Downing v WIN Television (NSW) Pty Ltd

[2010] NSWSC 1132

CITATION:	Downing v WIN Television (NSW) Pty Ltd & Ors [2010] NSWSC 1132
HEARING DATE(S):	29 September 2010 to 6 October 2010
JUDGMENT DATE :	21 October 2010
JUDGMENT OF:	Ball J
DECISION:	See paragraphs 62 and 63 of the judgment.
CATCHWORDS:	CONTRACT – interpretation – whether agreement is for a lease or a licence – whether licence is binding on subsequent purchaser of property – whether agreement contained right to sublicense. PROPERTY – fixtures – whether transmission tower and equipment shed are fixtures. REMEDIES – rectification – whether agreement was varied after document embodying agreement was executed – whether document embodying agreement should be rectified. TORTS – intentional – trespass to land – licence to occupy land – where defendant entered land for lawful purpose pursuant to licence but subsequently engaged in unlawful activity. WILLS AND ESTATES – executor – transfer of property from plaintiff’s father to plaintiff – whether defendant had a proprietary interest in that property - whether executor failed to recognise proprietary interests of defendant – whether executor failed to discharge contractual obligations of the deceased
LEGISLATION CITED:	Fair Trading Act 1987 (NSW) Local Government Act 1919 (NSW) Probate & Administration Act 1898 (NSW) Trustee Act 1925 (NSW)
CATEGORY:	Principal judgment
CASES CITED:	Angullia v Estate and Trust Agencies (1927) Limited [1938] AC 624 Anthony v Commonwealth [1972-73] ALR 769; (1973) 47 ALJR 83 Australian Provincial Assurance Co Ltd v Coroneo (1938) 38 SR (NSW) 700 Baker v R (1983) 153 CLR 338 Commonwealth v Verweyen (1990) 170 CLR 394 Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 605 Dillwyn v Llewelyn (1862) 45 ER 1285 Giumelli v Giumelli [1999] HCA 10; 196 CLR 101 Healing (Sales) Pty Ltd v Inglis Electrix Pty Ltd (1968) 121 CLR 584 Kauter v Kauter [2003] NSWSC 741 Minister of Health v Bellotti [1944] KB 298 New South Wales v Ibbett [2006] HCA 57; 229 CLR 638 Plimmer v Wellington Corporation (1884) 9 App Cas 699 Radaich v Smith (1959) 101 CLR 209 Ramsden v Dyson (1865) LR 1 HL 129 Reid v Smith (1906) 3 CLR 656 Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466 TCN Channel Nine Pty Ltd v Anning [2002] NSWCA 82; 54 NSWLR 333 TCN Channel Nine v Ilvarity Pty Ltd [2008] NSWCA 9; 71 NSWLR 323 Waltons Stores v Maher (1988) 170 CLR 394
PARTIES:	Robert John Downing (Plaintiff / First Cross Defendant) WIN Television (NSW) Pty Ltd (First Defendant / First Cross Claimant) Prime Television Limited (Second Defendant / Second Cross Claimant) The State of New South Wales (Third Defendant / Third Cross Claimant) Brian Anthony Lulham (Second Cross Defendant)
FILE NUMBER(S):	SC 2007/253463
COUNSEL:	M Leeming SC (Plaintiff / Cross Defendants) G Elliott (Plaintiff / Cross Defendants) D R Stack (Defendants / Cross Claimants) A R Vincent (Defendants / Cross Claimants)
SOLICITORS:	Galland Elder Lulham Solicitors (Plaintiff / First Cross Defendant) Thomson Lawyers (Defendants) DTA Lawyers (Second Cross Defendant)

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BALL J

21 OCTOBER 2010

2007/253463 ROBERT JOHN DOWNING v WIN TELEVISION (NSW) PTY LTD & ORS

JUDGMENT

Background

1 This case concerns the rights of the parties in relation to a television tower and an associated building erected by the first defendant, WIN Television (NSW) Pty Ltd, a regional television broadcaster, on an agricultural property known as “Nooga – The Dale”. Nooga, which is located just outside of Goulburn, has, since 1998, been owned by the plaintiff, Mr Robert Downing. Previously, it was owned by Mr Reg Downing, the plaintiff’s father. Mr Downing Snr, who died in September 1994, was a well-known public figure in New South Wales. He served as Attorney-General and Minister for Justice of the State from 1948 to 1965.

2 Situated on Nooga is part of Mt Gray, which looks out over Goulburn and which, because of its height and position, is particularly well suited for the installation of transmission towers for television, radio, telephone and similar services. Mr Downing Snr gave his permission to a number of organisations to install transmission towers on that part of Mt Gray that is on the property. Generally, Mr Downing Snr was prepared to enter into long term arrangements for organisations to erect and operate towers on Mt Gray for a nominal fee of $1.00 per year when he thought that installation of the tower provided a public benefit – particularly a benefit to the Goulburn community.

