Dorothy Jane Lefroy as executor of the estate of Noel Corinthia Pierce Lefroy v Minister for Lands
[2019] WASC 83
•15 MARCH 2019
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: DOROTHY JANE LEFROY as executor of the estate of NOEL CORINTHIA PIERCE LEFROY -v- MINISTER FOR LANDS [2019] WASC 83
CORAM: PRITCHARD JA
HEARD: 7 & 8 FEBRUARY 2018
DELIVERED : 15 MARCH 2019
FILE NO/S: CIV 1930 of 2015
BETWEEN: DOROTHY JANE LEFROY as executor of the estate of NOEL CORINTHIA PIERCE LEFROY
First Plaintiff
DOROTHY JANE LEFROY
Second Plaintiff
AND
MINISTER FOR LANDS
First Defendant
CONSERVATION AND LAND MANAGEMENT EXECUTIVE BODY
Second Defendant
Catchwords:
Statutory construction - S 98(11) of Land Act 1933 (WA) - Application by lessee to Minister for indication as to whether pastoral lease will be extended or subject to further grant - Meaning of lessee - Requirement for notice of decision by Minister - Effect of failure by Minister to determine key terms of further lease - Effect of deemed offer of a lease by Minister - Nature of obligation on Minister to grant further lease upon expiry of pastoral lease - Whether obligation to grant further lease owed to all lessees at date of expiry of existing pastoral lease
Statutory construction - S 98(11) of Land Act 1933 (WA) - Validity of Minister's decision to impose condition on offer of further pastoral lease - Whether condition severable from balance of decision
Statutory construction - Effect of repeal of Land Act 1933 (WA) on offer of lease made under s 98(11) of Land Act 1933 (WA)
Statutory construction - S 143 of Land Administration Act 1997 (WA) - Operation of transitional provisions on offer of further lease made, but not disposed of, under s 98 of Land Act 1933 (WA) prior to repeal of Land Act 1933 (WA)
Statutory construction - S 48 of Land Administration Amendment Act 2000 (WA) - Meaning and effect of deemed validation of offer of pastoral lease, acceptance of offer, and of lease or extension arising therefrom - Statutory purpose
Statutory construction - S 48 of Land Administration Amendment Act 2000 (WA) - Minister's power to exclude land required for public purpose from further grant of pastoral lease - Minister's obligation to enter negotiations about land to be excluded from further grant of pastoral lease - Meaning of negotiations - Whether Minister entered into negotiations - Whether deemed withdrawal of lessee from agreement for further pastoral lease
Statutory construction - S 48 of Land Administration Amendment Act 2000 (WA) - Whether obligation to grant further lease continues if at date of expiry of pastoral lease not all lessees seek further lease
Statutory construction - S 114(2) of Land Administration Amendment Act 2000 (WA) - Entitlement to compensation for improvements to land if pastoral lease not continued
Pastoral lease - Purpose of application by lessee under s 98(11) of Land Act 1933 (WA)
Pastoral lease - S 98(11) of Land Act 1933 (WA) and s 48 of Land Administration Amendment Act 2000 (WA) - Extent of Minister's power to exclude land from extension or further grant of pastoral lease upon expiry of existing pastoral lease - Whether Minister's power to exclude land from further lease is subject to requirement that leased land, once fully developed, will be capable of being worked as economically viable and ecologically sustainable pastoral business unit
Legislation:
Interpretation Act 1984 (WA)
Land Act 1933 (WA)
Land Act Amendment Act 1963 (WA)
Land Administration Act 1997 (WA)
Land Administration Amendment Act 2000 (WA)
Result:
Action dismissed
Representation:
Counsel:
| First Plaintiff | : | Mr C G Colvin SC & Mr M R B Hemery |
| Second Plaintiff | : | Mr C G Colvin SC & Mr M R B Hemery |
| First Defendant | : | Mr G Tannin SC & Mr J Misso |
| Second Defendant | : | Mr G Tannin SC & Mr J Misso |
Solicitors:
| First Plaintiff | : | Hotchkin Hanly Lawyers |
| Second Plaintiff | : | Hotchkin Hanly Lawyers |
| First Defendant | : | State Solicitor's Office (WA) |
| Second Defendant | : | State Solicitor's Office (WA) |
Case(s) referred to in decision(s):
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27
Aldi Foods Pty Ltd v Shop, Distributive & Allied Employees Association [2017] HCA 53; (2017) 92 ALJR 33
Bull v Attorney General (NSW) (1913) 17 CLR 370
Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd (2013) 247 CLR 149
Caves Beachside Cuisine Pty Ltd v Boydah Pty Ltd [2015] NSWSC 1273
Certain Lloyd's Underwriters v Cross [2012] HCA 56; (2012) 248 CLR 378
Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 41 FLR 338
Commissioner of Police v Eaton [2013] HCA 2; (2013) 252 CLR 1
Commissioner of Taxation v Comber (1986) 10 FCR 88
Commonwealth v Baume (1905) 2 CLR 405
Coverdale v West Coast Council [2016] HCA 15; (2016) 259 CLR 164
Craig Williamson Pty Ltd v Barrowcliff [1915] VLR 450
Director of Public Prosecutions (Cth) v Ede [2014] NSWCA 282; (2014) 289 FLR 82
Falc Pty Ltd v State Planning Commission (1991) 5 WAR 522
Forrest and Forrest Pty Ltd v Wilson (2017) 91 ALJR 833
Hicks v Aboriginal Legal Service of Western Australia (Inc) [2001] FCA 483; (2001) 108 FCR 589
Hunter Douglas Australia Pty Ltd v Perma Blinds (1970) 122 CLR 49
Independent Commission Against Corruption v Cuneen [2015] HCA 14; (2015) 256 CLR 1
IW v City of Perth [1997] HCA 30; (1997) 191 CLR 1
Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622
Killen v Commissioner of Police [2014] WASC 427
Lazarus v Independent Commission Against Corruption [2017] NSWCA 37
Macquarie Bank Ltd v Fociri Pty Ltd (1992) 27 NSWLR 203
Mascon Constructions Pty Ltd v Vadasz (No 2) [2017] SASFC 2; (2017) 127 SASR 193
Minister for Immigration v Li [2013] HCA 18; (2018) 249 CLR 332
Mohammadi v Bethune [2018] WASCA 98
Muller v Dalgety and Co Ltd (1909) 9 CLR 693
Murphy v Farmer [1988] HCA 31; (1988) 165 CLR 19
Plaintiff M174/2016 v Minister for Immigration [2018] HCA 16; (2018) 92 ALJR 481
Probuild Construction (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4; (2018) 92 ALJR 248
Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
R v Norfolk County Council 60 LJQR 379
Re Becker; Ex parte Minister for Immigration and Ethnic Affairs (1977) 15 ALR 696
Re Hunt [2017] VSC 779
Re Levy; ex parte Walton (1881) 17 Ch D 746
Registrar of Titles (WA) v Franzon (1975) 132 CLR 611
Samsung C&T Corporation v DuroFelguera Australia Pty Ltd [2018] WASCA 27; (2018) 52 WAR 281
Samsung C&T Corporation v Loots [2016] WASC 330
St Aubyn v Attorney General [1952] AC 15
Swinbourne v Brisbane City Council [1996] QPELR 308
SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 91 ALJR 936
Taylor v Owners of Strata Plan 11564 [2014] HCA 9; (2014) 253 CLR 531
Thiess v Collector of Customs [2014] HCA 12; (2014) 250 CLR 664
Thorby v Goldberg (1964) 112 CLR 597
Trajkoski v Director of Public Prosecutions (WA) [2010] WASCA 119; (2010) 41 WAR 105
Victims Compensation Fund Corporation v Brown [2003] HCA 54; (2003) 77 ALJR 1797
Woodlock v Commissioner of Land Tax [1974] 2 NSWLR 411
Table of Contents
1. The factual context for the dispute
2. The legislative provisions
3. Overview of the parties' pleaded cases
Whether the entitlement to the proposed pastoral lease derives from the Land Act or from the Amendment Act
Whether the Condition was invalid
Whether the Lefroy Interests Exclusion Notice was invalid and/or of no effect
Whether the Minister failed to engage in negotiations with the Lefroy Lessees
If there is an entitlement to a further pastoral lease, who is entitled to the grant of the proposed pastoral lease?
Did the rejection of a further pastoral lease by CALM EB have any bearing on any entitlement the plaintiffs have to a further pastoral lease?
The relief sought, including as to compensation
4. Principles applicable to the construction of the legislative provisions
5. Does any entitlement to the grant of a new pastoral lease depend upon s 98(11) of the Land Act (rather than the Amendment Act)?
(a) The proper construction of s 98(11) of the Land Act
(i) what is the meaning of 'lessee' used throughout the section?
Contextual considerations - statutory purpose
(ii) what matters must be determined by the Minister for the purposes of a decision by the Minister under s 98(11)(b)?
(iii) if the notice given by the Minister of his or her decision fails to comply with the requirements of s 98(11)(b), is the notice valid?
(iv) what is the effect of the notice of the Minister's decision being 'deemed' an offer of a lease?
(v) what is the legal consequence of the acceptance of a deemed offer of a lease?
(b) The effect of the Renewal Letter
(c) Was the Condition invalid, and what was its effect on the Offer?
Can the Condition be severed from the balance of the Minister's decision set out in the notice under s 98(11)(b)?
Can the Condition be read down to avoid it having an invalid operation?
Conclusion - the validity of the Offer
(d) The repeal of the Land Act, and the enactment of the Administration Act
(e) Did the acceptance by the Holders of the Offer give rise to a binding statutory obligation on the part of the Minister to grant the proposed pastoral lease over the entirety of Ningaloo Station in 2015?
6. The operation of the Amendment Act
The proper construction of s 48(1) and (2) of the Amendment Act and their application in this case
The application of s 48(3) - (9) of the Amendment Act in this case
Following the enactment of s 48 of the Amendment Act, was the Minister obliged to grant a further lease in respect of Ningaloo Station upon the expiry of the Pastoral Lease, and if so, to whom?
The parties' contentions
The Minister's obligation to grant a further lease
7. Did CALM EB's indication that it did not wish to have a further pastoral lease affect any obligation on the Minister (if one existed) to grant a further pastoral lease?
8. If any entitlement to a new pastoral lease is subject to the Amendment Act, was the process leading to the plaintiffs' deemed withdrawal from the agreement to grant a new lease validly followed?
Whether the Lefroy Interests Exclusion Notice was invalid
The process in s 48(3) - (6) of the Amendment Act
The plaintiffs' contentions
The requirement to enter into negotiations in s 48(5)(c) of the Amendment Act
No failure to engage in bona fide negotiations has been established
9. If there is no entitlement to a new lease, are the plaintiffs entitled to orders to facilitate a claim to compensation?
Conclusion
PRITCHARD JA:
Since 1933, the Lefroy family has operated a pastoral station, pursuant to the grant of successive pastoral leases, over land known as Ningaloo Station.
In 1977, a pastoral lease - number 3114/1093 (Pastoral Lease) ‑ was granted in respect of Ningaloo Station, for a term concluding on 30 June 2015. The Pastoral Lease was issued to four members of the Lefroy family as tenants in common: Edgar Lefroy (as to two undivided fourth shares), Gerald Francis Coaker Lefroy (as to one undivided fourth share) and Mary Alice Lefroy, who was known as Dot (as to one undivided fourth share).
