Australian Oil Exploration Ltd v Lachberg (1958) 101 CLR 119
Guaranty Trust Co of New York v Hannay & Co  2 KB 536
Foster v Jododex Aust. Pty Ltd (1972) 127 CLR 421
Liverpool & London & Globe Insurance Co Ltd v J W Deaves Pty Ltd  2 NSWLR 131
Bateman’s Bay Local Aboriginal Land Council v The Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247
Boyce v Paddington Borough Council  1 Ch 109
Australian Conservation Foundation Inc v Commonwealth (1980) 146 CLR 117
Onus v Alcoa of Australia Ltd (1981) 149 CLR 27
Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591
Ruddock v Vardarlis  FCA 1329
Sankey v Whitlam (1978) 142 CLR 1
Ainsworth v Criminal Justice Commission (1992) 175 CLR 564
Nelson v Nelson (1995) 184 CLR 538
Slee v Warke (1949) 86 CLR 271
Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336
Re Butlin’s Settlement Trusts  Ch 251
Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329
Bromley v Holland (1802) 7 Ves J 3; 32 ER 2
Peake v Highfield (1826) 1 Russ 559; 38 ER 216
1.1 A declaration is an order of the court, which declares a legal or equitable conclusion from a determined state of facts. It enunciates the rights as between the parties. For example whether the defendant holds his or her property upon trust or whether the plaintiff has validly terminated a contract. Declarations are referred to as “declaratory relief.”
The learned authors of Meagher Gummow & Lehane, Equity: Doctrines and Remedies (3rd ed, 1992),  state in their extra-curial capacity that “[t]here is virtually no situation in respect of which a declaration cannot be made.” A declaration can be a useful means of declaring legal rights either alone or in conjunction with other relief. However, a declaration will only bind the parties to the proceedings; Australian Oil Exploration Ltd v Lachberg (1958) 101 CLR 119, 133-134.
By their very nature, declarations are permanent statements of rights. They cannot be temporary.
1.2 There are four essential elements that must be established in order to obtain a declaration:
- Has the court jurisdiction?
- Has the plaintiff standing (locus standii) to bring the proceedings?
- Has the plaintiff established the facts necessary for the court to declare the legal conclusion?
- Are there any discretionary grounds for refusing the declaration?
Historically the Court of Chancery could not make a declaration in the absence of granting some other form of relief (‘naked’ declaratory relief) at least in its original jurisdiction: Guaranty Trust Co of New York v Hannay & Co  2 KB 536, 568 (Bankes LJ).
The position was different in the supervisory jurisdiction where relief was sought against the Crown. Historically the Crown could not be the subject of a coercive order so a declaration was the only way of resolving legal issues where the Crown was a party: Dyson v The Attorney-General  1 KB 410. Such restrictions do not exist today as the Crown is by force of statute treated in a similar manner as if it were an ordinary citizen: see Judiciary Act 1903 (Cth) and Crown Proceedings Act 1988 (NSW).
The Chancery Act 1850 (13 & 14 Vic c 35) gave the court limited powers to grant declarations in the absence of other relief. These were expanded by the Chancery Procedure Act 1852 (15 & 16 Vic c 86) of which section 50 purported to give a board power to grant ‘naked’ declarations similar to the present day power in NSW. The 1852 Act was restrictively interpreted so that a declaration without consequential relief could only be granted in situations where that consequential relief could have been granted but was not sought. Thus no declaration could be made if other equitable relief was not available: Rooke v Lord Kensington (1856) 2 K & J 753; 69 ER 986.
In the United Kingdom the position was resolved by the Judicature Act 1873 which today by effect of the RSC O 15 r 7 permit ‘naked’ injunctions.
In NSW the right to grant a declaration was restrictively interpreted. It was not until the decision in Foster v Jododex Aust. Pty Ltd (1972) 127 CLR 421 that the High Court gave a broad interpretation to the legislation that ‘naked’ declarations were permitted.