3 One of the organisations with whom Mr Downing Snr reached an agreement for the installation of a transmission tower was WIN. That agreement was entered into on 18 January 1989. WIN wanted to erect the new tower because of recent legislative changes concerning broadcasting. Those changes had two important consequences for WIN. First, they permitted regional television broadcasters, including WIN, to transmit television signals outside areas that previously had been reserved exclusively to them. That process was known in the industry as “aggregation”. Second, WIN was required to vacate the frequency band previously used by it (which was in the middle of the band used by FM radio) and move to the top of the UHF TV band. As a consequence of those changes, WIN required access to a suitable transmission tower to broadcast its service at the new frequency to the Goulburn community and to provide a microwave link for the transmission of its signal to Canberra – one of the areas to which WIN became entitled to broadcast its programming as a result of aggregation. WIN was required by a condition imposed on its licence to start broadcasting in the Canberra area by 1 March 1989.

4 Mr Downing Snr was first approached by WIN in February 1988 and, on 16 February 1988, Mr Dunstan and Mr Khourey, who both worked for WIN at the time, met with Mr Downing Snr concerning the tower. Mr Downing Jnr was living at Nooga with his father at the time, and, indeed, has lived there ever since. He discussed with his father the proposed meeting but did not attend it, and left it to his father, as the owner of the property, to enter into any agreements he thought appropriate concerning the property. Mr Downing Snr, who was about 80 at the time, was a man of strong opinions on what was appropriate and he did not always welcome the advice of others, including his son, on what he should do.

5 At the meeting on 16 February, Mr Downing Snr agreed that WIN could erect the transmission tower and proposed that WIN pay a nominal fee of $1 per year for a 25 year period with an option to renew for a further period of 25 years. Mr Downing Snr also indicated at the meeting that he wanted to be sure that he would receive good television reception if the new tower was installed – a request that his son had suggested he make when they discussed the matter before the meeting. The day after the meeting, Mr Khourey wrote to Mr Downing Snr confirming what had been discussed and saying that, in due course, a formal agreement would be sent to Mr Downing’s solicitors. In fact, a draft of the agreement was sent to Mr Downing Snr by Maguire & McInerney, who were WIN’s solicitors at the time, on 16 March 1988. On the same day, WIN lodged a development application with the local council to build the tower and a small brick equipment shelter. It did so with Mr Downing Snr’s consent. The application was approved by the council on 28 April 1988. At that time, it was contemplated that the tower would be 22 metres tall and would be supported by guy wires.

6 After the DA was approved, it became apparent that a 22 metre tower would not be adequate. On 27 October 1988, WIN submitted to council a building approval for a prefabricated concrete shelter in place of the small brick building. In the covering letter, WIN refers to “our application to erect a 39m transmission tower”. However, there is no reference in the building application itself to the tower. Moreover, it appears that the reference to “39m” was an error, since what was proposed was to build a self-supporting tower of 42 metres. The building permit was issued on 3 November 1988. It was addressed to Mr Downing Snr at his post office box number. It is unclear whether it was sent to him or to WIN. Although prior to this time there had been some correspondence between Maguire & McInerney and Taylor & Scott, who had been engaged by Mr Downing Snr to act for him, concerning the terms of the agreement permitting WIN to erect the tower, it appears that WIN did not inform Mr Downing Snr of the proposed change in the height of the tower or the nature of the shelter.

7 WIN started work on the transmission tower at Mt Gray in early January 1989 – shortly before signing the agreement with Mr Downing Snr. It is unclear from the evidence what progress had been made on the tower at the time the agreement was signed. There is no evidence that Mr Downing Jnr read the agreement at that time or, indeed, until much later, although he did witness his father’s signature. Mr Downing Jnr was, however, aware that the agreement provided for a nominal rent and was to last for an extended period.

8 Over a period of time, WIN developed the area it occupied on Mt Gray. Originally, there was the prefabricated concrete equipment shelter which, together with the tower, was surrounded by a fence. However, on 29 September 1993, WIN lodged a building application with the council to build a larger brick equipment shelter and demolish the old shelter, principally in order to house a diesel generator. It signed that application as “owner”. Again, WIN did not seek Mr Downing Snr’s consent to the new building. The council issued a building permit on 26 October 1993. The building permit was addressed to Mr Downing Snr, but there is no evidence that he received it. The only copies in evidence were one produced by the council in response to a subpoena and a copy provided to Mr Downing Jnr’s solicitors by WIN’s solicitors in response to a request for particulars. The latter copy had the telephone number of the council written on it. The likelihood is that the number was written on the letter by an employee of WIN shortly after the permit was sent. Mr Downing Jnr gave evidence that the handwriting was not his or his father’s, and it was WIN, not the Downings, who had an interest at that time in dealing with the council in relation to the permit. The likelihood, then, is that, although the letter was addressed to Mr Downing Snr, it was sent by the council to WIN. There is no other evidence that either of the Downings became aware of the new structure until well after it was built.