Over time, the lessees of the Pastoral Lease have changed. The lessees at the key points in time relevant to this action were as follows. In 1995, the lessees in the Pastoral Lease (Holders) were Noel Corinthia Pierce Lefroy (Billie[1]) (as to two undivided fourth shares),[2] Bettye Duffell Lefroy (as to one undivided fourth share)[3] and Dot Lefroy (as to one undivided fourth share). From the end of 2001, the lessees in the Pastoral Lease were Billie Lefroy (as to two undivided fourth shares), Bettye Duffell Lefroy (as to one undivided fourth share) and Australian Wildlife Conservancy Ltd (AWC) (as to one undivided fourth share).[4] Finally, from November 2006 until 30 June 2015, the lessees in the Pastoral Lease were Billie Lefroy (as to two undivided fourth shares) and the second defendant, the Conservation and Land Management Executive Body (CALM EB) (as to two undivided fourth shares).[5]
[1] The first plaintiff was known as Billie. In the judgment I have referred to her, as the parties did, by that name, to distinguish her from other members of the Lefroy family. No disrespect is intended.
[2] Edgar Lefroy died in 1987 and his two undivided fourth shares were transferred to Billie Lefroy in 1988.
[3] Gerald Lefroy transferred his share in the Pastoral Lease to Bettye Duffell Lefroy in August 1989.
[4] Dot Lefroy died in May 1999. Under her will, her share in the Pastoral Lease passed to Elizabeth Hayter. In April 2000, Ms Hayter sold that share in the Pastoral Lease to Paruna Sanctuary Ltd, and that company subsequently changed its name to Australian Wildlife Conservancy Ltd.
[5] In October 2006, Bettye Lefroy transferred her share in the Pastoral Lease to CALM EB, and AWC transferred its share in the Pastoral Lease to CALM EB.
From 2008, Billie and her daughter, Dorothy Jane Lefroy (Jane[6]), ran a pastoral business on Ningaloo Station as equal partners. Previously, that pastoral business had been run on Ningaloo Station by the members of the Lefroy family who were the lessees. Jane has lived and worked on Ningaloo Station for her entire life, and assisted her mother and the other Lefroy family lessees in their conduct of the pastoral business prior to 2008.
[6] In this judgment I refer to the second plaintiff by her first name, to distinguish her from other members of the Lefroy family. No disrespect is intended.
Billie died in July 2016. Jane is Billie's sole heir under her will. Jane brings these proceedings in her capacity as the executor of Billie's estate, and in her own right as the beneficiary of Billie's will.
Since Billie's death, Jane has continued to live at Ningaloo Station, and to operate a pastoral business there.
The present proceedings pertain to a dispute which came to a head in 2015 (but which arose well before then) between Billie and Jane, on the one hand, and the first Defendant (Minister), on the other hand. The issue at the heart of the dispute is whether, when the term of the Pastoral Lease expired on 30 June 2015, Billie, or Billie and Jane, were entitled to the grant of a further pastoral lease over the entirety of the land comprising Ningaloo Station which had previously been the subject of the Pastoral Lease.
That dispute arose because in 1997, the then Minister advised of his intention to grant a further pastoral lease (proposed pastoral lease) upon the expiry of the Pastoral Lease, on certain conditions, including that some of the land at Ningaloo Station may be excised from the proposed pastoral lease for certain purposes, including public works, conservation and government purposes (Condition). In 2002, the Minister advised the then lessees of the area of land she proposed to excise from the proposed pastoral lease (Excised Land). It was proposed that the Excised Land, which comprised a substantial area, would be used for the purposes of a marine park which was to be established along the coastline of Ningaloo Station and which would be known as the Ningaloo Marine Park.
The plaintiffs contend that it was not open to the Minister to impose the Condition or to exclude the Excised Land from the proposed pastoral lease, or alternatively, that the Minister had failed to comply with the legislative conditions for doing so, which were said to include a requirement to negotiate about the boundaries of the Excised Land. They also contend that the Minister failed to comply with the legislative requirements by which the plaintiffs would be deprived of any entitlement to the grant of the proposed pastoral lease over any of the land at Ningaloo Station. In addition, there is a dispute between the parties concerning the fact that CALM EB, which had a half share in the Pastoral Lease when it expired in June 2015, did not want the grant of a further pastoral lease. The Minister contended that in circumstances where not all of the lessees wanted the grant of a further pastoral lease, there was no obligation to grant a further pastoral lease to one of the lessees only, upon the expiry of the Pastoral Lease in 2015.
This case does not concern the merits of the Minister's decision to excise land from the proposed pastoral lease, or the merits of doing so to enable that land to be used for the purpose of a marine park, rather than for pastoral purposes. Those are questions of policy which fall within the domain of the executive government. Instead, the issues in dispute in this case fall to be resolved by reference to the statutory provisions governing pastoral leases.
The Pastoral Lease was granted pursuant to the Land Act 1933 (WA) (Land Act). However, the legislative regime governing pastoral leases has been subject to a number of changes since 1997, comprising the repeal of the Land Act, the enactment of the Land Administration Act 1997 (WA) (to which I will refer as the Administration Act), and amendments made to the Administration Act by the Land Administration Amendment Act 2000 (WA) (to which I will refer as the Amendment Act).
Having regard to the pleadings, and to the large measure of agreement as to the facts pertaining to the dispute, counsel submitted[7] that the questions which require resolution by the Court are as follows:
1.Does any entitlement to the grant of a new pastoral lease depend upon s 98(11) of the Land Act (rather than the Amendment Act)?
2.If so, is the Condition valid?
3.If any entitlement to a new pastoral lease is subject to the Amendment Act, did the Minister comply with the requirements of the Amendment Act in so far as she applied a policy relating to negotiations with Billie and Jane concerning the area of the Excised Land, and if she did not comply with the requirements, were Billie and Jane deemed to have withdrawn from negotiations for a new lease?
4.Has any statutory entitlement to a new pastoral lease in respect of the entirety of Ningaloo Station been lost by virtue of the position adopted by CALM EB?
5.If there is no entitlement to a new pastoral lease in respect of the entirety of Ningaloo Station, are the plaintiffs entitled to orders to facilitate a claim to compensation?
[7] ts 35. Counsel for the defendants did not dispute that these were the issues for determination.
For the reasons which follow, the answers to those questions are:
1.No;
2.Unnecessary to answer but in any event,, the Condition was invalid;
3.The Minister complied with the requirement to negotiate. Billie and Jane were deemed to have withdrawn from negotiations for a new lease, by virtue of the operation of the provisions of the Amendment Act;
4.In any event, the position taken by CALM EB meant that the Minister was not obliged to grant the proposed pastoral lease, upon the expiry of the Pastoral Lease in June 2015;
5.The plaintiffs are entitled to compensation, but have not established any present entitlement to the relief sought.
In these reasons, I deal with the following matters:
1.The factual context for the dispute;
2.The legislative provisions;
3.Overview of the parties' pleaded cases;
4.Principles applicable to the construction of the legislative provisions;
5.Does any entitlement to the grant of a new pastoral lease depend upon s 98(11) of the Land Act (rather than the Amendment Act)?
6.The operation of the Amendment Act;
7.Did CALM EB's indication that it did not wish to have a further pastoral lease affect any obligation on the Minister (if one existed) to grant a further pastoral lease?
8.If any entitlement to a new pastoral lease is subject to the Amendment Act, was the process leading to the plaintiffs' deemed withdrawal from the agreement to grant a new lease validly followed?
9.If there is no entitlement to a new lease, are the plaintiffs entitled to orders to facilitate a claim to compensation?
The factual context for the dispute
The parties have agreed most of the facts relevant to their dispute. The agreed facts were clearly established by the documentary evidence[8] (which was not in dispute) and by a witness statement of Jane,[9] which was tendered without objection, and without cross examination. I have therefore proceeded on the basis of the agreed facts, which are reproduced below, by reference to the paragraph numbering used by the parties.
[8] Exhibit 2.
[9] Exhibit 3.
The Minister and CALM EB disputed the admissibility of certain facts, namely those set out in paragraphs 8, 10, 13, 17, 27, 32, 33, 34, 36, 75 ‑ 82 (inclusive) of the parties' statement of agreed facts, on the basis that they were irrelevant to the determination of the matters in issue, but in the event that the Court determined those matters to be relevant, the Minister and CALM EB agreed those facts. Having regard to the conclusion I have reached at [229] below, the facts in the disputed paragraphs are not relevant to the determination of the action.
Turning now to the agreed facts, they were as follows:
1.Billie commenced this proceeding as plaintiff.
2.Billie died on 3 July 2016.
3.Jane Lefroy is Billie's daughter.
4.Jane is the executor of Billie's estate pursuant to a grant of probate by this Court dated 14 December 2016.
5.The Minister is a body corporate established under the [Land Act] and continued under the [Administration Act].
6.The second defendant [CALM EB] is a body corporate established under section 36 of the Conservation and Land Management Act 1984 (WA) (CALM Act).
Ningaloo Station
7.At all material times the lands known as Ningaloo Station constituted Crown land for the purpose of the [Land Act] and the [Administration Act].
8.At all material times a pastoral station business has been operated on the lands known as Ningaloo Station which business has comprised all commercial activities relating to the operation of the pastoral station at Ningaloo Station (Pastoral Business).
Issuance of Pastoral Lease
9.Prior to 1 March 1977 pastoral leases 3114/436 and 398/501 applied to Ningaloo Station (Former Pastoral Leases).
10.Prior to 1 March 1977, the Pastoral Business was being conducted at Ningaloo Station.
11.On 10 February 1977 the registered proprietors of the Former Pastoral Leases applied to surrender them and applied for the issue of a new lease over Ningaloo Station.
12.On 1 March 1977 the application to surrender the Former Pastoral Leases was approved by the Minister and the Pastoral Lease was issued to Edgar Jeffrey Lefroy (Edgar Lefroy) (two undivided fourth shares), Gerald Francis Coaker Lefroy (Gerald Lefroy) (one undivided fourth share) and Mary Alice Lefroy (Dot Lefroy) (one undivided fourth share) as tenants in common for a term concluding on 30 June 2015. A copy of the Pastoral Lease [was in evidence].[10]
[10] Exhibit 2.1.
I note that the Pastoral Lease was granted in the form of a deed poll, which was registered on the title to the land. The Pastoral Lease provided that the land in question was leased for pastoral purposes under and subject to the provisions of Part VI of the Land Act. The Pastoral Lease contained a number of terms which reflected the provisions of the Land Act. For example, the Pastoral Lease provided that if the lessee assigned or underlet the land without the Minister's approval, as required by the Land Act, then the lease would become void. Further, the Pastoral Lease provided that the lease was granted subject to the powers, conditions and reservations relating to pastoral leases in Part VI of the Land Act, including the right 'to dispose of such portions of the demised land under the provisions of the said Act as may be required for any purpose of public utility or for otherwise facilitating the improvement and settlement of the State as therein prescribed'.[11]
[11] Exhibit 2.1.
Returning to the agreed facts, they were as follows:
13.On and after 1 March 1977 the Pastoral Business continued to be conducted on the land the subject of the Pastoral Lease.
Transfers of interests in the Pastoral Lease prior to 1995
14.On 15 July 1988, the two undivided fourth shares in the Pastoral Lease held by Edgar Lefroy were transferred to Billie Lefroy.
15.On 9 August 1989 the one undivided fourth share in the Pastoral Lease held by Gerald Lefroy was transferred to Bettye Duffell Lefroy (Bettye Lefroy).
The renewal of the Pastoral Lease in 1998
16.In 1995, the then holders of the Pastoral Lease were Billie Lefroy as to two undivided fourth shares, Bettye Lefroy as to one undivided fourth share and Dot Lefroy as to one undivided fourth share, as tenants in common (Holders).
17.In 1995, the Holders were also partners in the operation of the Pastoral Business with partnership interests of Billie Lefroy as to 50%, Bettye Lefroy as to 25% and Dot Lefroy as to 25%.
