Broadcast Aust Pty Ltd v Minister Assisting the Minister for Natural Resources (Lands) S161-03 App

[2003] HCATrans 409

[2003] HCATrans 409

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S161 of 2003

B e t w e e n -

BROADCAST AUSTRALIA PTY LTD

Appellant

and

MINISTER ASSISTING THE MINISTER FOR NATURAL RESOURCES (LANDS)

Respondent

McHUGH J
GUMMOW J
HAYNE J
CALLINAN J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 9 OCTOBER 2003, AT 10.03 AM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friend, MR A.E. GALASSO, for the appellant.  (instructed by Minter Ellison)

MR B.A.J. COLES, QC:   May it please the Court, I appear with my learned friend, MR N. PERRAM, for the respondent.  (instructed Crown Solicitor for the State of New South Wales)

MR S.J. GAGELER, SC:   If the Court pleases, I appear with MS K.M. RICHARDSON for the Attorney-General of the Commonwealth, intervening in support of the appellant.  (instructed by Australian Government Solicitor)

McHUGH J:   Before you commence, Mr Jackson, may I note the presence in the Court of Chief Justice Li of the Final Court of Appeal of Hong Kong and mark how grateful we are for his presence here today.

MR JACKSON:   If the Court pleases, this case relates to the operation of a Commonwealth enactment, the National Transmission Network Sale Act 1998, upon a permissive occupancy granted to the Commonwealth by the State of New South Wales and in force pursuant to the Crown Lands(Continued Tenures) Act 1989 of that State. It is a case where, in our submission, the majority in the Court of Appeal simply failed to give a statute of the Commonwealth, the validity of which was unchallenged, the operation which, according to its terms, it plainly had. Your Honours, may I go immediately to the statutory provisions and to the circumstances to which they applied.

McHUGH J:   I rather thought, Mr Jackson, that the case turned on whether or not Mr Justice Hodgson was right at page 173, paragraph 64, where he says:

Condition 6 makes it clear that the rights under the permissive occupancy can be transferred, so long as the prior consent of the Minister is obtained.  If this happens, the result if not a new permissive occupancy, but a continuation of the existing permissive occupancy with a new tenant.

Is that not really the critical point of the case?

MR JACKSON:   Well, in our submission, your Honour, no.  It is a point.  If it is correct then it would follow that we would succeed.  However, whether it be correct or not the position, in our submission, was simply that the Commonwealth Act operated to vest what there was in us, and it would not matter whether one of the incidents of it by itself was that it was not capable of transferring.

HAYNE J:   That is, do I understand you to say, that even if the permissive occupancy did not contain clause 6, the Act operated according to its terms?

MR JACKSON:   Quite, your Honour, yes.  Your Honours, may I go to the statute ‑ ‑ ‑

GUMMOW J:   Is there any point about unjust terms in acquisition?

MR JACKSON: No, your Honour. That is the point I was going to mention, because one view of it, I suppose, is that - let us assume that the position was that it came to an end upon a transfer of any kind. If the true operation of the Commonwealth statute was that a new right was created, and that is a possible view perhaps, the position would be that it would not be an acquisition of property on unjust terms for two reasons. The first is the presence of the provision of section 28, I think it is, in the Act.

McHUGH J:   Yes, 28.

MR JACKSON:   In the National Transmission Network Sale Act, section 28, which is the common form provision for acquisition of property on just terms, so that is one thing.

McHUGH J:   It refers to “reasonable” compensation I think, does it not?  It does not necessarily refer to “just” compensation.

MR JACKSON:   Your Honour, if there is to be a question about the validity of that, no doubt it would arise in a case where the difference might be properly explored, but I was going to say the second feature to it and it is this, what one sees is that the interest on this assumption was taken, was an interest known to the law, it had been in existence for many years beforehand. The second feature about it is that the rent that was provided for was a rent which, in the absence of agreement about that which had been nominated by the Minister, was one to be fixed by a court at the market rent. So, with respect, your Honour, it would have to be of its nature just terms and, in any event, there is the provision of section 28.

McHUGH J:   And there is no attack on the validity of the legislation?

MR JACKSON:   No, your Honour.

McHUGH J:   Although one might have thought there was an argument that legislation which purported to transfer the liabilities of the Commonwealth to third parties might be outside the incidental power, however, no ‑ ‑ ‑

MR JACKSON:   Your Honour, that is why I said at the start there is no question about the validity, it is purely a matter of the operation of the Act.

McHUGH J:   Yes.

MR JACKSON:   And there may be very good reasons for not raising questions of validity.  This is not the only one of these that exists and sometimes questions of that kind have larger implications for other cases.  I take your Honours now to the Act itself, the Commonwealth Act.  Could I just say about that, that prior to the making of the declaration under section 9 of that Act the National Transmission Network had been conducted by the Commonwealth, and your Honours will see that adverted to in the primary judge’s reasons at page 122, paragraph 18.  The National Transmission Network, so operated by the Commonwealth, worked from a large number of sites.  Your Honours will see them set out in pages 76 to 93. They are listed State by State with what I assume is the postcode of the various States in the left column.  They include at page 79, about line 20, the land immediately in question, Mount Sugarloaf near Newcastle. 

Now, your Honours will see that the list to which I have just made reference is under the heading at page 76, “Properties”, towards the bottom of the page, and it forms part of Part 1 of Schedule A – and you will see that at the top of the page – to the declaration which appears at pages 74 and 75.  Your Honours, could I, before going to the operative part of that declaration, invite the Court to note also page 95.  Your Honours will see at page 95 Part 2 of Schedule A and under the heading “Instruments, licences and contracts” it refers, at about line 37, to “Any right of the Commonwealth”, et cetera.

So those are the two parts of Schedule A and could I take your Honours then to the declaration which is at page 74.  Your Honours will see in clause 2.1 at the bottom of the page there is a heading “Assets” and the Minister of the time declares that:

Each Specified Asset –

and if I could pause at that point, “Specified Asset” is defined in clause 1.1 about line 27 and it means “an asset specified in Part 1 of Schedule A” which includes this asset –

vests in the Company without any conveyance, transfer or assignment;

and your Honours will see what is set out then in paragraphs (b) and (c) at the top of page 75.  Your Honours will also see the term “Specified Instrument” at page 74, about line 30, and that is an instrument in “Part 2 of Schedule A” and in relation to that your Honours will have seen that, at the top of page 75 in paragraph 2.1(c), “Each Specified Instrument” which would include permissive occupancy “vests in the Company” in the manner in which it is there set out.

HAYNE J:   Sorry, it continues to have effect after the asset vests.

MR JACKSON:   Yes, your Honour.  Your Honours, could I also say that the power to make declarations of that kind comes from section 9 of the Act and I take your Honours to that.  Your Honours will see that from the terms of section 9(1) that it deals with assets and it provides in section 9(1)(a) that the declaration may provide that a:

specified Commonwealth asset vests in the company –

at the transfer time, to put it shortly –

without any conveyance, transfer or assignment;

(b)   . . . the company becomes the Commonwealth’s successor in law in relation to the transferred asset;

(c)  a specified instrument . . . continues to have effect . . . as if a reference in the instrument to the Commonwealth . . .  were a reference to the company.