9 Also in 1993, WIN entered into a shared facilities deed dated 1 June 1993 with Prime Television (Southern) Pty Ltd, the second defendant, another regional broadcaster, which permitted Prime to use WIN’s Mt Gray facilities. Prime had, in fact, been using those facilities since 1989 in accordance with arrangements between WIN, Prime and Capital, another regional broadcaster, to share facilities. After the new building was built, WIN also sublicensed space in the building to the State of New South Wales, the third defendant, and a number of other third parties and permitted them to use the tower it had built. In the case of the sub-licence to the State, WIN entered into a formal agreement with the relevant Minister on 22 November 1995, after Mr Downing Snr’s death. In each case, WIN charged fees for providing access to its facilities. In some cases, those fees where netted off against amounts charged to WIN for access it obtained to the sub-licensees’ sites. There is no evidence that WIN sought Mr Downing Snr’s consent or, after his death, Mr Downing Jnr’s consent to those sub-licences before they were entered into, although inexplicably the sub-licence to the State contained a representation and warranty by WIN that it had obtained the consent of Mr Downing Snr to that sub-licence.

10 By his will, Mr Downing appointed Mr Lulham, the second cross-defendant, and Mr Downing Jnr, as executors of his estate. Mr Downing Jnr obtained an option under a codicil to Mr Downing Snr’s will to buy Nooga from the estate for $1.5 million. Mr Downing Jnr exercised that option. There was a delay in settlement of the transfer to Mr Downing Jnr while he paid the other beneficiaries of the estate their share of the purchase price of the property. Eventually, Nooga was transferred to him on 15 June 1998.

11 Before Nooga was transferred to Mr Downing Jnr, he began, in the later part of 1997, to investigate who occupied Mt Gray and precisely what facilities each of the occupants had there. As part of those investigations, he wrote to WIN on 18 August 1997 advising it of his father’s death and seeking information concerning the use WIN was making of the Mt Gray site and indicating that he would like to “rationalise and consolidate” the telecommunications infrastructure on the site and to place “these matters on a more formal footing with a new and more appropriate tenure”. Mr Downing Jnr wrote a number of similar letters to other organisations who he believed were using Mt Gray, including the State. Mr Gough, WIN’s group chief engineer, who had been responsible for the construction of the tower but who by this time had moved to WIN’s Brisbane office, replied on 29 September saying that, once the information had been amassed, WIN would be in touch with Mr Downing Jnr again. It appears, however, that WIN did nothing more to respond to the request for information. The State, on the other hand, provided an extensive response to the letter sent to it. That response made it clear that the State had access as a result of a sub-licence from WIN and paid WIN a significant fee for that access.

12 On 14 December 1998, several months after Nooga had been transferred to Mr Downing Jnr, Johnson & Sendall, Mr Downing Jnr’s solicitors, wrote to WIN claiming that WIN’s telecommunications infrastructure was erected on Nooga without approval and requiring all “structures, installations and equipment” to be removed within one month, failing which Mr Downing would commence proceedings seeking appropriate relief. The letter went on to indicate that Mr Downing was willing to discuss the basis on which WIN’s occupation might continue.

13 WIN replied on 29 December 1998 saying that it was entitled to occupy the site under the 18 January 1989 agreement. Following a request from Johnson & Sendall, it supplied a copy of that agreement on 20 January 1999. In the same letter, it asserted that the $25 licence fee had been paid in full. There is no direct evidence of that payment. However, in circumstances where Mr Downing Snr never complained that he had not received the licence fee, I am prepared to infer that it was paid.

14 From January 1999 to early 2003, there were lengthy negotiations, some expressed to be without prejudice, between WIN and Mr Downing Jnr concerning the terms on which WIN would be permitted to remain on Nooga. The precise details of the negotiations are not important. However, I should make two points about them. First, I do not think that WIN was guilty of unreasonable delay in conducting the negotiations. It is difficult to piece them together from the evidence since, although the correspondence was tendered, it appears that there were also a number of meetings about which no evidence was given. However, I think that it is fair to say that the negotiations were protracted by their nature rather than because one party or the other was guilty of deliberate delay. No doubt that was partly because WIN was in no hurry to bring things to a head and because there was no real urgency from Mr Downing’s point of view in resolving the matter. Second, I do not think that WIN took an unreasonable position in the negotiations. It was prepared to offer a significant fee for its own use of the site. It was also prepared to agree that, when it vacated the site, the tower and building would become the property of Nooga’s then owner. There was disagreement about whether WIN should have a right to sub-license its facilities to others or whether other users should be required to enter into a direct licence with Mr Downing. WIN’s position was that the right to sub-license was important because the facilities were shared, which made a direct licence from Mr Downing difficult. WIN was, however, prepared to pay Mr Downing 50 percent of the fees it received from others and to agree not to enter into further sub-licences without Mr Downing’s consent.

15 It is not clear from the evidence why the settlement discussions broke down. However, they did and, on 12 May 2003, Johnson & Sendall wrote to Maguire & McInerney saying:

“We refer to your letter of the 4 ^th June 2002 and our recent discussions in relation to this matter. Our client would prefer that WIN vacate the property. In your letter you indicate there is an opportunity to negotiate with another owner and our client has no objection if you do so.
We therefore give you notice that our client requires that your installation be removed from our client’s land by the 31 ^st August 2003. You should interpret this letter as a Notice to Quit.”

The letter goes on to threaten proceedings against any occupier of the WIN tower after that date.

