McPherson at page 244 of the report and that is page 18 of my learned friend’s, sorry 78, of my learned friend’s bundle at line, well I’ll start at line 10. ‘In this atmosphere of disharmony it is tempting to look at what happened here between 1966 when the transaction was entered into, and 1985 when the subject proceedings were instituted. That represents a lapse of some 19 years’. It’s the next part which in my submission is very important. ‘Delay by itself is said to be no bar to relief in equity. Of this the pace of proceedings in the Chancery courts of old no doubt afforded such a compelling example that it could not in all honesty have been ignored by adopting any other principle. At a time when those courts were absorbed almost exclusively in investigating details of settlements of landed estates of ancient demesne and trusts of investments at 5% in the consolidated funds, such an attitude was understandable and may have been tolerable. It is, however, ill-suited to a society grown accustomed to measuring accrual of interest in fractions of a day and assessing the capacity to discharge it by reference to overnight fluctuations in the currency of payment’. And then he went on to say ‘In any event, even if delay alone remains no bar, the accompanying events bring changes that courts can sometimes be powerless to reverse’. So in my submission there again one sees first of all an indication that door is ajar as to whether time alone is sufficient but secondly here the Judge has an interesting rationale as to why it should be looked at afresh in any event given today’s demands of society and overall my submission on this issue of whether mere delay is sufficient is this that Your Honours have the opportunity in this case to decide what the principle should be for New Zealand and to do so in the light of circumstances today and of course my invitation as I’ve already made is to suggest that the principle should be that delay which is lengthy enough should be sufficient for laches to be applied
without more. There is one other case that I would like to draw your attention to. Again it’s not referred to either in our submission or in our bundle of authorities but I do have copies of it again for Your Honours. The case is Clewitt Peabody against MacIntyre Hogg Marsh and Company, a decision of Justice Upton
Tipping J Upjohn!
Keyte Upjohn, I’m sorry, you’re quite right Sir, Upjohn, yes. Tipping J A Freudian slip.
Keyte The decision, the case concerned trademarks and there was a device of an arrow and, a wording arrow or arrow brand and during the decision they talked sometimes of the device, sometimes of the word and sometimes of the two used in combination and the relevant facts and its effect on laches is easily seen by my simply taking you directly to the excerpt from the judgment that I wish to draw your attention to which is on page 353 of the report commencing at line 4 where His Honour said ‘the remedy sought is after all equitable and the delay on the part of the plaintiffs of great length with full knowledge of the facts must in principle effect the plaintiff’s right to relief. What are the facts here? The defendants have used the offending word in device continuously for more than 60 years, including the years of both wars before the issue of the writ, the plaintiffs have known of the defendant’s use of the device since 1911, 42 years before the writ, and almost certainly of the use of the word from the same time. Most certainly they have known of the user of both word and device since 1924, 29 years before the writ. I would be prepared to hold that such delay without more would bar the plaintiff’s claim.
Tipping J But that is acquiescence. The defendant’s breaching alleged rights without complaint to your knowledge for a huge length of time.
Eichelbaum J It’s acquiescence in conduct as Professor Worthington put it. Keyte Yes, yes, I agree.
Tipping J He hasn’t really, Mr Upjohn hasn’t gone into the subtleties that Professor Worthington goes into but I think his instinct as an equity Judge was that this is acquiescence.
Keyte Yes, yes, without saying and putting it in those words I think that can be acknowledged.
Tipping J Are you going to come at all, we’ve touched on this Mr Keyte but in Justice Baragwanath’s judgment there is the reference to this very early case of the Lord Chancellor in Ireland, it’s on page 69 of the Yellow
volume. The Chief Justice had a discussion with you on this question of possession. Perhaps I’ll just pause while you.
Keyte This is the Crofton and Ormsby case?
Tipping J Yes and it’s a citation from Lord Denning in the William and Greytail
case and Lord Denning cites Lord Reedsdale and then himself says
‘likewise we have here possession and so on’ as I read the construction of the citation. Now this is the point that really troubles me. Here possession was given and taken right from the start of the dominant tenement of this easement.
Tipping J But the fact that you don’t have possession if you like of the servient tenement is inherent in the whole concept of having an easement. You have the right to pass over someone else’s land but you get possession of the dominant tenement. Now I have the greatest difficulty in seeing that by if not precisely by inevitable analogy with the dicta in Crofton and Ormsby adopted by Lord Denning that this isn’t a case of laches or delay within the normal connotation of that expression for the reasons given that here is effectively the giving and taking of possession.
Keyte Well in my submission it is wrong to regard the taking of possession of the building by the purchaser as possession which equates with William and Greytail or some of the other cases.
Tipping J But what other possession can you take if you are the grantee of an easement? You take possession of the dominant tenement.
Keyte In my submission what we have here is as I said earlier this morning not a possession of the actual equitable right which is in dispute. You see it’s not possession of the building which is in dispute but it is possession of and I’ll use the word possession loosely, use of if you prefer, use of the equitable right to the right of way and so in my submission you don’t say this is a case where the purchase has gone into possession. When in possession of a building but he not only didn’t ever go into possession or use the right of way we submit on the facts, nor did he carry out some of the pre-conditions which entitled him to call for it and so this substantially in relation to the right of way remained an executory rather than an executed contract.
Tipping J But the very nature of an attempt to create or to translate inequitable interest to a legal one of necessity it must be executory. You can’t talk of the
Keyte I acknowledge that the perfecting of the legal right of way by registering the necessary transfer which is the end result of it, that may well be right, but there were other things that didn’t occur here and the primary one being as the trial Judge found they were not entitled to call
for that because they hadn’t paid their, say $25,000, that’s not the right amount, but their share of the cost.
Blanchard J I must say I found that a very surprising finding and it doesn’t seem to have been challenged. I wouldn’t read the conveyancing document that way at all.
Tipping J It’s not a pre-condition it’s a concurrence condition of the settlement if it’s anything.
Blanchard J Yes, but as I understand it that point was not taken on the first appeal and isn’t being taken here.
Tipping J But to warn you of my thinking, it doesn’t effect my taking what I think is a proper analysis of what this transaction, I don’t think we are bound for laches purposes by what Justice Baragwanath.
Keyte I’m bound to acknowledge that if Your Honours are minded to view the taking of possession of the building by the purchaser as a going into possession, then it seems clear on the cases that there is a higher hurdle to climb. I must acknowledge that.
Tipping J But it’s not really the taking of possession of the building; it’s the taking of the possession of the dominant tenement. It’s nothing to do with bricks and mortar
Keyte Well you see my submission is there is no dominant tenement yet. Tipping J There is in equity. We’ve already established that and the Court of
Appeal with respect seem to have spoken with slightly less than clear tongue on that point but they seem in the end to have come up with the right view that this transaction created an equity, vis a vis, the easement.
Keyte No I don’t think I can challenge that.
Tipping J You can’t, you can’t. This may sound a wee bit technical Mr Keyte but I think it’s important that we have to get the analysis correct before we start talking about how equity should respond to that analysis.
Keyte Well I don’t think I can take the matter further. I would I think submit that even if Your Honour’s point is correct that they took possession of a building and at the same time a dominant tenement the position remained that they were not entitled to use the right of way. I say that on the facts the timing was right that they hadn’t used it in accordance with the agreement and that that lack of use and lack of ability to use it is what for a right of way should be equated with the going into possession when one is talking of an equitable interest in land itself.
Tipping J I’m not entirely sure, I can understand your submission that they hadn’t in fact used it but why do you say they had a lack of ability to use it?
Keyte Because of the finding they had to pay their $25,000 first as a pre- condition.
Tipping J It all comes back to that. Yes well I have to say that I know that’s not on the table before us but if it’s going to make a material difference to the analysis for laches purposes
Keyte Well, well with respect Sir, in my submission that is a very important aspect of it. It is threaded through the evidence of the members of the Club who were called that they seemed to acknowledge that they had to pay their share before they were entitled to the right of way and they always set their face against doing it and then one can then raise the issue of well was it for the moment because they didn’t have enough money. There is one of their witnesses who said ‘no, we had the money alright, but we just decided not to do it’, and then there was another of their witnesses who had a question put to him along the lines
‘so you just put it off for the time being’ and he said ‘well you can say put it off if you like but for me it was never a goer’. Now all of that in my submission is relevant to the proposition we’re now talking about.
Anderson J Just speaking for myself, I have difficulty in dealing with it on what seems to me a palpably wrong construction of the contract.
Keyte I confess I have not come armed with argument on that issue. I had just taken it for what it was.
Anderson J I’m surprised at that with respect of that part of the judgment and I was also surprised that it wasn’t challenged on the first appeal. It’s just so wrong.
Blanchard J Anyway I thought you’d be jumping up and down Mr Keyte at any suggestion from my brother that we could simply reconstrue the contract.
Tipping J No doubt Mr Keyte will now start to levitate.
Keyte I like to try and be pragmatic and I mean His Honour Mr Justice Anderson if he has that feeling then it is very difficult to shut one’s eyes. Now I’m not inviting you to go back there and it is correct that it was neither appealed against to the Court of Appeal nor to here and with submission therefore it is difficult for you to go back and look at it now and I bluntly have to say I’ve not really thought of argument in relation to it because I just accepted it as part of the agreed basis of the situation in which we came here.
Tipping J Yes, well that may be your best point.
Anderson J I agree with your mission with respect Mr Keyte but it is an important aspect, whether or not it’s crucial remains to be seen.
Anderson J Speaking for myself again I see great difficulties in actually opening it up at this stage.
Keyte Yes, and in my submission that’s the position. Blanchard J That’s what you wanted to hear Mr Keyte. Keyte At page 15 of
Keyte I’ve not said that it’s unique.
Elias CJ No, the first instance Judge said it was.