Your Honours, if I may say so, with respect, there could not, we would submit, be a clearer declaration of intent that rights included in specified assets were to continue in being after the operation of the declaration.  “Asset”, your Honours, is defined by section 3 ‑ ‑ ‑

HAYNE J:   Sorry, can I just delay you a moment.  Section 9(1) tells us what the Minister may declare, any or all of, and it is (4) which gives effect to it, is it not?

MR JACKSON:   Yes, your Honour, I was going to come back to that.

HAYNE J:   I am sorry.

MR JACKSON:   Your Honour, can I just say, your Honours will see that section 9(2) deals with liabilities; 9(1) is assets, 9(2) is liabilities.  I have not gone to the detail of that, but it is contained in the declaration as well.  Assets and liabilities are defined by section 3, as one might expect broadly, and your Honours will then see, going back to section 9, that, as your Honour Justice Hayne said, a declaration under section 9(4) “has effect according to its terms” and then, your Honours will see from 9(3) that there may be one or more notices and that the notices may each encompass “more than one asset or liability”.

Could I come then, your Honours, to the State provisions and the rights in question are derived from, first of all, the document which appears at page 69.  Your Honours, all the relevant parts of it, I think, are extracted in the judgment of Justice Hodgson, but may I just say that your Honours will see from the top of it that it is a pro forma document with two relevant alterations.

The first is at page 65, about line 4, it indicates which of the printed terms will be part of the permissive occupancy and they are clauses 1 to 8, 12 and 13 and 19 and 20, together with the typewritten special conditions on page 70.  Your Honour, the special conditions seem to have no immediate relevance.  They relate, in part, to the fact it was a trig station.

Could I invite your Honours to note a couple of things about the conditions on page 69.  One is that in clause 1 there is a reference to the fact that there is rent which is payable “for each year” and it is to “be paid in advance”.  Under clause 2 there was provision for rent to be reviewed “on three (3) months notice”.  Under clause 3 it was said “The Permissive Occupancy is terminable at will by the Minister”.

Under clause 4, improvements can be removed or sold on termination; a slightly complicated provision, but that puts it shortly.  Then, your Honours, under clause 6 one sees that, consent to, to put it shortly, subletting or parting with the possession or selling or transferring requires the “consent of the Minister”.

Your Honours, they are the terms of the document.  The statutory authority for the document is found in two statutes.  The first is the Crown Lands Consolidation Act 1913, section 136K. There are really two provisions that are germane. One is subsection (1) which empowers the Minister to:

grant permissions to occupy Crown lands . . . for such purposes and, subject to this section, upon such terms and conditions as to him may seem fit.

McHUGH J:   When was 136K introduced?  It must have been some time after 1929.

MR JACKSON:   In 1958, your Honour.  Part VA came in – yes, your Honours, Act No 26 of 1958 and it is the Crown Lands (Permissive Occupancies) Amendment Act and effectively all that was done was to insert Part VA, which is section 136K.

McHUGH J:   Does the second reading speech throw any light on what its purpose was?

MR JACKSON:   Your Honour, I cannot give your Honour an answer to that, I am sorry.  The provision has been altered somewhat, or the operation of it has been altered by the later Act I will come to in a moment.

McHUGH J:   Yes.

MR JACKSON: Your Honours will also see section 136K(5) which says:

A permission to occupy Crown lands . . . granted under subsection (1) shall be terminable at will by the Minister.

Now, your Honours, the Crown Lands Act of 1989 then - your Honours, I need to say what there is to say about it.  The Crown Lands Act of 1989 was a new Crown Lands Act.  It made provision in section 6 for there to be various tenancies which might be granted, that is tenancies under the Act or rights under the Act, that did not make provision for permissive occupancies of this kind.  What happened was that already granted permissive occupancies were continued in being by the Crown Lands (Continued Tenures) Act 1989, and may I take your Honours to that.

Your Honours will see that that Act in the definition section which is section 3(1), defined “permissive occupancy” in paragraph (a) to include “a permissive occupancy . . . granted under section 136K” of the previous Act. It then provided, your Honours, in section 5(1) that:

A tenure in force under a repealed Act immediately before its repeal remains in force subject to the provisions of this Act and the Principal Act.

And the term “tenure” was defined by subsection (4)(c) to include a “permissive occupancy”.  So that the permissive occupancy remained in force, and that one went from there to section 11, which said that:

Part 6 of Schedule 2 applies to and in respect of permissive occupancies.

And if one goes then to Part 6 of that schedule your Honours will see, first of all, clause 1(1) which provides:

The rent, royalty, security deposit and any other money payable . . . are . . . payable under this Act as if those provisions were contained in this Act.

Clause 1(3):

The rent . . . is payable in advance.

There was then provision for redetermination of the rent and that is clause 2 which said that the rent “may be redetermined by the Minister at any time”.  Your Honours will see then provision for “3 months” notice of the effect of a redetermination and then an important provision was clause 2(3) which said that:

Clauses 11 and 12 of Schedule 5 apply to a redetermination –

as if it were the:

redetermination . . . of a lease.

Could I invite your Honours to note also that the conditions were continued by clause 4, and clause 5 said again that “A permissive occupancy is terminable at will by the Minister”.  The provisions picked up by clause 2(3) appear as clauses 11 and 12 of Schedule 5.  Your Honours will see that by clause 11 “The Minister shall give notice of a redetermination”, subclause (2) “consider any objection”, and then subclause (3) “An appeal”, and then 3(b) an appeal lay “to the Land and Environment Court”.

That is how this matter arose, of course, by an appeal from a new determination by the Minister.  Then your Honours will see clause 12(1)(a) said “the rent shall be the market rent”, and then clause 12(1)(b) “improvements on the land which were made by the holder . . . shall be disregarded”.  Your Honours, that, to put it shortly, is the legislative framework within which the issue arises.

GUMMOW J:   It is assumed in all of this that there was no place acquired by the Commonwealth, is it not?

MR JACKSON:   I am sorry, when your Honour says “in all of this”?

GUMMOW J:   In all of the litigation that has been assumed.

MR JACKSON:   Yes, your Honour, I think that is right to say.  Your Honour, there is a reference I think somewhere to section 51(xxxi) but the issue of whether it was an acquisition has never been raised.

GUMMOW J:   No, but there is no section 52 question.

MR JACKSON:   No, your Honour.

GUMMOW J:   It would be an odd way of arguing it when the place itself owes its life to a State Act.

MR JACKSON:   Your Honour, that gives rise I suppose to a number of difficult questions but what one would expect in the end was that if it be a Commonwealth place in that sense, then its nature – not every Commonwealth place is the same, if I could put it that way, your Honour, and whilst the place would be a Commonwealth place the legislative power of the Commonwealth would be exclusive.  But having said that, that would not seem to determine the point at which it ceased to be a Commonwealth place.

GUMMOW J:   Yes.

MR JACKSON:   Your Honours, the essence of the decision of the Court of Appeal, and, indeed, of the argument on behalf of the State, is that the interest created by the permissive occupancy was inherently non‑transferable and the second stage being that the vesting amounted to a transfer and that accordingly the permissive occupancy came to an end on the making of the declaration.