18.In 1995, the Holders in reference to section 98(11) of the Land Act sought to be informed by the Minister whether upon its expiration, the Pastoral Lease would be extended or a new lease granted.
19.On 24 December 1997, the Minister sent a letter to the Holders (Renewal Letter) informing them that the Pastoral Lease could be renewed in 2015, subject to certain conditions including 'the exclusion of areas from the existing lease that may be required for public works, conservation, national park, nature reserve or other Government purposes (Condition) and that the Renewal Letter was an offer for the purposes of section 98(11) of the Land Act which offer (Offer) may be accepted within one year.
20.A copy of the Renewal Letter [was in evidence].[12]
[12] Exhibit 2.2.
The Renewal Letter was addressed to:
Ningaloo
DF Lefroy
Ningaloo Station.[13]
[13] Exhibit 2.2.
The Renewal Letter was in the following terms:
You will recall that in 1995 the then Minister for Lands, the Hon George Cash wrote to you advising that under the Land Act, lessees may apply to the Minister for Lands during 1995 as to the future of their lease beyond the current expiry date of 30 June 2015.
As you applied during 1995, I am now in a position to advise that your lease will be renewed in 2015 subject to:
1.compliance with lease conditions, including stocking requirements and maintenance of infrastructure, at the time of expiry on 30 June 2015;
2.there being no Soil Conservation Notices or other orders by the Soil and Land Conservation Commissioner in force;
3.there being no unfulfilled requirements of the Soil and Land Conservation Commissioner and/or Pastoral lands Board …;
4.exclusion of areas from the existing lease that may be required for public works, conservation, national park, nature reserve and other Government purposes.
5.the annual rental for the lease up to 30 June 2015 will apply to the renewed lease. The rental review period for the renewed lease will continue to apply every five years in accordance with s 123(4) of the [Administration Act].
The next rent review for the renewed lease will be on 1 July 2019.
This offer is made in accordance with sections 98(11)(b) and (c) of the Land Act and you may accept the offer at any time within one year from the date of this letter. If you do not accept this offer within this period, the offer will lapse and be void.
Returning to the agreed facts, they were as follows:
21.By letter dated 23 September 1998 to the Minister, Jane Lefroy on behalf of the Holders accepted the Offer. A copy of that letter [was in evidence].[14]
[14] Exhibit 2.3
In her letter of 23 September 1998, Jane simply advised that 'we [that is, the Holders] are in receipt of [the Renewal Letter]' and that 'we except (sic) your offer to renew the lease on 1st July 2015'.[15]
[15] Exhibit 2.3.
Returning to the agreed facts, they were as follows:
22.By letter dated 8 October 1998 to Jane Lefroy on behalf of the Holders, the Executive Officer of the Pastoral Lands Board on behalf of the Minister, acknowledged receipt of the Holders' acceptance of the Offer.
23.On or about 3 December 1998, Jane Lefroy, on behalf of the Holders sent a letter to the Minister, a copy of which [was in evidence].[16]
[16] Exhibit 2.4.
The letter from Jane to the Minister, dated 3 December 1998, was in the following terms:
we write with reference to [the Renewal Letter] to renew our pastoral lease in accordance with sections 98(11) B and C of the Land Act 1933. We request that you extend the lease for the maximum possible period after 30/6/2015.
We hereby apply for lease renewal as stated above. However, we believe that section 98(11) of the Land Act 1933 requires you to identify precisely whether it is the whole or some clearly defined part of the land the subject of our existing lease, which will be offered to us under the renewal. How otherwise are we to determine whether or not we will continue to have a viable area to operate under the lease? We believe that [the Condition] of your offer letter in stating that there may be areas excluded from the new lease does not give us the certainty as to area of a new lease which section 98(11) requires.
In accepting your offer, we reserve the right to pursue this matter further with you to require you to identify precisely whether it is the whole or only some defined part of the current lease area which is being offered to us.[17]
[17] Exhibit 2.4.
Returning to the agreed facts, they were as follows:
Transfers of interests in the Pastoral Lease and Pastoral Business between 1998 and 2002
24.Dot Lefroy died on 11 May 1999.
25.Probate of Dot Lefroy's will was granted by this Court on 30 June 1999.
26.Under Dot Lefroy's will dated 18 June 1994, her niece Elizabeth Jane Hayter (Liz Hayter), inherited the whole of Dot Lefroy's estate, which included Dot Lefroy's undivided one fourth share in the Pastoral Lease.
27.The estate under Dot Lefroy's will also included her 25% interest in the assets and undertaking of the partnership conducting the Pastoral Business.
28.On 27 August 1999 the one undivided fourth share in the Pastoral Lease held by Dot Lefroy was transferred to Liz Hayter by transmission under Dot Lefroy's will.
29.On 22 February 2000 Paruna Sanctuary Ltd (Paruna) as purchaser and Liz Hayter as Vendor entered into a contract for sale of land by offer and acceptance (AWC Purchase Contract).
30.A copy of the AWC Purchase Contract was in [evidence].[18]
31.On 20 April 2000 pursuant to the AWC Purchase Contract the one undivided fourth share in the Pastoral Lease held by Liz Hayter was transferred to Paruna (the name of which was later changed to Australian Wildlife Conservancy). \
32.On 15 August 2000 Liz Hayter as Assignor, Jane Lefroy as Assignee and Billie Lefroy as Covenantor executed a deed entitled Assignment of Partnership Interest (Liz Hayter Assignment).
33.A copy of the Liz Hayter Assignment [was in evidence].[19]
34.By the Liz Hayter Assignment, Liz Hayter assigned her 25% partnership interest in the Pastoral Business to Jane Lefroy for a consideration of $25,000.
The Exclusion Notices and negotiations from 2002 to 2004
35.In 2002, the then registered holders of the Pastoral Lease were Billie Lefroy as to two undivided fourth shares, Bettye Lefroy as to one undivided fourth share and AWC as to one undivided fourth share, as tenants in common.
36.In 2002, the partners in the Pastoral Business and their respective partnership interests were Billie Lefroy as to 50%, Bettye Lefroy as to 25% and Jane Lefroy as to 25%.
37.On 27 November 2002 the Minister sent a letter to Bettye Lefroy and Billie Lefroy as holders of two undivided fourth shares, and one undivided fourth share, respectively in the Pastoral Lease (Lefroy Interests Exclusion Notice).
38.A copy of the Lefroy Interests Exclusion Notice [was in evidence].[20]
[18] Exhibit 2.5.
[19] Exhibited 2.6.
[20] Exhibit 2.7.
The Lefroy Interests Exclusion Notice referred to the fact that the Holders had accepted the Offer, which was subject to a number of conditions, including the Condition. The Lefroy Interests Exclusion Notice then stated:
The [Amendment Act] amended the [Administration Act]. The effect of these Acts set out the procedure by which land may be excluded from your renewed or extended pastoral lease 'for a public purpose' as from 1 July 2015.
NOTICE OF EXCLUSION
Pursuant to [the Condition] of the Offer and those Acts and in my capacity as Minister for Lands under the [Administration Act] I now give NOTICE that the land described below will be excluded from the area of your pastoral lease when the renewal or extension of it commences on 1 July 2015, and the following applies … .[21]
[21] Exhibit 2.7.
The Lefroy Interests Exclusion Notice then set out a description of the land to be excluded which was described as 'that area coloured pink and comprising an area of approximately 22,202 hectares, as shown on Ningaloo Exclusion Sketch, a copy of which is attached to this notice'. The Lefroy Interests Exclusion Notice then set out the 'Reason for land being excluded (ie public purpose)' which was said to be 'Ningaloo Marine Park. Acquiring Authority - [CALM EB] …'.[22]
[22] Exhibit 2.7.
The Lefroy Interests Exclusion Notice also set out the actions which it was open to Billie and Bettye (Lefroy Lessees) to take, namely to 'accept the above exclusion conditions', to 'withdraw from the renewal or extension of your pastoral lease as from 1 July 2015' or to 'enter into negotiations on the area to be excluded from the lease, or the rent to be paid under it as a result of the exclusion'.[23] The Lefroy Lessees were asked to indicate their preferred option on an enclosed form. The Lefroy Interests Exclusion Notice also noted that 'where the homestead is included within the area of exclusion, it is proposed to offer owner occupiers of current pastoral leases other tenancy arrangements for their existing homestead'.[24]
[23] Exhibit 2.7.
[24] Exhibit 2.7.
The Lefroy Interests Exclusion Notice contained an explanation as to the consequences of each option. In so far as the option to enter into negotiations was concerned, the Lefroy Lessees were advised that
if at the end of two years from this letter, agreement has not been reached on conditions to the conditions set out in this letter, then you can accept the conditions as set out in this letter. Otherwise you will be taken to have withdrawn from having your lease renewed or extended on 1 July 2015. In this case, you will not have this pastoral lease at all, from that date.[25]
[25] Exhibit 2.7.
Finally, the Lefroy Interests Exclusion Notice stated that if land was excluded from the proposed pastoral lease from 1 July 2015, the Lefroy Lessees would be entitled to compensation to be determined, by the Valuer-General, on the market value of any lawful improvements existing on the land as at 30 June 2015, when the Pastoral Lease expired.
Returning to the agreed facts, they were as follows:
39.The land to be excluded from the renewal of the Pastoral Lease as stated in the Lefroy Interests Exclusion Notice would result in approximately 44% of the total area of the Pastoral Lease being excluded.
40.The land to be excluded from the renewal of the Pastoral Lease also included buildings and major infrastructure used for the Pastoral Business.
41.The land to be excluded from the renewal of the Pastoral Lease also included water resources used for watering stock.
42.On 27 November 2002 the Minister sent a letter to AWC in identical terms to the Lefroy Interests Exclusion Notice (AWC Exclusion Notice).
43.On 14 January 2003 AWC sent a notice to the Minister, being a completed election form that had been attached to the AWC Exclusion Notice (AWC Election Notice).
44.A copy of the AWC Election Notice [was in evidence].[26]
[26] Exhibit 2.8.
In the AWC Election Notice, AWC indicated that it elected to enter into negotiations on the area to be excluded from the Pastoral Lease, in relation to the following aspect:
AWC wishes to negotiate in relation to the area that is proposed to be excluded from the Pastoral Lease. AWC is opposed to the exclusion of any area from the Pastoral Lease. AWC also wishes to negotiate in relation to the rent, should the government proceed with any exclusion.[27]
[27] Exhibit 2.8.
Returning to the agreed facts, they were as follows:
45.On 27 March 2003 Garry Crow, Executive Officer, Pastoral Lands Board Executive Unit, Department of Planning and Infrastructure, on behalf of the Minister, wrote to Billie Lefroy and Bettye Lefroy (Minister's March 2003 Letter).
46.A copy of the Minister's March 2003 Letter [was in evidence].[28]
47.The Minister's March 2003 Letter attached a document entitled Exclusion Negotiation Guidelines.
48.On 27 March 2003 Garry Crow sent a letter to AWC in identical terms to the Minister's March 2003 Letter.
[28] Exhibit 2.9.
The Exclusion Negotiation Guidelines enclosed with the Minister's March 2003 Letter indicated, in relation to the scope of the negotiations, that:
In general, negotiations will focus on alterations to the boundary of the proposed exclusion. Negotiations will not consider any changes to the timetable for transfer of excluded areas, which is set by the [Administration Act] as 1 July 2015. The Minister for Lands may, however, consider agreements reached between the lessee(s) and acquiring authorities over potential sale, surrender or transfer of the identified exclusions areas of currently pastoral leasehold land … prior to 1 July 2015. …
In some situations, alternatives to exclusion involvement management agreements or covenants may be negotiated.[29]
[29] Exhibit 2.9.