Keyte Oh I see, yes, yes. Well Your Honour if one thinks of a condition such as perhaps a building line that is a matter of contract between the parties where it is envisaged nothing will happen, may not happen for a long time, then in that sort of instance I can accept the analogy you made, but in my submission this is not such a contractual position as that. This is one where it was envisaged that the right was then given for them to turn that particular floor of the building they were purchasing into a car park and it was with vehicular access for that person and they went into great detail about timing of it being done so this wasn’t the sort of thing which one might envisage would last many years before being activated. There was a plan of action to activate it and actually that plan of action was pursued, even earlier than the provided for in the specific agreement. In my submission that makes it that little bit different from the situation the analogy made.
Elias CJ Although I’m not sure that the fact that it was pursued helps you.
Keyte Well I can understand the other side of that penny but what was pursued was the physical creation. There were two things I guess, the
physical creation of the surface of the right of way and secondly the application to the City Council for the creation of the legal entity of the right of way, so it was pursued in those two ways promptly as the document envisaged it would be and then the matter sat unused. That’s in my submission why this case is not quite the same. I can’t take that any further I don’t think.
Elias CJ Thank you Mr Keyte.
Keyte At page 15 at the bottom of my submission, para.32, we then more or less in summary form make our submissions about the principles of laches which should be applied in this case. I think during the course of the morning we have gone over them and I don’t think I need to return to them unless there is any startling statement there Your Honours wish to test me on further, otherwise if I pass straight on to s.6 of this submission starting at para.16. Here again I have largely dealt with this so far. This is the section in which we make the claim ‘a delay of 25 years may be sufficient on its own without the defendant suffering any detriment or prejudice, particularly where there has been no acknowledgement of the right between the parties during that time’. And perhaps that last phraseology I should dwell on for a moment because I say again that this seems to me to be a third category of situation, it’s not one where after the work in the right of way was done there was any acknowledgement of the right way, nor it is one where it was disputed until the balloon went up 25 years later, though a middle thing happened here, the person who could have said anything about it died and then as I’ve said those in the second generation simply didn’t know it existed and therefore they objected as soon as they learned about it but they weren’t in a position to adopt a position until they knew. In para.34 I make the submission that the length of delay effects this and so we say that if the delay is short the Court might require significant detrimental prejudice before applying the doctrine, but with the delay of 25 years it is submitted that no additional detriment or prejudice other than the long delay itself should be necessary and we’ve already covered that. It’s submitted that that approach is common sense in the way that Mr Justice Cooke referred to it. It seems a matter of common sense to infer that there are things that have occurred, people have moved on when the delay is so long such that laches should be applied without law. In the first of those cases, that of Neylon and Dickens the judgment referred back to an earlier 1976 decision of the New Zealand Court of Appeal, Fitzgerald and Beattie and I’m here at para.37 of my outline. Fitzgerald and Beattie is in the bundle of authorities at no 10 and this was a strike-out case. Strike-out because of lack of action by the plaintiff and the President Justice McCarthy said this ‘extensive delay by itself can in any type of case give rise to the inference that it will be unfair to allow the action to proceed’ and he said in the New Zealand Industrial Gases case also that
‘in most if not all instances of delay there is some prejudicial effect arising out of the mere expiration of time, the dimming of memories, possible changes in physical features and so on. To what extent this
was important depended upon the character of the action. This aspect assumes a special importance if the action is one such as we have here where the claim was founded on negligence and where its proof will not be by business records or other written records but by the oral testimony of witnesses, it would have to depend largely on the memories for much of the detail of events which happened nine years ago’.
Eichelbaum J It was a personal injury claim wasn’t it? Keyte Yes.
Eichelbaum J So was New Industrial Gases. Keyte Yes, yes that’s correct Sir.
Eichelbaum J I don’t see for myself, I don’t see a strong analogy with a case such as the present.
Keyte Well in principle Your Honour I submit there is because just as he said there is not a case where business records are available, touché, there not here either because of the delay and because they’d all been thrown out and so the appellant here was forced back on the 25 year old memory of witnesses and in that respect I submit that what he’s saying is very pertinent and in Neylon, of course Justice Cooke said a somewhat analogist question of striking out which applies to the present case so in my submission the fact that you were there talking about a personal injury case nine years old doesn’t make it completely different given those circumstances I referred to.
Anderson J You can have an action on a debt and bring it one day short of six years and proceed expeditiously, there’s no problem, or you could file your proceedings the day after it fell due and do nothing on the proceedings for almost six years and you’d be struck out which really goes to show that in strike out proceedings there is an element of control by the Court of the same process and to prevent internal delays which are not present in a case such as the one before us.
Keyte I understand that and of course with statutes of limitations it’s sudden death as it were whereas in equitable doctrines such as this there’s clearly more flexibility than that, but with respect I do submit that it is correct to say that the position is closely analogist.
Anderson J One recalls dealing with criminal cases of historic alleged sexual abuse. Applications were brought to stay by reason of delay in cases going back 20 or 25 years and there was a great reluctance on the part of the Courts in those cases to assume prejudice merely by delay when there was no actual indication. It’s always difficult when one says delay must stop itself create prejudice if in the facts of any particular case you say well the generalisation doesn’t seem to apply here.
Keyte Well in this case there was evidence given by Mr Moore who was the engineer retained by Beltons to do the engineering concerning the right of way and at a point of time in I think 1980 he wrote to his client and this letter was one of the only ones that was available in which he said ‘ I have written to the City Council stating that the car parking in the adjourning building is now not proceeding’. That seemed a very important piece of information. He was called to give evidence and a letter was produced and the Judge asked him what he meant and he had to say it’s 25 years ago, I just don’t remember what that was all about. In our submissions that is one part of the prejudice we specifically rely on and it’s also again one of these other little indicators I keep on talking about that are there that something occurred. Why would the engineer say that to the Council unless something had occurred?
Anderson J Well it would be additional expense in creating the entrance way to the respondent’s building and creating a physical car parking area wouldn’t there?
Keyte Undoubtedly, but the sense of the letter is in my submission different from that and perhaps I should take you to it if my learned friend can remind me of the certain bundle of documents, yes I have it here. If you turn to the green book, page 139, it’s the second sentence of the letter. You see it’s written to the client but he says ‘I also enclose a copy of the letter sent to the City Council explaining the amendment sheet and noting that the car park on Lot 71 is now not to be formed’. He didn’t say ‘not to be formed for the moment’. The use of the word
‘now’ is interesting. We can’t put it any further because he didn’t remember and I should just note that although he talked about enclosing a copy of the letter to the City Council, that couldn’t be found but it probably wouldn’t have been taken any further anyway.
Blanchard J He doesn’t say the right of way is not to be proceeded with.
Keyte True, I acknowledge that but why I highlighted the joint purpose of the parties was set out in that paragraph of the agreement, the purpose was to provide car parking in the building being purchased and there they are saying it now won’t proceed.
Blanchard J What’s the writing at the top of the page? The 1, 2, 3, 4, 5. I’m particularly interested in No. 3.
Keyte First of all I’m sorry that we couldn’t produce a clear clean copy. Your
Honour has done better than me in even being able to decipher No. 3.
Elias CJ I wouldn’t try. Mr Keyte where do you think you’re heading with your argument now.
Keyte In terms of time?
Elias CJ Yes. Bearing in mind that we have read your submissions of course and we’ve traversed quite a lot of it in the oral question and answers, what do you still want to develop?
Keyte I did want to highlight, sorry, touch on each of the sections that follow if for no other reason to ensure that I have the opportunity to answer any questions Your Honours, but beyond that I don’t need to spend any great deal of time from now on through the rest of it.
Elias CJ Right, so you’d expect to be completed within about 20 minutes of resuming?
Keyte That might be a little bit brief but may be half an hour. Elias CJ Yes, alright.
Eichelbaum J Could I ask a question? Elias CJ Yes.
Eichelbaum J Would you mind if I just flagged the question for later on? I’m interested in when the various items of evidence became unavailable. Under three headings the death of Mr Macdonald Senior, you said this morning that it was in 1999. I’d be interested in reference to evidence about that. Secondly the same question in relation to Mr Kelsey. I’ve been unable to find any reference to the date of his death, and the third is the disappearance or destruction of Beltons records.
Keyte Thank you, I’ll do my best to answer all of that.
Eichelbaum J And the purpose of my question is in relation to a case with which you may be familiar called Trainer and William Cable.
Keyte Yes I am familiar with it but there is in some of the cases that I have referred to here the very same point. There’s not much use trying to claim prejudice for destruction of documents if they’ve been destroyed or if the witness had died before the delay could be said to have been the responsibility
Eichelbaum That’s exactly my point.
Keyte I understand that that’s the issue, yes.
Elias CJ Yes thank you. We we’ll take the adjournment now Mr Keyte. Keyte 2.15pm?
Elias CJ 2.15, yes.
Elias CJ Thank you.
Keyte First of all Your Honours the answers to Justice Eichelbaum’s questions of me just before lunch, as to Mr Kelsey first of all, his date of death is simply not known. There is evidence that on balance of probability indicates that it was Mr Kelsey and his company that was involved in developing the right of way, improving it I might say, in
1985 but that’s the only evidence there seems to be and so his date of death is simply not known. As to the date of death of Mr Scotch Macdonald, my learned friend has agreed that I should advise you from the bar that his date of death was March 1999 which if my calculation is correct, is 21 and a half years after the agreement was entered. As to the destruction of records, the answer to that is found in the evidence of Ms Kristine Moorish in the Red book, page 76 is her evidence in chief. In para.8 of her statement she refers to the fact that she was financial controller of Crocker Property Management Ltd, a company owned by the Macdonald family. ‘As the financial controller I can speak with some authority as to the records of all the various companies founded and/or run by Scotch Macdonald, including Beltons Ltd, now named Eastern Services Ltd until a couple of years ago, and you’ll notice that this was typed out as if it was going to be dated December 2003, although this is an unsigned copy I have here. Until a couple of years ago there were quite extensive financial records relating to Beltons stored in a garage area at the back of the Epsom property. At that time there was some building alterations carried out and all the old Beltons records were dumped. I confirm that to the best of my knowledge there are no financial records relating to Beltons Holdings Ltd dating from the 1970s or 1980s. I have also checked with Staples Rodway who have been the accountants for all the Macdonald entities including Belton Holdings over the years. They confirmed for me that they only keep records seven or eight years and they no longer have any records relating to Belton Holdings from the 70s or 80s. So that’s the evidence.