The position, of course, your Honours, was that this was a right granted pursuant to a statute. If one looks at the statutory provision pursuant to which it was granted, section 136K, there is nothing in it at all which makes a permissive occupancy something which is inherently non‑transferable. It empowers the granting of a permission to occupy Crown lands. The terms of section 136K(1) do not, in our submission, suggest that the permission, or the ambit of the powers they created, is limited by the fact that any right so granted has to come to an end if the right is transferred.

McHUGH J:   Does your argument involve a rejection of what was said in Barrow v Brooksby and what I said in the Court of Appeal in Minister for Natural Resources v New South Wales Aboriginal Land Council?

MR JACKSON:   What your Honour said, I think, was that it was something that appeared to be terminable at will, as it were.

McHUGH J:   Well, I think I said more than that, did I not?  I said it was a personal licence such as would afford a defence to an action for trespass, but it did not go beyond that.

MR JACKSON:   Your Honour, I am sorry. Certainly one of the things that can be created pursuant to section 136K(1) would be a personal licence which would be a defence to an action for trespass or writ of intrusion, whatever it might be, but having said that, it does not follow that what is granted is limited to that, with respect, and there is nothing, we would submit, in section 136K(1) that says it is. But, your Honour, to describe ‑ ‑ ‑

McHUGH J:   What about the context of the legislation?  You have perpetual leases, you have various tenures.  That is why I asked you about the second reading speech as to whether it threw any light on it.  Somewhere there are provisions which deal with permissive occupancies to remove gravel and matters of that kind.

MR JACKSON:   I think your Honour is thinking of 136K(2).

McHUGH J:   Yes.

MR JACKSON:   Your Honour, all that is required under 136K(2) is that because of the nature of it falling within, in effect, another portfolio, another area of government, is that there be an “approval of the Minister for Mineral Resources and Development”, but the reference in 136K(2) does not exhaust 136K(1).

McHUGH J:   Yes.

MR JACKSON:   Your Honour, what one sees in 136K is that it does not just speak really in terms of licence, because if one looks at 136K(1A), what is spoken of is the “minimum rent per annum”.  It speaks of rent.

McHUGH J:   Do you adopt what Justice Hodgson said, that it was more tenancy than a licence?

MR JACKSON:   Yes, your Honour, I am happy to.  I do not need to, with respect, but I am happy to.  It is not an issue, in our submission, that one needs to resolve.

HAYNE J:   What is the point you are now addressing, some proposition about inherent non‑transferability?

MR JACKSON:   Yes, your Honour.

HAYNE J:   What is the content of that proposition, “inherent non‑transferability”?  What does it mean?

MR JACKSON:   Your Honour is right, and that is really something I was going to mention in a moment, because if one is speaking about non‑transferability it can mean, I suppose, broadly speaking, two things.  One looks in a sense at the identity of the person who has an entitlement at any particular point to the rights and that looks at the position of the holder of it.  If the holder changes there is a new and presumably different right.  That really, I suspect, is the case for the other side.  The other way of looking at it, your Honours, is that ‑ ‑ ‑

HAYNE J:   That is a proposition, or set of propositions, that would depend upon the construction that is given to the Crown Lands Consolidation Act and its relevant provisions about whether the set of rights thus created can be transferred pursuant to, for example, specific legislative provision or whether the capacity to transfer is somehow to be regarded as not taken away by the legislation, but what is the significance of following that set of rabbits into particular burrows?

MR JACKSON:   Your Honour, the hope - and this is really the argument for the other side - would be that having got the rabbit into the burrow, that if you get a rabbit out it is a new rabbit altogether, and there cannot be a vesting of one - the first and the second are not identical, to put it shortly, your Honour.  I got caught up with the rabbits.

McHUGH J:   The terms of condition 6 point in your favour, I suppose, and distinguish a case of the tenancy at will in that condition 6 appears to enable you to sublet, which seems altogether inconsistent with the notion of a personal licence that comes to an end.  It is very difficult to see how you can fit in this notion of a new licence, in effect, allowing a subletting because a hypothesis is that the original occupancy continues but nevertheless you can sublet it.  Condition 6 also refers to parting with possession or selling.

MR JACKSON:   Yes, your Honour, I was going to come to that in a moment if I may.  Just staying with section - my second answer is in effect to what your Honour Justice Hayne was saying.  I was saying there are two possible ways I suppose of identifying the relevance of some inability to transfer.  One is to say that if there is a transfer from person to person then there is a new right created; the old one has come to an end.  Another way of looking at it of course is to say if what you have is a person who is exercising the same rights as the person who was the predecessor in title is exercising, then there is not a transfer.  Certainly there is a different person and that person now has the rights and, presumably, the prior holder does not have the rights, but to regard that as bringing the first one to an end is perhaps absolutely correct in one sense, but it does not really reflect the concept of something that is a transfer.

GUMMOW J:   There is a distinction as to whether the condition is truly something which goes to the very nature of the grant itself or whether it is a covenant which may be broken upon dealing with that which has been granted.

MR JACKSON:   Yes.

GUMMOW J:   If it is the latter, there may be an action for damages.

MR JACKSON:   Well that is so, your Honour, and if that is ‑ ‑ ‑

GUMMOW J:   If it is the former, it just cannot happen.

MR JACKSON:   It cannot happen and that then becomes a question of the effect of the Commonwealth Act. I was going to say, your Honours, just staying with section 136K for a moment, if one goes to subsection (1), it assumes it may be “reserved from lease or licence”. Whether that is so or not, rights of the kind referred to it can be granted. Subsection (1A) refers to rent, and your Honours will see rent referred to on a number of occasions. Your Honours, if I could go from that ‑ ‑ ‑

McHUGH J: Section 136K(3) seems to indicate that at some stage tenancies were created in terms of permissive occupancy.

MR JACKSON:   Yes, it validates them if they were otherwise ultra vires and then subsection (5) applies to them as well.

GUMMOW J:   There is a question also as to whether condition 6, when it speaks of “the consent of the Minister”, would attract the law about refusal of consent, unreasonable refusal of consent.

MR JACKSON:   Yes, your Honour, there is.  But if one goes to condition 6 at page 69, what one sees is that it does contemplate, in our submission, that it is transferable, it is capable of transfer.

McHUGH J:   What about the last sentence in condition 6:

On termination of the Permissive Occupancy the tenant shall deliver up quiet and peaceable possession of the premises.

MR JACKSON:   Your Honour, that, prima facie, would attract the principle, sometimes honoured in the breach, that if one uses legal language one is intending to create rights that are of that nature.

GUMMOW J:   I think we are back in Wik territories.

MR JACKSON:   Yes, your Honour

GUMMOW J:   We have statutory creatures partly expressed in general law concepts and partly sui generis, I suspect.

MR JACKSON:   Yes.  Your Honour, what one does see in condition 6, in our submission, is that it may be to transfer without prior permission is a breach, but, in our submission, it does not follow that as soon as there is breach of that condition, there is a termination of the permissive occupancy, particularly in circumstances where there is specific provision in the Act and in the document itself for termination at the will of the Minister.

McHUGH J:   The concepts of subletting and possession do seem to indicate that this permissive occupancy is more than a personal licence.

MR JACKSON:   Yes.  Your Honour, it uses the language at least.

