Australian Capital Territory v BJM Canberra Pty Ltd
[2019] ACTSC 170
•28 June 2019
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title:
Australian Capital Territory v BJM Canberra Pty Ltd
Citation:
[2019] ACTSC 170
Hearing Date:
28 May 2019
Decision Date:
28 June 2019
Before:
McWilliam AsJ
Decision:
See [68]
Catchwords:
CONTRACT – INTERPRETATION – Whether a clause of a deed permits a developer to charge for car parking required to be provided to ACT Policing – standing of the Australian Capital Territory – whether utility in granting relief – declaration made
Legislation Cited:
Australian Capital Territory (Planning and Land Management) Act 1988 (Cth) ss 4, 28, 30
Australian Capital Territory (Self-Government) Act 1988 (Cth) s 36
Evidence Act 2011 (ACT) s 144
Planning and Development Act 2007 (ACT) s 11
Cases Cited:
Ainsworth v Criminal Justice Commission (1992) 175 CLR 564
Aussie Airlines Pty Ltd v Australian Airlines Ltd (1996) 68 FCR 406
Beswick v Beswick [1968] AC 58
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337
Coulls v Bagot’s Executor and Trustee Co Ltd (1967) 119 CLR 460
Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12; 261 CLR 544
Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; 251 CLR 640
Farmer v Honan (1919) 26 CLR 183
Mermaids Café and Bar Pty Ltd v Elsafty Enterprises Pty Ltd [2010] QCA 271
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; 256 CLR 104
Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286
Thorby v Goldberg (1964) 112 CLR 597
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165
Tweddle v Atkinson (1861) 1 B & S 393
Upper Hunter Country District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429
Parties:
Australian Capital Territory (Plaintiff)
BJM Canberra Pty Ltd (ACN 614 417 953) (Defendant)
Representation:
Counsel
P Walker SC (Plaintiff)
J Pappas with J Dempster (Defendant)
Solicitors
ACT Government Solicitor (Plaintiff)
Aulich Civil Law (Defendant)
File Number:
SC 25 of 2019
McWILLIAM AsJ:
1. This case concerns the use of a parcel of land described as Blocks 9 and 10, Section 100, City (the Site), situated immediately south of the City Police Station between London Circuit and Vernon Circle. The Site is currently used as a car park.
2. A dispute has arisen between the Australian Capital Territory (Territory) and the Defendant, BJM Canberra Pty Ltd (ACN 614 417 953) (the Developer), who is the current holder of the Crown lease over the Site. The issue is whether 100 secure parking spaces located on the Site and being used by ‘ACT Policing’ are required to be provided by the Developer to the Territory free of charge.
3. The Site was sold by public auction by the Land Development Agency (then an agency of the Territory) to City West Property Holdings Pty Ltd (ACN 128 901 771) (City West) on 14 December 2007. At the time of the auction, the Site was part of Block 19 Section 63 City but has subsequently been subdivided and consequently renamed.
4. The current obligation to provide the 100 spaces is created by a Deed executed on 14 January 2014 (Deed) between the Planning and Land Authority (the Authority) and the previous holder of the Crown Lease, City West. The Deed was assigned to the Developer in April 2018, when it purchased the Site from City West, with the sale transfer being registered in June 2018.
5. The Deed is the latest iteration of an earlier deed of agreement covering the Site, executed in March 2008 by City West following the auction. The earlier version of the Deed is noteworthy only to the extent that the critical clause concerning the car parking in dispute, being Clause A2.1.6.4 of Annexure A2 of the Deed was in materially the same terms.
6. Since 2014, Clause A2.1.6.4 of Annexure A2 has been amended by subsequent variations to the Deed, which are immaterial for the purposes of the issue in dispute between the parties. Clause A2.1.6.4 is currently in the following relevant terms:
Car parking is to be provided on Section 63 City in accordance with the rates set out in the ACT Parking and Vehicular Access Guidelines for land uses other than office use. …
[The paragraph then prescribes the number of parking spaces required per 100m2 of the gross floor area and whether it is to be accommodated on‑site.] …
In addition to on-site parking provision requirements generated by the development, 750 publicly available parking spaces available 24 hours per day and seven days per week are also to be developed and may be privately owned and operated. If the development is undertaken in stages, the 750 public spaces must be constructed and made operational as part of Stage 1. Real time public parking availability information to Territory requirements is to be provided for permanent public parking provided within the site …
[The paragraph then prescribes further requirements for real time information.]