Eichelbaum J Thank you for that. Is the effect of that so far as Mr Kelsey is concerned that we really can’t take into account any prejudice arising out of his unavailability?
Keyte I wouldn’t put it quite so strongly as that given that on balance of probability he seems to be there in 1985 and that of course is still eight years following the entry of the agreement so in my submission it would be fair to acknowledge that the effect of his loss you might place less weight on but the fact that it was eight years is still significant in my submission.
Eichelbaum J Thank you.
Blanchard J The statement of claims dated the 10 October 2002. When was this claim first flagged, either by No. 68 Limited or anyone else?
Stewart June. Keyte June? Stewart Yes.
Keyte Yes, my learned friend said June of that year and I certainly acknowledge that.
Stewart So 1 May, document 55.
Keyte Yes I was going to say May, so I’m perfectly satisfied with May 2002
Sir. Blanchard J 55?
Keyte Document 55 or page. Stewart Page.
Blanchard J Thank you.
Keyte I would like to deal with one further question of Your Honour the Chief Justice. You asked me more than once whether there were any of the cases where it was an equitable interest where laches had been applied. A good example is Orr and Ford which is in our bundle of authorities - that’s a case of an equitable interest in a lease. The finding was the evidence fell short of the plaintiff having released or abandoned it but the Court still went on to consider laches and in particular went on to consider prejudice caused by a lack of evidence, or loss of evidence and on the facts it’s my submission that the only reason why the plea of laches failed in that case was because on the facts the Court was able to say in relation to two witnesses, they had died before the period of delay commenced and in relation to the third witness who had died, and this was the point I raised with Your Honour this morning, he had written two letters which were diametrically opposed to the stance that I believe the party wished to call him would have wanted to persuade the Court that he was likely to adopt it. And so on those facts the plea failed but it’s High Court of Australia of course and a good example of equitable interest no abandonment or release and yet laches still considered to be pertinent. Now unless Your Honours have any other questions from this morning if I may come back to my submission.
Elias CJ Sorry was this a constructive trust or something? Keyte It was an interest in a lease.
Elias CJ I see.
Tipping J It was an attempt to enforce what was alleged to be an express trust. Elias CJ Right, right, so it was something that depended upon clay?
Tipping J Yes. Elias CJ Yes.
Tipping J That is apparent from the judgment of Chief Justice Mason, a very short judgment on page 323.
Elias CJ Yes.
Tipping J There was no status if you like involved was there? I suppose it could be argued that by implication there was but we would have to look at this case quite closely I suspect Mr Keyte to see just how much assistance it gives.
Keyte Yes, I acknowledge that. I just was looking over lunch for an example which might answer Your Honour’s question.
Elias CJ Yes, yes, at first sight it doesn’t seem to meet the point I was raising but I’ll look more closely at it.
Tipping J That is the only case in the books or authorities that touches in your submission on this question of laches defeating an equitable estate?
Keyte Ah no, I think Williams and Greatrex which is in the respondent’s bundle is another example.
Stewart Joyce and Joyce.
Keyte Joyce and Joyce?
Stewart Fitzgerald and Masters.
Keyte Yes I think there are a number of them
Tipping J I deliberately used the word.
Keyte The point is not whether the end result was to defeat or to uphold, the point surely is whether the Court considered that the issue of laches had to be dealt with.
Tipping J Well it depends on how precisely the point was argued of course, but anyway we’re no doubt going to hear more from Mr Stewart from his perspective.
Keyte If I may now come back to my submission, and I do want to dwell for a moment on the issue of loss of evidence and loss of records, I
commence that on page 19 at section 8, I won’t go through the references that are set out there except that I would like to refer Your Honours to the case that I mention in the middle of page 20 which is the case of Crago and that is in our bundle at page 111. The decision was really this that a settler at the date when he made the settlement that was the subject of the dispute lacked the necessary mental capacity to do so and therefore all other things being equal the settlement should have been able to have been set aside but the decision rests to start with on a finding of res judicata because there had been previously a consent decree in proceedings between the same parties and having the same subject matter in 1960 at a time when it was not suggested the settler was under any mental disability. And I was just reading that from the headnote on the first page of the decision. But in addition the Court also found that even if they had not decided the case on that basis they would have found that he was barred by his laches, and I particularly want to refer Your Honours to page 749 of the report, which is 121 of the bundle. I’m reading just above letter (f) on page
740 – I’m sorry it’s 748 not 749. ‘By the evidence which the plaintiff had been able to put before me I had been persuaded to the conclusion that in relevant respects the plaintiff was wanting in mental capacity to execute the deed but I may have come to a different conclusion if all the witnesses, including the Doctors, who could have given first hand accounts of the plaintiff’s behaviour and other relevant circumstances, had been able to be called as witnesses. I’m not saying that I would have come to a different conclusion but it is now impossible to be certain that my conclusion would have been the same if these important witnesses could have been called. It is unnecessary to decide the question but I should say that I would have been inclined to reject the plaintiff’s present claim on the ground of laches acquiescence and delay alone’. If I then turn to the facts, at para.52 we make the point that Mr Scotch Macdonald would have been a key witness had he been still alive and there I set out seven issues that he would have been able to give evidence about. Point 1 was the money which was spent and question, why did he never try to recover half those costs? Point 2 as I put it in here, Beltons engineer Mr Moore wrote to Beltons stating, and this is the letter that I referred you to this morning, that the car parking is now not proceeding and in answer to a question in Court Mr Moore said he simply couldn’t explain what he meant by that comment and the point is that in addition to Moore’s memory having gone, Mr Macdonald may well have been able to cast light on that also. Point 3 was the towing away of the cars, and I should add and the bollards that I referred you to this morning. Point 4, the plans were developed by Mr Macdonald in 1995, and I think we’ve covered that. They’re clearly inconsistent. Point 5, Mr Macdonald never said anything to key staff who gave evidence, two of whom were involved in managing the property, or to his two sons about the right of way. Point 6, Maritime made no move to exert their right or to pay money or to open the side wall of their building when the right of way would have provided entry and it’s just an open question as to what Mr Macdonald may be able to say about any of that and then point 7, this doesn’t really directly relate
to Mr Macdonald as such I suppose, Maritime on-sold their property without mentioning the right of way when fixing their price, took a lease back for a total of nine years, including the right to renewal, for use as a Club and bar and that was on the very floor space where the right of way would have provided entry for car parking, so that also seems inconsistent with them having any intention to continue with the right of way.
Blanchard J Do we have any evidence of how it was that the right of way became a live issue? Did Maritime remember or did
Keyte No, my understanding is that, call it due diligence if you wish, the purchaser saw something at the Council and raised it with Maritime. They’d already fixed the price. I think it’s fair to say though that the agreement had not yet been signed, but that’s how it was raised and then the extraordinary part is the only copy of the agreement of sale and purchase that was ever found, and the one that’s before you now, was actually in a safe in Maritime’s building that hadn’t been opened for many years. Nobody could say how long. They couldn’t open it and somehow they got through a wall and through the back of it and that’s when these documents came to light.
Eichelbaum J Wasn’t the right of way shown on a land transfer plan?
Keyte Yes, but not on the title so it wouldn’t have come up on a search because it had not been registered. I think I’m right in saying the plan had been deposited had it not? Yes, certainly the City Council had given its approval anyway and it was my understanding the purchaser had seen the references at the City Council
Blanchard J Have we got the titles?
Keyte Yes, the title is there. It’s in the green volume, yes 114. If I may pick it up again at my para.58, ‘I do want to emphasise at this point that it is a matter of policy I submit to require a business to retain its records for a period of 25 years or more casts an undue burden on business in conducting their affairs, yet if such a long delay of 25 years is not sufficient without a defendant having to prove detriment then prudent businessmen may conclude that their records have to be kept and so in my submission that’s a matter of business inefficiency which shouldn’t be promoted by finding that loss of records in this case really doesn’t matter too much’.
Tipping J It could only be records of something that might have supported abandonment couldn’t it?
Tipping J If you were going to abandon something at this point and you were going to seriously and consciously abandon it surely you’ve entered
into some written instrument. I can understand an allegation that you might be a bit disadvantaged in relation to estoppel or something like that but to say that that was a conscious abandonment that was not recorded and properly put in writing seems to make it inherently most unlikely.
Keyte In my submission that’s not the test. The test is there is evidence here, perhaps I’m sliding sideways from records back to Mr Macdonald where I keep saying that the test
Tipping J Yes I’m just focusing on records Mr Keyte. I can understand the absence of Mr Macdonald.
Keyte I take the point. Elias CJ That’s immortality.
Keyte Immortality. I should have also added and I haven’t given you reference to the evidence but there was also evidence that the records of the lawyers involved have also gone – Simpson Grierson.
Tipping J What I’m putting to you and I think it has to be put directly is just the theoretical absence of records can’t be enough and it seems inherently most improbable that if some sort of a record was kept if you like that might assist and argument of abandonment, it wasn’t pursued to the point of something formal.
Keyte Yes, I acknowledge that, I mean the records might have been something short of something so formal although in my submission I refer to the possibility of even Mr Macdonald’s files, file notes, even a diary, wouldn’t need to be to the extent of a formal record with respect.