16 In anticipation that it might have to vacate Mr Downing’s property, WIN, in about June 2002, began investigating the possibility of building a new transmission tower on land on Mt Gray which was adjacent to Nooga and which was owned by Mrs Fitch. It signed a lease for that land on 28 November 2003 and, on 4 December 2003, it lodged a development application with the council to build a new tower and building on Mrs Fitch’s land and, when that was complete, to demolish the existing tower and building on Mr Downing’s land. That application was signed by Mrs Fitch but not by Mr Downing. WIN did not seek Mr Downing’s consent to the lodgement of the application.

17 In July 2004, BTS Networks, a subsidiary of WIN, took over responsibility for maintaining all WIN’s transmission sites, including those on Mt Gray. It appears that BTS investigated a number of alternatives to the facility on Nooga before making a final decision to remain on Mt Gray. On 2 March 2005 Maguire & McInerney wrote to Johnson & Sendall saying that, in order for WIN to supply electricity to its new site on Mrs Fitch’s land, it required an easement over Mr Downing’s land of approximately 20m x 5m. WIN offered to pay a reasonable fee for the easement. The letter went on to say that:

“Relocation of our client’s transmitter at Mt Gray is in the final stages. We herewith advise that the existing tower will be removed and if your client wishes WIN Television will demolish the building and return to its natural state.”

18 There was then a further delay and, on 23 November 2005, Galland Elder Lulham, who had taken over from Maguire & McInerney, put a further without prejudice offer directly to WIN. That letter apologised for the delay since “our last correspondence”. Two offers were put. One was in relation to the easement requested by WIN. The other was a further proposal for WIN to remain on Nooga. There was then further correspondence. It is not clear precisely what happened next, but at some time Heard McEwan started acting for WIN and, on 11 August 2006, Galland Elder Lulham wrote to Heard McEwan asking when WIN was going to vacate and indicating that Mr Downing now wanted the existing tower, shed and fence to remain. They also repeated the second offer that had been made in their letter dated 23 November 2005. Finally, in early 2007, WIN built a facility on Mrs Fitch’s land and ceased to use the facility on Nooga. However, employees of BTS continue to visit the Nooga site periodically for normal maintenance work.

19 Mr Downing commenced these proceedings in January 2007. He seeks declarations that the defendants are trespassers, injunctions restraining them from having further access to the property, damages or mesne profits and, against WIN, exemplary damages.

20 On 11 June 2010 Bergin CJ in Eq made an order listing the matter for hearing on liability only, although the hearing before me proceeded on the basis that I would make findings relevant to Mr Downing’s entitlement to exemplary damages – but not, of course, the amount of those damages assuming I found the entitlement to exist.

21 Mr Downing Jnr’s case is quite simple. He says that the agreement entered into by his father was a licence not a lease, that WIN has breached the terms of the licence entitling the executors to terminate it, that, in any event, the licence is not binding on Mr Downing Jnr as the purchaser of the property and finally that the transmission tower and associated structures are fixtures which now belong to him.

22 The defendants have developed a substantial catalogue of responses to Mr Downing’s claim. WIN says that the agreement that was entered into on 18 January 1989 was an agreement for lease, not a licence. It denies that it is in breach of the agreement and says that if, on the face of the agreement, it is, then the agreement was varied on several occasions or the document embodying it should be rectified. Alternatively, it says that Mr Downing Snr engaged in misleading or deceptive conduct in connection with the agreement in breach of s 42 of the Fair Trading Act 1987. No submissions, however, were made in support of this last claim and I think Mr Leeming, who appeared for Mr Downing, was right to say that I should take it as having been abandoned. WIN says that Mr Downing Jnr is bound by the terms of the agreement for lease or that he is estopped from denying that WIN is entitled to exclusive possession of the Mt Gray site. Alternatively, WIN submits that Mr Downing Jnr and Mr Lulham, as executors, were in breach of the agreement (as varied or rectified) by transferring the property to Mr Downing Jnr on terms which did not recognise its rights. Finally, it says that the transmission tower (but not the building) was a chattel, not a fixture, which it is entitled to remove.

23 Mr Lulham (but not Mr Downing) in response to the claim made against him as executor says that he should be excused under s 85 of the Trustee Act 1925. Mr Downing relies on a defence of laches in relation to the rectification claim. All parties rely on limitation defences in one form or another.

The agreement dated 18 January 1989

24 The question that ultimately must be addressed is whether WIN has enforceable rights against Mr Downing Jnr. But the starting point for that enquiry is the agreement signed by Mr Downing Snr and WIN on 18 January 1989. It is that agreement that WIN says in some way or another became binding on Mr Downing Jnr.

25 The agreement dated 18 January 1989 described Mr Downing Snr as the “Licensor” and WIN as the “Licensee”. Clause 1 provided:

“The Licensor shall permit the Licensee to erect at the Licensee’s own expense in a proper and workmanlike manner a transmission translator/repeater station (hereinafter called the “station”) on an area of appoximately [sic] 4m x 4m with attendant guy wires on the Licensor’s land at Goulburn in the position marked “X” in red in the Plan annexed hereto and shall allow that station to remain on his land for a period of twenty five years from the date hereof.”

26 Clause 2 permitted WIN and others to “carry out such inspections, alterations, additions, substitutions and other works as may be necessary for the proper efficient and safe use of the said station”.

