Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service

LEGISLATION CITED: Conveyancing Act 1919 (NSW), s 129

Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2010] NSWCA 268 CASES CITED: Seltsam Pty Limited v Ghaleb [2005] NSWCA 208 Walker Corporation Limited v Sydney Harbour Foreshore Authority [2009] NSWCA 178

PARTIES: MACQUARIE INTERNATIONAL HEALTH CLINIC PTY LTD (appellant) SYDNEY SOUTH WEST AREA HEALTH SERVICE (respondent)

COUNSEL: R DUBLER SC/ S PHILIPS (appellant) G K BURTON SC/ P K BRUCKNER (respondent)

SOLICITORS: S Moran & Co (appellant) Bolzan & Dimitri (respondent)

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 2009/298398

ALLSOP P HODGSON JA MACFARLAN JA

13 DECEMBER 2010 MACQUARIE INTERNATIONAL HEALTH CLINIC PTY LTD v SYDNEY SOUTH WEST AREA HEALTH SERVICE Judgment 1 THE COURT: Following delivery of the principal judgment in this matter on 14 October 2010 ([2010] NSWCA 268), the parties have submitted short minutes of order, which are largely agreed. 2 One matter that is not dealt with in the short minutes is the setting aside of costs orders made by Nicholas J on 7 October 2010, just before judgment was given on the appeal. An application for leave to appeal against these orders has now been filed. We propose to deal with these orders now to avoid further expenditure of costs. We shall give the parties an opportunity to vary what we propose to do. The costs orders made by the primary judge proceed on the basis of the primary judge's principal decision that is being set aside, and so they too should be set aside in their totality as a matter incidental to the setting aside of the principal decision. 3 The first matter of dispute concerns draft order 3(5). Area Health seeks the insertion of the words "essential terms of" and the addition of two further agreements. These matters were not explicitly decided by the Court, and in our opinion these insertions should not be made. 4 The second matter of dispute concerns proposed order 3(6), which is sought by Area Health and opposed by Macquarie. Again, in our view this was not explicitly decided, and indeed may reasonably be considered as having been explicitly left open by par [338] of the Court's principal judgment. In our opinion, proposed order 3(6) should not be made. 5 The final matter of dispute concerns the question whether the Court should make an order to the effect that the inquiry to be undertaken should not be before the primary judge. 6 Principles relevant to this question were stated as follows by Young JA (Beazley JA agreeing) in Walker Corporation Limited v Sydney Harbour Foreshore Authority [2009] NSWCA 178 at [119] to [121]: [119] The court certainly has power to remit a matter to a different judge. My researches have not discovered any overriding principle as to when it does so, but there are guidelines in the authorities. The key question is whether there will be a perception of a fair trial if the case is remitted to the judicial officer who previously heard it.

[120] As Kirby J said in Minister for Immigration and Multicultural Affairs v Wang [2003] HCA 11; (2003) 215 CLR 518 at 556, a direction to remit to a fresh person: … is not uncommon in the exercise of appellate or judicial review jurisdiction where a conclusion is reached that a rehearing by the same decision-maker would be unlawful (where the decision is set aside for reasons of actual or apparent bias) or otherwise undesirable (in the interests of justice).

[121] The guidelines include the following: (1) Ordinarily, the Court of Appeal will not interfere with the assignment of the matter by the trial court: Steedman v Baulkham Hills Shire Council (No 2) (1993) 31 NSWLR 562 at 576; (1993) 80 LGERA 323 at 336 per Kirby P; Castle Constructions Pty Ltd v North Sydney Council [2007] NSWCA 164; (2007) 155 LGERA 52 at 87 per Basten JA.

(2) The power to direct a remittal to a fresh person is to be exercised sparingly: Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208; (2005) 3 DDCR 1 at [12].