Tipping J No it wouldn’t need to be but my worry is that if we’re being asked to take the view that there was such a degree of possibility if you like that something helpful has been lost as to defeat a prima facie equitable, it would have to be something of some cogent possibility nor a mere speculative possibility.
Keyte Yes perhaps my submission though has more point in combination with the loss of the witness.
Elias CJ Well then it’s the same point really.
Tipping J The loss of the witness and his ability to produce something on paper to support his oral recollection so to speak. It’s really speculation on speculation. First of all we’re wondering whether or not there was anything and then we’re wondering if there was any evidence of it when it come to the documentary.
Keyte My respectful submission is that you can’t avoid speculation.
Elias CJ Well the High Court of Australia suggests you should avoid pure speculation and that quote you give at page 20 at line 50 seems right in point really. The issue is not whether evidence may have been lost but whether evidence which may have cast a different complexion on the matter has been lost and there must be some evidential threshold and you say it’s met by the car parks, plans and so on.
Keyte It’s met in my submission by the 7 points I referred to a couple of pages ago but I also submit that the test should be that here was a witness centrally involved.
Tipping J He strikes me as a man of some business acumen just from what one feels from the evidence and I would have thought if there were any suggestion that his company was being let off the hook from a formal commitment it wouldn’t have been left to chance. I’m just putting that to you because I mean one’s got to look at the sort of inherent probabilities or possibilities against one’s impression of the people in the evidence.
Keyte The fact of the matter is that we have surrounding this a whole host of little bits of information but a big deep hole in the middle where we just don’t know but I do submit and will carry on submitting that those
7 points that I’ve referred to in pages 20 and 21 take it out of pure speculation should be enough to fulfil the test.
Eichelbaum J What if we were to conclude that each of those points although capable of the conclusion that you would wish to draw from is in the end ambiguous because there is another equally plausible explanation?
Keyte I have little difficulty that there may be more than one explanation in relation to all of them. In my submission it would be extraordinary if then the test is such that the prejudiced party fails because they’re not able to show whether or not which of the ambiguous possibilities applied. To my mind that gives an advantage to a plaintiff who delays which will increase with time. In my submission the test should be here is a central witness. There are indicators that he would be able to give evidence which might well have decided the case in the favour of my client, the appellant. We cannot say it would have. It might have decided right the other way, but to say that the test is that we have to show his evidence would have decided the case and in my submission must be too high. As I say otherwise the advantage from delay is with the other side all the time and that can’t be the equity of the situation. Just in order to test whether there is anything I should answer at section
10 of my submission I refer to the relevance of a statutory limitation periods in the way His Honour dealt with it and submitted that in fact his reference to it is quite reasonable and fair and proper as a factor that could be taken into account. I leave it at that unless any of you have any questions about that. What I am saying is he didn’t, as the Court of Appeal seems to be saying, he didn’t treat this case as one by analogy,
he simply referred to the other statute of limitation periods as a pointer. I don’t wish to say anything about the analysis or the Court of Appeal decision which is there if you care to read it, nor about the issue of judicial discretion unless there is some other question you have of me and that would bring me to the end of my submission.
Elias CJ Thank you Mr Keyte. Yes thank you Mr Stewart.
Stewart If I’ve been following the exchange as I think I have the two matters which I should primarily focus on in my submission is this question of prejudice and then the equitable interest and then I’ll seek some guidance from the bench as to whether there are further matters that I can assist you on. If I could perhaps start with the prejudice issue first. Now on prejudice the appellant submits for the first time in this proceeding that Mr Macdonald may have been able to give some evidence of some other or new arrangement from that recorded in the May 1977 agreement. Now it should be noted that on the issue of alleged prejudice at the High Court no such matter was pleaded. The prejudice pleaded in the High Court as a result of the delay was restricted to the impediment in now fully developing the site by virtue of this claimed right of way of such antiquity and in my submission the Court of Appeal properly dealt with that by saying that that impediment was always there by virtue of the undisputed arrangement made in 1977. The other pleaded prejudice was that Mr Macdonald’s interest was unable to register a transfer, having purchased the property from Beltons. Now there was in the High Court a submission that evidence had been lost in connection with the construction of the right of way. That was dealing with the claim as to whether or not Maritime had met its contribution, but not in any way connected with a suggestion now being made that Mr Macdonald may have been able to give evidence of some other arrangement. This claimed prejudice did not feature in Beltons detailed closing submissions in the High Court. In the Court of Appeal the appellant’s written submissions did not deal with prejudice at all, except at para.6.2 under a heading ‘additional factors not considered by Baragwanath J’ where it simply stated “the death of Mr Kelsey and the loss of evidence available from Parnell Construction, nothing about Mr Macdonald’s evidence and that’s for the reason that even if the Court of Appeal the focus was on the disputed evidence about who constructed the right of way.
Tipping J What was that supposed to be relevant to?
Stewart At the first stage of this hearing they got into a dispute as to who did construct the right of way. Maritime said they did and Beltons said they did.
Tipping J Was it to deal with some contractual issue?
Stewart Whether or not Maritime had met its contribution to half the construction costs such that it was then able to call for a transfer without payment of any money. That was the sole issue.
Blanchard J Mr Stewart are you working up to suggesting that it was never put to
Maritime’s witnesses that there had been some other arrangement?
Stewart Oh yes, I am because there were eight Maritime members called to give evidence, or six I believe. Two of them called by the appellant. That indeed is my next point Sir. It was never put to any witness, in particular the Maritime witnesses, that there was some other arrangement or even possibility of such an arrangement. It was just simply never canvassed and if this type of prejudice was going to be advanced, the witnesses, particularly those who knew and dealt with Mr Macdonald, should properly have been asked and cross-examined on whether there was or could have been some arrangement. They were not and in my submission it’s too late now to invite this Court to speculate on what that evidence might have educed and what might have been produced had this been examined at trial. And I’ll go further than that because the evidence on other issues in fact educed contradicts and flies in the face of there being some other arrangement. Firstly, there was evidence from a number of Club members that over the years the Club gave active and regular consideration to developing the car park. The reference to that evidence is in para.26 of my written submission. The Club simply would not have done that had there been some other arrangement whereby they gave up the right of way. Secondly
Elias CJ That wasn’t specific as to date was it Mr Stewart? I’m just trying to remember now.
Stewart Yes and the reference is one of them said that had been considered as recently as over the last four to five years so it was
Elias CJ Oh, I see.
Stewart Secondly, my learned friend said that this arrangement was likely to have been made at about the time that the right of way was in fact constructed. But that leaves open the question of why would the members have involved themselves so much in the construction of the right of way if indeed there was an arrangement at that time that they were to have no interest or not to proceed with their interest in the right of way? There was evidence from a Club member, Mr Kopu, in the red book at page 79, para.12. He was the current president and he had been a member of the Club since the time it was in Newmarket before it shifted to Anzac Avenue, and I should say most of these witnesses had been with the Club throughout, right from the time they went to Anzac Avenue and many had occupied the personal president and he says at para.12 ‘he always thought that the paperwork had been done and the right of way registered’. We have Mr Gillard at page 63,
para.8 of the red book. ‘I was surprised to be contacted recently with regard to this right of way. I recall that there was some paperwork to be completed but that was only a formality. That didn’t bother the Club. The Club had an agreement and so naturally we thought it was ours’. So all the evidence that was in fact left and educed in evidence contradicted the possibility now being raised for the first time.
Tipping J Was this man Kopu, was he there throughout the whole period and was he the president or what did you say he was Mr Stewart?
Stewart Current president Sir, sorry.
Tipping J Current president, but a member throughout the whole period? Stewart Yes, yes Sir.
Blanchard J Yes, it says that on page 78, para.2. Anderson J Gillard was as well.
Stewart Yes Gillard was and in fact I think that perhaps and so was Mr Hughes.
I think they all were, they all had, yes Mr Hughes at page 27 had been there since late 1977. But these are people who one would assume would have been able to respond to that suggestion that there was possibly some other arrangement. You see para.114 is a written submission, I say it’s now too late to advance this, but at 115 I say that at para.50-60 the appellant refers to what Mr Scotch Macdonald could have said as to abandonment. Well not only is abandonment no longer an issue but in its closing submission in the High Court the appellant as good as gave that issue away, where I’ve got it recorded at 115, the submission was ‘although the Club probably never made a final decision to abandon the right, even that’s a little unclear’. That’s why abandonment and these issues really never went any further in the Court of Appeal but are being revisited here now. Now just on the question too there is this issue of use of the right of way and I have in my written submission at para.23 referred to some of the evidence about the, unequivocal evidence I should say, of the use which the members have made of the right of way throughout the last 25 years. Now I don’t know if you wish me to take you to the references.
Blanchard J How could they use the right of way?
Stewart They used it, well if we go to the red book 27, this is the evidence of Mr Hughes at para.3. He talks there about the use of it for getting access after hours down to the boxing ring and he says at the last paragraph ‘the latter set of doors are the ones used for access to the boxing ring and for other purposes’. And he says see below and if we go to para.5 he says ‘in addition to access to the boxing ring the right of way is being used for access to No. 68 through the access doors on a number of occasions, for example cleaning up the premises. I’ve been
present on many working bees where that access has been used to remove rubbish. Bins have also been dropped off in the right of way area and filled using the access doors, in fact I’ve personally used the doors myself from time to time for access and at no time to my knowledge has any access to No. 68 ever been denied’. Then at para.7 he refers to Emery’s evidence, who was a former president who left the Club in 1985 and didn’t return, but Mr Emery gave evidence that he doesn’t recall any Club member using the right of way and Mr Hughes said when asked about it said ‘I expect he means for the use of driving down and parking and to this extent I agree, however he will be well aware that it was used for the purposes mentioned above’. So the Club had no parking facilities so it wouldn’t go down the right of way to park but it used it freely for the purposes that Mr Hughes has described; cleaning up, access to the gym, fire escape etc.