27 Clause 4 provides:

“The Licensee shall from time to time and at all times take and exercise proper and sufficient care and precautions and effect such alterations, repairs, replacement or additions as are reasonably necessary to prevent the occurrence of accident, injury or damage to any person or persons or to the property of the Licensor.”

28 Clause 5 requires, where the circumstances permit and except in the case of emergency, WIN to give Mr Downing Snr at least 7 days’ notice in writing whenever it is necessary “to repair, maintain, alter, renew or remove the said station or any additions thereto”. Clause 6 requires WIN to pay a license fee of $1.00 per year and cl 7 gives WIN an option to renew the license for a period of 25 years for a further fee of $1.00 per year. Clause 8 imposes an obligation on WIN to indemnify Mr Downing Snr against loss. Clause 9 provides:

“Unless repugnant to the context wherever herein mentioned the words Licensor and Licensee shall be deemed to extend to and include the successors and assigns of the Licensor and Licensee respectively.”

29 Clause 10 imposes an obligation on WIN to maintain an adequate WIN TV signal to Mr Downing Snr’s residence.

30 The agreement raises two issues. The first is the scope of the rights that it confers. The second is whether it is a licence or an agreement for lease.

31 The agreement must be interpreted having regard to the context in which it was intended to operate. Several features of the context are important in this case. First, the clear purpose of the agreement was to permit WIN to build a transmission tower and associated shed on Mt Gray to transmit television signals to Goulburn and to act as a relay station for the microwave signal that was being transmitted to Canberra. The shed was necessary to store equipment that was essential in order for the tower to perform its function. Second, the land on which the facility was to be constructed was of no particular use to Mr Downing Snr. It was not suitable for farming and there was no evidence that it could be put to any other use. That, in part at least, explains why Mr Downing Snr was happy to charge a nominal fee for its occupation. Thirdly, similar facilities had already been erected nearby on Mt Gray and Mr Downing Snr had visited those facilities. The expectation of the parties must have been that the WIN facility would, broadly speaking, be similar in nature to what was already there, would be located in the same area but obviously would not encroach on the other facilities.

32 Taking this background into account, in my opinion, cls 1 and 2 of the agreement confer on WIN a right to build a “station” of the type described together with additions, substitutions and other works as may be necessary for the proper efficient and safe use of that station. The reference to “station” in my view is a reference to the tower itself, since it is the tower that has or may have “attendant guy wires”. The “additions” that are permitted by cl 2 include a building to house electronic equipment and a generator. They also include a fence preventing access to others. In my opinion, each of those things is necessary for the proper, efficient or safe use of the station. The electronic equipment is necessary for the tower to do what it was erected to do. The generator is necessary for the equipment to run efficiently. The building is necessary to protect that equipment and the fence is necessary to ensure that the equipment is not damaged by vandals and that daredevils do not attempt to climb the tower. These facilities must be located in the area that is marked with a cross. But that is not a precise location. The agreement does not say that the tower must not exceed a particular height. However, the agreement does say that it must not occupy an area substantially in excess of 4m x 4m – which effectively places some limits on the height of the tower. In fact, the tower that has been erected occupies an area of approximately 5.7m x 5.7m – which in my opinion, having regard to the location and the fact that the tower does not interfere with the enjoyment of the land, falls within the description “approximately 4m x 4m”. On the other hand, I do not think that the agreement should be read as requiring everything else to occupy the area of approximately 4m x 4m. Taking into account the area occupied by the tower, original building and fence, it seems to me that the agreement would be unworkable if cl 1 were to be read as requiring everything to be accommodated in an area of approximately 4m x 4m. Having regard to that fact and to the surrounding circumstances, the preferable construction is to interpret cl 1 as requiring the tower to occupy an area which is not substantially greater than 4m x 4m and to interpret cl 2 as permitting other structures to be erected outside that area provided that they are necessary for the proper efficient and safe use of the tower. The requirement that the additional structures be necessary for the proper efficient and safe use of a tower that cannot occupy a space which is more than approximately 4m x 4m places an effective limit on the total size of the area that will be occupied by WIN.

33 In my opinion, the agreement does not permit WIN to sub-license space to third parties. There is no term in the agreement which permits it to do so. There is no basis for implying such a term. The only reason WIN advanced in support of a right to sub-license was that the tower and shelter should be regarded as chattels belonging to WIN and consequently it was entitled to permit others to place equipment on them. One problem with this submission is that WIN does not plead that the shelter is a chattel. That problem aside, by placing equipment on the tower or in the shelter, third parties are also clearly placing that equipment on the land; and they are doing so without the consent of the landowner.

34 Whether the agreement creates a licence or an agreement for lease depends on whether it was intended to confer exclusive possession on WIN. That intention is to be gathered from the terms of the agreement and the relevant surrounding circumstances: Radaich v Smith (1959) 101 CLR 209 at 223 per Windeyer J. In my opinion, the agreement is not an agreement for lease. There are several reasons for that conclusion.

35 First, the agreement uses the language of a licence. It refers to the parties as “Licensor” and “Licensee”.

36 Secondly, on the interpretation of the agreement that I prefer, the agreement permits WIN to engage in a particular activity on an area of land which is not precisely defined. Even the area that is identified (that is, the 4m x 4m) is only said to be approximate. I do not see how the parties could have intended to give WIN exclusive occupation of an area of land which cannot be identified with precision and which may alter depending on WIN’s needs.