In addition to the parking described above, the developer will be required to provide a minimum of 100 secure spaces for the ACT Policing in immediate proximity to the City Watch House (Block 4 Section 18 City) to provide secure parking for individual officers and police vehicles as well as to minimise response time for police vehicles on call-out. The parking spaces are to be provided both during construction and upon completion of the development to the requirements of the ACT Policing.
[A paragraph concerning car parking under the Edinburgh Avenue extension was deleted by a variation to the Deed.]
The undeveloped area to the south of the Holding Lease between London Circuit and Vernon Circle may be licensed to the developer for the purpose of new temporary car parking. This will be subject to negotiation with the NCA [(National Capital Authority)] and the Territory.
The Project Implementation Plan must also contain a staged parking management plan that identifies how car parking will be managed during construction and upon completion of the development.
During construction, a minimum of 200 temporary public parking spaces, which must include a provision for controlled parking for all construction workers, and an additional 100 secure temporary spaces for ACT Policing use, are required to be maintained by the developer either within the holding lease or on licensed land at all times. Additionally, 100 spaces of the existing surface car park immediately to the south of the Holding lease boundary are to be maintained for public access at all times.
The temporary car parking must be provided before start of construction and maintained until permanent car parking is complete and operational.
Existing public car-parking is to remain operational 24 hours per day seven days per week in its current form until a Notice of Commencement of Construction or approval is issued by the Estate Manager and until approved temporary replacement car-parking is made operational. The developer will be responsible for implementing a pay parking regimen on the site during this period.
[Emphasis added.]
Relief sought
7. By Amended Originating Application dated 28 May 2019, the Territory seeks alternative declarations in the following terms:
(a) A declaration that pursuant to clause A2.1.6.4 of Annexure A2 of the Deeds of Agreement, the Defendant must provide a minimum of 100 car parking spaces to ACT Policing, a business unit of the Australian Federal Police, and that the provision of those parking spaces is to be free of charge.
(b) In the alternative, a declaration that pursuant to clause A2.1.6.4 of Annexure A2 of the Deeds of Agreement, the Defendant must provide a minimum of 100 car parking spaces to ACT Policing, a business unit of the Australian Federal Police, irrespective of whether it receives payment for providing those car parking spaces.
Standing
8. The Developer raised an argument that the Territory does not have standing to seek the above relief, broadly for two reasons. The first was that the Territory was not a party to the Deed. The second is that the Territory does not have a commercial interest in the dispute. There were a number of submissions put:
(a) Declaratory relief will not be granted by a stranger or a party without a sufficient interest in the outcome of the application.
(b) There is no ‘dispute’ between the parties most directly affected by the controversy, being the Developer and the Commonwealth of Australia.
(c) The Developer has a licence agreement with the Australia Federal Police (AFP) in respect of the same car parking spaces, which is unaffected by the relief sought.
(d) The wording of the declaration is vague and imprecise.
(e) The relief sought has no utility.
9. The Developer’s submissions cover both the concept of standing and the Court’s discretion to refuse to grant declaratory relief. I will deal with what I consider to be submissions directed purely to standing at the outset, and latter arguments about declaratory relief will be considered separately once the proper construction of the Deed is known.
10. As to the Territory not being a party to the Deed, the Territory’s standing clearly arises by statute.
11. The Deed was executed by the Authority. Section 11 of the Planning and Development Act 2007 (ACT) provides that anything done in the name of, or for, the planning and land authority is taken to have been done for, and binds, the Territory. The Territory is thus the entity entitled to enforce the terms of the Deed. It is the proper plaintiff in the proceedings and has sufficient interest in the outcome of the application by virtue of statute.
12. The next argument was that the Authority in fact executed the Deed as an agent for the Commonwealth of Australia (Commonwealth), because the Commonwealth owns the subject land, not the Territory. The Court’s attention was drawn to recitals B and C:
B The Commonwealth is the owner of the Site, being land which is classified as Territory Land within the meaning of the Australian Capital Territory (Planning and Land Management) Act 1988 (Cth).
C Under statutory powers and duties prescribed by the Commonwealth, the Territory, through the Authority and on behalf of the Commonwealth.
(i) has responsibility for the management of Territory Land, and
(ii) may grant, dispose of, acquire, hold and administer leasehold estates in Territory Land.
13. Again, the complete answer to this argument is found in statute, in particular ss 28-30 of the Australian Capital Territory (Planning and Land Management) Act 1988 (Cth) (PLM Act).
14. Territory Land is defined as any land in the Territory that is not National Land: s 28 of the PLM Act.
15. The Territory Executive is created by s 36 of the Australian Capital Territory (Self-Government) Act 1988 (Cth) (Self-Government Act). That definition feeds into the definition of ‘Executive’ in the PLM Act: see s 4 of the PLM Act.
16. Section 29 of the PLM Act then relevantly provides that the Executive, on behalf of the Commonwealth, has responsibility for the management of Territory Land, and in that management role, may dispose of, acquire, hold and administer estates in Territory Land.
17. Section 30 of the PLM Act is then in the following terms:
30 Territory liable as manager
(1) Where, apart from this section, the Commonwealth would be liable in respect of an act done or omitted to be done by the Territory in the performance of its functions under section 29, the liability is vested in the Territory and ceases to be a liability of the Commonwealth.
(2) Where:
(a) a liability arises in respect of:
(i) land at a time when it is Territory Land; or
(ii) the management of the taking of water on National Land; or
(iii) the regulation of the taking of water on National Land; and
(b) the liability arises from a covenant given by the Commonwealth at any time in its capacity as owner of the land;
the liability is vested in the Territory and ceases to be a liability of the Commonwealth.
[Emphasis added.]
18. The effect of the legislation is that the Territory, in managing Territory Land, acts through the Authority but is nevertheless the legally responsible entity for any liabilities notwithstanding that the Commonwealth may remain the ultimate owner of all Territory Land.
19. Thus, if a liability to pay money for car parking on the Site arises out of the Deed executed by the Authority with the Developer, then that responsibility, and the right to argue about it, vests in the Territory.
20. The Developer’s next argument was that the car parking on the Site is provided to the AFP and not the Territory, so that the Territory does not have a present entitlement to control the use of the car parking spaces, nor to use them at its discretion, and such an entitlement might never arise.
21. Such an argument misunderstands the doctrine of privity of contract as it applies to third party beneficiaries.
22. Clause A2.1.6.4 requires the Developer to provide a benefit to ACT Policing. The evidence establishes that presently, the policing service in the Territory is being carried out by the AFP. Indeed, that the AFP provides community policing services to the Territory is such a matter of common knowledge in the Territory that I consider the Court could take judicial notice of that fact: s 144 of the Evidence Act 2011 (ACT).
23. The fact that the car parks are being provided to the AFP as the service provider under the clause does not mean that the Territory has no interest. Clause A2.1.6.4 does not result in ACT Policing, or anyone who carries out the service for ACT Policing, being the entity able to litigate in respect of the present disputed question of construction under the Deed.
24. The AFP, in its capacity as service provider to and for ACT Policing, is the equivalent of a third-party beneficiary under the Deed. The long-established rule is that such an entity cannot enforce the obligation under the Deed in its favour: Tweddle v Atkinson (1861) 1 B & S 393 at 397. This is because a third party is not the contracting party, and has not given any consideration for any rights negotiated in the contract.
25. However, the contract itself remains legally effective and the right and title to sue to enforce the obligation, or to obtain damages for the breach of it, remains with the contracting party: see Beswick v Beswick [1968] AC 58 at 88 and 101; Coulls v Bagot’s Executor and Trustee Co Ltd (1967) 119 CLR 460 at 501-2. In this case, that party is the Territory, for reasons explained above.
What is the proper construction of clause A2.1.6.4?
General principles on construction of contracts
26. The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context and purpose: Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; 256 CLR 104 (Mount Bruce) at [46] per French CJ, Nettle and Gordon JJ.
27. For commercial contracts, the Court asks what a reasonable businessperson would have understood the terms to mean. That enquiry requires “consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract”: Mount Bruce at [47].
28. Ordinarily, the contract alone governs the process of construction. Absent ambiguity, evidence of surrounding circumstances cannot be adduced (Mount Bruce at [48], [52]; Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 352 per Mason J). However, sometimes recourse to events, circumstances and things external to the contract is necessary. Examples include (Mount Bruce at [49]):
… identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding “of the genesis of the transaction, the background, the context [and] the market in which the parties are operating”. It may be necessary in determining the proper construction where there is a constructional choice. …
[Citations omitted.]
29. Evidence of the surrounding circumstances must be objective (Mount Bruce at [50]):
… What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties’ statements and actions reflecting their actual intentions and expectations.
[Citations omitted.]
30. The commercial context of a contract is a relevant consideration. The contract should be interpreted on the assumption that the parties intended to produce a commercial result, and the contract construed to avoid it “making commercial nonsense or working commercial inconvenience”: Mount Bruce at [51] (citations omitted). In Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12; 261 CLR 544, Kiefel, Bell and Gordon JJ observed at [16]:
It is well established that the terms of a commercial contract are to be understood objectively, by what a reasonable businessperson would have understood them to mean, rather than by reference to the subjectively stated intentions of the parties to the contract. In a practical sense, this requires that the reasonable businessperson be placed in the position of the parties. It is from that perspective that the court considers the circumstances surrounding the contract and the commercial purpose and objects to be achieved by it.
[Citations omitted.]
31. See also Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40]; and Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; 251 CLR 640 at [35].
32. Evidence of subsequent conduct is admissible as part of considering the extrinsic circumstances. The subsequent conduct of the parties may clarify or illuminate what was uncertain at the outset: Farmer v Honan (1919) 26 CLR 183 at 197.
33. Relevant to one of the arguments below is the issue of uncertainty in contractual terms (as distinct from ambiguity). A court will strive to uphold an agreement with uncertain terms where possible. In Upper Hunter Country District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429 at 436-7, Barwick CJ said:
But a contract of which there can be more than one possible meaning or which when construed can produce in its application more than one result is not therefore void for uncertainty. As long as it is capable of a meaning … the court … will decide its application. … [n]o narrow or pedantic approach is warranted …
34. If a party has latitude of choice in the manner of performance or an obligation can be performed in more than one way, this does not make the term void for uncertainty: Thorby v Goldberg (1964) 112 CLR 597 at 605 per Kitto J; Mermaids Café and Bar Pty Ltd v Elsafty Enterprises Pty Ltd [2010] QCA 271 at [38].
Arguments of the parties
35. The Territory contends the following (in summary):
(a) Text: The express text of clause A2.1.6.4 does not permit the Developer to charge for providing the 100 car parking spaces.
(b) Context: The surrounding context of the remainder of the clause supports the plain reading of the text. The publicly available car parking spaces are able to be “privately owned and operated” (as seen from the emphasised words in [6] above), from which an inference may be drawn that those spaces are ones for which a charge may be incurred. No such reference occurs in relation to the 100 car parking spaces for ACT Policing.
(c) Commercial purpose: There is no basis for implying a term permitting the Developer to charge for the 100 spaces into the Deed. When regard is had to the commercial context of the Deed, it is not the case that the clause would be interpreted to require payment, having regard to the public nature of the Territory and the long standing history of the car park spaces having been made available to the AFP since 1992.
(d) Extrinsic evidence: If extrinsic evidence is taken into account at the time the parties signed the Deed, the position is clear that the 100 car parking spaces were to be provided free of charge. Further, the conduct of the original contracting parties is consistent with a construction of the clause where there was no charge for the use of the 100 car parking spaces by the AFP.
36. The Developer contends (in summary from the written and oral submissions):
(a) Lack of express text: There are no words in clause A2.1.6.4, or in any of the variations to the Deed, that the 100 car parking spaces are “to be provided to the Territory free of charge”.
(b) Context: The provision of carparking is part of the defined ‘works’ in the Development. There are a number of clauses requiring the Developer to do things at its expense or at its own cost. The requirement of the Developer under the Deed is only to design, construct and complete the development. It is not to manage, or provide into the future, parking at no charge.
(c) Extrinsic evidence does not assist: To the extent that extrinsic evidence is taken into account as to the surrounding circumstances at the time the Deed was executed, the Developer had no knowledge of those circumstances.
(d) No remedy for unilateral mistake: If there was a mistake by the Authority, in acting as agent of the Territory, in failing to ensure that the documentation properly reflected the Territory’s intention that the AFP should have the benefit of 100 free car parking spaces, such mistake does not mean that the Territory is now entitled to the remedy it seeks.
(e) Lack of notice to Developer: The Developer did not have any notice of the obligation for which the Territory now contends in its negotiations with City West. Had the Developer been made aware of the obligation, then it would have offered a lesser purchase price for the Site.
(f) Licence Agreement now exists: The Developer has entered into a licence agreement with the AFP where it is entitled to charge for the same car parking (a copy of which was in evidence). At no stage during the negotiation of that agreement was the issue raised by or on behalf of the Commonwealth.
(g) Uncertainty: The term ACT Policing is not defined in the Deed and the clause refers to a ‘minimum’ of 100 car parking spaces, which is productive of uncertainty. On no version of what the Territory seeks is it clear that the car parking spaces, however many there may be, are able to be provided free of charge to the Territory to control and use at the Territory’s discretion in the event the AFP no longer requires them.
Consideration – text and context
37. The plain text of the clause does not refer to any charge for the 100 car parking spaces. The obligation on the Developer is simply to ‘provide’ those spaces.
38. The Macquarie Dictionary defines “provide” relevantly to mean:
1. to furnish or supply.
2. to afford or yield.
…
39. The ordinary meaning of the word does not require that the act of furnishing or supplying be for value. The express language used is, to my mind, clear. Had there been any intention by the contracting parties to enable a charge for the 100 car parking spaces, the arrangement would not have been simply to ‘provide’ them. The language would have instead specified that the Developer must rent, lease or license the spaces to ACT Policing.
40. Next, reading the phrase “the developer will be required to provide” in the context of the paragraph as a whole, there is no mention of payment and no words from which an obligation to pay for the provision of the car parking spaces may be inferred. On the contrary, the words ‘provide’ or ‘provided’ are used five times throughout the paragraph (see the emphasised words in the clause at [6] above), and each time the word is used in the sense of supplied or made available. The consistent use of the language in context supports the plain meaning of the text.
41. The same result is achieved if the context of the paragraph is considered from a broader perspective, focusing on the overall car parking scheme. The first paragraph of Clause A2.1.6.4 states that “Car parking is to be provided … in accordance with the rates set out in the ACT Parking and Vehicular Access Guidelines for land uses other than office use”. No party submitted that this was a reference to a monetary rate. Instead, the reference to guidelines is a reference to the need for a certain number of parking spaces calculated by reference to the gross floor area in a new development. The first paragraph is silent on the issue of charging. That is consistent with the Development attaching or allocating such car parking to the residential or commercial units in the development when they are sold, reflected in the purchase price of the units.
42. The second paragraph requires the Developer to develop 750 publicly available parking spaces with all-day access. Critically, the paragraph stipulates that these 750 spaces “may be privately owned and operated”, which I accept gives rise to an inference that permits the charging of fees for public parking.
43. The last three paragraphs of the clause are directed to ensuring that appropriate temporary parking is available prior to and during construction. The third-to-last paragraph refers to “a minimum of 200 temporary public parking spaces … and an additional 100 secure temporary spaces for ACT Policing use” to be “maintained” during construction.
44. Again, it is important, in my view, that the final paragraph of Clause A2.1.6.4 refers to “Existing public car-parking” remaining operational 24 hours per day seven days per week in its current form until a Notice of Commencement of Construction or approval is issued. The last sentence stipulates that the Developer is responsible for “implementing a pay parking regimen” during that period. Again, the reference to charging is for the public car parking part of the scheme.
45. In the context of the entirety of Clause A2.1.6.4, the only provision for car parking fees is expressly in relation to the public car parking aspect of the scheme. This reinforces the construction for which the Territory contends.
46. The Developer relied on the context of the entire Deed, submitting that none of the clauses referring to works or obligations to be carried out at the Developer’s cost deal with this aspect of car parking. That is unsurprising given that the obligation is contained in a separate clause, being Clause A2.1.6.4. There is no necessity to deal with the issue twice in a contract. Having reviewed the numerous clauses relied upon by the Developer, contained in an aide memoire handed up to the Court during the hearing, none of those clauses appear to have any bearing on the issue of interpretation for determination here.