The adoption of the Judicature system in NSW by the Supreme Court Act 1970 (NSW) brought NSW in to line with the United Kingdom so that there is a plenary power to grant declarations conferred by section 75. Thus the court may grant declaratory relief in all cases it considers appropriate save where a statute removes jurisdiction in the particular case. Such as where the statute gives another court or tribunal exclusive jurisdiction over a matter: see Liverpool & London & Globe Insurance Co Ltd v J W Deaves Pty Ltd  2 NSWLR 131.
NB: only the Supreme Court has such a broad ranging declaratory jurisdiction. Inferior Courts such as the District Court and the Local Court do not have such jurisdiction.
1.4 Locus Standii
In the original jurisdiction a party’s legal rights had to be in issue in order to obtain a declaration. A stranger to the dispute could not seek a declaration in order to clarify a legal point.
The issue is more starkly exposed with respect to public rights. A person must have standing to seek a declaration if seeking to assert a public right. In order to obtain standing such person must:
- Obtain the Attorney-General’s permission to sue in the name of the Attorney-General, i.e. a relator action; or
- Demonstrate sufficient connection to the subject matter of the dispute.
The requirement to obtain the Attorney General’s permission derives from English law whereby the Attorney General was charged with upholding the law with respect to public rights. However the Attorneys General in Australia do not occupy the same role as in the United Kingdom. They are not as separate from the political process and thus may not have the same incentive to uphold public law rights; Bateman’s Bay Local Aboriginal Land Council v The Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247.
In order to show sufficient connection a plaintiff must establish:
- That the action in question interferes not only with a public right but also with a private right of the person; or
- If no private right of the plaintiff is interfered with the plaintiff will nevertheless suffer special damage.
The above two criteria are known as the rule in Boyce v Paddington Borough Council  1 Ch 109. This rule applies to cases of both declarations and injunctions; Gouriet v Attorney-General  AC 435.
These requirements cause the most difficulty especially with respect to interest groups and other like bodies that attempt to assert public rights.
In Australian Conservation Foundation Inc v Commonwealth (1980) 146 CLR 117 the ACF was held not to have standing to object to whether decisions by a state government to build a tourist resort were invalid.
Facts: The ACF applied for an injunction to compel the Cth government’s compliance with the Environmental Protection (Impact of Proposals) Act 1974 (Cth) in order to prevent the construction of the Gordon above Franklin Dam in Tasmania.
Held, per Gibbs J at 526 that the plaintiff’s interests were not threatened in any direct way and at 530 interest meant:
- Something more than an intellectual or emotional concern.
- The plaintiff must gain some advantage beyond that of righting a legal wrong.
- If the action fails the plaintiff must have loss beyond that of mere grievance or a debt for costs.
- A belief no matter how strongly felt is not enough.
A more lenient view was taken in Onus v Alcoa of Australia Ltd (1981) 149 CLR 27 where an aboriginal tribe was held to have standing to seek declaratory and injunctive relief to protect cultural artifacts on land with which they had traditional ties. In this case the plaintiffs would have suffered a loss beyond that of ordinary Australians as they were custodians of the relics and actually used them, albeit they were members of a class.
The subject matter and nature of the litigation can determine ‘Special Damage’. Commercial loss due to the ultra vires provision of public moneys to a competitor can amount to special damage; Bateman’s Bay Local Aboriginal Land Council v The Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247.
A more restrictive view exists in the United Kingdom where the plaintiff must show ‘particular direct and substantial damage’; Lonrho Ltd. v Shell Petroleum Co Ltd. (No 2)  AC 173.
Some legislation will give a statutory right of standing; e.g. sections 80 and 163A of the Trade Practices Act 1974 (Cth). See Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591.
Some special causes of action do not require standing. E.g. any person may move the court for a writ of habeas corpus in respect of a person wrongfully detained; Waters v The Commonwealth (1951) 82 CLR 188 at 190 and Ruddock v Vardarlis  FCA 1329 (Full Court in the so-called Tampa case).