McHUGH J:   Yes.

MR JACKSON:   Your Honours, the view adopted by the majority in the Court of Appeal was that a purported assignment without consent terminated the permissive occupancy.  May I go to the core of the reasons on that.  That is in Justice Sheller at page 157, paragraph 21.  Your Honours will see in the second sentence, his Honour says:

The law applicable, it seems to me, to a permissive occupancy means that, whether it be regarded as a personal licence for consideration or a form of tenancy at will . . . a purported assignment without such consent operates as a termination of the licence of tenancy.  Such an assignment is inconsistent with the personal relation between the parties and with the express intention of the Minister that the occupancy remain personal to the Commonwealth.

Your Honours will see that he goes on to say that one looks at that consequence.  Your Honours, we would submit two things in relation to that.  The first thing is – and I have said this on a number of occasions – it was not suggested that the Network Sale Act was invalid and therefore it should be given effect according to its terms.  If one goes to the terms of section 9, if I can go back to that for a moment, one sees that the effect of the declaration is that the asset:

vests in the company . . . without any conveyance, transfer or assignment.

The second thing is that the company “becomes the Commonwealth’s successor” and the third is that the “specified instrument . . . continues to have effect”.  Your Honours, those things mean, if one gives them their ordinary meaning, that we are substituted for the Commonwealth in relation to the permissive occupancy.

HAYNE J:   Is the proposition in paragraph 21 a proposition about voluntary transactions or is it a proposition about all transactions having a particular effect?

MR JACKSON:   Your Honour, it seems to be a proposition based upon any instrument which would create a relationship, be it a personal licence or a tenancy at will, which may have required consent to a transfer or which may have contained no such provision.  I say the latter for a reason, but his Honour seems to be saying that in either case it comes to an end because of the nature of it.

Your Honour, I said there were two aspects to it.  One is that if one goes back to paragraph 17 on page 156, your Honours will see a quotation from Anderson v Tooheys Limited.  I will not read out the quotation but the view his Honour is adopting there is that a purported assignment by a tenant at will operates as a termination of the tenancy because it is inconsistent with the intention.  To the same effect is the passage referred to but not quoted from Commonwealth Life v Anderson at the top of page 156.  I will take your Honours to those passages in just a moment, if I may come back to them.

GUMMOW J:   Sir Frederick Jordan was not dealing with permissive occupancy under this statute, was he?

MR JACKSON:   No, your Honour.  In the passage they have quoted at the bottom of page 155 – the common law develops, of course – that does seem a little of a development from what was actually said in Buckworth v Simpson – I will take your Honours to that in a moment – as does the observation that the estate created is unassignable, in his reference to the Commonwealth Life Case, which seems to be a further development of an old decision to which he there refers.  May I return to those in just a moment, your Honours.  That is why it seems to be that his Honour, in paragraph 21, was not just referring to cases where there was a requirement for consent.  He seems to be referring to both.

HEYDON J:   Your basic point is this though, is it not, that whether paragraph 21 is correct or not – and it may not be correct, even for private transactions – it has nothing to say about a statutory substitution of one party for another?

MR JACKSON:   No.  That is so, your Honour.

HEYDON J:   That is your essential point.

MR JACKSON:   Yes, your Honour.

GUMMOW J:   When the substitution is by a federal Act.

MR JACKSON:   Indeed, your Honour.  I have not taken your Honours to one further provision of that Act, which is section 12, which says:

The operation of this Part is not to be regarded as ‑

and your Honours will see paragraph (c):

placing a person in breach of any contractual provision prohibiting, restricting or regulating:

(i)  the assignment or transfer of any asset or liability ‑

So, your Honours, in relation to that provision, it either applies directly to clause 6 or, if it does not, it is a legislative indication that section 9 is to be given the fullest operation it could, in the light of provisions of that kind.

McHUGH J:   Are you going to take us to Barrow v Brooksby?  Was that not the reason that 136K was brought into the Act, because Justice Sugerman was of the view that it was very doubtful whether the permissive occupancies that had been granted under the Crown Lands Consolidation Act were valid?  It was 1958, Brooksby.

MR JACKSON:   Yes.  Your Honour, it is referred to at page 153, paragraph 12.  Your Honours will see a short history of it, as it were, and it was described as, as your Honours will see, the form of document there referred to and it creates “a personal licence for valuable consideration” revocable by notice at any time.  Your Honour, if one comes to the present case, one sees that the provision ‑ ‑ ‑

GUMMOW J:   The problem is in the opening sentence of Justice Sugerman’s judgment.  It does not have to be referred to any category in the common law.

MR JACKSON:   That is so, your Honour.

GUMMOW J:   That is the problem.  It may be sui generis.

MR JACKSON:   That is why 136K ‑ ‑ ‑

McHUGH J:   I think in fairness to his Honour, when his Honour was talking about it, there was no classification of permissive occupancy in the legislation, if I remember rightly, and it was just out of some general power in the old Crown Lands Consolidation Act, was it not?

MR JACKSON:   Yes, it was, your Honour.

McHUGH J:   That was what they acted under.

MR JACKSON: That was what they were doing. There had to be statutory authority of course to grant an interest in Crown land, but that being so, the question was whether there was authority to do what they were doing. Your Honours, having said that, one then gets section 136K(1), and 136K(1) could not be more broadly expressed. It may allow occupation for a short time, for a long time, always subject to the statutory ability to bring it to an end.

CALLINAN J:   Mr Jackson, the case can be contrasted with, for example, American Dairy Queen where you had a statutory vacuum and the court then applied a number of common law principles in relation to property law.  You do not have that.  The statute really covers everything.  That is part of your submission, is it not?

MR JACKSON:   Yes, your Honour, I am speaking about the Commonwealth statute.

CALLINAN J:   Mr Jackson, could I ask you this, is there any part of the Network Act that has the effect in any way of enlarging the nature of the permissive occupancy previously enjoyed by the Commonwealth?

MR JACKSON:   No, your Honour, there is not.

CALLINAN J:   Is there anything that says expressly it is the same?  It seems to be clearly enough implied, but is there anything express on that?

MR JACKSON:   Your Honour, it is really section 9 and section 9(1)(b) makes us the “successor” and then 9(1)(c) says that it “continues to have effect”, only the names have been changed, as it were, and the same thing obtains in relation to liabilities, subsection (2).

CALLINAN J:   So there is no adverse effect, for example, upon the reversion.  It remains exactly what it was ‑ ‑ ‑

MR JACKSON:   Yes.

CALLINAN J:   ‑ ‑ ‑ when the Commonwealth was the occupant.

MR JACKSON:   Your Honour, we could be given notice tomorrow.  It may be a question, of course, how long or whether there had to be some notice, but ‑ ‑ ‑

GUMMOW J:   That is an important point really.

MR JACKSON:   Yes, but the situation remains the same.

GUMMOW J:   That is an important point for the acquisition of property ‑ ‑ ‑

MR JACKSON:   Indeed, yes.

GUMMOW J:   There may not be any acquisition of property.

CALLINAN J:   So that the remark made by Justice Hodgson at paragraph 71, page 175, the last sentence may well, with respect, be correct.

MR JACKSON:   Yes.

