District Council of Lacepede v Russell Woodward Trading as Seaweed Sales Australia No. Scgrg-97-834 Judgment No. 6295 Number of Pages 3 Primary Industry

[1997] SASC 6295

IN THE SUPREME COURT OF SOUTH AUSTRALIA

KING AJ

Primary industry - fish licences - appeal from decision of Magistrate that Appellant's sub-licence to seaweed was invalid and judgment for Respondent on counterclaim - Appellant agreed to allow Respondent to collect seaweed from beach for licence fee and royalties. Appellant did not pay royalties claiming sub-licence invalid - s45 Harbours Act did not preclude Appellant from receiving licence for seaweed. s44 Harbours Act gives Minister power to grant licence to Appellant. - Consent of Minister under s225 Crown Lands Act is not applicable to licence. Minister did give consent in any case - Sub-licence to Respondent did not extend beyond term of licence to Appellant. Appellant was issued with fresh licence at conclusion of old licence. Disparity in any case was matter of contract and did not render sub-licence invalid - Sub-licence not invalid for lack of stamp duty as it is not liable to stamp duty. Harbours Act 1936 ss44,45.; Crown Lands Act 1929ss244, 225.; Stamp Duties Act 1983 , referred to.

ADELAIDE, 30 July 1997 (hearing), 12 August 1997 (decision)

#DATE 12:8:1997

#ADD 4:9:1997

Appearances :

Counsel for appellant: Mr M Doherty

Solicitors for appellant: Lynch & Meyer

The respondent appeared in person.

Order: appeal allowed.

KING AJ

This action arises out of an agreement between the appellant and the respondent whereby the appellant granted to the respondent the right to remove "beach cast seagrass" from a section of the foreshore at Lacepede during the period 1 November 1993 to 31 October 1994 and the respondent agreed to pay a "licence fee" of $599 and royalties on seaweed sold at the rate of $10-50 per tonne. The agreement was embodied in a document entitled "Licence to take seaweed (Posidonia Australis)" dated 2 November 1993.

The respondent rendered a return to the appellant on 31 August 1994 setting out the particulars of seaweed sold. The royalties calculated at $10-$50 per tonne amount to $5,560.15. The respondent has not paid the royalties.

The appellant sued the respondent in the Magistrates Court for the sum of $5,560.15. The respondent contested the claim. At the hearing the learned Magistrate allowed the respondent to counter-claim for the return of the licence fee $599 and the amount of a $5,000 bond lodged with the appellant.

The learned judge dismissed the claim on the ground that the sub-licence was invalid and gave judgment for the respondent on the counterclaim in the sum of $5,599. The appellant appeals against that judgment. The learned magistrate gave reasons for his decision and I turn to a consideration of those reasons.

His Honour questioned the validity of the appellant's right to the seaweed. That right derives from a licence granted by the Minister of Environment and Land Management. The Magistrate questioned whether the officer who signed the licence had authority to do so. The claim of delegation was duly proved, however, and that point was disposed of. His Honour questioned whether the licence to the appellant may not have been in contravention of section 45 of the Harbours Act 1936 which provides that no part of the foreshore "shall be placed or shall continue to be under the care control or management of any municipal council or district council or shall be granted to or vested in, or shall continue to be vested in, any such council." The foreshore of the sea is placed under the care control and management of the Harbours Board by section 44 except in so far inter alia as it is subject to a licence granted by and on behalf of the Crown. Section 45 therefore does not detract from the power of the relevant Minister to grant a licence on behalf of the Crown. Power is conferred on the Minister to grant licences with respect to crown lands by section 244 of the Crown Lands Act 1929.

The learned magistrate held that the sub-licence was invalid for lack of consent by the minister. He considered that there was a statutory requirement of consent in section 225Crown Lands Act. This also appears from correspondence to have been the view of the Department of Environment and Land Management. That section provides that "no transfer assignment or subletting of a lease or agreement shall have any force or effect unless the Minister has consented to the transfer assignment or subletting." "Lease" is defined as meaning "a perpetual lease or a miscellaneous lease" and "agreement" is defined as meaning "an agreement containing a covenant to purchase land ....".

As the licence granted by the Minister was neither a lease or agreement as defined, section 225 has no application to it. The licence itself curiously contains a provision that "The Licensee shall not transfer assign sublet or mortgage the land comprised in this licence" without consent. The sub-licence of course does not purport to deal with this land in that way so that provision is also inapplicable. The head licence is to a local government body and it was obviously in contemplation that the work would be performed by others, whether employees or independent contractors. There was no relevant prohibition, either statutory or contractual, against contracting out the right to remove the seaweed and I do not think that the magistrate was correct in his belief that consent was required.

In fact, however, the Minister did consent to the sub-licence. Before it was granted the Ministerial delegate wrote: "Approval is given to sublease this licence to Russell Keith Woodward of B.. 338 Kingston SE pursuant to section 285 of the Crown Lands Act." The Magistrate considered that consent given in such general terms was ineffectual. I do not agree. The implication clearly is that the Minister consents to a sub-licence on such terms, being consistent with the head licence, as the Licensee considers appropriate. The correspondence discloses that the Department was subsequently furnished with a copy of the actual sub-licence.

The learned Magistrate also held that the sub-licence was a nullity because it purported to grant rights to the respondent for a period extending beyond the term of the head licence. The sub-licence was for a period from 1 November 1993 to 31 October 1994. The magistrate believed that the head licence was for a period from 1 August 1993 to 31 July 1994.

This was a misconception. That was indeed the term of the head licence as originally issued. Subsequently, however, a fresh licence was issued for the period 1 November 1993 to 31 October 1994. But even if the position was as understood by the magistrate the sub-licence would not be invalid. The contract embodied in it obligated the appellant to permit the respondent to remove seaweed until 31 October. That obligation was undertaken no doubt on the assumption that the period of the head licence would be extended beyond 31 July. That is what occurred. If it had not occurred and the appellant was therefore unable to perform its obligation, it would have been in breach of contract and liable in damages. The initial disparity in the terms of the licence and sub-licence did not render invalid the contract embodied in the sub-licence.

The final ground of invalidity relied upon by the learned magistrate was that the sub licence instrument was not duly stamped. This was an error. An examination of the second schedule to the Stamp Duties Act 1983 shows that this instrument is not one which is liable to stamp duty. This is confirmed by the fact that the instrument has since the hearing been produced to the Commissioner of State Taxation who has adjudged that no duty is payable.

The legal position is quite clear. There was a contract between the appellant and the respondents whereby the respondent was authorized to remove seaweed and was obligated to pay royalties on seaweed removed and sold. The amount of the royalties claimed is that payable under the contract on the seaweed removed and sold. The respondent is plainly liable to pay the amount claimed.

The appeal must therefore be allowed and there must be judgment for the plaintiff on the claims. As to the oral counterclaim there must be judgment for the plaintiff discussing the counterclaim for the fee of $599. In my view the claim for the return of the bond money should not have been allowed to be raised in these proceedings. The judgment in favour of the defendant on this claim must be set aside, but I will not enter judgment for the plaintiff. I will simply strike out the claim so that there is no judgment on the merits. That will leave the respondent free to sue for the return of the bond money, if so advised, and enable all matters relevant to that issue to be canvassed in appropriate proceedings.

Appeal allowed, judgment of the Magistrates Court set aside, in lieu thereof judgment for the plaintiff on the claim for the sum of $5,560.15. Judgment for the plaintiff dismissing the counterclaim for $599. Order of the magistrates Court permitting the making of an oral counterclaim for the return of the amount of a bond, set aside.