1.5 Discretionary Factors
1.5.1 Judicial Review is more appropriate
This might apply if the plaintiff’s private right arises out of public law: Gillick v West Norfolk & Wiesbech Area Health Authority  AC 112. This view has been criticized on the grounds that the boundary between equitable relief and judicial review is not clear and as such the declaratory remedy ought be freely available. But the mere fact that an alternate remedy might be available is not enough: Pyx Granite case  AC 260.
1.5.2 Criminal Proceedings
As a general rule a declaration will not be granted with respect to properly instituted proceedings; Imperial Tobacco Ltd v Attorney General  AC 718, but the jurisdiction exists albeit to be exercised sparingly; Sankey v Whitlam (1978) 142 CLR 1. As the criminal trial and appeal process are considered best able to deal with issues that arise in the proceedings.
However in special cases where it is appropriate to determine if certain conduct if undertaken would be criminal the courts have granted a declaration, see Airedale NHS Trust v Bland  AC 789 and Re: F  2 AC 1.
1.5.3 Hypothetical Questions
A court will not answer abstract or hypothetical questions; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564, 582 where it was held:
- That the plaintiff must have a real interest in the matter to be decided.
- Relief cannot be in relation to circumstances that have not occurred and might never happen.
- The declaration must produce foreseeable consequences for the parties.
There must a dispute which is attached to the facts of the case; Australian Boot Trade Employees Federation v Commonwealth (1954) 90 CLR 24.
NB: the court retains the power to make such a declaration and will do so in exceptional cases.
1.5.4 Non-justiciable issues
That is, non-legal issues; Johnco Nominees Pty Ltd v Albury Wodonga (NSW) Corporation  1 NSWLR 43.
1.5.5 Unsettled issues
A court will not grant a declaration if it would leave the issue between the parties unsettled, such as a failure to seek appropriate final relief and may lead to further litigation; Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286.
- Speed – A declaration can sometimes be obtained separately from other issues of fact and quantification of damages. The Supreme Court has power to try separate issues from the main case. A declaration on a critical point can sometimes prevent a full-blown trial.
- Inexpensive .
- Prevents further litigation.
- Negative relief – A declaration can be obtained stating that something did not happen, i.e. the plaintiff is not in breach of contract.
- The only available remedy This may be because:
- The dispute has not developed very far.
- The alternative remedy is unsuitable.
- There is no alternative remedy, i.e. the assertion of public law rights.
1.7 Equitable Defences
A declaration, although historically given by a court of equity, is not in fact an equitable remedy. It is therefore not subject the equitable defences of unclean hands etc. It is in fact a statutory remedy and relief will not be refused upon an equitable defence; Mayfair Trading Co Pty Ltd v Dreyer (1958) 101 CLR 428, 450-456.
Where the declaration is sought in aid of equitable relief a party may be required to do equity in order to be able to obtain the relief sought; Nelson v Nelson (1995) 184 CLR 538 (Deane and Gummow JJ).
Declarations may be made in regard to any subject matter or situation. In Hanson v Radcliffe UDC  2 Ch 490 at 507;  All ER Rep 160 at 162, Lord Storndale MR expressed the view that:
“. . . the power of the Court to make a declaration where it is a question of defining the rights of two parties, is almost unlimited; I might say only limited by its own discretion.”
The court may therefore make declarations as to equitable and legal interests in:
- land – Vanmeld Pty Ltd v Fairfield City Council  NSWCA 51
- personal property – Health Services for Men Pty Ltd v D’Souza (2000) 48 NSWLR 448
- deceased estates
1.8.2 contractual matters
- the respective rights of vendor and purchaser – ASC v Ampolex Ltd (1995) 38 NSWLR 504
- whether a breach has occurred
- the consequences of the breach
- construction of the contract
1.8.3 personal status
Whether a person is:
- a member of a club, association or other organisation – R v Jockey Club, Ex parte Aga Khan  2 All ER 853
- an employee – McGerrigle v Public Service Board  1 NSWLR 243.