37 Thirdly, at the time s 327AA(2) of the Local Government Act 1919 provided:

“Notwithstanding the provisions of section 195I of the Conveyancing Act 1919, where any land is included in a current plan, that land shall not be disposed of by way of sale, conveyance, transfer, partition or lease (other than a lease for a period that, including any period for which the lease could be renewed by the exercise of an option, does not exceed 5 years) or be mortgaged unless the land is a lot or portion shown in the current plan …”

It is to be expected that, if the parties intended to create an agreement for lease, they would have complied with this section. However, it is accepted that the land that is the subject of the agreement is not “a lot or portion shown in the current plan” as required by the section.

38 WIN relies on two matters in support of its claim that the agreement is an agreement for lease. First, it points to the length of the agreement and the age of Mr Downing Snr. It was certain that the rights Mr Downing Snr purported to confer would extend beyond his life. In those circumstances, the parties could not have intended to create rights that were merely personal. That conclusion was supported by cl 9 of the 18 January 1989 agreement (which provided that the references to the “Licensor” and “Licensee” were to include references to their successors). Second, WIN says the parties intended that WIN would have exclusive possession because it was agreed at the meeting on 16 February that the site would be secured by a padlocked fence.

39 I do not think that either of these matters out-weighs the considerations I have referred to. The first point is undermined by the fact that the parties did not prepare a lease in registrable form and register that lease – which is what might have been expected if they had intended to create a lease for 25 years with a 25 year option; and there is nothing in the agreement that suggests that the parties contemplated that some further document would be executed by them. As to the second point, there is no reason to suppose that the purpose of the fence was to exclude Mr Downing Snr, and there is nothing in the agreement that suggests that a fence could be built for that purpose.

Rectification and variation

40 WIN does not seek to rectify the agreement so that it provides for exclusive possession. It only seeks to rectify the agreement to permit it to build the shelter and fence it has built. On the conclusions I have reached concerning the correct construction of the agreement, it was permitted to build those structures. Consequently, the question of rectification does not arise.

41 Three variations to the agreement are pleaded in WIN’s defence, although only the third is relied on by WIN in its cross-claim. The first variation is said to be one that permitted WIN to build a small brick equipment shelter (in addition to the tower), which was the subject of the DA lodged by WIN and approved by council on 28 April 1988. The second variation is said to be one that permitted WIN to build a 39 metre tower (in place of the original 22 metre tower) and prefabricated concrete shelter (in place of the small brick shelter), which was the subject of the BA dated 3 November 1988. The second variation is also one that is said to have granted WIN exclusive possession of the area that would be fenced off. The third variation is said to be one that permitted WIN to demolish the concrete shelter and build a brick building in its place, which was the subject of the BA lodged on 29 September 1993. The third variation, like the second variation, is said to have granted WIN exclusive possession of the area that was to be fenced off.

42 Having regard to the conclusions that I have reached, the variations pleaded by WIN are not necessary for its case, except to the extent that it is asserted that the result of the variations was to change what was a licence into an agreement for lease. Moreover, the only variation that WIN relied on in its closing submissions was the third – and then only for the purpose of establishing that it was entitled to build the larger brick building. In those circumstances, I think that the first two variations can be put to one side.

43 In my opinion, there is no basis for the submission that the agreement was varied in 1993. The only evidence that WIN can point to of an agreement on the part of Mr Downing Snr is that he did not object to the building permit issued on 26 October 1993, that he was happy to permit anyone to use the site and that between 1993 and January 1999 neither he nor his executors objected to the structures that had been built in 1993. None of these matters evidences an agreement in 1993. I have found that Mr Downing Snr was not aware of the building permit issued on 26 October 1993. Even if he were, I do not see how an agreement could arise out of that awareness. There was no consideration that would support such an agreement. The fact that Mr Downing Snr was willing to let people use the site provided they entered into an agreement on terms that were acceptable to him does not mean that he was happy to let people use the site on terms that were not the subject of an agreement; and it certainly does not mean that he reached agreement on the terms on which the site could be used. Similarly, the fact that Mr Downing Snr did not complain about the new building after it had been built does not mean that he agreed to it being built. More importantly, none of these matters provide any evidence at all that Mr Downing Snr reached some sort of agreement in 1993 by which WIN gained a right to exclusive possession.

WIN’s claims against Mr Downing Jnr and Mr Lulham as executors

44 The claim against Mr Downing Jnr and Mr Lulham as executors is really put as an alternative in the event that WIN’s primary claim against Mr Downing Jnr as purchaser of the property fails. However, it is convenient to deal with it now, since doing so permits the claims to be dealt with in chronological order. In addition, as will become apparent, there is a connection between the two claims.

45 The claim against Mr Downing Jnr and Mr Lulham has two aspects. First, WIN alleges that it had a proprietary interest in Nooga which they, as executors, were bound to recognise. In making this submission, WIN relies on s 45 of the Probate and Administration Act 1898. That section provides:

“All real estate held by any person in trust or by way of mortgage, and vesting as aforesaid under this part, shall as from the death of such person vest in the person’s executor or administrator, subject to the trusts and equities affecting the same.”