CALLINAN J:   I mean, his Honour has not purported to decide the point, but it may well be correct ‑ ‑ ‑

MR JACKSON:   Your Honour, in the end one can say, assume everything in favour of the other side so that you get a situation where it would come to an end upon the operation of the Commonwealth statute on one view, but having made that assumption it would come to an end because it is a transfer, let us assume, but having made that assumption the terms of section 9, and perhaps section 12 as well, make it apparent that it is not going to come to an end.  So what would follow from that would be that presumably there was a new right acquired by the Commonwealth to give to us.

GUMMOW J:   Yes, it is as if the words “without the consent of the Minister for Lands” were removed from clause 6 of the conditions.

MR JACKSON:   Yes.

GUMMOW J:   It is a transfer, but by force of the federal Act, it is by force of that Act and it does not require the consent of the Minister.

MR JACKSON:   That is so, your Honour.

CALLINAN J:   Section 8 of the Act repeals to the extent necessary for the purposes of this Act the notice and like provisions in the Acquisition of Land Act which might otherwise have to be complied with.

MR JACKSON:   Yes, that is so, your Honour. Assume it be an acquisition of property, section 28 provides for terms and then the other thing about it is that it would be difficult, with respect, to see that leaving aside section 28 altogether that there would not be an acquisition on just terms where, bearing in mind the nature of the interest, it is one where the rent is to be market rent.

CALLINAN J:   But you do not have to worry about that.  That was not an issue here.

MR JACKSON:   No.

CALLINAN J:   If it is not enough then the people have their rights and they can pursue them.

MR JACKSON:   That is so, your Honour.  Your Honours, I was going to say the judgment of Justice Sheller relies on the statements by Chief Justice Jordan in two decisions that I mentioned earlier.  Paragraph 17 at page 156 refers to Anderson v Tooheys and your Honours will see that most of what his Honour says there is based upon what was said in Buckworth v Simpson 149 ER 1317. We have given your Honours copies of that decision and your Honours will see the facts of it set out, it is a photocopy of it. At the top of page 1318 one sees the basic facts. There was a demise of lands “for one year certain, and then from year to year” until there was a “notice to quit” given:

The lessee died, and his executors entered into the occupation of the premises, and continued to occupy and paid rent.

Your Honours will see that this aspect of it was dealt with by Baron Parke at the bottom of page 1321 of the English Report and the last two lines on page 1321, what he said was:

The nature of the demise is this, that the party taking it is to hold on from year to year, so long as the parties shall please, with the power of notifying that dissent by giving a notice to quit.  Suppose the land to descend to the heir-at-law, and he omits to signify his dissent to its continuance by giving notice to quit, the tenancy will continue. Again, if the tenant assigns, and the landlord do not give notice, the assignee must hold on the same terms.  That contract the law will imply -

Your Honours, I will not read out the remainder of it, but your Honours will see, if one goes to the end of the paragraph, Baron Parke goes on to say:

therefore it is better to hold that a new relation of landlord and tenant arises by implication from the situation of the parties, where there is a continuance of the occupation –

Your Honours, certainly it says it is better to hold that a new tenancy arises, but it is not really saying, in our submission, that there is not a continuation and a transfer of the old right that was there.

The other case, your Honours, is that referred to at the top of page 156.  Your Honours will see a reference there to Commonwealth Life (Amalgamated) Assurance Limited v Anderson 46 SR (NSW) 47 at 49 to 90. What his Honour said at the bottom of page 49 - your Honours will see the last paragraph on that page, and then at the top of the next page is the most relevant part:

Since the existence of the tenancy depends upon the will of the parties, the death of either terminates his will, and, therefore, the tenancy.  The estate created by the tenancy is unassignable, because a purported assignment terminates it as soon as it comes to the notice of the owner:  Pinhorn v Souster.

Could I just take your Honours to the case upon which Chief Justice Jordan relied?

GUMMOW J:   But we know this is assignable.

MR JACKSON:   I know, your Honour.

HAYNE J:   We seem to be about four stages removed from the current problem, do we not?

MR JACKSON:   Your Honour, with respect, I agree.  All I wanted to say was that these seem to be the decisions ultimately relied upon in the Court of Appeal in that one sees again Baron Parke ‑ ‑ ‑

HAYNE J:   Dependent upon the equation of a statutory creature with a non‑statutory creature, a drawing of conclusions from that, regardless of the content of a federal statute.

MR JACKSON:   Indeed, your Honour, indeed.  I adopt that, with respect.  Your Honours will see at the bottom of page 1564 Baron Parke saying:

It however now seems clear, from a case in Yelverton, that the assignment by the tenant at will of his interest to a third party is no determination of the tenancy, unless the lessor at will have notice.

And then at the last few lines:

The principle laid down in that case clearly is, that a tenant at will cannot determine his tenancy by transferring his interest to a third party without notice to his landlord.

Your Honours, that is all the case decides.  It does not, with respect, decide the larger proposition referred to by Chief Justice Jordan. 

Your Honours, could I submit simply this, that, in our submission, the approach taken in the Court of Appeal did not give primacy to the statute which should have been given primacy, namely, the terms of the Commonwealth enactment. If it be that there was a provision of the State law which would bring the permissive occupancy to an end, then, in our submission, that must be inconsistent with the terms of section 9 and perhaps section 12 and to that extent inoperative because of section 109. Your Honours, those are our submissions.

McHUGH J:   Thank you, Mr Jackson.  Yes, Mr Gageler.

MR GAGELER:   Your Honours, may we add to our written submissions a very short oral submission directed solely to the construction of the Commonwealth statute.  If your Honours look to the definition of “asset” in section 3 of that statute, paragraph (a) deals with proprietary rights, paragraph (b) clearly enough goes beyond the field covered by paragraph (a) and encompasses “any right” – and I emphasise the word “any” – “any right, privilege or immunity”, which may well be of a purely personal nature and which may or may not be otherwise capable of being transferred under the common law in equity or under State statute.

What that means, in our submission, is that if all one has under a permissive occupancy is a personal immunity from an action in trespass, then that personal immunity is something that falls within paragraph (b) of the definition.

McHUGH J:   The thought has occurred to me that it is possible that the conditions go beyond what is authorised by 136K.  There is something to be said for the view that 136K on its face may only create personal rights and the conditions here may go beyond that, but it is not a point that is taken against you.

MR GAGELER:   And it is not a point I need to address, your Honour.

McHUGH J:   No.

MR GAGELER:   In the light of that definition, if your Honours then look at section 9, what one sees manifestly is an intention in section 9(1) and section 9(4) to allow both classes of assets, proprietary and non‑proprietary, to be dealt with in precisely the same way, that is by paramount force of Commonwealth law and irrespective of the position of the common law in equity or under a State statute, the assets become vested in the company to the intent and effect that the company becomes the legal successor to the Commonwealth.

McHUGH J:   There is no attack on the validity of section 9.

MR GAGELER:   Not at all.

McHUGH J:   So if you are on the question of statute, the Commonwealth statute says the Commonwealth’s asset is now vested in somebody else, end of case.