Blanchard J The right of way didn’t extend to the door though did it?
Stewart Well there’s no evidence of which the door they’re referring to and it was a matter I tried
Blanchard J Can we not tell from the dimensions on the plan?
Stewart No, which door that was used for access to the boxing ring?. No, if you look at the, there are two doors there, did Your Honour notice that? If you look at the photograph at red book, page 18 at the bottom left hand corner there’s a door entering the second level and that also you can just see that door at the top right photograph on page 18.
Blanchard J Oh I see.
Eichelbaum J Wasn’t that the site of an old sort of lean-to and that door gave access to that structure?
Stewart There was uncertainty about that Sir, it was never resolved and Mr Macdonald’s evidence was that he couldn’t recall that building because he never went down to the back of the site in those days when it was there.
Eichelbaum J Sorry, Mr Macdonald?
Stewart Was unable to recall about when that brick building was removed or much about it because he never went down to the back of the site prior to the construction of the right of way.
Tipping J My impression of the evidence Mr Stewart, both from what I read earlier and from what you’ve just said is that no-one was paying a great deal of attention to the formalities but obviously they couldn’t park back there but they used it for the purpose of coming and going so to speak and as a de facto it was used whether that was precisely in terms
of the easement, isn’t that at a very uncertain or debatable point but there was if you like user in the loose sense, is that a?
Stewart Yes, yes, in fact several of the members from the Maritime Club gave evidence that after hours they’d use the right of way to park on Beltons site and had been doing so right up until last year and the only time they got towed was when Beltons engaged Wilsons.
Tipping J The hilarity on the bench Mr Stewart is the result of the fact that it was thought that my car had been towed over the lunch hour but it had nothing to do with this present dispute I assure you.
Stewart I’m pleased to hear that Sir.
Anderson J So what do you take from that Mr Stewart, that even though they may have been using it strictly outside the scope of the right of way they never really thought if they had a right of way?
Stewart Yes they did. This site according to the evidence of Mr Hughes was vacant for 10 to 15 years. That’s No. 17.
Tipping J No. 17 is the white building in the photograph, on page 18 is it?
You’ve got the brick building straight ahead of you and you’ve got the white building to the left and you could park under there albeit not lawfully but there would be a strong temptation to park under there if it was empty.
Stewart Yes, and there was no difficulty until Wilsons got the management so they could use the parking there for the public and of course they would jealously guard the parking facility and there was no doubt that the members were not allowed to park on Beltons site particularly when Wilsons came along. So the regime changed but prior to that and particularly for these many years while the site was vacant, No. 17 was vacant, no doubt the members used the access way at will and parked down there. Now the evidence about it being vacant for so long is in the Blue book at page 49, sorry it’s in the red book of Mr Hughes, page
28 of the Red book, para.6. Now whilst it was vacant for all those years one could also assume it would be most unlikely there’d be any circumstance whereby there would be some other arrangement concluded between Beltons and the Maritime Club and far from being challenged on that evidence about how long it was vacant for on the notes of evidence in Blue book, page 49, line 8, the witness was asked to confirm his evidence that it had been largely vacant for 10 to 15 years, he said yes and then he was asked ‘so if a Club member walked down the driveway and across the bottom parking area there was no one there to say yea or ney’ was there and he said no. The evidence I’ve given too which is referred to in my written submissions is that no member was ever denied use of the access way whenever required and Mr Macdonald said that to his knowledge the Maritime Club were
never denied access from using the right of way. Now this bollards matter
Tipping J This finding by the Court of Appeal, and I’ve forgotten exactly where it is, but they seem to have made a, because I noticed a pretty firm finding that there had been no user but this doesn’t seem to be consistent with this evidence.
Stewart No, no it’s not.
Tipping J You’ll probably be able to point to where it is but I remember, because I noted it specifically because it’s obviously a matter of some importance.
Anderson J A user as for vehicles. That’s about as far as I can go isn’t it?
Stewart Yes there was no user of it for gaining access to parking within No. 68.
The certainly used it to park on Beltons’ land. Blanchard J Well that’s not a user of the right of way. Stewart No.
Blanchard J That’s just trespassing. Stewart Yes, we all do that Sir.
Anderson J Even if they believed that they were entitled to.
Tipping J Well it’s the message at the end of para.64 of the Court of Appeal’s judgment on page 29 of the yellow book that attracted my attention where they say blandly ‘there was no evidence that its members had ever exercised the right of way’. Well I don’t know whether they were meant to say lawfully exercise the right of way but if they did it’s a rather loose way of putting it.
Stewart What paragraph was that Sir?
Tipping J Para.64, the last sentence which is at page 29 of the yellow volume. Blanchard J I wonder whether that’s actually the Court of Appeal
Stewart Yes, I see I’ve got written in the column in large letters, capital letters, wrong.
Tipping J Well I’ve got a question mark alongside it just because I didn’t seem to be entirely consistent. Unless they were meaning it in a very technical sense of exercising the right of way formally after grant, but that would have begged the whole question. The question here I would have
thought was what expectations parties were getting from the conduct of each other. That seems to be the context.
Eichelbaum J Do you think it’s possible that the Court were saying that it was never exercised in the manner contemplated by the original contractual agreement.
Stewart To that extent I wouldn’t take issue with it. That wasn’t used for the purpose of gaining access to park within its own building.
Eichelbaum J Quite.
Elias CJ I suppose really whether it’s user of the right of way you would say that this is evidence which is inconsistent with acquiescence and it’s acquiescence really that’s the subject of the speculation as to whether there might have been some evidence.
Stewart Yes, well you’ll see in my submission I couldn’t understand the acquiescence reference in the High Court judgment but acquiescence wasn’t dealt with at all by the Court of Appeal because it didn’t feature in the appellant’s submissions in the Court of Appeal.
Tipping J Well there was no conduct of the what they call Beltons end and it would seem that the other side were acquiescing in from which an inference of abandonment if you like could be drawn.
Stewart Yes that’s right Sir and that was the difficulty I have with the reference to the acquiest and the delay.
Tipping J I’m grateful for your assistance because I was quite puzzled by this no user business in the context of expectations on the part of the other side that Maritime would not receive an easement.
Stewart Yes, you see in my submissions I talk about these expectation references in the High Court judgment when I dealt with the judgment in the High Court but I’m not, it’s true that abandonment is a live issue in this Court. You see there was no finding of abandonment in the High Court and there was no notice given for the Court of Appeal hearing to support the judgment on other grounds.
Tipping J No, Mr Keyte doesn’t say you can establish abandonment, he’s complaining that if he had Mr Macdonald he might have been able to establish abandonment. That’s as I understand the argument. I don’t think he’s actually trying to get abandonment, he lamenting the fact that his witness that he hoped might have been able to prove it isn’t about any more.
Stewart So does that become ahead of prejudice under the laches. Tipping J Yes.
Stewart Yes, well in my submission the matter that I referred Your Honours to makes that not a starter for the reason it wasn’t raised with the witnesses and there is other evidence contradicting that speculation.
Tipping J Well if they kept discussing the easement in their meeting up until quite recently that of itself seems highly inconsistent with any voluntary abandonment.
Stewart It does. Now in para.116 of my written submission I refer to the fact that the appellant says for the first time that the existence of diary notes and file notes for Macdonald might also have been highly significant but there’s no evidence at all that Mr Macdonald who kept or made diary notes or kept file notes. He may have been like me in that regard. Safer to have none.
Tipping J A bit cynical.
Stewart Now those submissions and generally what I’ve said about the prejudice issue in para.104 to 116 of my submission, unless there is anything else I don’t propose to say anything more on that issue. Now on the equitable interest we have the case of Williams and Greatrex. Now in that case Lord Denning noted that in addition to having an equitable interest the plaintiff had taken possession. In my submission on the facts of that case possession was a very precarious one in that not long after being thrown off the land in 1947 the plaintiff did nothing further apart from putting up a shed and garage until 1955. In
1955 the plaintiff put in a service land and built another garage as the one he had built earlier had fallen down and at that point he was again ejected from the property and then he issued proceedings for a specific performance in 1956. So whatever actual possession he enjoyed was a fragile one because when he returned in 1955 to do some more work he was promptly thrown off by the defendant. Now in Fitzgerald and Masters the plaintiff went into possession of the land with the defendant for a short time after agreeing to buy a half interest in the farm. He went into possession in 1929 but left in 1932 never to return to the property again and he left the property because there wasn’t enough in it for both of them, that is the two partners. It was intended that they operate the farm as a joint venture, or a partnership
Elias CJ Sorry, which case are you referring to now? Stewart Fitzgerald and Masters.
Elias CJ Thank you.
Stewart The Court accepted that when the plaintiff the farm that was the end of the partnership. That was the purpose for which the agreement to buy was made in the first place. Now in my written submission, page 17 of the written submission, just below half way down the on the right hand
side of the page the words saying ‘before he left the property’ do Your
Honours have that? Tipping J What page Mr Stewart?
Stewart Page 17 of the written submission. There is a respondent’s written submission. Page 17, just below half way down the words saying
‘before he left the property he had paid more than half of the purchase price and he had an equitable interest in the land. The truth is we think that the equitable interest in the land which the plaintiff had acquired could not be lost or destroyed by mere inaction on his part. It would only be lost or destroyed by release or express agreement on his part or if the deceased lawfully rescinded the contract’. No that’s dealing with abandonment. The Court then went on to consider whether the very long delay, 26 years in that case, by the plaintiff and seeking to enforce his contract with such as a Court ought to induce a call of equity to refuse specific performance. This is of course a separate and quite distinct question but what has already been said goes a long way towards answering it. There appear to be no circumstances apart from delay as such which would make it inequitable to decrease the specific performance. The land is said to have increased greatly in value over the years but that cannot be a material consideration. Improvements may have been ineffective but if so these can be provided for in any ultimate decree. There’s been no prejudicing, alteration in the position of the vendor or his estate. Delay indeed may be said to have been to the advantage of the vendor who endured all the benefit to be derived from this whole possession from 1932 to his death. If there are no third parties his interest may be affected. In these circumstances equity does not we think refuse specific performance unless it thinks that the plaintiff ought to be regarded as having abandoned any rights he ever had. Many reasons have been given for saying that no abandonment can be inferred here. Now of course here the significance of Fitzgerald and Masters is that the plaintiff was out of possession from 1932 until
1956 when he issued the writ.