Returning to the agreed facts, they were as follows:
49. On 24 November 2003 Bettye Lefroy and Billie Lefroy sent a notice to the Minister, being a completed election form that had been attached to the Lefroy Interests Exclusion Notice (Lefroy Interests Election Notice).
50. A copy of the Lefroy Interests Election Notice [was in evidence].[30]
[30] Exhibit 2.10.
In the Lefroy Interests Election Notice, the Lefroy Lessees indicated that they wished to enter into negotiations on the area to be excluded from the proposed pastoral lease, and advised that the matters about which they wished to negotiate were:
1.Negotiate on coastal strip which takes in homestead, shearing shed, holding paddocks, stock watering points. Area of freehold encompassing homestead, shearing shed and old lighthouse.
2.Negotiate on whole of northern inland area - takes in important paddock and watering point and good grazing land.[31]
[31] Exhibit 2.10.
Returning to the agreed facts, they were as follows:
51.There were no negotiations with Billie Lefroy or Bettye Lefroy in respect of the land to be excluded from the Pastoral Lease before February 2004.
52.Between February 2004 and June 2004, 3 meetings were arranged between Billie Lefroy and Bettye Lefroy or their authorised representatives and officers of [CALM EB] and officers of the Department for Planning and Infrastructure (DPI), representing the Minister.
53.From 1975 onwards, the recommendation of the Environmental Protection Authority was that the Government purchase Ningaloo Station and reserve it for the purposes of a National Park.
54.On 10 May 2004 the Minister for Planning and Infrastructure approved the Gascoyne Coast Exclusion Policy (Policy) that:
(a)was expressed to apply to all pastoral lease exclusions between Ningaloo and Wooramel (which included the area of land known as Ningaloo Station); and
(b)stated that 'the exclusion boundaries are not negotiable, whilst the lawful pastoral improvements within the exclusion boundary are negotiable'.
55.A copy of the Policy [was in evidence].[32]
[32] Exhibit 2.12.
The Policy stated that it applied to all 'coastal strip exclusions for the pastoral leases of Ningaloo, Cardabia, Warrorra, Gnaraloo, Quobba, Boolathana, Brickhouse, Edaggee and Wooramel'. It also stated:
The Gascoyne Coast Exclusion Policy is to ensure a uniform approach to all pastoral lease exclusions between Ningaloo and Wooramel. The policy is that the exclusion boundaries are not negotiable, whilst the lawful pastoral improvements within the exclusion boundary are negotiable. The only exception would be to provide for homesteads and associated infrastructure that are not to be excluded from the pastoral lease.
The Gascoyne Coast Exclusion Policy only refers to the coastal strip exclusions.
The consequence of this policy is that regardless of the acquiring authority or the immediate needs of the acquiring authority, the exclusion boundary as depicted on the exclusion plans provided with the Notice for Exclusion in 2002 will remain largely unchanged.[33]
[33] Exhibit 2.12.
Returning to the agreed facts, they were as follows:
56.On 9 June 2004 Jeff Murray, Exclusion Negotiations Project Officer, Pastoral Land Management in the DPI wrote to Jane Lefroy (Minister's June 2004 Letter).
57.A copy of the Minister's June 2004 Letter [was in evidence].[34]
[34] Exhibit 2.13.
The Minister's June 2004 Letter advised that the Policy had been approved by the Minister, and advised that 'the consequence of this policy is that regardless of the acquiring authority or the immediate needs of the acquiring authority, the exclusion boundary as depicted on the exclusion plans provided with the Notice for Exclusion in 2002 will remain largely unchanged'.[35]
[35] Exhibit 2.13.
Returning to the agreed facts, they were as follows:
58.On 9 June 2004, Mr Murray also sent a letter to AWC in identical terms to the Minister's June 2004 Letter.
59.The proposals made in the negotiations included the State purchasing the Pastoral Lease, or the individual interests of Billie Lefroy or Bettye Lefroy or both as holders of the Pastoral Lease.
60.Following the Minister's approval of the Policy, the Policy guided the approach adopted in the Minister's negotiations with Billie Lefroy and Bettye Lefroy in relation to the Lefroy Interests Exclusion Notice.
61.On 20 October 2004, the Minister wrote to Jane Lefroy, in her capacity as Billie Lefroy's representative in the negotiations (Minister's October 2004 Letter), regarding a modified exclusion boundary proposed by Jane Lefroy as part of the exclusion agreement negotiations. A copy of the Minister's October 2004 Letter [was in evidence].[36]
[36] Exhibit 2.16.
In the Minister's October 2004 Letter, the Minister advised:
I understand that you recently proposed a modified exclusion boundary … . Informal advice I have received … is that your latest proposal is not supported, in particular as it relates to the northern area and the north coastal area. The removal of these from the exclusion area would be a substantial modification and beyond our intention to accommodate station infrastructure as a basis for any boundary modification. The area proposed for exclusion around the homestead may also require some modification, however this would require further discussion with yourself and the negotiating agencies … .
I recognise the attachment you have to Ningaloo Station and your efforts to accommodate the increasing visitation to the Station by campers. I also acknowledge that the magnitude of the exclusion area makes the viability of the remainder of the lease for pastoralism questionable or difficult. I am also aware that you hold the lease in common with a quarter shareholder that does not have either an historical or current interest in pastoral activity on Ningaloo Station.
Taking the above key factors into account leads me to suggest that the best way forward would be for the State to purchase the entire lease. … I am committed to ensuring that you would have a life-time occupancy of the homestead under any purchase arrangement. Further, I would also be prepared to support an ongoing role for you in some form, such as in a caretaker role … .
… In principle, from the Government's perspective, substantial modification to the exclusion boundary is not supported and it would seem, given all of the circumstances, that purchase of the entire lease with a life-time occupancy of the homestead and a management role for yourself would be suitable.
… Of course, should you wish to seek an agreed exclusion boundary, then you should focus on resolving a boundary around the homestead and related station infrastructure with the agencies.
… Please also note that I have written to the [AWC] suggesting that the State acquire their quarter share in the pastoral lease.[37]
[37] Exhibit 2.16.
Returning to the agreed facts, they were as follows:
62.On 23 November 2004 the Minister wrote to Jane Lefroy, in her capacity as Billie Lefroy's representative in the negotiations Minister's November 2004 Letter).
63.A copy of the Minister's November 2004 Letter [was in evidence].[38]
[38] Exhibit 2.17.
In the Minister's November 2004 Letter, the Minister proposed 'a final position for an agreement'. She noted that Jane had previously advised that she wished 'to continue a viable pastoral business and the successful management of the coast and camping'. However, the Minister advised that:
The continuation of the existing situation in relation to coastal camping is not possible on the pastoral lease, given:
•The exclusion area for public purposes of conservation and recreation;
•The Ningaloo Coast Regional Strategy Carnarvon to Exmouth; and
•The limitations of a pastoral lease to legitimately accommodate the increased levels of visitation/tourism and its associated commercial aspects.
I believe that the compromise proposal provides a fair and generous response to your stated preference and that it provides you with an ongoing role in the management of the area, a lifetime occupancy, an asset and business development opportunity through tourism camping leases, a source of income, a legitimated role in management of coastal camping and an offer for realisation of the residual pastoral lease value in a lump sum payment.
I have enclosed a draft Agreement setting out the above matters …
I also remain prepared for the State to purchase the entire lease and to assist your decision-making I provide the following indicative offer …'[39]
[39] Exhibit 2.17.
Returning to the agreed facts, they were as follows:
64.The Minister's November 2004 Letter enclosed for signing by Billie Lefroy an agreement entitled "2015 Exclusion Negotiations ‑ Concluding Report (Agreement)" proposed to be entered into by Bettye Lefroy, Billie Lefroy and AWC as lessees of the Pastoral Lease, the Minister, and [CALM EB] as the acquiring authority (Ningaloo Station Exclusion Agreement).
65.Neither Billie Lefroy nor Bettye Lefroy signed the Ningaloo Station Exclusion Agreement.
The terms of the proposed Ningaloo Station Exclusion Agreement included that the land to be excluded from the proposed pastoral lease would comprise an area of 21,090 hectares which were delineated and shaded in pink on a map attached to the proposed Ningaloo Station Exclusion Agreement, with the exception of an area outlined in pink on the Ningaloo Pastoral Lease plan (a copy of which was attached to the proposed Ningaloo Station Exclusion Agreement) and which would be retained within the Pastoral lease.
The proposed Ningaloo Station Exclusion Agreement also included a number of conditions, including that the lessee would be granted an access agreement for the exclusive use of the existing stock water sources within the excluded area, that a separate lease would be granted over the homestead area for the lifetimes of Billie and Jane, or until such time as neither of them resided at Ningaloo Station, and that compensation would be payable in respect of the exclusion, pursuant to the Administration Act.
A further alternative proposal was included within the proposed Ningaloo Station Exclusion Agreement. It was that the lessees would voluntarily surrender the excluded area by 7 December 2006, in which case the lessees would receive other benefits, including that they would be granted the right to prepare development plans for certain 'tourism envelopes' within that area, with a view to the grant of a lease (but not a pastoral lease) in respect of those areas. In addition, the Minister indicated that the State would negotiate to purchase the balance of the Pastoral Lease at the request of the lessees.[40] However, if the lessees agreed to this alternative proposal, and voluntarily surrendered the excluded area, no compensation would be payable under the Administration Act.
[40] Exhibit 2.17.
Returning to the agreed facts, they were as follows:
66.On 29 November 2004, Jane Lefroy sent an email to the Minister requesting various changes to the exclusion boundary (Jane Lefroy's email). A copy of Jane Lefroy's email [was in evidence].[41]
67.On 3 December 2004, the Minister sent a letter to Jane Lefroy (Minister's December 2004 Letter) in response to Jane Lefroy's email. A copy of the Minister's December 2004 Letter [was in evidence].[42]
[41] Exhibit 2.18.
[42] Exhibit 2.19.
In Jane Lefroy's email, she proposed a number of terms in relation to the Excised Land, and also proposed terms on which the Lefroy Lessees would be willing to sell the Pastoral Lease. In the Minister's December 2004 Letter, she urged the Lefroy Lessees to discuss the terms concerning the Excised Land with departmental officers negotiating on the Minister's behalf while indicating that negotiations concerning the purchase of the Pastoral Lease could proceed in parallel. Ultimately, no agreement was able to be reached on either option for resolving the parties' dispute.[43]
[43] Exhibit 2.18.
Returning to the agreed facts, they were as follows:
68.On 17 December 2004 Atticus Fleming, the Chief Executive Officer [of] AWC wrote to the Minister (AWC's December 2004 Letter).
69.A copy of AWC's December 2004 Letter and enclosure [was in evidence].[44]
[44] Exhibit 2.20.
In that letter, Mr Fleming advised the Minister that AWC was opposed to the proposed exclusion of the Excised Land because AWC had intended to implement a biodiversity reconstruction project at Ningaloo Station, and it did not believe that the exclusion of the Excised Land would lead to the best outcome for conservation. Nevertheless, AWC had decided to sign the Ningaloo Station Exclusion Agreement because it did not consider that it had any other alternative.[45]
[45] Exhibit 2.20.
Returning to the agreed facts, they were as follows:
70.In all subsequent dealings with Billie Lefroy, Bettye Lefroy and AWC or their successors in title as lessees of the Pastoral Lease, the Minister has claimed that Billie Lefroy, Bettye Lefroy and AWC are deemed by section 48(6) of the Amendment Act to have withdrawn from the agreement to renew the Pastoral Lease.
71.On 22 April 2005, a letter was sent from DPI to Billie Lefroy and Bettye Lefroy. A copy of that letter [was in evidence][46].