1.8.5 When a court makes a declaration as to the rights of the parties, it will then make further orders.
For example, a declaration that A holds Blackacre on resulting trust for B, followed by an order that A transfer all right and title in Blackacre to B. In such a situation the declaration is referred to as ancillary relief.
2.1 Rectification is the amendment of a document by the Court. Therefore, if a written instrument does not reflect what can be shown to be the common continuing intention of the parties at the time the document was executed, the Court will allow rectification of the instrument: Slee v Warke (1949) 86 CLR 271 At common law, a document which does not reflect the intention of the parties is still effective, even though it does not conform to the wishes of the parties.
2.2 Documents which may be rectified
The Court has jurisdiction to rectify all classes of documents in which intention is a crucial element of the contents. For example, contracts, leases, contracts of insurance, bills of exchange, deeds, documents relating to the sale or assignment of real and personal property.
However, equity does not have the power to rectify a will, except in conformity with the Succession Act 2006 (NSW) Chapter 2, Division 3, which allows the Court to alter a will through the addition of written material which the deceased “intended to forma an alteration of his or her will” (s 8 (2) (b)).
Similarly, the Court cannot alter the memorandum of association of a corporation. Memoranda of association may only be amended pursuant to corporations law.
Rectification is purely a discretionary remedy.
A mere mistake as to the meaning or effect of the words is not sufficient, if the parties intended the use of those words: Bacchus Marsh Concentrated Milk Co v Joseph Nathan & Co (1919) 26 CLR 410.
However, the agreement does not need to be enforceable, but the written document must be intended to give effect to the intentions of the parties: Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336; 1 ALR 169.
Facts: Before the auction of a piece of land in Vaucluse, the auctioneer announced that the vendor would only require $75,000 of the purchase price on completion. The balance would be secured by way of mortgage over the land and repayments of the balance by the purchaser over three years. The land was sold for $155,000 and a contract of sale was drawn up and executed by representatives of the parties after the auction. The contract provided that the purchaser must pay the whole of the purchase price on completion. The purchaser applied to the Court for rectification of the contract so as to include the provision relating to the mortgage.
Held: Rectification was refused. The remedy is only available where the parties are in agreement at the time of the execution of the document and when the text of the document fails to reflect this agreement. As stated by Mason, J:
“…the purpose of the remedy is to make the instrument conform to the true agreement of the parties where the writing by common mistake fails to express that agreement accurately” (at 350).
Thus, in order for an application for rectification to be successful, the following elements must be present:
- A written instrument
- A mistake by all parties as to its meaning and effect
- The intention of all parties expressed in the agreement must be common or concurrent at the time the instrument was executed
2.3.1 Written instrument
As noted above, the Court has the power to rectify all instruments apart from wills and memoranda of association. In considering an application, it will start from the premise that the document, as it stands, reflects the intention of the parties. The onus is on the plaintiff to prove that due to a mistake the instrument does not reflect the wishes of the parties.
Historically, equity would only grant rectification when all parties to the instrument were mistaken as to its form or content. A mistake as to its effect was insufficient to attract relief. This was the view reflected by the High court in Maralinga.
Today, however, rectification is available where the parties were mistaken as to the meaning (and therefore the effect) of the words used in the document: Re Butlin’s Settlement Trusts  Ch 251.
For example, in Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329:
Facts: The parties instructed a solicitor to amend a trust deed so a company would become the beneficiary of the income of the trust. However, the amendment had the effect of making the beneficiary a capital beneficiary and also making it liable to pay stamp duty.
Held by the NSWCA, that there was a discrepancy (“disconformity”) between the “form or effect of the document executed and the intention of the parties who executed it” (at 336).
Similarly, traditionally the Court would not grant rectification for unilateral mistake when the mistake of one party was induced by the fraud of another.