Tipping J And here you’d actually paid fully for the property now in issue. Stewart Yes. The reason that I didn’t trouble this Court with the construction
that the High Court put on the obligation to pay the money. I wasn’t aware that if you hadn’t appealed a matter from the High Court, the Court of Appeal, that you could raise it as a point in this Court.
Tipping J Well you can’t generally.
Stewart It hasn’t been raised by the respondent either and I thought I had overlooked something but I was tempted to embark on that but didn’t think it was fatal to the equitable interest argument.
Tipping J It isn’t.
Stewart No and so in my submission therefore the respondent could live with the construction placed on it by His Honour Justice Baragwanath.
Anderson J The surprised I expressed in relation to an appeal was not this appeal but the one to the Court of Appeal.
Stewart Yes. Now there are other cases dealing with equitable interest which are mentioned in my submission. There’s Joyce and Joyce at para.37 which I won’t trouble Your Honours with because I’ve dealt with it in some detail and I have three texts for Your Honours. Two of them are mentioned in a submission but the texts were not included in the booklet unfortunately. Now the first one is Spry.
Tipping J This is all on equitable interest is it or is this general?
Stewart Yes, equitable interest. Spry, page 234, ‘but the taking of possession by the purchaser is relevant also in a third respect. There is authority that suggests that in the course of execution of a contract of sale the purchaser may, especially when he obtains possession, obtain what may be described as an accrued beneficial or equitable interest although it still remains for him to get in the legal title and that once the plaintiff has obtained an interest of this kind it will rarely be found that he has deprived himself of it by his subsequent delay on the ground of laches. In such cases it may properly be said that the purchaser has obtained a beneficial or equitable interest that is not merely dependent on his right to specific performance. Commonly an interest of this kind arises through an intention formed by the parties that the material land shall be beneficially held for the purchaser such as where an original contract of purchase has been sufficiently acted on to indicate an intention of the parties that the purchaser had become the beneficial owner so that his rights do not depend merely on the future performance of the agreement. Now Spry also deals with, page 232, dealing with the type of adjustment which the Court of Appeal did in ordering specific performance. About eight lines down again on the right hand side of the page ‘and again if the material prejudice to the defendant arises with the expenditure of money by him and appropriate circumstances and order for specific performance may be made that is conditional upon his being indemnified. Thus the order of the Court may be modified or restricted according to the circumstances in question so that its operation cannot be said to be practically unjust or some other remedy such as equitable damages may be awarded instead’.
Tipping J Well this is the opposite side of equitable rescission where you can rescind an equity with just allowances. That’s the reference I think to Lindsay Petroleum again at the bottom.
Stewart Yes. Down the bottom of the page, about five lines from the bottom
‘where the only prejudice to the defendant consists on the expenditure of money by him, he may be sufficiently protected from making an
order that is conditional on his being sufficiently compensated by the plaintiff’. There is another old case which is in the respondent’s casebook.
Blanchard J Sharp and Milligan, which is where the fact of the interest invested was equitable interest and at least the Court would not deny specific performance on the facts of that case.
Stewart Now on the legal principles I’ve set out in my written submissions what I want to say on that. I’ve just had handed up the Mark Gunner and the Haines work on the topic and just draw Your Honours’ attention to para.36065 where the authors consider mere delay and the lapse of time and in 36070 they refer to a raft of cases where the plaintiff’s right have been upheld despite quite extraordinary delays exceeding the 22 years we have in this case. Then para.36075 the authors consider a contrary view and para.3608A you will see a discussion of the case that my learned friend passed up, Cluet Peabody
& Co being the trademarks case which the authors criticise decision and at the bottom of page 1042 it says ‘it would seem that Upjohn J as he was then was neither willing to allow the proprietor to sue after all that time nor happy to rest his judgment on delay alone’ and at the bottom of that paragraph it says it submitted that Ashburner is wrong as referred to earlier in the article about the contrary view and that mere delay does not constitute laches such a conclusion is constant of the principle and is supported by the older authorities.
Elias CJ Savage and Lun seem to be of the view that mere delay doesn’t constitute laches.
Stewart You probably see that statement in virtually every text book on laches that you pick up, usually near the beginning and certainly in Spry and the article on Spry, I think it appears on page 1.
Tipping J People normally get out of this dilemma by inferring acquiescence from delay.
Tipping J Which is shall we say capable of being slight of hand but it rests on something more than delay per se, it rests on the effect of delay in the particular circumstances usually as I recall all this.
Stewart Well there’s no evidence here that the Maritime Club had any idea that Beltons regarded them as having abandoned or given up its interest in any way. They knew nothing about these plans that were prepared in
1995 and look they spent $5,000 for the full redevelopment of a site, I mean it must have been very sketchy for $5,000, you hardly get plans done for a double garage these days for $5,000, architects plans. That was never brought to their attention. There was no evidence they were ever denied access, there’s just not a suggestion that they knew that
Beltons were in any way reliant upon them or had a belief even that the Maritime Club were wasting their time considering putting in that car park because the right of way had gone. Now I don’t need to take Your Honours through other parts of my submission do I?
Elias CJ No I don’t think you do.
Stewart There are just one or two matters that haven’t come up which may not have been drawn out on the question of the application of the principles to the facts of this case.
Tipping J Just one thing Mr Stewart, it probably doesn’t matter in this case but if we look right at the end of the Marr text that you’ve helpfully provided you will see this reference to personal defence. I don’t understand you to be pressing this point in this particular case but it is a feature.
Stewart It is and I just wasn’t sure why it hadn’t been raised previously, particularly having read O’Connor & Hart at the Court of Appeal decision. You see I do want to bring Your Honours to about this transaction that has occurred by Beltons since this matter arose. I am going to address that, but looking at the last page there of Marr ‘the defendant wishing to make a good defence of laches or acquiescence must rely on the behaviour of the plaintiff not of its predecessors in title’. Now the plaintiff here asserting the right of course is No. 68
Limited and that’s having to deal with the delay of its predecessor and title though it’s not on the title yet, ah, yes it is on the title. So I think the argument that was suggested was that it took an assignment of Maritime’s rights to enforce the equitable interest and in doing so it must take subject to equities, but I thought that on the face of it on both O’Connor & Hart and the Lacobie case that there was a problem here.
Tipping J This would have been a legal assignment for equable right wouldn’t it, not inequitable assignment of inequitable right.
Stewart I think it’s a legal assignment under s.130 of the Property Law Act. Tipping J Anyway don’t let’s get muddied water with that.
Stewart In the end I didn’t develop the submission because I wasn’t certain that the matter was that clear cut, but where it is relevant is one of the matters I want to address to you is that after this dispute arose, after the claim was made Beltons sold the property to a company which is effectively Mr Macdonald’s interest and I deal with this in the written submission at para.82, page 26, and the point being from those few paragraphs in the submission being made is that Beltons have sold this property for market value irrespective of the impact which this litigation might have on its value for $1,025,000. It is difficult to see what prejudice Beltons has suffered by virtue of the right of way being granted and an order now being made for specific performance it’s had full market value, as though the right of way wasn’t there.
Tipping J It’s the prejudice not so much of Beltons that’s being relied, it’s suggested against you it’s the prejudice of Eastern as Beltons successor in title and yet can in effect take advantage of the prejudice that Beltons would have suffered if it had still been in the frame.
Stewart Sorry, Eastern were called Beltons. It’s another company altogether. Tipping J Sorry, well whatever the new company is, the company now
represented by Mr Keyte is seeking to take advantage isn’t it of a prejudice that would have been the prejudice of the person in it’s predecessor’s position?
Stewart Yes, well in my submission Sir having purchased with full knowledge I
can’t see that it possibly can.
Anderson J The prejudice would be extinguished upon the point of sale for full value.
Stewart Yes, yes.
Tipping J But with respect it’s not so much the sale with full value it’s the purchase with knowledge that there was this potential monkey on the title.
Stewart And that he would have to deal with it and he may succeed and he may not; it’s a risk he took. Now my learned friend doesn’t agree with the way that I’ve described the matter in para.85 so if I could just, the relevant notes if you want to make a note there about where this evidence appears, I’ve given the reference where it appears in the red book and the green book. It’s at the notes of evidence and the whole page of para.84 of the notes of evidence on page 65 is really the evidence of Mr Macdonald. Now he says himself in giving that evidence that he’s contradicting himself in response to the question
‘did you pay full market price for the property’. He said at one stage that he did and then he said at another stage ‘well I know it’s a bit vague but we were restructuring 38 properties and I’m not quite sure how the adjustment occurred but I believe there was some adjustment in there somewhere’. In my submission it altogether too vague and too unsatisfactory.
Tipping J Does it matter whether he paid full value or not? The simple fact is surely that he bought knowing of this present problem and being prepared to take the risk whatever value he gave that it might turn out, he’s in effect bought the prejudice.
Stewart Bought the prejudice. But the full price Sir I believe is relevant in saying that Beltons, the person
Tipping J Oh yes I agree it’s relevant to Beltons at Beltons end but there’s no complaint is there by Beltons? Well they’re no longer in it.
Stewart Well I think that they are. Tipping J Are they, why?