[46] Exhibit 2.21.
That letter indicated that
as agreement was not reached between the lessees and [CALM EB], within the statutory timeframe extended to 17 December 2004, the lessees are taken to have withdrawn from the renewal or extension of the lease in 2015. The lessees will, however, be entitled to receive as compensation an amount determined by the Valuer-General to be the fair market value on the date of expiry of the current lease (ie on 30 June 2015), of any lawful improvements existing on the land under the lease.[47]
[47] Exhibit 2.21.
Returning to the agreed facts they were as follows:
Subsequent dealings with interests in the Pastoral Lease and Pastoral Business
72.On 12 October 2006, Bettye Lefroy transferred her undivided one fourth share in the Pastoral Lease to [CALM EB].
73.On 20 October 2006, the one undivided fourth share in the Pastoral Lease held by AWC was transferred to [CALM EB].
74.Bettye Lefroy died on 17 September 2007.
75.Probate of Bettye Lefroy's will was granted by this Court on 15 May 2008.
76.Under Bettye Lefroy's will dated 19 March 1987, her sons John Ulverstone Lefroy (John Lefroy) and Robert James Lefroy (Robert Lefroy) inherited Bettye Lefroy's residuary estate, which included her 25% partnership interest in the Pastoral Business.
77.On 3 January 2009 Robert Lefroy as Assignor, Jane Lefroy as Assignee and Billie Lefroy as Covenantor executed a deed entitled Assignment of Partnership Interest (Robert Lefroy Assignment).
78.A copy of the Robert Lefroy Assignment [was in evidence].[48]
[48] Exhibit 2.22.
79.By the Robert Lefroy Assignment, Robert Lefroy assigned his 12.5% partnership interest in the Pastoral Business to Jane Lefroy with effect from 1 July 2008, for a consideration of $27,500.
80.On 6 March 2009 John Lefroy as Assignor, Jane Lefroy as Assignee and Billie Lefroy as Covenantor executed a deed entitled Assignment of Partnership Interest (John Lefroy Assignment).
81.A copy of the John Lefroy Assignment [was in evidence].[49]
[49] Exhibit 2.23.
82.By the John Lefroy Assignment, John Lefroy assigned his 12.5% partnership interest in the Pastoral Business to Jane Lefroy with effect from 1 July 2008, for a consideration of $27,500.
Expiry of the Pastoral Lease
83.By a deed poll executed on 24 June 2015 the Minister executed a licence pursuant to section 91 of the [Administration Act] in favour of Billie Lefroy and Jane Lefroy, over a licence area designated in Annexure A being that part of the Pastoral Lease known as the Ningaloo Homestead, for a term commencing on 1 July 2015 and ending on the earlier of the events in clause 4.2, unless terminated earlier in accordance with clause 4.1 (Homestead Licence).
84.By letter from the Minister's solicitors to Billie Lefroy and Jane Lefroy dated 25 June 2015 the Minister:
(a)informed Billie Lefroy and Jane Lefroy that he had executed the Homestead Licence;
(b)provided, for signature:
(i)a draft deed of licence between the Minister and Billie Lefroy and Jane Lefroy (Grazing Licence) by which the Minister would grant a licence pursuant to section 91 of the [Administration Act] in favour of Billie Lefroy and Jane Lefroy over a licence area designated in Annexure A (Grazing Area), for Grazing Purposes as defined, for a term commencing on 1 July 2015; and
(ii)a draft deed of licence between the Minister and Billie Lefroy and Jane Lefroy (Tourism Camping Licence) by which the Minister would grant a licence pursuant to section 91 of the [Administration Act] in favour of Billie Lefroy and Jane Lefroy over a licence area designated in Annexure A and entitled 'section 91 Licence Area - Coastal Camping (Tourism Camping Area), for the Permitted Uses as defined, for a term commencing on 1 July 2015 and ending on 30 June 2020; and
(iii)stated that unless Billie Lefroy and Jane Lefroy signed the Grazing Licence and the Tourism Camping Licence they would not be lawfully entitled to continue with grazing and tourism camping activities on the Pastoral Lease after 1 July 2015.
85.By letter to the Minister's solicitors dated 30 June 2015 Billie Lefroy refused to sign the Grazing Licence and the Tourism Camping Licence, and affirmed her claim to a right under the agreement to renew the Pastoral Lease on and after 1 July 2015 to continue to occupy the Homestead and to conduct grazing activities on the Pastoral Lease on and after 1 July 2015.
86.Billie Lefroy and Jane Lefroy and their servants, agents and contractors so authorised by them together have occupied the area of land known as Ningaloo Station previously the subject of the Pastoral Lease from its expiry on 30 June 2015 until Billie Lefroy's death on 3 July 2016, and thereafter Jane Lefroy has occupied that land in her own capacity and in her capacity as Billie Lefroy's sole heir.
Compensation for improvements
87.As at the date of expiry of the Pastoral Lease on 30 June 2015, there were lawful improvements on the land known as Ningaloo Station within the meaning of section 114 of the [Administration Act].
88.The Valuer-General has not made a determination of the kind provided by section 114(2) of the [Administration Act].
There are two other aspects of the evidence to which I should refer. First, in her witness statement, Jane expressed the opinion that the land which would remain subject to the proposed pastoral lease after the exclusion of the Excised Land 'would not support nor be able to operate as a commercially viable pastoral station because there were and are not developable water sources, and insufficient land, to justify making a new investment in pastoral buildings and stock yards'.[50] In the course of the negotiations concerning the area of the Excised Land, the Minister accepted that 'the magnitude of the [Excised Land] makes the viability of the remainder of the lease for pastoralism questionable or difficult'.[51] However, counsel for the Minister disputed[52] that Jane's evidence was capable of supporting a finding that the land over which the Minister proposed to grant the proposed pastoral lease (that is, following the exclusion of the Excised Land) would be capable, when fully developed, of carrying sufficient stock to enable it to be worked as an economically viable and ecologically sustainable pastoral business unit (Viability Requirement). (The Viability Requirement was said to derive from the terms of both the Land Act and the Administration Act, and is discussed at [158] - [164] below.) I accept Jane's evidence as the expression of her genuinely held view about the implications of the exclusion of the Excised Land from the proposed pastoral lease. However, for the reasons outlined below at [165], I do not accept that Jane's evidence is capable of supporting a finding that the land the subject of the proposed pastoral lease would not be capable of meeting the Viability Requirement.
[50] Exhibit 3 [41].
[51] Exhibit 2.16.
[52] Defendants' submissions [78].
Secondly, in the course of the trial, a question was raised as to whether there was any difference between the boundaries of the land proposed to be excluded under the Exclusion Notice, and the land proposed to be excluded under the proposed Ningaloo Station Exclusion Agreement. After the trial, the parties clarified that issue, and provided a copy of a map which was annexed to the Ningaloo Station Exclusion Agreement.[53] That map depicted the area of the Excised Land then proposed by the Minister, and comprised a reduced exclusion area of 21,090 hectares, which was 1,112 hectares less than the area of the Excised Land which had initially been proposed. That map shows, and I find, that there was a change in the boundary of the proposed Excised Land, which resulted in a reduction in the total area of the Excised Land.
[53] Notice of 2015 Exclusion Areas Ningaloo Pastoral Lease Working Map filed 19 February 2018.
The legislative provisions
It is convenient to commence by setting out the key legislative provisions at the heart of the parties' dispute. The plaintiffs contend that their entitlement to a further pastoral lease over the entirety of Ningaloo Station arises from the operation of s 98(11) of the Land Act. That subsection relevantly provided:
(11)(a)At any time during the year 1995 a lessee of a pastoral lease may apply in writing to the Minister requesting to be informed as to whether the Minister will upon the expiration of the pastoral lease extend that lease or grant to the lessee a new lease of the whole or part of the land the subject of that lease and if so, at what rent and upon what other terms and conditions not inconsistent with this Act.
(b)On receipt of an application pursuant to paragraph (a) the Minister shall consider and determine the matters referred to in that paragraph and shall give to the lessee notice in writing of his decision not later than 31 December 1997.
(c)A notice to a lessee pursuant to paragraph (b) shall be deemed an offer of a lease or, as the case may be, an extension of a lease, at the rent and on the other terms and conditions specified in the notice; and the lessee may accept the offer at any time within 1 year from the date that the notice is given.
The Land Act was repealed by the Administration Act,[54] the relevant provisions of which came into effect on 30 March 1998.
[54] Administration Act (WA) s 281(1).
The Administration Act contained a number of transitional provisions in respect of pastoral leases. A pastoral lease which existed under the Land Act immediately before the 'appointed day' (that is, 30 March 1998) was continued in existence subject to the Administration Act, as if it had been granted under Part 7 of the Administration Act.[55] In addition, a number of provisions in s 143 of the Administration Act were directed to the situation where an application was made under s 98(11) of the Land Act, but not disposed of under that section before the appointed day. Relevantly, s 143 provided:
[55] Administration Act s143(1).
(1)A pastoral lease subsisting under the repealed Act immediately before the appointed day ('existing pastoral lease') continues in existence subject to this Act, as if it had been granted under this Part.
…
(5)An application made under section 98(11) of the repealed Act but not disposed of under that section before the appointed day may be disposed of under that section as if the repealed Act had not been repealed.
(6)If a lessee of a pastoral lease who was entitled under section 98(11)(a) of the repealed Act to make an application at any time during 1995 did not do so, the Minister may -
(a)treat that lessee or a successor in title of that lessee as if he or she had made an application (the deemed application) under that section; and
(b)act under section 98(11)(b) of the repealed Act in relation to the deemed application.
(7)Section 98(11)(c) of the repealed Act applies to a notice given to a lessee or successor in title under section 98(11)(b) of the repealed Act as read with subsection (6)(b) of this section as if the repealed Act had not been repealed.
(8)For the purposes of subsections (6) and (7) of this section, references in section 98(11) of the repealed Act to a lessee of a pastoral lease, however described, are whenever necessary to be construed as including references to a successor in title to such a lessee.
(9)Section 140 does not operate in relation to an existing pastoral lease.
The final legislative provisions of significance are contained in the Amendment Act. That Act amended s 143 of the Administration Act to deal with two cases. First, s 143(6) was repealed,[56] a new s 143(6), s 143(6a) - (6i), and s 143(10) were inserted into the Administration Act,[57] and s 143(7) and (8) were repealed.[58] Those amendments effectively dealt with cases where the lessee of a pastoral lease was entitled to make an application under s 98(11)(a) of the Land Act but did not do so. The amendments also applied to pastoral leases granted under the Administration Act between 1 January 1996 and 29 March 1998. Those amendments are not presently relevant. Secondly, the Amendment Act[59] inserted a new s 143(5a) into the Administration Act. It was in the following terms:
(5a)If an application is disposed of under section 98(11) of the repealed Act either before or after the appointed day by the lessee accepting the offer of a lease or an extension of a lease, as the case may be, the grant or extension commences immediately upon the expiration of the lease concerned in relation to any land subsisting in the lease at the expiration of the lease.
[56] Amendment Act s 38(2).
[57] Amendment Act s 38(4).
[58] Amendment Act s 38(3).
[59] Amendment Act s 38(1).