MR GAGELER:   Exactly.  If your Honours then, in the light of that, go to page 153 of the appeal book, this is in the concurring judgment of President Mason in the Court of Appeal, paragraph 10, the first sentence is, in our submission, an incomplete statement and in that incompleteness lies the seeds of the error of the majority in the Court of Appeal.  What his Honour said was that:

The Network Sale Act does not purport to change or affect the legal incidents of the broad range of “assets” which it addresses.

What his Honour should have added is, “save insofar as it vests those assets in the company and makes that company the legal successor to the Commonwealth”.  If the Court pleases.

McHUGH J:   Yes, thank you, Mr Gageler.  Yes, Mr Coles.

MR COLES:   May it please, your Honours. What is provided for by section 136K(1) is a permission to occupy Crown land. That permission may, as that subsection indicates, be made subject to conditions but those conditions would be in aid of or effective of the essential quality of the right which the subsection provides for, that is to say the creation of a permission to occupy Crown land. A permission to occupy Crown land, in our respectful submission, accordingly involves the notion essentially of a person, corporate or otherwise, being given that permission to occupy that land and, in short, we would contend for the view that the nature of the right so conferred is accurately stated in the Aboriginal Land Rights Case in the Court of Appeal to which you referred ‑ ‑ ‑

McHUGH J:   But no point has been taken so far in this litigation that the conditions themselves may create rights of estates and interests that go beyond what 136K permits.

MR COLES:   No, that is not suggested.  What is suggested, I think, as one of the limbs of the argument is that condition 6, for example, may somehow enlarge the right of permission to occupy into something wider than a permission to occupy and into something else, but I will deal with that proposition when I come to it. 

We contend, therefore, for a view of the right created by the subsection as essentially having these features.  It is a permission to occupy and it is terminable at will.  They are its essential features and it is therefore accurately described as a personal right such that would authorise occupation of the land in question and, indeed, of course, accordingly provide a defence to an action in trespass by the grantee of the right, but affords no other right according to the terms of the right itself.  That is to say the right is essentially and inherently dependent upon the will of the Minister in favour of some specified person on whom the Minister has bestowed that permission and unless and until the Minister were to bestow that permission on some other person in lieu of the original grantee then that other person cannot enjoy that right.

HAYNE J:   Is that a proposition about federal power?

MR COLES:   No, it is a proposition that does no more ‑ ‑ ‑

HAYNE J:   That is, is it a proposition which denies that if otherwise within power federal Parliament cannot say whereas A has permission to occupy Blackacre, A’s permission to occupy Blackacre may now be exercised by B.

MR COLES:   It may be that in terms federal Parliament could say something to that effect, but it has not accomplished it by simply vesting assets of a general character described as rights, because if the object of the legislation, as it appears to be, is to vest rights already in being and those rights for some reason are defeasible - if, for example, not held by the person ‑ ‑ ‑

GUMMOW J:   You have to think about section 12 as well.

MR COLES:   Let me say shortly what we contend about section 12.  Section 12, in our respectful submission, appears to do no more than in effect avoid the consequences of a contravention if in fact the vesting procedures, or the vesting mechanism, dealt with by section 9, caused some breach of a contract or led to some other civil wrong.

McHUGH J:   But it does declare that the effect of the part is not to place a person in breach of any contractual provision restricting the assignment or transfer.

MR COLES:   Yes.  That is right.  We would suggest that the result of that is that what the section is doing is no more than saying, if as a result of the operation of this part there is some breach or contravention, then that is a breach or contravention not at all is washed out.  What the section importantly does not do, or does not go so far as to say, is that - I am sorry, I will put that again.  What the section does is deny any consequences, for example, to a contractual provision which prevents assignment or transfer, for example, without consent.

In other words, it eradicates any consequences of there being no consent.  What the section does not do and what, in our respectful submission, it would need to do to accomplish the end that your Honour Justice Hayne was describing, it would need to actually go a little further and say, “And furthermore not only does it wash out the fact of absence of consent, it has the effect of actually conferring consent”.  We submit that section 12 does not on its reasonable reading go that step further and amount to a conferral of the consent which the State Minister might have conferred on the supposed transferee or vested party.

McHUGH J:   Mr Coles, is not the difficulty with your argument that it starts at the wrong end.  You throw the weight of your argument on the terms of the licence.  Is it not the proper approach to look at the terms of the federal statute which says immediately before this declaration was made, pursuant to section 9(4), the Commonwealth had certain rights and the Commonwealth now vests those rights in a third party.  Now, you do not challenge the validity of the Commonwealth statute.  Why is that not the end of the matter?  The statute, according to its terms, just simply vests the Commonwealth’s right that existed immediately before the declaration was made.

MR COLES:   That analysis, in our respectful submission, correct so far as it goes, fails at the point where it becomes necessary to see what the Commonwealth’s right was.  If the Commonwealth’s right was in effect a passive right involved in being the recipient of permission from a third party, then in effect the Commonwealth is the only entity that at the time of vesting is the recipient of that permission.

HAYNE J:   Is that a proposition about the construction of the definition of “asset” in the Commonwealth Act?

MR COLES:   No, it is really directed to the examination of the nature of the right under the State Act.

HAYNE J:   Do you accept that the Commonwealth had a right of some kind under the permissive occupancy?

MR COLES:   Yes, I do.  We have not ‑ ‑ ‑

HAYNE J:   Does not the generality of paragraph (b) of the definition of “asset” then present an obstacle in the way of your argument?

MR COLES:   No, what one can accept, in our respectful submission, that there are assets in the sense of rights, powers, immunities, privileges and the like for the purposes of subparagraph (d) which undoubtedly exist as such, whilst the Commonwealth is the holder of the right and that the Commonwealth rights under the permissive occupancy, or its right to go upon the land and occupy it, lasted as an asset, in our submission, so long as the Commonwealth itself enjoyed that right.

What we say is that it is not simply the fact that a person has an asset that means that asset is capable of vesting.  The identification of an asset does not conclude the issue whether the asset, according to its terms, is amenable to vesting in somebody else.  For example, we suggest by way of analogy if the Commonwealth were a natural person and a sequestration order was made then there would not, notwithstanding section 58 of the Bankruptcy Act, there would not vest in the trustee in bankruptcy the right to occupy, the reason for that being that the trustee in bankruptcy is not the grantee of the Minister’s permission to occupy, is not the object of the Minister’s favour in that regard.

Now, we respectfully suggest that the same analysis is perfectly applicable when one is looking at this Act because the Act is doing no more than vesting the rights the Commonwealth had, and if by their nature those rights simply cannot vest, then there is no great difficulty with that.  That does involve of course a rejection of the proposition which commended itself to Justice Hodgson, namely that the Act in some way purports to create some new right.  It is quite plain that the right which the appellant would enjoy if the vesting worked would be a right which is not the same as the Commonwealth enjoyed.  It would be a right, a permission on the part of the appellant to occupy, and the right which the Commonwealth theretofore enjoyed, a right on its part to occupy, would be no more.

McHUGH J:   What would you say if the Commonwealth legislation had authorised a declaration which said that at a date anterior to 26 June 1998 the permissive occupancy vested in this particular company?  In other words, if it said that it vested in this company as from, let us say, 1 June 1998, how would your argument run then?