Stewart Yes cause the transfer hasn’t gone through to the new purchaser yet although Beltons
Tipping J But they’re not joined as a party in these proceedings, or are they? Blanchard J Yes they are, they’re Eastern.
Stewart They’re Eastern.
Tipping J Oh they’re Eastern, I’m sorry of course I keep overlooking that. Blanchard J So the claims against them because they’re still on the legal title. Tipping J Legal title.
Blanchard J Do I understand you correctly that Mr Macdonald having paid full price doesn’t have the recourse on Eastern if the litigation goes against Eastern?
Stewart No he doesn’t Sir and that’s at green book, page 93. Page 92 is the agreement whereby Eastern or Beltons sold the property in March 2003 and at page 93 there is the special term relating to this litigation.
Anderson J And that’s the end of it. I mean the fact that they haven’t transferred is neither here or there, they’re entitled to convert their interest into cash for full value.
Stewart Full value.
Blanchard J Did the trial Judge deal with this?
Stewart Having complained about my learned friend Mr Keyte not, or not Mr Keyte but Beltons not having raised matters earlier, this doesn’t seem to have been raised, oh yes the Judge treated it as immaterial, as an immaterial matter because DMT purchased with full knowledge therefore he said it was immaterial, ie, DMT couldn’t claim any prejudice, it had its eyes open when it purchased. I think the Judge dealt with that in two places. One at para.1 he refers to the fact of the purchase.
Blanchard J Sorry where are we looking now? Stewart The judgment of the High Court Sir.
Elias CJ Yellow.
Stewart And then at para.84 which is yellow book page 64 but I’ve put aside as immaterial the last transaction which relates to an inter-family transaction that occurred during and with full knowledge of this proceeding.
Tipping J But isn’t the issue in laches the position between the actual parties to the suit and here if Beltons have effectively sold on so that the effective title is now in the new person surely it’s they who have to show that they are personally prejudiced by this.
Tipping J In the same way as laches has defined the new party on the other side.
But the history of it is not irrelevant but that’s the primary focus isn’t it?
Stewart Yes Sir.
Tipping J Yes, and the Privy Council made that pretty clear if one chooses to follow it in that Nigerian case.
Stewart Yes, and the textbooks repeatedly say it’s a personal defence.
Nothing’s changed on this site and that’s been a relevant factor in cases virtually admitted in the evidence by Mr Macdonald which is in my submission between 1977 and 2003 physically the properties are the same. Now as I understand it the question of the inability to develop the site is no longer claimed as prejudice. In the Court of Appeal one of the prejudices that Beltons claimed and indeed they claimed it also in the High Court was the inability to fully develop the site with the right of way in place and the Court of Appeal rightly acknowledged that that was a consequence of the contract you entered into in 1977 not the delay and you’re always going to have that restriction but it is to be noted too that there was a 12 foot restriction on the height of the right of way and that was specifically imposed and it’s in the sale and purchase agreement so that future development of the properties by Beltons they could build over the right of way and that’s at page 4 and under the flap (a) ‘the easement shall be limited in height to 12 feet to the intent that future buildings may be constructed on Lot 72 and 73 above the right of way whilst still permitting clearance of 12 feet for vehicles to pass along the right of way’.
Tipping J Mr Stewart would you forgive me for asking whether Eastern is simply
Beltons renamed or is it a new company?
Stewart Beltons renamed, Beltons Holdings Ltd renamed. Tipping J It’s simply a new name?
Tipping J Yes, thank you.
Anderson J The new company, do we know when that was formed?
Stewart The trustee company for the interests of Mr Macdonald’s family and
Blanchard J That transaction was after the writ was issued. Stewart Yes.
Blanchard J And they did it at full value? Stewart Yes.
Anderson J Hard to see how they were effected by the way before they came into existence.
Anderson J They’re not a party anyway.
Blanchard J If they can’t claim and they’re not a party anyway and Beltons has received full value and that can’t be adjusted where’s the prejudice?
Stewart There’s none and so there’s no issue here unless you accede to my learned friend’s submission that mere delay in itself is enough.
Anderson J Mere delay with no prejudice demonstrably.
Stewart Yes, that could be the aim but then you get into the cases that routinely and uniformly say that you must balance the interest, to get to where the greater injustice or
Anderson J Where’s the inequity? Stewart Inequity lies.
Elias CJ Well where’s the delay, vis a vis the purchaser?
Stewart No, well relevant delay for the purpose of laches in my submission.
Now I know we’re drawing to the end of
Blanchard J But Beltons just can’t on that scenario, Beltons just couldn’t say it suffered any prejudice at all. That there’s just nothing to put into the scales.
Stewart No. I see it’s 15.51pm Ma’am and incidentally I’m content to lie on the other factual matters developed in my submission.
Elias CJ Yes thank you Mr Stewart and Mr St John. Well Mr Keyte I think you’d better address this in reply on this last point and any others of course you want to address.
Keyte The answer to it in my submission lies in the evidence, well first of all the fact that as just agreed a few moments ago Eastern Services Limited who’s the appellant is Beltons. The transaction in which it was sold to, the property was sold to the personal interests of Mr David Macdonald and in my submission the evidence, although it might be general, is actually that it was the appellant that suffered the loss and value. I ask you to look at the blue book, the notes of evidence, page
65, and I think you’d start about line 9 where he’s being examined by Mr Schnauer and there is reference to provision about litigation in clause 14, and you’ve already been taken to that, ‘in terms of fixing the purchase price was there any adjustment made about the litigation or how was that resolved’ and the answer of Mr Macdonald was as you might recall he’s really talking here to his own solicitor as it were ‘as you might recall there was quite a bit of discussion’ I’m not quite sure what the next
Tipping J I think.
Keyte I think, yes. ‘I think it was resolved as part of a global sort of package.
I think there was some cognisance had some possibly deleterious effects as to value and consequently that was built into the whole settlement process that we went through. There were other properties, yes about 38 I recall’. That’s the evidence as to value, I accept that it’s very general but in my submission it is an indication that the hit was taken by the present appellant not by the
Tipping J Well go down a bit, line 24. Anderson J And 31.
Elias CJ Market value.
Tipping J When he had the point clarified for him as to whether this related to the price of this property he said no.
Blanchard J Well then you’ve got line 37 where he appears to wobble back the other way.
Keyte Yes the figure, a lower figure than it would have been apart from the dispute yes I guess you could say yes.
Anderson J That would have been sold above market value if it hadn’t been for the dispute.
Tipping J Well he didn’t really know.
Anderson J Well what he’s really indicating I would think is that he perceives some disadvantage to the group as a whole but Salamon and Salamon put paid to that type of approach in the 19th century.
Keyte With respect Sir I don’t think he can be said to be talking to about a Salamon and Salamon type group approach, he’s talking about a purchase of a group of properties not a group of companies and it is the only evidence but that is
Blanchard J There’s no cross-examination on it. Stewart Yes Sir at page 70.
Tipping J Page what? Elias CJ Page 70.
Tipping J This is the warts and all passage, yes.
Keyte That’s simply confirming the no recourse point in my submission.
That is not saying anything about whether it was for full market value or not. Now that’s as far as I can take that but that is as I understand it the only evidence relating to who took the hit and I have listened with interest to the exchange with my learned friend Mr Stewart and I understand the points that have been raised but in my submission the burden of that page is that it was the appellant that took the hit. Mr David Macdonald’s interest are not a party to the litigation, it is only Beltons and that’s as far as I can take it.
Elias CJ Why, I’m sorry it’s probably getting late in the day and I’m starting to get more confused than usual, but why does it remain the party to the litigation? Why is the
Blanchard J Because the conveyance hasn’t gone through. Elias CJ Oh because the conveyance hasn’t gone through. Tipping J But in equity it’s the new company that’s the owner. Elias CJ Yes, yes.
Blanchard J Yes and it’s naïve to suggest Mr David Macdonald’s not concerned about this.
Keyte Oh yes, yes, of course he is.
Tipping J You have the bare legal title at the moment and unless you can show you sold for an under-value on account of this I would have thought you’ve suffered no loss as a result of anything.
Keyte I take that point, I take that point and I say again here is the only evidence that I can produce that suggests that it was an under-value in the sense that it was
Tipping J Wouldn’t it be a classic case if this point had been firmly addressed earlier of compensation rather than recision?
Keyte Could well be, yes.
Anderson J But if this is the case you say that this suggests that the purchase price would have been higher than market value?
Keyte No I believe that what I’m saying and what the evidence is saying is that the purchaser acquired and in the transaction 38 properties arrived at a price for the whole 38 and that the price was adjusted because of the litigation. The litigation related to this property and so it was this litigation which affected the price downwards.
Anderson J The compendious price 38 properties.
Blanchard J Mr Macdonald makes a number of contradictory assertions on page 65 but I wonder whether the truth of it isn’t at line 25 where he says ‘I do recall discussions as to the impact this would have on the potential value of the property for litigation’ that’s this, the litigation ‘and that there was some contra or some adjustment made in the overall settlement due to that. I can’t recall any numbers’.
Keyte I agree Sir and in my submission he’s saying the same thing there as he’s saying at line 15 and as he’s saying again at the bottom of the page, it’s the same message.
Blanchard J But it would be absolutely amazing if they got themselves into this situation, but it certainly doesn’t appear that Mr Macdonald was anticipating this kind of questioning when he went into the witness box or surely he would have had the numbers at his fingertips.
Keyte I think it can be seen too from the decision that it wasn’t a point which was argued.
Blanchard J Yes.
Eichelbaum J If it was all adjusted in the global figure what is the relevance of the
Blanchard J Well they would have had to have contributed particular figures to particular properties for various reasons including revenue but for
accounting purposes. I think what he’s saying here is that a market figure of $1.025,000 was attributed to the particular property but globally there had been some putting and taking in which the problem with this property was taken into account. It’s unsatisfactory because there’s no precise evidence but he does make that assertion.