In addition, s 48 of the Amendment Act contained provisions dealing with the validity of offers of an extension, or further grant, of a pastoral lease pursuant to s 98(11) of the Land Act, and made provision for a process by which land could be excluded from pastoral leases which the Minister proposed to renew, or grant afresh, upon the expiry of existing leases in 2015. Section 48 provided:
48. Validation of certain purported offers of leases
(1)If a lessee of a pastoral lease or a former lessee of a pastoral lease -
(a)was given a notice under section 98(11) of the Land Act 1933; or
(b)was, after 31 December 1995 and before the coming into operation of the Land Administration Act 1997, given notice in writing by the Minister that the Minister would upon the expiration of the pastoral lease extend that lease or grant to the lessee a new lease of the whole or part of the land the subject of that lease,
then -
(c)that notice is deemed to be, and always to have been, a valid and effective offer of a lease or an extension of a lease, as the case may be;
(d)any acceptance of that offer by the lessee is deemed to be and, in the case of an offer accepted before the coming into operation of this section, always to have been valid and effective; and
(e)any lease or extension of a lease arising from an offer and acceptance referred to in paragraphs (c) and (d) is deemed to be and always to have been valid and effective.
(2)Without limiting the effect of subsection (1) -
(a)the offer is deemed to have been made to the person who at the time the notice was given was the lessee of the lease in respect of which the notice was given;
(b)if the offer was made in relation to a lease by reference to the name of a station and not by reference to the location details of the land contained in the lease or the registered number of the lease under the Transfer of Land Act 1893, the offer is deemed to have been made in relation to the land contained in the registered lease applicable to that station at the time the notice was given;
(c)if the offer was for a lease or an extension of the lease, the term of the lease or the extension offered is to be for the same term as the term of the existing pastoral lease;
(d)the annual rent payable for the lease or extension of a lease, as the case may be, is to be and is taken always to have been determined under section 123 of the Land Administration Act 1997;
(e)the offer is to be regarded as being accepted in relation to the land contained in the existing pastoral lease at the time the offer is accepted (other than any land excluded under subsections (3) to (6)); and
(f)unless otherwise provided in this subsection, the text and terms and conditions of the lease or extension of the lease are the terms and conditions specified in the notice given to the lessee.
(3)The Minister may for a public purpose exclude land from a lease or extension of lease referred to in subsection (1) by giving a notice in writing under subsection (4) to the lessee, or the successor in title to the lessee, (the "lessee") not later than 2 years after the day on which this section comes into operation.
(4)The notice under subsection (3) is to contain the following information -
(a)a description of the area of land to be excluded from the lease;
(b)the reason for the land being excluded from the lease;
(c)any reduction in the rent payable under the lease as a result of the exclusion of the land from the lease;
(d)any proposed variation in the conditions of the lease as a result of the exclusion of the land from the lease; and
(e)that the land is to be excluded from the lease or extension concerned upon the commencement of the lease or extension, as the case may be.
(5)If a lessee is given a notice under subsection (4) the lessee may -
(a)accept the conditions contained in the notice;
(b)withdraw from the agreement to lease or to extend the lease; or
(c)enter into negotiations with the Minister on the area to be excluded from the lease or the rent to be paid as a result of the exclusion of the land from the lease.
(6)If agreement is not reached on the matters referred to in subsection (5)(5)(c) by the day that is 2 years, or such other longer period as may, for the purposes of this section, be prescribed under the Land Administration Act 1997, after the day on which the notice was given to the lessee (the "final day"), the lessee is deemed to have withdrawn from the agreement to lease or to extend the lease on the final day.
(7)If land is not to be excluded from a lease or extension of a lease referred to in subsection (1) for a public purpose under this section, the Minister may give notice in writing to that effect to the lessee not later than 2 years after the day on which this section comes into operation.
(8)If a notice is not given by the day specified in subsection (3) no land may be excluded from the lease under that subsection.
(9)In this section -
"existing pastoral lease" means a pastoral lease subsisting under the Land Act 1933 immediately before the appointed day as defined in section 3(1) of the Land Administration Act 1997;
"public purpose" has the same definition as it has in section 143(10) of the Land Administration Act 1997.
Overview of the parties' pleaded cases
Although counsel for the plaintiffs submitted that the resolution of the case boiled down to the five issues set out above at [12], it is as well to bear in mind the parties' pleaded cases as the framework within which those five issues fall to be determined. I do not intend to set out in detail the parties' pleaded positions. Some of the matters raised in the pleadings assumed little or no importance in the trial.
It is appropriate to mention at this point that the defendants ran consistent cases. For convenience, in the outline below, I will refer to the defendants' case, collectively, by reference to the Minister's pleading, except in so far as the defence pleaded by CALM EB dealt with the additional issue of the implications of the rejection by CALM EB (as the holder of a half share in the Pastoral Lease), of the grant of a further lease over Ningaloo Station.
By way of overview, the parties' cases are outlined below.
Whether the entitlement to the proposed pastoral lease derives from the Land Act or from the Amendment Act
The plaintiffs contend that in 1995, Billie, on behalf of the Holders, applied to the Minister in accordance with s 98(11) of the Land Act. They say that the Renewal Letter was an offer for the purposes of s 98(11) of the Land Act, which was able to be accepted within one year. The plaintiffs say that while the Offer was not accepted before the repeal of the Land Act, s 143(5) of the Administration Act applied. They say that s 143(5a) had the effect that the application the Holders had made to the Minister under s 98(11) of the Land Act, but which was not disposed of under that section before its repeal, could be disposed of as if the Land Act had not been repealed. The plaintiffs say that the Holders accepted the Offer on 23 September 1998, and that that acceptance created an enforceable agreement between the Minister and the Holders by which the Minister agreed to renew the Pastoral Lease on the terms of the Offer immediately upon the expiry of the Pastoral Lease on 30 June 2015.[60]
[60] Third Further Amended Statement of Claim (ASOC) [14].
The defendants' case is that under s 98(11)(c) of the Land Act, the Offer was deemed to be an offer of a lease on the terms and conditions specified in the Offer; and the Offer was accepted by Billie on 23 September 1998.[61] (The defendants say that Billie's attempt to reserve a right to require the Minister to identify whether the whole or part of the land the subject of the Pastoral Lease would be the subject of the proposed pastoral lease, was of no legal effect.[62])
[61] Further Amended Defence of the First Defendant (ADFD) [9(a) - (d)].
[62] ADFD [10].
The defendants say that the Offer and its acceptance by the Holders gave rise to an agreement between the Minister, and Billie and the other Holders, or their successors in title, that the Pastoral Lease would be renewed for a term commencing on 1 July 2015, subject to the terms and conditions specified in the Offer, including the Condition.[63]
[63] ADFD [9(e)].
The defendants also say that if the terms and conditions of the Offer were invalid or ineffective, the Offer was deemed to be, and always to have been, a valid and effective offer of a lease by virtue of s 48(1)(c) of the Amendment Act, and that Billie's acceptance of the Offer was deemed to be and always to have been valid and effective by s 48(1)(d) of the Amendment Act.[64]
[64] ADFD [9(c) - (d)].
The defendants further say that the agreement for the proposed pastoral lease was subject to s 48 of the Amendment Act, and to the Lefroy Interests Exclusion Notice, and that by the operation of s 48(6) of the Amendment Act, Billie and the other lessees are deemed to have withdrawn from that agreement on 17 December 2004.[65]
[65] ADFD [9(f) - (g)].
In the alternative, the defendants contend that if the Offer was not a notice within s 48(1)(a) or (b) of the Amendment Act, then Billie (and the Holders) accepted the Offer subject to the terms and conditions set out in it; that under s 143(5a) of the Administration Act, the grant of the proposed pastoral lease commenced on 1 July 2015, subject to the terms and conditions (including the Condition) specified in the Offer; that under that Condition, the Minister was entitled to exclude or excise any area from the proposed pastoral lease on and after 1 July 2015; that the Minister gave notice of the area to be excised by giving the Lefroy Interests Exclusion Notice; and that Billie had no entitlement to negotiate with the Minister as to the area to be excised, either under the Land Act, the Administration Act or the Amendment Act.[66]
Whether the Condition was invalid
[66] ADFD [19].
The plaintiffs say that upon the proper construction of s 98(11) of the Land Act, as continued by s 143(5) of the Administration Act, the terms and conditions that could be imposed upon any renewal of the Pastoral Lease could not include the Condition and, for the purposes of satisfying the obligations of the Minister under s 98(11) of the Land Act, the Offer took effect as if the Condition was not included in it. Consequently, the plaintiffs say, Billie and Jane are entitled to a renewal of the Pastoral Lease, excluding the Condition.[67]
Whether the Lefroy Interests Exclusion Notice was invalid and/or of no effect
[67] ASOC [15] - [18].
The plaintiffs say that the Lefroy Interests Exclusion Notice was of no effect for either of two reasons.[68]
[68] ASOC [26].
First, the plaintiffs contend that before the Minister sent the Lefroy Interests Exclusion Notice, Billie (or Billie and Jane) were entitled to a renewal of the Pastoral Lease with effect from 1 July 2015, and that that entitlement did not depend upon the deeming provisions in s 48 of the Amendment Act for its validity. Consequently, they say that the power in s 48(3) of the Amendment Act, for the Minister to give the Lefroy Interests Exclusion Notice, did not apply to the agreement to grant the proposed pastoral lease.[69]
[69] ASOC [24] - [26].
In the alternative, the plaintiffs say that the Minister had given the lessees an offer of a lease, and when she sent the Lefroy Interests Exclusion Notice, the Minister purported to exclude land from the lease in the exercise of power under s 143(6d) of the Administration Act. [70]
[70] ASOC [26B].
The plaintiffs say that the Minister had no power to issue the Notice, because under s 101(5) of the Administration Act, a pastoral lease could not be granted unless the Pastoral Board was satisfied that the land subject to the lease, when fully developed, would be capable of meeting the Viability Requirement, namely that when fully developed, the land would be capable of carrying sufficient stock to enable it to be worked as an economically viable and ecologically sustainable pastoral business unit. The plaintiffs say that on the proper construction of s 143(6) of the Administration Act and s 48 of the Amendment Act, the land that could be excluded from the offer of a new pastoral lease could not be such as to result in the land subject to the lease being incapable of meeting the Viability Requirement. The plaintiffs contend that the exclusion of the Excised Land from the proposed pastoral lease would have that result. The plaintiffs say that the Lefroy Interests Exclusion Notice, which purported to exclude land from the renewal of the Pastoral Lease, was therefore invalid and of no effect.[71]
[71] ASOC [26C] - [26G].
The plaintiffs contend that the consequence is that the Lefroy Lessees were offered a renewal of the pastoral lease in November 2002, but without the Lefroy Interests Exclusion Notice having any effect. The plaintiffs then say that by participating in negotiations as to the area to be excluded, the Lefroy Lessees communicated their acceptance of that offer. On that basis, the plaintiffs contend that the Lefroy Lessees had an agreement with the Minister, which was not affected by the purported exclusion of the Excised Land.[72]
[72] ASOC [26A] - [26J].
The defendants dispute that the Lefroy Interests Exclusion Notice was issued under s 143(6) of the Administration Act.[73] They say that s 143(6) does not apply in this case because the Holders applied to the Minister under s 98(11)(a) during 1995, and had not been granted a pastoral lease during the time frame specified in s 143(6).[74]
[73] ADFD [13].
[74] ADFD [15].
As I understand their cases, the defendants contend that regardless of whether the agreement for a further lease derived from s 98(11) of the Land Act or from s 48(1) and (2) of the Amendment Act, s 48 of the Amendment Act applied in relation to the exclusion of land from the proposed pastoral lease. They deny that the Lefroy Interests Exclusion Notice 'purported' to give notice, to the Lefroy Lessees, of the land to be excluded from the proposed pastoral lease, as the plaintiffs contend.[75] The defendants say that the Offer was a notice under s 98(11) of the Land Act, referred to in s 48(1)(a) of the Amendment Act, or a notice referred to in s 48(1)(b) of the Amendment Act, and in any event was deemed to have been a valid and effective offer of a lease, by virtue of s 48(1)(c) of the Amendment Act.[76]
[75] ADFD [17].