However, when the other party has committed equitable fraud or unconscientiously took advantage of the mistake in the agreement, the Court will grant rectification on the grounds that it would be unconscionable to allow the party who knows about the mistake, to profit from his or her silence: Maralinga.
In an application for rectification the party applying to the Court must show that the instrument does not reflect the true and concurrent intention of the parties at the time the instrument was executed. It is not sufficient that the intention was expressed by the parties at some earlier time, but abandoned or changed later. For example, in Slee v Warke:
Facts: The owner of a hotel in Victoria agreed that the lessor, Warke, could have an option to purchase, exercisable within one year of the lease, provided the option was exercised within the twelvemonths. The owner instructed his solicitor to draw up the lease, which stated that the option could be exercised after the expiry of the one year.. Warke noticed the omission, but presumed that the owner had changed his mind. The owner, however, did not notice the change. The parties executed the lease and later Warke purported to exercise the option as per the document. The owner refused to convey title to the hotel. Warke applied for and obtained a declaration that the owner was bound to sell the hotel as per the terms of the lease. The owner appealed to the High Court claiming rectification of the document.
Held: There was no concurrent intention of the parties at the time the contract was executed. At the time the lease was signed, it was only the owner who intended that the option be exercised before the expiry of the year: Warke’s intention was in conformity with the written agreement as it was executed by the parties. The mistake of the owner was unilateral and had not been induced or perpetuated by Warke. Rectification was refused.
The plaintiff in an application for rectification must prove that the parties held the necessary concurrent intention. The proof must be “convincing.” Not only may documentary evidence be adduced, but also oral evidence to show the parties’ intentions at the time of execution, even though this contravenes the parol evidence rule.
2.5 Effect of rectification
A decree of rectification operates retrospectively and the amendments take effect as if the document were correct from the time that it was drafted.
3 DELIVERY UP
3.1 Ineffective Documents
Equity has always exercised a jurisdiction to order the deliver up and cancellation of documents that have been avoided by the party entitled to avoid them.
Thus a person avoiding a contract on the grounds of undue influence may seek an order that the defendant surrender the document to the court for cancellation.
The basis of the jurisdiction is that the public should be protected from being deceived by invalid documents.
The jurisdiction relates both to void and voidable documents; Bromley v Holland (1802) 7 Ves J 3; 32 ER 2.
All kinds of legal documents may be the subject of an order, including forgeries; Peake v Highfield (1826) 1 Russ 559; 38 ER 216.
Documents which are patently invalid on their face will not be ordered to be delivered up; Gray v Matthias (1800) 5 Ves 286; 31 ER 591.
Documents part of which are void only will not be ordered to be delivered up; Ideal Bedding Co Ltd. v Holland  2 Ch 157.
Delivery Up may be refused where the plaintiff is guilty of ‘unclean hands’, laches, acquiescence etc. or where the document is void on grounds of public policy and the parties are in pari delicto; Vauxhall Bridge Co v Earl Spencer (1821) Jac 64 at 67; 37 ER 774 at 775. But c.f. Money v Money (No 2)  1 NSWR 348 where deliver up was ordered notwithstanding the plaintiff’s participation in fraud on the grounds that as the jurisdiction existed for the protection of the public the order.
Delivery Up will be refused where the contract is neither void nor voidable even though there is in existence a good defence at law; Brooking v Maudslay Son & Field (1888) 38 Ch D 636.
Where an equitable right to seek delivery up and cancellation exists the party with that right is not bound to wait until the document is in fact used against him or her.
7.2 Infringing goods
In the 19th century the equity courts developed the remedy of deliver up and destruction with respect to goods which violated another’s intellectual property rights.
The basis for the order is to protect the public from goods made in breach of copyright, trademarks etc.
The order did not deny the defendant’s title to the goods but restrained the defendant from use of the goods by injunction with an order for delivery up to remove the goods from the temptation of the defendant. The plaintiff did not get title to the infringing goods; Vavasseur v Krupp (1878) 9 Ch D 351 at 360 per Cotton LJ.