(3) [Note, however, the Full Federal Court in Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal (1990) 26 FCR 39 took the contrary view, see per Davies and Foster JJ at 42 and that view has prevailed in subsequent cases in the Federal Court; see eg Vaitiaki v Minister for Immigration and Ethnic Affairs (1998) 150 ALR 608 at 615].

(4) It must always be borne in mind just what is the extent of the power of the appellate court to order remitter: Castle Constructions Pty Ltd v North Sydney Council [2007] NSWCA 164; (2007) 155 LGERA 52 at 87 per Basten JA and see Morrison v Kiwi Electrix Pty Ltd (1998) 19 WAR 482 at 494.

(5) It may well be a ground for remitting a matter to a differently constituted court or tribunal where there have already been strong findings about the credibility of a party; see eg Smith v New South Wales Bar Assn (1992) 176 CLR 256 at 269 per Brennan, Dawson, Toohey and Gaudron JJ.

(6) If there has been stringent criticism of the judge or tribunal member in the appeal court, the appearance of justice might recommend that the matter be remitted to a fresh mind: Brackenreg v Comcare Australia (1995) 56 FCR 335 at 352 per Sheppard J.

(7) If there is a reasonable likelihood that a judicial officer or tribunal member will be perceived to have pre-judged an issue to be remitted to him or her, the matter should be remitted to a fresh mind: Baulkham Hills Shire Council v Basemount Pty Ltd [2003] NSWCA 189; (2003) 126 LGERA 339 at 345 per Tobias JA with whom Handley and Ipp JJA agreed.

(8) If the appeal hearing throws up a reasonable suggestion of bias in the original decision maker, remittal to a different person will be ordered: Castle Constructions Pty Ltd v North Sydney Council [2007] NSWCA 164; (2007) 155 LGERA 52 per Tobias JA at 73.

(9) In Land and Environment Court matters the court follows Baulkham Hills Shire Council v Basemount Pty Ltd . It might be noted that the Full Federal Court in Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 2) (2009) 174 FCR 175 at 204 and 213 seemed to consider that Basemount was merely a decision on particular facts and circumstances. This court places greater significance on it. 7 I note also that in Seltsam Pty Limited v Ghaleb [2005] NSWCA 208, Mason P at [15] expressed the following view about the exercise of the power to direct that a further hearing be before a different judicial officer: [15] I agree with Basten JA that the power should be exercised with caution and with respect for the authority of the judicial officer or officers in the court or tribunal below who have authority to assign cases. But where this Court is seized of a matter that persuades it as to the propriety of making a direction of this nature, the power should be used. It should not be left to the President, Chief Judge or List Judge of the court or tribunal below to have to make enquiries and form a judgment on such matters. Rather, absence of a direction should be read as a signal that it is open (but not obligatory) to assign the new trial to the original judicial or other officer. 8 In this case, the primary judge did emphatically express views adverse to the merits of Macquarie's case and against the credit of officers who gave evidence; and he did not resolve an important conflict in the evidence of Area Health witnesses, where that resolution could have led to a serious adverse finding against Area Health. In all the circumstances, in our view it would be preferable that the inquiry be held before another judge; and having regard to the comments of Mason P in Seltsam, we think it best for this Court to give a direction to that effect. It goes without saying that this conclusion is not a criticism of the learned primary judge. 9 We note that in proposed order 3(14) (our order 4(13)), the alternative of damages and account are still left open. Unless there is good reason to the contrary, we think Macquarie should make this election at an early stage. 10 The Court makes the following orders:

Set aside order 1 of the orders made by Nicholas J on 13 October 2008 and the judgment for the Respondent, being order 2 made by Nicholas J on 15 July 2009.

Set aside the costs orders made by Nicholas J on 7 October 2010.

In lieu of the orders of Nicholas J set aside by this Court in order 2 above, the Court makes the following judgments, orders, declarations, notations and directions: (1) Judgment and an order for possession by the appellant of Lot 11 in DP 809663 ("the car park site") and Lot 12 in DP 809663 ("the hospital site");

(2) Judgment for the cross-appellant (the cross-claimant) against the cross- respondent (the cross-defendant) for $389,207.34 plus interest.