Second, WIN says that the executors breached the duty they owed to WIN by transferring the property to Mr Downing Jnr without ensuring that he recognised WIN’s proprietary interest. In the alternative, WIN says that it has a claim for damages against the estate for breach of the 18 January 1989 agreement.

46 The first question, then, is whether WIN had a proprietary interest. One interest that WIN relies on is the interest said to be created by the 18 January 1989 agreement. I have already rejected the submission that that agreement created a proprietary interest. The second type of proprietary interest contended for by WIN is more elusive. As I have said, WIN pleads an estoppel case against Mr Downing Jnr and it referred to a number of leading decisions on estoppel – such as Waltons Stores v Maher (1988) 170 CLR 394 and Commonwealth v Verweyen (1990) 170 CLR 394 – in support of that claim. However, it became clear during the course of final submissions that the form of estoppel on which WIN relies is one that has its genesis in cases such as Dillwyn v Llewelyn (1862) 45 ER 1285; Ramsden v Dyson (1865) LR 1 HL 129 and Plimmer v Wellington Corporation (1884) 9 App Cas 699. See also Giumelli v Giumelli [1999] HCA 10; 196 CLR 101; Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466. Essentially, what WIN says is that it was encouraged or allowed to spend money on Mr Downing Snr’s land in the expectation that it would be permitted to stay there and that, as a consequence, WIN had an equitable entitlement to access, maintain and operate its tower and shelter until 18 January 2014 or, at its election, until 18 January 2039 – an entitlement it could assert against Mr Downing Jnr as purchaser of the property.

47 In my opinion, an insuperable problem with this submission is the fact that WIN built the tower and shelter on Mr Downing Snr’s land pursuant to a licence that he granted to it. This is not a case where WIN was encouraged either by words or silence to believe that it would obtain a right that it did not have. It entered into a licence with Mr Downing Snr and that is what it got. It is difficult to see why equity would intervene in those circumstances, let alone in a way that would give WIN the benefit of a contractual promise in the form of a proprietary right. This point, in my opinion, is sufficient to dispose of this aspect of the claim.

48 WIN also relies on a personal right against the executors. There is no doubt that the executors have a responsibility to discharge the contractual obligations of the deceased: Angullia v Estate and Trust Agencies (1927) Limited [1938] AC 624; Kauter v Kauter [2003] NSWSC 741 at [75] per Young J (as he then was). Here, however, it seems clear that WIN was in breach of the licence agreement – in two ways. First, it was in breach of cl 5 of the licence agreement by failing to give Mr Downing Snr at least 7 days’ notice of work to repair, alter or renew the tower or additions to the tower (which, on the interpretation I prefer, include the associated buildings). In my opinion, however, breach of that clause did not entitle Mr Downing Snr to terminate the agreement. WIN was clearly permitted to undertake the work and I do not think that notice of that work to Mr Downing Snr was an essential term of the agreement.

49 Secondly, however, WIN was in breach of the licence by sublicensing space to third parties. Although there was no express prohibition on sublicensing, the licence was for a limited purpose and that purpose did not include a right to sublicense. A necessary corollary of that finding is that there was an implied prohibition on sublicensing. In my opinion, the scope of the permitted use goes to the heart of the licence. For that reason, a breach of the implied prohibition on sublicensing entitled Mr Downing Snr and the executors to terminate the licence.

50 A further question that arises is whether, in exceeding its licence, WIN was a trespasser. A person who exceeds the scope of his or her licence may become a trespasser: Baker v R (1983) 153 CLR 338. In this case, however, I do not think that WIN became a trespasser by permitting third parties to use its facilities, although, of course, the third parties themselves were trespassers. The issue was considered by the High Court in Healing (Sales) Pty Ltd v Inglis Electrix Pty Ltd (1968) 121 CLR 584. In that case, the plaintiff carried on the business of a retailer of electrical appliances at a number of shops. The defendant sold stock to the plaintiff and also supplied the plaintiff with goods under hiring agreements known as display plan agreements. The defendant was entitled to retake possession of the stock sold to the plaintiff if the plaintiff did not pay the purchase price within 60 days. It was entitled to terminate the display plan agreements immediately in certain events, including the appointment of a receiver and manager, and to enter the plaintiff’s premises to retake possession of the goods the subject of those agreements in those circumstances. A receiver and manager was appointed to the plaintiff and, within the 60 day period, the defendant entered the plaintiff’s premises and seized both the sold stock and the hired goods. The court held that the defendant was guilty of conversion in seizing the stock. One question raised in the case was whether the defendant also committed a trespass in entering the stores to seize the stock. It clearly had a licence under the display plan agreements to enter the stores to seize the hired goods. Barwick CJ and Menzies J took the view that the defendant was not guilty of trespass. In their view, a person could not at the same time be both a trespasser and not a trespasser. The defendant was entitled to enter the shops under the display plan agreements. Therefore, they were not trespassers: see 121 CLR at 598-9. Kitto J took a different view:

“No doubt a person cannot be at the one moment of time both a trespasser and not a trespasser in respect of the same land. The initial entry of the defendant’s servants and agents upon each of the relevant parcels of land and the acts they did thereon for the purpose of retaking possession of the goods which were subject to display plan agreement were all authorized (as I am here assuming), but the acts that they did for the purpose of taking possession of other goods were clearly not. Every step that they took on the plaintiff’s lands for the latter purpose was an unlicensed step and therefore a trespass.” (121 CLR at 606)

Windeyer and Owen JJ did not deal with the issue, and there appears to be no authoritative decision on the point: for discussion, see TCN Channel Nine Pty Ltd v Anning [2002] NSWCA 82; 54 NSWLR 333 at 342 per Spigelman CJ.