Eichelbaum J It seems curious that a detriment effecting this property should be taken into account in the figure relating to some other property.
Keyte Well I take the point that one would have thought for tax reasons somewhere eventually prices had to be put against each property but I took the evidence to mean that there was one price in the transaction for the whole 38. Now I’m sorry I’m not of the understanding that the agreement itself attributes individual figures but I may be wrong in that. While I just cover another matter I might ask my learned friend Mr Schnauer to see if he could look at the agreement and see if there is anything to contrary effect. Well my learned friend says I’m wrong, there was an agreement property by property with a separate figure as part of an overall settlement.
Blanchard J I have the impression that this really wasn’t a live issue in the High
Keyte Exactly Sir and you can see that from the fact there’s no other evidence directed to it and the trial Judge sort of waved it away as if it was not an issue.
Tipping J Well it probably wasn’t put to him in the way it should have been put to him so you can’t really criticise him.
Keyte I’m not, I’m not.
Tipping J No I’m not saying you are, because it all derives from this personal detriment focus.
Tipping J In other words laches doesn’t run with the land, it attaches to the litigant.
Keyte Yes, yes I understand your point. May I go on to other matters?
Elias CJ Yes. My learned friend suggested that there was no evidence which established which door it was that gave access to the boxing Club, was it one to the right of the picture or was it the one to which I referred which one can see and it might be useful if I ask you to open again in the red book page 18. My learned friend’s correct that there are doors in two positions.
Eichelbaum J If not three.
Keyte Oh well there’s one upper storey, yes, yes indeed. You will notice in my submission it is clear from the picture on page 18 lower right that the doors shown there is a double set of doors, whereas the other door to which my learned friend referred which is seen on the bottom left- hand side is clearly a single door I submit and I’m sorry Your Honour Justice Eichelbaum correctly twigged to the fact that there had been evidence about that having given access to a little lean-to, but I put that to one side. I think what’s far more relevant is the evidence then of Mr Hughes which is in the red book at page 27. In my submission he clears it up. If you look towards the bottom of page 27, four lines up from the bottom of the page in the middle of his para.3, on this point there are two sets of doors to No. 68 at this level, one is the fire escape which can only be opened from the inside and the other to enable access to the building from the outside, the latter set of doors are the ones used for access to the boxing ring and for other purposes, see below, and in para.5 in addition to access to the boxing ring the right of way has been used for access to No. 68 through the access doors on a number of occasions, for example cleaning up the premises and in my submission the very terminology used indicates that I was correct when I submitted that the use that had been made was an informal use which used that set of doors shown off the right of way on page 18 of the lower rights and with respect to suggestions to the contrary it is my suggestion that Your Honour Justice Blanchard is correct when you say that is not a proper use of the right of way in legal terms at all. This right of way was to pass and re-pass etc for the purpose of entering the building at one end and for no other purpose and with respect also it follows that the learned trial Judge was right when he referred to this and essentially said in the absence of Mr Macdonald to clarify the point, thought it was quite unfair to decide it was anything other than an informal use with his consent and that is at the judgment, page 71, para.105, ‘it has not been established that Maritime ever went into possession, it appears consistent with the evidence that the boxers went on to Beltons property with permission of Mr Scotch Macdonald rather than in righting Maritime and in the absence of Mr Macdonald it would be unjust to find otherwise’, and with respect the evidence was there which fully entitled him to come to that finding and it would accord with the correct position I take issue with and submit that it cannot be right to suggest that even so such use might somehow be confirmatory of the legal equitable interest being claimed because there could not be in my submission use of the right of way that is the subject of this argument.
Anderson J It’s not really helped much by the plan that shows the right of way veering off to one side, page 175.
Keyte That’s the green book Sir.
Anderson J Yes. You can hazard a guess, you’ll see that to the right of the right of way on Lot 1 is just under 6 meters and then you get the edge of the
right of way which probably does put it around about between that left hand pillar and the side of your client’s building. In that area there by the look of it.
Keyte As I have always understood the position which it was to be.
Blanchard J Do we know whether the brick building goes right to the rear boundary.
Keyte The which building Sir? Blanchard J The brick building.
Keyte The brick building. I know from observation that there is a free piece of land in a very steep gully at the back but I
Blanchard J I wasn’t inviting you to give evidence.
Keyte No, no, no, but I’m saying I don’t know precisely where the title ends. Eichelbaum J But if you look at the middle photograph on page 19 it suggests that the
Beltons building extends beyond the end as it were of the Maritime
Keyte There is no doubt that the title to the Beltons land does extend further, that is correct. What I can’t answer though is whether the title to the plaintiff’s building, the plaintiff’s land goes any further than that rear hedge of its building.
Blanchard J It looks as though it does.
Eichelbaum J But isn’t the rear boundary a straight line. There’s a plan somewhere that shows both the properties.
Blanchard J Page 175, the one that Justice Anderson was referring to. What I’m interested in is trying to line that plan up with the building. It looks as though the right of way probably extends over the width of the face of the building and no more than that and there does appear to be an area of vacant space behind that building.
Keyte If you are looking at page 176, are you Sir? Blanchard J I’m comparing 175 actually.
Keyte Yes. Blanchard J Oh I see, 176.
Keyte I think you do see the confirmation of the question in the combination of 175 and 176.
Blanchard J Yes.
Keyte Because it’s clear on 175 that the rear boundary of all those properties is a straight line and it is quite clear from the photographs even that the Beltons property extends behind the rear brick wall of the building. I think it must follow therefore that the plaintiff’s title extends further back. My learned junior refers me to 174 but it doesn’t really make clear the rear boundary of Lot 71. It does seem to me that 175 is the page which puts that question to bed. Replying to other submissions made by my learned friend, he suggested that the prejudice caused by the absence of Mr Macdonald was not raised any earlier than in this Court. With respect that’s not so. I can say at least this that it was raised very directly in the what was of course then the respondent’s submission, that is the present appellant’s submission to the Court of Appeal and I’m referring in that to page 15, 6.1 factors considered by Justice Baragwanath in determining the overall justice or injustice of the case in exercising his laches discretion, it appear that Baragwanath considered the following. One was the very long period of delay and Roman 2 was the loss of evidence during this period. His Honour did not consider this a minor matter but clearly regarded the loss of evidence as a significant issue. In paras.13 and 14 he said and he then refers to the evidence lost. Now I appreciate you don’t have that submission before you but I just have to take issue with my learned friend that it was not raised in the Court of Appeal.
Elias CJ I’m sorry I didn’t find the reference, where? Keyte That submission is not in front of you.
Elias CJ No but what paragraph in the Court of Appeal judgment were you referring to?
Keyte I was not, I was referring to the written submission that my learned friend Mr Schnauer made to the Court of Appeal and I felt I had to raise that because my learned friend suggested it had not been raised at that point.
Eichelbaum J But the point related specifically to the defence, not the defence, the prejudice of possible abandonment evidence, is that the point that you were raising, I’m sorry not you, that counsel was raising in the Court of Appeal?
Keyte I will read you the part Sir. Eichelbaum J Yes, sorry I missed it if it’s there.
Keyte The heading was ‘Loss of Evidence During This period’ and the submission then proceeded ‘His Honour did not consider this a minor matter but clearly regarded the loss of evidence as a significant issue’.
In paras. 13 and 14 he said ‘during this period significant evidence of particular moment was lost. Mr Scotch Macdonald, the major proprietor of Beltons who represented it in the transactions with Maritime is no longer alive. The business and accounting records of Beltons have been disposed of and witnesses memories have dimmed’. Then there’s a new paragraph, new quote which is clearly from para.14 of the Judge’s decision ‘both parties have experienced difficulty in mounting their respective cases because of the passing of time but it is Maritime and therefore the plaintiff as its assignee which as well as bearing the onus of proof, must accept responsibility for the long delay in pursuing this claim’. That’s the submission that was made.
Eichelbaum J Yes well I’m sorry if I’ve still missed it but there’s nothing there about abandonment is there?
Keyte No I agree, not specifically. Eichelbaum J Well not inferentially as I heard you.
Keyte Well with respect Sir it’s put on a very broad basis I submit that Mr Macdonald, a major proprietor, who represented it in the transactions with Beltons, and is no longer alive and my in my submission that covers everything and so the point perhaps was not explicitly there but it surely covers a range of things which includes that.
Blanchard J Was it ever put to the witnesses who had been members of the Maritime Club that there might have been another arrangement under which they’d given it all up?
Keyte I acknowledge my learned friend is right in that regard, it was not put but I ask you to bear in mind that there was no contradictory evidence which could be put. I accept that the proposition could have been put anyway but not
Blanchard J And it’s going to be suggested that there might well have been such an arrangement. Surely people who are witnesses and who were on the other side of any such arrangement should have been asked about it.
Keyte Well they were not Sir and I acknowledge that. I shouldn’t overlook the statement of defence which in my submission directly raised the issue. It appears in the casebook of pleadings, the yellow book, at page
85, Roman 4, sub-para.b ‘on the contrary in or about 1980 the Maritime Club actually decided not to use its basement for car parking and its committee consciously decided to abandon its legal right to be granted a right of way easement’, so it was there explicitly in the statement of defence which I acknowledge is a different point from putting it to the witnesses. My learned friend when referring to that case of William and Greatrex suggested that the evidence of possession was precarious because the plaintiff had been in possession for a while and then left it again and so on but in my submission the Court
decision proceeded on the basis that there the plaintiff had an equitable interest which included possession so whatever my learned friend should say about how precarious it was the decision proceeded on that basis. There are no other matters I think that I can usefully cover by way of response unless there’s anything Your Honours would like to ask me about.
Elias CJ No thank you Mr Keyte, we’ll reserve our decision in this matter.
Thank you counsel for your assistance. Court adjourned at 4.21pm