(3) The respondent is to pay the appellant nominal damages in the amount of $1 in respect of the respondent's found breaches of the obligation of utmost good faith prior to 17 March 2000 contained in: (a) clause 15.4 of the Heads of Agreement dated 18 September 1989 ("HoA");

(b) clause 20.13 of the Hospital Lease dated 2 December 1996 Registered No N3553375 ("Hospital Lease");

(c) clause 19.13 of the Car Park Lease dated 2 December 1996 Registered No N3553374 ("Car Park Lease");

(d) clause 10.8 of the Construction Deed dated 2 December 1996 ("Construction Deed");

(e) clause 3.2 of the Car Park Sub-Lease dated 2 December 1996 ("Sub-Lease") by which clause 19.13 of the Car Park Lease was incorporated into the Sub-Lease;

(4) The Court notes that the award of nominal damages is without prejudice to Order (13) below.

(5) A declaration that, as at 30 June 1999, the appellant was in default of each of the leases, construction deed, and car park sub-lease dated 2 December 1996 ("the transaction documents") in its failure to commence the private hospital and its failure to complete the car park.

(6) A declaration that the appellant was not in breach of clause 2.2 of the car park lease when the notice of default was issued.

(7) A declaration that the appellant is not indebted to the respondent under clause 2.2 of the car park lease.

(8) A declaration that the respondent was not in breach of clause 3.5 of the Construction Deed when the default notice was issued.

(9) A declaration that the appellant is not indebted to the respondent under clause 3.5 of the Construction Deed.

(10) A declaration that amounts payable under clause 2.2 of the Car Park lease and clause 3.5 of the Construction Deed are not " rent" within the meaning of s 129(8) of the Conveyancing Act 1919 (NSW).

(11) A declaration that by virtue of s 129 of the Conveyancing Act 1919 (NSW) the respondent was precluded from taking possession of the hospital and car park sites on 17 March 2000 and the respondent's eviction of the appellant was a trespass against the appellant.

(12) A declaration that the Car Park Lease, Hospital Lease, Sub-Lease and Construction Deed continue to operate and bind both the appellant and the respondent.

(13) Order that there be an enquiry before a Judge or Associate Judge other than Nicholas J as to the amount of damages which are payable by the respondent to the appellant, or an account of moneys received by the respondent (which account would include both revenue received and reasonable expenses incurred and rental from 1 December 1999), at the appellant's election, in respect of being kept out of possession of the car park site and the hospital site between 17 March 2000 and the date of being restored to possession.

The Respondent's Cross-Appeal and Notice of Contention are dismissed.

Stay the operation of the judgment in 3(2) above, including any form of enforcement of such judgment, until the conclusion of the enquiry or further order of the Court.

Stay the operation of the balance of the orders: (1) for 28 days after date of making of these orders unless within that time an application for special leave to appeal to the High Court of Australia is filed;

(2) until further order, but subject to any order of the High Court of Australia, if within 28 days after the date of making of these orders an application for special leave to the High Court of Australia is filed; provided that, for the purposes of the enquiry, the date of being restored to possession shall not operate until any stay of the order for possession in order 3(1) above has been lifted.

Direct as follows in relation to the hearing on costs: (1) The matter be listed for directions with respect to the further hearing on costs on 15 December 2010 at 9.30 am;

(2) The Summons Seeking Leave to Appeal (2010/34949.003) filed by the Appellant on 4 November 2010 which is currently listed for directions at 2:00pm on 13 December 2010 and any cross-summons seeking leave to cross-appeal be stood over to 15 December 2010 at 9.30am with a view to dismissal with no order as to costs in the light of order 3 above.

Liberty to apply on two working days' notice to Hodgson JA's associate and the solicitor for the other party. **********

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