[76] ADFD [18].
The defendants contend that the Lefroy Interests Exclusion Notice was a notice to the Lefroy Lessees for the purposes of s 48(3) of the Amendment Act; that that Notice contained the information required to be set out in such a notice; that the Notice was given to the Lefroy Lessees and constituted notice to them for the purposes of s 48(4) of the Amendment Act; and that having been given that Notice, the Lefroy Lessees could have taken any of the actions set out in s 48(5) of the Amendment Act, and that they elected to enter into negotiations with the Minister. The defendants say that as no agreement was reached between the Minister and Billie on the matters referred to in s 48(5) by 17 December 2004, the effect of s 48(6) of the Amendment Act was that the Lefroy Lessees were deemed to have withdrawn from the agreement for the grant of a new lease on that date.[77]
[77] ADFD [18], [19B].
As for the Viability Requirement in s 101(5) of the Administration Act, the defendants contend that compliance with the Viability Requirement had to be determined, based on the capability of the land when fully developed; and that if the land described in the Lefroy Interests Exclusion Notice was excluded from the Pastoral Lease, the remaining land would be capable of meeting the Viability Requirement.
The defendants also contend, in the alternative, that on the proper construction of s 48 of the Amendment Act and s 114(4a) of the Administration Act, the Minister's power to exclude land from the Pastoral Lease for a public purpose was not subject to the remaining land meeting the Viability Requirement, and the Lefroy Interests Exclusion Notice was not invalid even if it could be said that the remaining land would not meet the Viability Requirement.[78]
In my view, there is nothing in the Amendment Act, the Land Act, or the Administration Act, which provides any support for the conclusion that the benefit of the Minister's obligation to grant a further lease in 2015 constituted, or gave rise to, a proprietary right which was capable of assignment independently of the pastoral lease. Consequently, the facts referred to at [16] are not relevant to the resolution of the action. However, under the Administration Act, a lessee of a pastoral lease is entitled to transfer their interest or any part of that interest in a pastoral lease to another person, provided the Minister consents to that transfer in writing.[195] (In the case of a transfer of an interest in a pastoral lease by operation of the law, that person stands in the shoes of the pastoral lessee.[196]) The Administration Act provides that the Minister must not unreasonably refuse to approve such a transfer.[197] Consequently, a lessee to whom a pastoral lease was transferred, and who held that lease at 30 June 2015, would enjoy the benefit of any obligation on the Minister, which arose by virtue of s 45 of the Amendment Act, to grant a further lease over all or part of the same land.
[195] Administration Act s 134(1).
[196] Administration Act s 134(2).
[197] Administration Act s 134(3).
Leaving to one side that part of the plaintiffs' case which concerned the withdrawal of the Lefroy Lessees from the 'agreement to lease' pursuant to s 43(6) of the Amendment Act, the obligation on the Minister following the enactment of the Amendment Act was an obligation to grant a further lease to the holders of the Pastoral Lease as at 30 June 2015.
Did CALM EB's indication that it did not wish to have a further pastoral lease affect any obligation on the Minister (if one existed) to grant a further pastoral lease?
The lessees as at 30 June 2015 were Billie and CALM EB. In the alternative to its denial that the plaintiffs have any right to a new lease, CALM EB says that it does not consent to the renewal of the Pastoral Lease and opposes the grant of a new pastoral lease.[198] I therefore turn to consider whether the Minister was obliged to grant a further lease only to Billie, in light of the position taken by CALM EB. In doing so, I will assume, contrary to the conclusion set out later in these reasons, that the Minister remained under an obligation to grant a further pastoral lease when the Pastoral Lease expired on 30 June 2015.
[198] Further Amended Defence of Second Defendant [20(b)] and [20(c)].
Counsel for the plaintiffs submitted that there is nothing in s 98(11) of the Land Act, or in the Administration Act or the Amendment Act, which supports the conclusion that the statutory entitlement to a new pastoral lease was held, together, by Billie and CALM EB (as the lessees as at 30 June 2015) so that the benefit of that entitlement could not be pursued by only one of those parties if the other did not wish to proceed.[199] Further, he submitted that nothing in the deemed offer made by the Minister under s 98(11) stated that the offer was conditional upon all successor lessors at the expiration of the Pastoral Lease agreeing to take up the new lease.[200] In addition, counsel for the plaintiff submitted that if successors to the rights in respect of the original Pastoral Lease became entitled to the benefit of the offer of a new lease without any assignment or dealing in that right, then the new lease could be taken up by such of the successor lessees who wished to do so when the original pastoral lease expired in 2015. He submitted that consequently Billie could take up the lease alone because CALM EB had indicated that it did not wish to do so.[201]
[199] Plaintiffs' submissions [105].
[200] Plaintiffs' submissions [106].
[201] Plaintiffs' submissions [41].
Counsel for the plaintiff also submitted that if an offer made by the Minister to grant or extend a lease was accepted then that created a binding commitment on the Minister to grant the new lease or extension, and the benefit of that commitment constituted a statutory entitlement. Counsel for the plaintiffs submitted that the statutory commitment given by the Minister was not conditional upon all the lessees at the time, or their assigns, or their successors, agreeing to take up the new lease or extension.[202] He submitted that uncertainty would be introduced if the refusal by one party to take up the new lease or extension meant that there could be no new lease or extension.[203]
[202] Plaintiffs' submissions [110] - [111].
[203] Plaintiffs' submissions [112].
The issue raised by CALM EB's confirmation that it does not want a further lease falls to be determined by reference to the provisions of the legislation. The starting point is s 98(11)(a) of the Land Act, which indicated the nature of the obligation on the Minister which would arise on the acceptance of a deemed offer by a lessee. As I explained at [141], [190] ‑ [192], that obligation, which was made valid and effective by the Amendment Act, was to grant a further lease to 'the lessees' - that is, all of the lessees at the time of the expiry of the Pastoral Lease. Nothing in the Administration Act or the Amendment Act suggests that the Minister was obliged to grant a further lease only to those of the lessees as at 30 June 2015 who wished to have a further lease. The Minister did not have power, under the Land Act or Administration Act, to grant a share in a pastoral lease, so it would not have been open to the Minister to grant Billie a half share in a further pastoral lease over Ningaloo Station, to reflect the half share she held at 30 June 2015.
Furthermore, I accept the submission of the defendants[204] that if the Minister were to grant a new lease solely to one of the lessees of a pastoral lease, then the other lessee would be deprived of the opportunity to apply for compensation for its share of the value of any improvements on the land, pursuant to s 114(2) of the Administration Act. Consequently, in my view, even if the Minister had remained under an obligation to grant a further lease when the Pastoral Lease expired on 30 June 2015, it would not have been open to the Minister to grant a new lease to Billie alone, rather than to all of the lessees at 30 June 2015 (namely Billie and CALM EB). The fact that CALM EB did not wish to have a further lease meant that no further lease could have been granted at all.
[204] Defendants' submissions [149].
It is unnecessary to consider whether any issue would arise between lessees holding a share in a pastoral lease, in the event that one wished to have the grant of a further pastoral lease, and the other declined to do so.[205] This case is concerned only with the extent of the obligation (on the Minister) to grant a new lease, and not with any obligations which might exist as between other persons each of whom holds a share in the same pastoral lease.
[205] cf Plaintiffs' submissions [117].
If any entitlement to a new pastoral lease is subject to the Amendment Act, was the process leading to the plaintiffs' deemed withdrawal from the agreement to grant a new lease validly followed?
In the alternative to their primary case on the construction of the legislation, the plaintiffs contended that if the Amendment Act provisions applied in this case, the procedure required by those provisions was not validly invoked by the Minister.[206] There were two planks to this argument. First, the plaintiffs contended that the Lefroy Interests Exclusion Notice was invalid. Secondly, the plaintiffs contended that the Minister had failed to comply with the obligation to enter into negotiations. The plaintiffs submitted that either or both of those failures to comply with the statutory process in s 48(3) - (6) rendered invalid the process which resulted in the lessees being deemed to have withdrawn from the agreement to a further pastoral lease over Ningaloo Station.
[206] Plaintiffs' submissions [27].
Whether the Lefroy Interests Exclusion Notice was invalid
The plaintiffs' contentions in relation to the invalidity of the Lefroy Interests Exclusion Notice essentially reflected the arguments they advanced in relation to the invalidity of the Condition.
As I understood it, the argument proceeded on the basis that the power in s 48(3) of the Amendment Act, to give a notice of the proposed exclusion of land from a lease or extension of lease, could not be exercised in a manner which was inconsistent with the Viability Requirement in s 101(5) of the Administration Act.[207] As I have already noted, s 101(5) provided that a pastoral lease must not be granted unless the Pastoral Board is satisfied that the land the subject of the lease (either on its own, or in conjunction with land under other pastoral leases) will be capable, when fully developed, of carrying sufficient authorised stock to enable it to be worked as 'an economically viable and ecologically sustainable pastoral business unit'.
[207] Plaintiffs' submissions [95].
The plaintiffs' argument as to the invalidity of the Lefroy Interests Exclusion Notice fails, for the same reasons as are outlined above at [157] - [165] in relation to the Condition. The Lefroy Interests Exclusion Notice was given to the Lefroy lessees 13 years before the expiry of the Pastoral Lease. Whether the proposed pastoral lease, once granted, would meet the Viability Requirement could not be determined at that stage. Furthermore, for the reasons set out at [158] - [164], the evidence did not establish that the land the subject of the proposed pastoral lease, once fully developed, would be incapable of meeting the Viability Requirement.
The plaintiffs' argument in respect of the Lefroy Interests Exclusion Notice also fails for an additional reason. Unlike s 98(11)(a) of the Land Act, the power to issue a notice under s 48(3) of the Amendment Act was not subject to an express limitation that the exclusion of land from a proposed pastoral lease not be inconsistent with the Administration Act. Nothing in the statutory context supports the conclusion that the exercise of the power in s 48(3) of the Amendment Act was itself intended to be subject to the limitation in s 101(5) of the Administration Act.
That is not to say that s 101(5) would have no application in relation to a pastoral lease which was granted, in 2015, as a result of the operation of s 48 of the Amendment Act, nor that there would be no remedy for a lessee in that situation. In the event that the land the subject of a further pastoral lease, granted in 2015, was incapable, once fully developed, of meeting the Viability Requirement, the provisions of s 114(4a) of the Administration Act would apply. At that point, as counsel for the plaintiffs appeared to accept,[208] it would be open to the Minister to cancel the grant or extension of the lease, and the lessees of the pastoral lease in question would be entitled to compensation for any improvements on the land.
[208] Plaintiffs' submissions [190].
The process in s 48(3) - (6) of the Amendment Act
The plaintiffs' case was that the Minister had not complied with the statutory procedure in s 48(3) to s 48(6) of the Amendment Act, and that in those circumstances, s 48(6) did not operate to deem the lessees to have withdrawn from the agreement to a further pastoral lease.
The facts set out above at [26] - [31] establish that the Minister issued the Lefroy Interests Exclusion Notice and the AWC Exclusion Notice before the period of 2 years after s 48 of the Amendment Act came into operation (that is, by 7 December 2002). Those Notices identified the Excised Land as the land the Minister intended to excise from the proposed pastoral lease. Apart from the plaintiffs' contention that the Lefroy Interests Exclusion Notice was invalid for its inconsistency with the Viability Requirement, there was no suggestion that the Lefroy Interests Exclusion Notice did not contain the information required by s 48(4) of the Amendment Act.
