(a) Any right of way, drainage or other easement right or licence not disclosed in the contract?
4 The answer that was provided was "not so far as vendor is aware".
5 The basal allegation is that following completion the purchaser set about developing the land and discovered an underground cable said to have been originally placed there in 1943 and to have been subject to some further work done in the early 1970s. The allegation is that the work was done by the then PMG (Postmaster General's Department) and at a time when the land belonged to the Commonwealth of Australia as it did until the subject contract for sale.
6 The Equity proceedings in question were brought by the claimant against Telstra Corporation Limited and the Commonwealth of Australia. It is the claim against the Commonwealth with which this Court is concerned.
7 There was a further amended statement of claim that was perceived by the plaintiff to be unsatisfactory in a number of respects. A second further amended statement of claim was propounded. The question before the Chief Judge in Equity was whether leave should be given to file and rely upon that further pleading. There had been earlier proceedings and there was a hearing date that was imminent, but his Honour's reasoning did not ultimately turn upon those sorts of issues. The question that his Honour posed to himself early in his reasons was whether the claim propounded in the new pleading was doomed to fail. The well known principles of General Steel Industries Incorporated v the Commission for Railways (1964) 112 CLR 125 were those that regulated the judicial discretion that was engaged. See too Queensland v J L Holdings Pty Limited (1997) 189 CLR 146.
8 At one stage in his reasons (see para 26) Young CJ in Eq said that the plaintiff would probably not succeed in its pleaded claim. The claimant submits in its written submissions that this involved a departure from the proper test governing the relevant discretion that his Honour had stated earlier in his reasons. I am prepared to read that part of his Honour's reasons as more in the nature of a slip. In my view however, the matters raised in the proposed pleading cannot be said to be doomed to failure such that it was proper to have refused the amendment that was sought.
9 The proposed pleading effectively reached for two causes of action. In paras 4 and 5 it was pleaded that there was an implied term in the contract that the purchaser was entitled to make requisitions with a concomitant implied warranty in the contract that any answers to requisitions would be prepared with reasonable care and skill. The juridical basis for such a claim was sourced in the remarks of Handley JA in Bebonis v Angelos (2003) 56 NSWLR 127 at 134. His Honour's reasons, with which Beazley and Heydon JJA, agreed, were obiter. Nevertheless, it is not in dispute that they should be taken as representing, at the very least, an arguably correct view of the law, at least if the facts engage them.
10 The second cause of action invoked in para 6 of the proposed pleading was a common law duty of care that was said to arise out of the vendor/purchaser relationship and the existence of the implied term and warranty already referred to.
11 Young CJ in Eq's judgment (Votraint No 1088 Pty Limited v Commonwealth of Australia [2004] NSWSC 1003) summarised his Honour's conclusions in para 27 as follows: