BJM Canberra Pty Ltd v Australian Capital Territory
[2020] ACTCA 9
•25 February 2020
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL
Case Title: | BJM Canberra Pty Ltd v Australian Capital Territory |
Citation: | [2020] ACTCA 9 |
Hearing Date: | 7 February 2020 |
DecisionDate: | 25 February 2020 |
Before: | Burns, Mossop and Charlesworth JJ |
Decision: | Appeal dismissed with costs. |
Catchwords: | CONTRACT – INTERPRETATION – Appeal – whether a clause of a deed permits a developer to charge for car parking required to be provided to ACT Policing – construction of the clause in the context of a Crown lease – appeal dismissed |
Cases Cited: | Australian Broadcasting Commission v Australasian Performing Right Association (1973) 129 CLR 99 Australian Capital Territory v BJM Canberra Pty Ltd [2019] ACTSC 170 WN Hillas & Co Ltd v Arcos Ltd (1932) 43 LI L Rep 359 |
Parties: | BJM Canberra Pty Ltd (Appellant) Australian Capital Territory (Respondent) |
Representation: | Counsel N Hutley SC with J Pappas (Appellant) P Walker SC (Respondent) |
| Solicitors Aulich Civil Law (Appellant) Australian Capital Territory Government Solicitor (Respondent) | |
File Number: | AC 31 of 2019 |
Decision under appeal: | Court/Tribunal: Supreme Court of the ACT Before: McWilliam AsJ Date of Decision: 28 June 2019 Case Title: Australian Capital Territory v BJM Canberra Pty Ltd Citation: [2019] ACTSC 170 |
THE COURT:
Introduction
This appeal concerns the use of parcels of land described as Blocks 9 and 10 Section 100 City (the site). This land is situated immediately to the south of the City Police Station between London Circuit and Vernon Circle. The appellant is the current holder of a Crown lease over the site.
The site was originally sold at auction in 2007 to a different company, City West Property Holdings Pty Ltd (City West). The site was originally part of Block 19 Section 63 City, but that block was subsequently subdivided and renamed.
The dispute between the parties relates to the obligation upon the appellant to provide 100 secure parking spaces on the site for “ACT Policing”. That is an obligation which is provided by a deed of agreement executed on 14 January 2014 between the Planning and Land Authority (the Authority) and the previous holder of the Crown lease, City West (the Deed). (There are in fact separate deeds of that date relating to Block 9 and Block 10, but they are in relevantly identical terms and it is appropriate to refer to them simply as the Deed.) The Deed was varied on occasion, but the details of such amendments are immaterial for the purposes of the current dispute. The Deed was assigned to the appellant in April 2018 when it purchased the site from City West. The assignment was effected by a deed of assignment dated 3 April 2018 (Deed of Assignment). As part of the assignment the appellant agreed with City West and the Authority that it would be bound by the terms of the Deed, as if the appellant was named in the Deed as City West: Deed of Assignment clause 3.1(b).
In 2019 the Australian Capital Territory (the Territory) sought a declaration that pursuant to clause A2.1.6.4 of Annexure A2 of the Deed, the defendant was obliged to provide a minimum of 100 parking spaces to ACT Policing, a business unit of the Australian Federal Police (AFP), “and that the provision of those parking spaces is to be free of charge”. Alternatively, it sought a declaration in the same terms except instead of the quoted words, concluding with the words “irrespective of whether it receives payment for providing those car parking spaces”.
The primary judge found that the Territory was entitled to the declaration sought and made it in the first of the two alternative forms: Australian Capital Territory v BJM Canberra Pty Ltd [2019] ACTSC 170 (ACT v BJM) at [68]. She also ordered the appellant to pay the respondent’s costs of the proceedings.
The appellant has appealed against that decision. The grounds of appeal are lengthy. A number of them (grounds (a)-(e)), which principally related to the standing of the respondent to seek the relief that it obtained, were not pressed on the appeal. The remaining grounds were not individually addressed in the written or oral submissions made on behalf of the appellant. Rather, the substance of the grounds argued on behalf of the appellant were:
(a)that the primary judge erred in the construction of the relevant clause in holding that the obligation upon the appellant was to provide the parking spaces free of charge; and
(b)in reaching that conclusion, the primary judge erred in taking into account the extrinsic evidence that she did.
Having regard to the manner in which the case was argued, it is appropriate to address the appeal on the basis that these are the grounds upon which the appellant seeks to overturn the decision of the primary judge.
Background
Following various amendments to the documentation, which it is unnecessary to describe, and the assignment of the obligations by City West to the appellant, the basic structure of the arrangement between the appellant and the respondent is that the appellant has a holding lease over the relevant blocks and is required to carry out a development on those blocks in accordance with the terms of the Deed and relevant planning approvals.
Following the completion of the construction of the development (or a relevant stage of it) a new long-term Crown lease will be issued for the blocks. The terms of the long-term Crown lease are not comprehensively set out in the Deed or current holding lease. However, it is required to incorporate relevant obligations from the Deed, including the clause relating to the provision of parking set out below: Deed clause 5.2 and Annexure A3.
So far as the issue in the present case is concerned, the critical clause is clause A2.1.6.4 of the Deed for each relevant block. The text of the clause as set out in the primary judge’s reasons is as follows:
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.]
Construction point
The appellant’s first argument was that the primary judge erred in the construction of clause A2.1.6.4. Its ultimate contention was that on the proper construction of the documentation, all the appellant was required to do was to construct and make available for use by the AFP the requisite number of secure car parking spaces. Whether, to what extent and upon what terms, generally or as to remuneration, the AFP chose to utilise those spaces was a matter for negotiation between the appellant and the AFP. The appellant accepted that it may be that it was obliged to provide the spaces on reasonable terms, so that if agreement could not be reached an expert (acting under the dispute resolution provisions of the Deed) or a court could determine the content of the terms (including the amount to be paid for the provision of the parking spaces).
The reasoning leading to that position was articulated in the appellant’s submissions as follows:
(a)There is an obligation to provide a minimum of 100 secure places. The use of the word “provide” does not exclude the possibility that the provision be on reasonable terms including terms requiring payment. For example, lawyers may “provide” services but in doing so require payment for those services.
(b)Those parking spaces, at least “upon completion”, are to be provided “to the requirements of ACT Policing”. Nothing is said in the clause as to how this is to be effected. The “requirements of ACT Policing” points to physical needs consistent with the purpose of making available secure parking and minimising response times. Otherwise the clause is silent on matters of management and maintenance of the spaces, that is, their supply.
(c)Those matters depend on implications of reasonableness with respect to the utilisation of the spaces provided: see WN Hillas & Co Ltd v Arcos Ltd (1932) 43 LI L Rep 359 at 367; Australian Broadcasting Commission v Australasian Performing Right Association (1973) 129 CLR 99 at 109-110. Unless that implication be made the clauses would fail for want of certainty: Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429 at 436-7.
(d)The Deed clearly does not provide any of the machinery provisions for the operation of the police parking following completion of the development such as:
(i)the means of ingress and egress;
(ii)limitations on the use of the land for car parking by police officers and police vehicles;
(iii)the cost of and means of upkeep, cleaning, repairs or maintenance;
(iv)insurance;
(v)lighting; and
(vi)the terms upon which more than 100 secure spaces might be supplied if required from time to time.
(e)These are essential matters which could not be determined by the unconstrained demands of the body which from time to time meets the description of “ACT Policing”. As that body is not a party to the Deed any dispute would be between the parties or any assignees. It may be that the relevant body might have standing to seek a declaration.
(f)There is similarly no indication in the clause that these parking spaces are to be made available free of charge for use by the AFP, the body currently meeting the description of “ACT Policing”, following the completion of the development and for the duration of any consequential lease. As with the other bases of supply any terms would have to be reasonable.
These submissions cannot be accepted.
While the word “provide” considered in the abstract may accommodate circumstances in which the provision may be conditional upon payment, the issue in this case is what the word means in the context in which it appears in clause A2.1.6.4 of the Deed.
An important part of the context in which the word is used is that it appears in an agreement with a developer designed not only to permit development of the site for the private benefit of the developer, but also to achieve a range of public infrastructure purposes. Clause A2.3.3 of the Deed describes significant off-site works to be designed and constructed by the developer. Those include obligations the content of which is to be determined by other agencies (such as the Territory, the National Capital Authority, ActewAGL) and for which development approval would also be required. In that context it is not at all unusual that obligations to build and operate facilities significant for the operation of the relevant police service would also be included. The fact that such obligations may be ongoing is not a determinative distinction between the off-site works and the obligation to provide parking spaces for police. Both categories involve burdens upon the purchaser of the land, the cost of which may readily be factored into the purchase price. This was pointed out by the primary judge: ACT v BJM at [48]. In the Territory context where the government has, through its control of the granting of Crown leases, significant control over the development of land, it is not at all unusual that burdens of the kind imposed under clause A2.1.6.4 might be expressed in terms conferring no specific commercial benefit upon developer. For the many and various burdens imposed under the Deed, the developer has the considerable benefit of the use of the site.
So far as the language of the clause is concerned, the primary judge analysed the various paragraphs of the clause in her reasons at [37]-[46]. Her Honour’s reasons indicate that the text of the clause does not support the appellant’s contention that “provide” should be interpreted as permitting provision conditional upon payment. The use of the word “provide” in the context of the other terms of the clause indicates that parking spaces are to be provided in accordance with the requirements of the clause but without any condition as to payment. We adopt her Honour’s reasons on this point. It is unnecessary to repeat them.
Insofar as the appellant may have pressed its contention that its only obligation was to “provide” the police parking at the point of completion of the development and not beyond that point, we do not accept that contention. The process provided for by the Deed is that the substance of any continuing obligations or restrictions on the use of the land will be incorporated into long-term leases granted following the completion of the development. That includes the obligations in clause A2.1.6.4: see Deed clause A3.3. The language of clause A2.1.6.4 clearly contemplates ongoing requirements relating to the provision of parking, including police parking, and not obligations which terminate upon the completion of the development.
Insofar as the appellant sought to rely upon the absence of specification in the Deed of matters relating to the subsequent management and operation of the car parking, those are not matters which suggest that the appellant may impose conditions upon the provision of the car parking, thereby opening up the contention that one of those conditions may be a condition as to payment. It is true to say that the obligation is an open textured one. However, content is given to the obligation by the terms of the Deed, the necessity for planning approval to be granted by the Authority for the development to be carried out on the site, the likely other terms of the long-term lease which is to be subsequently granted and reasonable implications as to what is involved in providing a car park. As to each of those matters:
(a)The Deed itself identifies that the parking must be: “secure”, “in immediate proximity to the City Watch House”, provided for “individual officers” as well as “police vehicles”, for the purpose of “minimis[ing] response time for police vehicles on call-out”, provided “to the requirements of the ACT Policing”. This defines expressly or by necessary implication many of the significant features of what is required to be provided.
(b)The development required to be carried out on the site is subject to planning approval by the Authority: Deed clause 4.3.2. This permits the Authority to control the location, design and facilities associated with the car park to a significant extent so as to ensure that it not only meets the requirements in the Deed but is otherwise suitable for its purpose. It will ensure that things such as the means of ingress and egress are appropriately addressed.
(c)Upon completion of construction, the holding lease for the site is to be substituted with a long-term lease of the site. That lease will incorporate provisions giving effect to the obligations in the Deed, but also standard provisions that routinely appear in Territory Crown leases relating to the maintenance and repair of the premises to the satisfaction of the Territory.
(d)The provision of secure parking as part of a development where that parking is to be provided underground carries with it an implication that the premises will be reasonably suitable for that purpose. Insofar as the appellant suggested that there was uncertainty as to its obligation to, for example, provide lighting to the premises, such uncertainty is illusory having regard to what may reasonably be implied as part of its obligation.
Other matters pointed to by the appellant as suggesting areas of uncertainty that would support its construction of the clause do not in fact do so. Whether or not the Crown lessee insures the premises containing the parking spaces is a matter which may readily be addressed by the Crown lessee acting in its own self-interest. Whether or not parking spaces beyond the minimum of 100 required by the Deed or the future lease are provided and if so, on what terms, is not a matter which affects the obligation to provide the minimum of 100 spaces identified in the Deed.
Therefore, the fact that these issues are not spelt out in the Deed does not support the contention that the obligation to provide the car parking is conditional upon compliance with “reasonable terms”. There is therefore no basis for the contention that one of those “reasonable terms” is a condition relating to payment for use of the parking spaces. The decision of the primary judge was correct.
Extrinsic evidence point
In the primary judges’ reasons her Honour assumed that there was ambiguity in the clause and referred to material outside the terms of the holding lease or Deed which she said put beyond doubt the construction of the clause for which the Territory contended: ACT v BJM at [49]. That evidence was to the effect that, prior to the auction of the land at which City West was the successful bidder, a draft Deed and a further document entitled “Section 63 Questions and Answers” were circulated to potential bidders. Relevantly, the latter document included the following question and answer:
2. Are the 100 police spots charged at market rates or do they receive “peppercorn” rate?
…
The 100 car parking spaces for use by the AFP are to be provided to the Territory free of charge…
A similar statement was made by the auctioneer at the auction at which the site was purchased by City West.
In the Deed City West agreed that it had “read the background information (if any) issued by the Land Agency for release of the Site”: Deed clause 2.1. As stated at [3] above, in the Deed of Assignment from City West to the appellant, the appellant agreed to be bound by the terms of the Deed as if the appellant had been named in the Deed as the seller.
The appellant contended that the primary judge erred in taking into account this extrinsic evidence because the instrument involved was of a character to be the subject of assignment, as in fact occurred, and had the public character which precludes reference to idiosyncratic events by way of surrounding circumstances. It relied upon the statement of general principle in Phoenix Commercial Enterprises Pty Ltd v City of Canada Bay Council [2010] NSWCA 64 at [154], which picks up the formulation by Priestley JA in Burns Philp Hardware Ltd v Howard Chia Pty Ltd (1987) 8 NSWLR 642 at 655.
It is clear that, if it was open to take this evidence into account, it would favour the interpretation of the contract which was reached above without regard to it. Had the extrinsic evidence pointed in the other direction, and suggested that the car parking spaces could be charged for, then it might have been necessary to determine the point argued by the appellant. However, given that the evidence merely supports the conclusion already reached as to the proper interpretation of the Deed, it is not necessary to determine whether or not the evidence was admissible for the purpose of construing the Deed.
Orders
The appellant has failed to show any error in the primary judge’s construction of the obligation in clause A2.1.6.4 of the Deed. That means that the appeal must be dismissed.
The order of the Court is:
1. Appeal dismissed with costs.
| I certify that the preceding twenty-seven [27] numbered paragraphs are a true copy of the Reasons for Judgment of their Honours Justice Burns, Justice Mossop and Justice Charlesworth. Associate: Date: 25 February 2020 |
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