MR COLES:   In my respectful submission, the analysis would be no different because the putative vestee, or the party in whom it was intended by the Commonwealth Act assets of general description might vest, would still not become thereby the grantee of the Minister’s permission to enter upon or occupy the land.  That is the crucial element ‑ ‑ ‑

McHUGH J:   But you seem to be saying that by reason of the declaration the Commonwealth’s right came to an end.

MR COLES:   That is one way of putting it. The reality is, of course, not that the Commonwealth’s right – the only thing that matters presently is whether the appellant does enjoy that right and it is our essential submission that before the appellant could claim to enjoy the permissive occupancy right which the Commonwealth theretofore enjoyed, the fact would have to be that the Minister, assuming he was legislatively presently able to do so, would have had to have conferred that right and unless and until the appellant can say, “I am the grantee of the right of occupation under section 136K” or some equivalent, then it just does not enjoy that right.

It is interesting but not necessarily ultimately to the point to analyse how the right came to fall away. It is probably correct to say that once the Commonwealth went out of occupation then the purpose of the permission went away with it. In other words, the Commonwealth gave up the right, therefore, there was no either desire on the Commonwealth’s part or intention on the Minister’s part that the right should continue to subsist. But it is not essential to the analysis, in our respectful submission, to do anything more than recognise that the present appellant cannot claim to have the right because the condition upon which it might have so enjoyed it, namely, the grant from the Minister, assuming section 136K, for example, was still in force, just has not become applicable to it.

GUMMOW J:   Do you dispute paragraphs 8 and 9 of Mr Gageler’s submissions as to the operation of section 109 in respect of 9(4) of the federal Act?

MR COLES:   If I could, just in the interest of accuracy, turn them up.  The only part of paragraph 8 I am disposed to cavil with is the last line and a bit, that is to say, if it is suggested that anything in State legislation destroys the rights, privileges or immunities or the like which the Commonwealth had, then it is submitted that nothing in any State legislation does do that.

McHUGH J: But does it not do it this way? Do you not have to say that condition 6 finds its authority in section 136K(1) and therefore it has statutory authorisation and, insofar as you rely on that statutory authorisation, to prevent the Commonwealth from transferring its right, then section 109 of the Constitution renders 136K(1) inoperative?

MR COLES:   The reason why the right has prevented it from arising in the appellant is not because, for example, of clause 6 of the permissive occupancy.  I will develop an argument ‑ ‑ ‑

McHUGH J:   I understand.  Your point is that it is a defeasible right.

MR COLES:   It is a defeasible right.  To complete my answer to Justice Gummow’s question, that is our proposition about the last part of Mr Gageler’s paragraph 8.  I think your Honour asked about paragraph 9 as well and our short answer to that is essentially the same, that there is nothing in the State legislation that itself purported to terminate the permissive occupancy. 

The State legislation may have failed to sustain its continued existence, but that is not the same as terminating, in our respectful submission, and it is likewise not to the point that the Minister has not, for example, ever taken any step in terms to terminate the permissive occupancy.  Indeed, the Minister would contend, in the context of this case, there being as yet thus far no grant of any right, any permission, to occupy in favour of the appellant by the Minister, there is nothing, at the present time, so far as the appellant is concerned, which the Minister is entitled to terminate.  The status of the appellant shortly is ‑ ‑ ‑

GUMMOW J:   You keep looking at it through the State end of the telescope.

MR COLES:   Well, because we say the right itself ‑ ‑ ‑

GUMMOW J:   The relationship between these parties is now no longer exclusively governed by the State Act, and you have to live with it.

MR COLES:   We would agree with that, your Honour, but one has to recognise, in our respectful submission, that the right in question, without any inconsistency with any federal legislation, simply depends upon a state of affairs created by a State Act.  If that state of affairs does not exist, that is to say, that permission to occupy has not been extended or bestowed, then the State right does not exist.  It is not a question of the State right being inconsistent or the State aspect of terminating an otherwise enduring right being inconsistent with a federal statute; it is simply a case of the State right ceasing to endure because the conditions necessary to support it no longer exist.

GUMMOW J:   It is not just a question of the State right.  There is concurrent federal power….. ‑ ‑ ‑

MR COLES:   About which our submissions do not, I hope, your Honour, call into ‑ ‑ ‑

GUMMOW J:   ‑ ‑ ‑ which is not disputed and that has been exercised and it produces this result.  It may be, at the end of the day, you do not just point to the original permissive occupancy, you have to read it with all these other provisions as well.  In that sense it is a different creature.

MR COLES:   That really does bring me to – our first submission, if I can so ‑ ‑ ‑

CALLINAN J:   Could I add to that, though - and if in any way that enlarges the new occupant’s rights, then there may be a claim for compensation available, but it does not invalidate or reduce the interest created by the Commonwealth land ‑ ‑ ‑

MR COLES:   My submission ‑ ‑ ‑

CALLINAN J:    ‑ ‑ ‑ once it is within power, as everybody accepts it is. 

MR COLES:   One would have to reach the conclusion, in our submission, really, that what the federal Act did was to create a new right which was an enlargement or a re‑creation of the State right. 

CALLINAN J:   But if that has happened, that does not mean that you win here.  You may have another claim, or ‑ ‑ ‑

MR COLES:   Quite.  Our submission on that, of course, is that before one could reach the conclusion that the federal Act created a new right, which was different in character and different in the identity of the persons who enjoyed it and so forth, to the right that the Commonwealth possessed, one would need to find that conclusion on the proper construction of the federal Act.  It is our submission that the federal Act itself makes it very plain that what it is dealing with is those rights which are in existence and enduring for the benefit of the Commonwealth ‑ ‑ ‑

GUMMOW J:   Well, that is a very unlikely construction, is it not, really, having regard to the items Mr Jackson took us to? 

McHUGH J:   And your argument does lead to the rather strange result that there is nothing for the Commonwealth declaration to operate on.  It cannot vest, according to your argument, because the moment the declaration came into effect the right had disappeared. 

MR COLES:   The declaration, of course, purports to do many things.  It covers at large, and in very general terms, everything that could be foreseen as, no doubt, part of what was hoped comprised the vestable or transmissible network.  Now if, perchance, an asset failed to correspond with the asset in the schedule, that, with respect, is not fatal to the argument.  It merely means that steps that might or could have been taken to rope in that outstanding asset simply have not been taken. 

HAYNE J:   Tell me again, because I do not understand it, why this is not a right caught by the federal Act. 

MR COLES:   Because the right itself has an inherent quality for its own existence and its own continuation ‑ ‑ ‑

GUMMOW J:   Yes, but you say an inherent quality of insulation from the exercise of federal power.  That is what you have to say, I think, and you cannot say that. 

HAYNE J:   It is a proposition about power. 

MR COLES:   Probably the issue, so far as the federal power is concerned, is what really is meant in the Sale Act by the word “vest”.  Does “vest” mean vest such property as the Commonwealth presently enjoys, according to the incidence and nature of that property, so far as that property is itself inherently capable of vesting?  Or does it mean that, as well as and also, insomuch as, insofar as, any other property, which would not, in the ordinary course, vest, in the ordinary understanding of that word?  It also picks up and delivers that property, as well. 