Commerciality supports the plain and contextual meaning
47. As to the commercial purpose of the Deed, it was clearly in the commercial interest of the Territory, in selling the Site to be developed, to seek to protect the availability of car parking for ACT Policing purposes in the same manner that it had previously enjoyed as the owner of the Site. The overriding commercial purpose for the Developer was also clearly to develop a Site presently used as a car park for its highest and best use, being a mixed residential and commercial development.
48. A construction which favours the provision of car parking for ACT Policing free of charge does not work against producing a commercial result for the Developer. Rather, an ordinary businessperson would view permitting ACT Policing to continue to use part of the Site for no charge as part of the price to be paid for what was a substantial development opportunity.
Extrinsic evidence of surrounding circumstances supports the plain and contextual meaning
49. Assuming ambiguity from the fact that the parties are in dispute about the meaning of Clause A2.1.6.4, when regard is had to the extrinsic evidence of surrounding circumstances, the construction of the clause for which the Territory contends is put beyond doubt.
50. The affidavit evidence discloses that before the auction of the land in 2007, a draft Deed of Agreement was provided to potential bidders together with a document entitled “Section 63 Questions and Answers”. Question 67 reads:
With regard to the 1,000 public car parking bays and 100 police parking bays required to be delivered by the Developer in accordance with the Deed of Agreement we seek clarification on the following:
1. Are the 1,000 car parking bays chargeable at market car parking rates?; and
2. Are the 100 police spots charged at market rates or do they receive “pepper corn” rate?
51. The answer to that question reads:
The Deed of Agreement provides that the 1000 car parks can be held in private ownership.
The 100 car parking spaces for use by the AFP are to be provided to the Territory free of charge. In the event that at some future time the AFP no longer requires the parking spaces, the Territory will continue to control use of the 100 parking spaces and use them at the Territory’s discretion.
52. Further, a copy of the auctioneer’s opening statement delivered at the auction on 14 December 2007 was also in evidence. That document states:
All bidders have had the opportunity to review the Auction material for [the Site] on the website at … including but not limited to:
…
[a series of Addendums, including an Addendum to the draft Deed of Agreement to be signed]
…
the 75 questions and answers that have been posted on the website.
If you have not received a copy of any of the Addendums or any of the questions and answers please see a representative of [the Land Development Agency] at the registration desk immediately.
I specifically draw your attention to the response to question 67:
The 100 car parking spaces for use by the AFP are to be provided to the Territory free of charge. In the event that at some future time the AFP no longer requires the parking spaces, the Territory will continue to control use of the 100 parking spaces and use them at the Territory’s discretion.
[Emphasis added.]
53. There was no suggestion that the auctioneer did not read the statement in the terms presented to the Court.
54. This is objective evidence of the surrounding circumstances at the time the original deed of agreement was entered into by City West. The intention of the seller was a mutually known fact, expressly communicated to all potential buyers as the basis on which the Site would be sold both in writing and orally at the auction. It falls into the category of a matter of common contemplation or assumption of the parties (Codelfa at 354). Again, it supports the construction of the clause favouring the provision of the 100 car parking spaces free of charge.
55. The Developer argued that at time of the auction, it did not exist as a corporate person, and therefore did not have notice of these matters. So much was accepted by the Territory. However, the Developer’s state of mind or knowledge is irrelevant as it was not the original contracting party. The Developer is bound by the obligations of City West. That is made clear by the Deed of Assignment that was in evidence, executed by the Authority, City West and the Developer on 3 April 2018. Clause 3.1(b) of the Deed of Assignment states:
The Buyer agrees to be bound by the terms of the Deeds of Agreement and to perform the obligations of the Seller under the Deeds of Agreement on and from the Effective Date as if the Buyer had been named in the Deeds of Agreement as the Seller.
56. Clause 5 of the Deed of Assignment also provided that the Authority remained entitled to its rights under the Deeds of Agreement. The reference to more than one deed of agreement in these clauses arises from the same document being executed in respect of each parcel of land when it was subdivided.
57. For completeness, there was also evidence before the Court of post-contractual conduct. From 2014 when the Deed was executed until 2018 when City West sold the Crown lease in respect of the Site, City West did not charge for the 100 car parks used by the AFP.