Normally the order is one giving the defendant the choice of delivery up or destruction.
If goods can be modified so as to remove the infringing part then the court will be reluctant to deprive the owner of the goods of possession by an order for delivery up; Slazenger & Sons v Feltham & Co (No 2) (1889) 6 RPC 531, 538.
In cases of breach of copyright there is a statutory right to an action for conversion or detinue by the copyright owner in respect of the goods made in breach of copyright as if the copyright owner was the infringing goods; s.116, Copyright Act 1968 (Cth). This is an alternate right to possession than delivery up.
It is a defence to an action under s.116 that the defendant believed on reasonable grounds that the goods did not infringe copyright; Young v Odeon Music House (1976) 10 ALR 153.
8 Hypothetical Problem
Peter Pooter was an elderly man, living alone on his property near Bringelly. In June 2010, after having recovered the property from Roy Rogers (see ETR 1, Week 3), he had a conversation with his only relative, his sister Edna, about his future. He decided that the property was too large for him to manage and that at some time in the near future he would want to move into a residential retirement centre. Because 30 hectares of the property had recently been re-zoned for residential development, Edna suggested that Peter sell this portion of the property. The money he received for this could then be invested until he was ready to move.
The only problem with this plan was that the homestead was situated on the re-zoned portion of the property. However, Edna was certain that their lawyer would find a way to exclude the house from the sale.
The next day, Peter and Edna went to see Bazza Murphy at Fairfield, who had just started a practise on his own as a solicitor. After examining the surveys Peter had taken with him, Peter, Edna and Bazza discussed the problem of excluding the house. Bazza assured them that the house was situated on a separate lot, Lot 15, and could be excluded from the sale. The land that Peter wanted to sell comprised Lots 12, 13, 14 and 16. Peter gave Bazza instructions to draft a contract for sale and to engage a real estate agent, Joe Shady, to sell the land. Bazza told Joe that Lot 15 was not for sale and that he should make that clear to any prospective purchaser.
On 14 July 2010, an advertisement for the sale of the land appeared in the Fairfield Chronicle. Archie Pythagoras, a local accountant, saw the advertisement and contacted Joe. Archie was interested in property development as a side-line to his accountancy business. Archie went to visit the property with Joe, who told him that he didn’t think the house was included in the sale. Archie said words to the effect that:
“That’s fine. It would be a nuisance, anyway. It’s falling down and we’d have to demolish it!”
Archie went back to Joe’s office and paid a 10% deposit for the land and organised for the contract to be sent to his solicitor.
When Bazza had drawn up the contract, his secretary, Tiffany, had included the house in the lots subject to the sale. The contract therefore included Lot 15. Bazza did not check the contract for accuracy, and when Peter attended Bazza’s office to sign it, because he was functionally illiterate, he was unable to read it.
The contract was sent to Archie’s solicitor, Tony Mason, who read it through carefully. Archie had told Tony that he thought he was buying only four lots. When he noticed that five lots were listed, Tony contacted Archie, who replied:
“The agent didn’t seem to know whether an old house on the property was for sale. The old bloke must have decided to include it. It’s an even better deal than I thought it was!”
Archie signed the contract and completion took place on 1 September 2010. Peter deposited the proceeds from the sale into his bank account.
On 24 November 2010 three trucks and a bulldozer arrived at Peter’s house to commence demolition of the property. Peter was distraught and contacted Bazza, who, in turn, contacted Archie. Initially, Archie argued that he could do what he liked with the house, since it was his property. However, he reluctantly agreed to delay the demolition of the property until the matter could be sorted out. However, he pointed out to Bazza that the hire of the bulldozer and the wages of the workers were costing him $1,000 per day.
(a) Are there any remedies available to Peter? If so, what are Peter’s chances of saving his house in these circumstances?
(b) Does Archie have any arguments that he can put forward to protect his title to Lot 15?