The Lefroy Lessees elected to enter into negotiations with the Minister on the area to be excluded from the proposed pastoral lease, while AWC agreed to the exclusion of the Excised Land. No agreement was reached, within the prescribed period,[209] between the Minister and the Lefroy Lessees, on the area to be excluded from the proposed pastoral lease. The defendants' contention was that the effect of s 48(6) of the Amendment Act was that the Lefroy Lessees were deemed to have withdrawn from the agreement to lease, and that their only entitlement was to compensation under the Administration Act. The plaintiffs' case was that the process in s 48(5) and (6) of the Amendment Act was not validly followed, with the result that the Lefroy Lessees were not deemed to have withdrawn from the agreement to the grant of a further lease.
[209] The prescribed period was the period of 2 years after the Lefroy Interests Exclusion Notice was given to the lessees. However, that period was extended to 17 December 2004, by virtue of r 17D of the Land Administration Regulations 1998 (WA).
The plaintiffs' contentions
The plaintiffs' case was that the Minister was required to enter into bona fide negotiations in respect of the exclusion of land from the proposed pastoral lease, and that the Minister did not do so in this case. The plaintiffs contended that the procedure invoked by the Minister was invalid because the Minister adopted the Policy, which was contrary to the requirement, under s 48(5)(c) of the Amendment Act, for the Minister to negotiate. The plaintiffs submitted that as a result of the application of the Policy in this case, the Minister (through her Department) was unwilling to negotiate in relation to the boundaries of the land to be excluded from the pastoral lease.[210]
[210] Plaintiffs' submissions [205] - [206].
Counsel for the plaintiffs submitted that the Policy adopted mandatory language which gave it a character that was contrary to the legislative requirement to negotiate, in that it required the outcome of the negotiations to be dictated by the Policy, without a consideration of the merits of each case.[211] Counsel submitted that it was an error of law to allow a decision to be dictated by a policy without consideration of the merits of the decision.[212]
[211] Plaintiffs' submissions [199] - [203].
[212] Plaintiffs' submissions [103] relying on Re Becker; Ex parte Minister for Immigration and Ethnic Affairs (1977) 15 ALR 696, 699; Falc Pty Ltd v State Planning Commission (1991) 5 WAR 522, 525 ‑ 527, 529-30, 533 ‑ 534.
Counsel for the plaintiffs also submitted that the requirement to negotiate was a necessary pre-condition to the operation of the deemed withdrawal from the agreement to grant a new lease, and that the requirement to negotiate was the only protection that the Amendment Act afforded the Lefroy Lessees in respect of their entitlement to a new lease from which they would be deemed to have withdrawn in the absence of agreement.[213] Counsel for the plaintiffs submitted that the purpose of the Amendment Act would not be advanced if there was a breach of the statutory obligation to negotiate, and in those circumstances, the failure to comply with the statutory requirement would result in invalidity in the process by which land could be excluded from a proposed pastoral lease.[214]
[213] Plaintiffs' submissions [204].
[214] Plaintiffs' submissions [205] relying on Project Blue Sky Inc v Australian Broadcasting Authority [93]; Forrest and Forrest Pty Ltd v Wilson (2017) 91 ALJR 833 [61] - [62].
The plaintiffs contended that because of the time limit in s 48(3), the invalidity of the statutory process under s 48(3) - (6) could not be overcome by the grant of a further notice. Counsel for the plaintiffs submitted that the result was that the plaintiffs had an entitlement to the grant of a further pastoral lease over the entirety of Ningaloo Station, without the exclusion of the Excised Land.
For the purposes of dealing with this aspect of the plaintiffs' case, it suffices to proceed on the assumption (without deciding) that a failure by the Minister to negotiate on the area to be excluded from a proposed pastoral lease would result in the invalidity of the process which culminated in the Lefroy Lessees' deemed withdrawal from their agreement to the grant of a further lease. This part of the plaintiffs' case fails on factual grounds, for the reasons set out below. Before turning to the facts, however, it is necessary to say something more about the nature of the obligation on the Minister in s 48(5)(c) of the Amendment Act.
The requirement to enter into negotiations in s 48(5)(c) of the Amendment Act
The starting point is that s 48(5)(c) is framed in terms of empowering the lessee to engage in negotiations with the Minister on the area to be excluded. I accept that that clearly carries with it a reciprocal obligation on the Minister to participate in those negotiations. The obligation is to 'enter into negotiations'. The negotiations in which the Minister was required to participate were negotiations 'on the area to be excluded from the lease or the rent to be paid'.
Next, I turn to consider the content of the obligation to enter into negotiations. To 'negotiate' is 'to communicate or confer (with another or others) for the purpose of arranging some matter by mutual agreement; to discuss a matter with a view to some compromise or settlement'.[215] The word 'negotiations' means 'a discussion or process of treaty with another (or others) aimed at reaching an agreement about a particular issue, problem'.[216] The ordinary meaning of those words does not carry with it an expectation that the parties to the negotiations must each be willing to compromise to any particular extent on any or all issues in dispute. That is so even if the Minister's obligation is construed as an obligation to act reasonably in those negotiations.[217] The defendants did not dispute that construction.[218] What is reasonable in the negotiations will depend on the context. For example, an obligation to negotiate in a commercial context does not prohibit the adoption of a negotiating position which is firm or even uncompromising.[219] Furthermore, s 48(5)(c) carries no express or implicit expectation that the Minister must reach an agreement as a result of those negotiations. Indeed, s 48(6) contemplates the possibility that no such agreement will be reached.
[215] Oxford English Dictionary Online.
[216] Oxford English Dictionary Online.
[217] Minister for Immigration v Li [22] - [31] (French CJ); [47], [63] - [86] (Hayne, Kiefel & Bell JJ).
[218] ts 122.
[219] cf Caves Beachside Cuisine Pty Ltd v Boydah Pty Ltd [2015] NSWSC 1273 [125].
As a practical matter, the extent to which the Minister might reasonably be expected to compromise in the course of negotiations on the area of land to be excised in any particular case may depend on the purpose for which the land is being excised, and the extent to which the relevant authorities had, from the outset, endeavoured to limit the land proposed to be excised to that which was actually required for the public purpose in question. If achievement of that public purpose required the excision of particular land, by virtue of its location, or land area, or both, then the Minister may have limited scope to compromise on the area of the excised land, without undermining the achievement of that public purpose. However, it is not necessary or appropriate to pursue this issue further for two reasons. Firstly, the plaintiff's case was solely that the Minister did not negotiate by virtue of the inflexible application of the Policy. Secondly, there was no evidence as to the basis for the negotiating position adopted in this case.
No failure to engage in bona fide negotiations has been established
Turning to the agreed facts, and to the documents supporting those facts, the plaintiffs have not established, on the balance of probabilities, that the Minister failed to engage, bona fide, in negotiations as required by s 48(5)(c), for the following reasons.
First, while the Policy is, with respect, somewhat clumsily drafted, when read as a whole, it did not prohibit the Minister from agreeing to any change in the land to be excised from the proposed pastoral lease. While the Policy stated, on the one hand, that 'the exclusion boundaries are not negotiable' (emphasis added), the areas of lawful pastoral improvements within the exclusion boundary were negotiable. Indeed, the Policy expressly contemplated that the homesteads and associated infrastructure, which were not to be excluded from the affected pastoral lease, were matters which were negotiable. Even in so far as the exclusion boundaries were concerned, the Policy did not exclude the possibility of any change in the boundaries. Rather, it recognized that the consequence of the Policy's application would be that the exclusion boundaries 'will remain largely unchanged'.[220]
[220] Exhibit 2.12.
257 Secondly, while the Policy guided the negotiations, it was not applied inflexibly, in the course of the discussions between Billie and Jane, and the Minister's representatives. It is true that Billie and Jane were put on notice that the Policy would be applied, and that the consequence of it was that 'the exclusion boundary as depicted on the exclusion plans provided with the [Lefroy Interests Exclusion Notice] in 2002 will remain largely unchanged'.[221] However, the agreed facts and underlying documents demonstrate that while the approach adopted on behalf of the Minister in the negotiations was firm, in so far as the boundaries of the proposed excised land were concerned, the Minister's representatives were nevertheless willing to compromise on that issue to some extent, especially in relation to the homestead and infrastructure.[222]
[221] Exhibit 2.13.
[222] See, eg, exhibit 2.15.
Thirdly, it is quite clear that the Minister herself did not inflexibly apply the Policy. In the course of negotiations, she offered to depart from it entirely, and instead suggested that the State purchase the Pastoral Lease as a whole, and then grant Billie and Jane a lifetime occupancy of Ningaloo Station, and a management role in the tourism and associated activities which were contemplated for the Excised Land once the marine park was established.[223] (Those alternative options were also referred to in the proposed Ningaloo Station Exclusion Agreement and remained open until the end of the negotiation period.)
[223] Exhibits 2.16, 2.17, 2.19.
Fourthly, even in so far as the area and boundaries of the Excised Land were concerned, the evidence established that the Minister in fact was willing to compromise on those matters. As I noted at [45] ‑ [49] above, the proposed Ningaloo Station Exclusion Agreement, which set out the Minister's final position at the conclusion of the negotiations, reflected both a significant reduction in the total area of the Excised Land, and a modification in the boundary of the Excised Land.
The plaintiffs have not established that the Minister failed to engage in bona fide negotiations on the area to be excluded from the proposed pastoral lease. Consequently they have not established any invalidity in the process which resulted in the Lefroy Lessees' deemed withdrawal from the agreement to the grant of a further lease following the expiry of the Pastoral Lease. The effect of that deemed withdrawal was that the Minister was no longer under any obligation to grant a further pastoral lease over Ningaloo Station when the Pastoral Lease expired on 30 June 2015.
If there is no entitlement to a new lease, are the plaintiffs entitled to orders to facilitate a claim to compensation?
The plaintiffs say that if there is no entitlement to a new pastoral lease over Ningaloo Station, then they are entitled to compensation and they seek an order requiring the Minister to cause the Valuer-General to determine the market value of the lawful improvements on the land.[224]
[224] Plaintiffs' submissions [28].
There is no doubt that when the Pastoral Lease expired in 2015, Billie was entitled to compensation in accordance with the provisions of s 114(2) of the Administration Act. The Minister does not dispute that that is so. The only dispute concerns whether the plaintiffs are entitled to the order that they seek. They are not, for two reasons.
First, the plaintiffs seek an order that the Minister compel the Valuer-General to make a determination as to compensation. It is open to doubt that the Minister has the power to compel the Valuer-General in that way. The Minister can, and no doubt will, request the Valuer-General to undertake an assessment of the compensation that should be paid to the plaintiffs. That is not equivalent to a power for the Minister to compel the Valuer-General to undertake the statutory task which it would be incumbent on the Valuer-General to perform.
Secondly, in so far as the relief sought by the plaintiff effectively seeks to compel the Valuer-General to undertake that assessment of compensation, the relief sought is in the nature of a writ of mandamus or of a mandatory injunction. Quite apart from the fact that the Valuer‑General is not a party to this action, the availability of relief of that kind would depend on it being shown that the Valuer-General had failed to comply with an obligation to perform the statutory duty to assess compensation under s 114 of the Administration Act. There was no evidence to support such a finding in this case. On the contrary, the position appears to have been that because of the dispute between the parties as to whether compensation is payable to the plaintiffs, the assessment of the compensation which may be payable to them has not yet been finally undertaken.
The question of the plaintiffs' entitlement to a new lease, or to compensation, now having been determined, there is no reason to doubt that the Minister will promptly request the Valuer-General to undertake the assessment of compensation, and that the Valuer-General will do so. Should there be any refusal to perform that duty in the future, then the plaintiffs would be entitled to seek appropriate relief.
Conclusion
266 As the plaintiffs have not established any basis for the grant of relief, the action will be dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
FP
Associate to the Honourable Justice Pritchard15 MARCH 2019
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