In our respectful submission, “vest” must have its, if I may say so, plainer or more limited meaning, and not the rather extended and grander meaning of doing not only vest, but create and enlarge and deal with.  In other words, “vest” would mean nothing else in this Act than it means, for example, in the Bankruptcy Act or in the Wills Act.  If the property does not vest in a trustee – if, by its very nature, it could not have vested – if it was terminable on the death, for example, of the testator, or it was, in the case of a bankrupt, limited to cease on the bankrupt’s becoming so bankrupt. 

HAYNE J:   What effect then do you give to 9(1)(c), plus 9(4), with reference to the specified instrument continuing to have effect substituted?

MR COLES:   Very carefully, 9(1)(c) is conditioned on the vesting already having happened so that you do not get to 9(1)(c) unless and until the vesting has occurred.  Indeed, that is what is plain from the terms of the declaration itself.  You have to vest first, and only after you have accomplished the vesting exercise do you accomplish the statutory rectification of the instrument in question, in our submission.  There might have been another technique available.  For example, 9(1)(c) need not, on one view, have been so limited, but it is and, in our respectful submission, it does not assist in the resolution of the case.

McHUGH J:   Do you accept that on the proper construction of the Commonwealth legislation it intended to transfer any rights that the Commonwealth possessed immediately before a declaration was made?

MR COLES:   To the fullest and most ample extent of their transmissibility, yes, but that qualification is not unimportant.

GUMMOW J:   It is critical for you.

MR COLES:   It is critical.

GUMMOW J:   Yes.

MR COLES: I was going to put some other submissions. I perhaps should, in the interest of completeness, put some short submissions about clause 6, but subject to that I think your Honours understand our submissions and have our written outline. We do wish to emphasise, your Honours, that in as much as clause 6 is relied upon - clause 6 of the conditions of the “permissive occupancy” document - that is, in our respectful submission, firstly to be understood in the context of section 136K(1) under which that condition comes to be inserted, that is to say it is not to enlarge or expand the content of the statutory right, the right of permission to occupy, so as to create and enlarge some new right going beyond “permission to occupy”. Rather, it is simply to be assimilated to and if necessary read down to accommodate the essential nature of the 136K right as a right of occupation rather than read up, as it were, to create a larger right than the right of occupation itself, to which it is intended to be but a term or condition approved by the Minister.

The second thing we say about it is that clause 6 in its terms is really in the nature of a machinery provision, which if activated, produces the only thing it could produce, either the Minister saying, “No I do not desire some other person to occupy this land and I withhold my permission” or, alternatively, the Minister agreeing that a new person may occupy, in which case there is simply a novation of the permissive occupancy and a new grant of new permission to the new occupant.  So there is then a new permission to occupy, again at the will of the Minister.

It is in that sense that, although the analysis is not controlled by it, it is analogically assisted by looking at what the similar result has produced in the context of personal licences or even tendencies of will.  In our respectful submission, if it be correct that this is in the nature of a right of permission only, then the analogy may be regarded as acceptably close, in our submission.  It stands, therefore, in real contradistinction to the type of vested interest in land that one encounters with a lease.  Where there is an assignment by a lessor to a lessee the interest which the lessee takes is the interest which the lessor himself had.

GUMMOW J:   Why does all this matter?

MR COLES:   It merely means that ‑ ‑ ‑

GUMMOW J:   If it falls within the definition of “asset”, why does it matter?

MR COLES:   If it falls within this definition of “asset”, it must satisfy the next test, namely, is it an asset that vests, and that, as I say, depends on the content of the operation of vesting.  It will not vest just because it is an asset, if the nature of the asset is such that it prevents it or intercepts the vesting process.  The situation therefore ‑ ‑ ‑

CALLINAN J:   But does not the Act change it into an asset that makes it vestable?

MR COLES:   Well, that is, as we understand it, really what is inherent in the argument that if it is an asset it vests.

CALLINAN J:   Well, what is wrong with that?

MR COLES:   It is our contention that it does not because, firstly, if the federal Act made the asset theretofore not vestable into a vestable one, then it really would be changing or creating an asset rather than simply vesting an existing one and that, in our respectful submission, is not a fair description of the legislation.

CALLINAN J:   Well, then you claim compensation if it changes, if there is a financial implication.  But is that not the clear intention of the Act, that whatever has to happen in order to enable the successor to be in the same position as the Commonwealth, the Act is designed to achieve?

MR COLES:   In general terms that is accurate, in our respectful submission, but the Act falls short of fulfilling the function of vesting anything more than that which, in accordance with the nature of the asset itself, is capable of vesting.

McHUGH J:   Supposing condition 6 was not there at all, that clause 1 just simply said the Commonwealth may occupy this land and its occupancy may be terminable at will by the Minister.  Why would not section 9 operate in that situation to transfer that occupancy of the Commonwealth to the third party company?

MR COLES:   If one supposed the analysis that the permissive occupancy endures unless and until the Minister actually affirmatively recalls his will, that might be right, but, in our submission, that is not the way it works.  The will itself is, of course, something that the Minister brings to bear only on the basis that he has already extended that will to somebody to begin with and if that somebody is no longer the intended occupant of the land, then the result we contend for, we submit, ought to be the case, because we say, shortly, the permission to occupy does not pass.

I think, your Honours, in short, to sum it up in response to something I think that was put against us previously, that whilst the federal Act vests things, it vests assets according to their terms and it does not substitute.  The word used against us, I think, was “substitution” and we would respectfully cavil with that, because that is not a proper interpretation, in our respectful submission, of the statutory language of vest.  Unless there are other matters, your Honours, those are our submissions.

McHUGH J:   Thank you, Mr Coles.  Yes, Mr Jackson.

MR JACKSON:   Your Honours, there are four matters I wish to mention. The first concerns the assumption underlying our learned friend’s argument about the ambit of the power conferred by section 136K. What I mean by that is that it seems to be an underlying assumption that it is not possible under 136K(1) to grant a permission to occupy, which would be in terms such as a grant to A, successors and assigns.

Your Honours, the validity of that assumption, in our submission, really is not supported by the terms of that provision.  If one goes to it, it simply says:

The Minister may grant permissions to occupy Crown lands . . . upon such terms and conditions as to him may seem fit.

There is not any reason, in our submission, why a permission to occupy could not be in favour of A and then A’s successors or assigns.  There is no reason why the power should be treated as so limited.

The second point, your Honours, is this, that there was a reference by your Honour Justice Hayne to the terms of section 9(1)(c) of the Commonwealth Act.  Your Honours, it may well be that section 9(1)(c) would be enough by itself but the Parliament has made it clear, in our submission, by the operation of 9(1)(a), 9(1)(b), 9(1)(c), that the belt and two sets of braces perhaps to make sure that there is the complete transfer.

The third thing, your Honours, is that your Honour Justice McHugh referred to The Minister v Aboriginal Land Council Case (1987) 9 NSWLR 154. Your Honour referred to the history of the legislation in, I think, terms similar to those used in the judgments in the present case at page 159 between B and C, going through to the top of the next page.

Finally, your Honours, the argument on behalf of the respondent really comes down to this, that the asset came to an end by the operation of the very provision which said it was to continue and that is, with respect, bizarre.

McHUGH J:   Thank you, Mr Jackson.  The Court will reserve its decision in this matter.

AT 11.33 AM THE MATTER WAS ADJOURNED