58. All of this demonstrates that there was no unilateral mistake by the Territory. If anything, the mistake has been made by the Developer. Complaints by the Developer about lack of notice or that it would have paid less for the Site had it known the true position as to the 100 car parking spaces used by the AFP are matters more properly directed to its negotiations with City West when it purchased the Crown lease.
The existence of the licence agreement with the AFP is irrelevant
59. The licence entered into by the AFP in 2018 with the Developer, apparently without notice to the Territory, whereby the AFP was obliged to pay for the car parking spaces, is a document signed by a different entity and does not bind the Territory in any way. It is irrelevant to the construction issue before the Court.
No uncertainty
60. There is no uncertainty with regard to Clause A2.1.6.4. and the terms ‘ACT Policing’ and the reference to a ‘minimum’ of 100 secure car parking spaces. That the AFP is the service provider for ACT Policing is notorious, but even if that were not the case, the reference to the AFP is made in the extrinsic evidence both orally and in writing. Further, the evidence was that the AFP had used the 100 car parking spaces since 1992. Again, it must be taken to be at least a common assumption.
61. However, even if my view based on all those aids to construction were incorrect, the clause itself provides an alternative, namely that the Territory will continue to control the 100 car parking spaces and use them at its own discretion. On the authorities discussed above, that provides sufficient certainty to make the Clause A2.1.6.4 legally enforceable.
62. Similarly, the presence of the word ‘minimum’ does not render the clause uncertain at all, or in a way that would render that part of the clause void for uncertainty. The common-sense interpretation of those words is to leave it open to the parties to negotiate if the Territory wishes to obtain more car parking spaces for ACT Policing. Even if the word ‘minimum’ were to be found to be too uncertain or meaningless, that single word is easily severed and does not affect the content of the obligation in the remainder of the sentence, let alone the remainder of the clause.
Should declaratory relief be granted?
63. A court may make a declaration at its discretion in relation to the proper construction of the contract. The issue raised by the Defendant relying on Aussie Airlines Pty Ltd v Australian Airlines Ltd (1996) 68 FCR 406 (and the authorities referred to in that judgment) was that in order for a party to have sufficient standing to seek and obtain the grant of declaratory relief, it must satisfy a number of tests, some in the alternative and some cumulative.
64. The arguments raised lack of utility based on lack of commercial interest and the issue being hypothetical.
65. It may be accepted that the court will not make a declaration if in the circumstances to do so would serve no useful purpose or if the question is purely hypothetical: Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286 at 307; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-582.
66. However, the Territory does not need to demonstrate a direct commercial interest in the fulfillment of the obligation under Clause A2.1.6.4 in order to obtain demonstrate utility and obtain declaratory relief. If the licence agreement between the Developer and the AFP has any relevance, it establishes that a body that is carrying out ACT policing services for the Territory is being required to pay for car parking spaces that under the Deed, it was entitled to use free of charge (on the above construction of the Deed). The issue is not hypothetical; it arises by virtue of the Developer’s present conduct.
67. As I have found, the Territory is entitled to enforce the terms of the Deed. It may not be the party suffering financial loss, due to the obligation being for the benefit of a third party. Accordingly, seeking damages for breach may not be appropriate, as the damages payable to the Territory may be nominal. Absent an order for specific performance of the obligation to provide car parking free of charge, which was not sought for reasons not explained, a declaration as to the proper construction of the Deed will serve some utility for the parties in how they proceed with the ongoing contractual relationship under the Deed.
Conclusion
68. For the above reasons, I consider it appropriate to grant declaratory relief, although not in the words sought by the Territory. I will order that the Developer should pay the Territory’s costs on the usual basis that costs ought to follow the event. If either party seeks a variation of the order for costs on the basis of external considerations relevant to the question of costs, they are to make such an application to my chambers within 7 days. The Court makes the following declaration and orders:
(1) On the proper construction of Clause A2.1.6.4 of Annexure A2 of the Deed executed 14 January 2014, as varied, between the Planning and Land Authority and City West Property Holdings Pty Ltd (ACN 128 901 771), the Defendant as assignee of the Deed must provide a minimum of 100 secure car parking spaces to ACT Policing free of charge.
(2) The defendant is to pay the plaintiff’s costs.
(3) Order 2 is stayed for seven days.
I certify that the preceding sixty-eight [68] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Associate Justice McWilliam.
Associate:
Date:
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