51 In my opinion, the approach taken by Barwick CJ and Menzies J is preferable, at least in the circumstances of this case. In this case, WIN was clearly entitled to broadcast, and send by microwave, television programming from its tower on Mt Gray, and that is what it was doing. It breached an implied term of its licence agreement by sub-licensing to others and, as a result, Mr Downing Snr became entitled to terminate the licence if that is what he wanted to do. However, there seems to be no reason to treat WIN as a trespasser unless and until Mr Downing Snr exercised that right.

52 The result of the conclusions that I have reached is that, at the time that Nooga was transferred to Mr Downing Jnr, WIN did not have a proprietary right but it was not a trespasser. On the other hand, the executors had a right to terminate the licence agreement as a consequence of WIN’s breach. In those circumstances, any claim against them must fail.

Mr Downing Jnr’s rights in relation to WIN

53 It follows from what I have said that, at the time that Nooga was transferred to Mr Downing Jnr, WIN did not have any rights against him. However, I do not think that that means that WIN was a trespasser immediately. To Mr Downing Jnr’s knowledge, WIN had been on the land for a number of years pursuant to a licence it had from his father and he purchased Nooga with that knowledge. WIN was not asked to leave immediately after the property was transferred to Mr Downing Jnr. It is true that WIN was in breach of the licence agreement, but as I have said, I do not think that that breach meant that WIN was a trespasser at that time. In those circumstances, in my opinion, WIN had an implied licence to remain there until a reasonable time after it was requested by Mr Downing Jnr to leave: see Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 605 at 630-1. In determining what a reasonable time is, it is necessary to consider all the circumstances of the case: Minister of Health v Bellotti [1944] KB 298. Mr Downing requested WIN to leave on 14 December 1998. He gave it one month to do so. In my opinion, that was not reasonable in the circumstances. As I have said, WIN, to Mr Downing Jnr’s knowledge, had been using the site to broadcast its television station to the Goulburn community for a number of years. That did not interfere with the farming activities carried on at Nooga. In those circumstances, a reasonable time would include sufficient time for WIN to establish an alternative site. That would include time to locate and reach agreement in relation to an alternative site and to build the appropriate facilities. There is no evidence before me about how long that could reasonably be expected to take. However, I think that it was certainly longer than a month – particularly a month that included Christmas. In the absence of any evidence, I think it is appropriate to allow a period of approximately 6 months. That does not mean that the notice served by Mr Downing was invalid: see Minister of Health v Bellotti [1944] KB 298. However, it does mean that WIN was not a trespasser until the end of June 1999.

Is Mr Downing entitled to an award of exemplary damages?

54 In order to establish an entitlement to exemplary damages in respect of WIN’s trespass, Mr Downing must establish that WIN’s conduct amounted to a conscious and contumelious disregard of Mr Downing’s rights: New South Wales v Ibbett [2006] HCA 57; 229 CLR 638; TCN Channel Nine v Ilvarity Pty Ltd [2008] NSWCA 9; 71 NSWLR 323.

55 On the findings I have made, WIN was not a trespasser until the end of June 1999. Mr Downing points to WIN’s conduct well before that time as justifying an award of exemplary damages. In particular, he says that WIN’s conduct in lodging applications to the council without the consent of Mr Downing Snr, in sublicensing space to others and in giving a warranty to the State that Mr Downing Snr had consented to it doing so demonstrated a conscious and contumelious disregard of Mr Downing Snr’s rights. There are several difficulties with this submission. First, I do not think that WIN’s conduct during that period of time could be described as conscious and contumelious. On the findings that I have made, WIN was entitled by the licence agreement to erect the tower, buildings and fence that it did. The fact that it did not seek Mr Downing Snr’s consent to lodge building applications to erect those structures does not amount to a contumelious disregard of his rights in circumstances where Mr Downing Snr had given his consent to the structures themselves in the licence agreement. WIN shared its facilities with others and charged a fee for doing so. But it is not obvious that it was seeking to profit from its licence rather than recover a proportion of the costs of its installation. Secondly, as I have said, I do not think that WIN was guilty of trespass before Nooga was transferred to Mr Downing Jnr. Third, if WIN was disregarding any rights by its conduct before Nooga was transferred to Mr Downing Jnr, then it was disregarding the rights of Mr Downing Snr. In some circumstances, that prior conduct may shed light on nature of WIN’s subsequent conduct, but I do not think that Mr Downing Jnr can make a claim in respect of the earlier conduct.

56 In my opinion Mr Downing is not entitled to an award of exemplary damages during the period following the transfer of Nooga to him. On the conclusions I have reached, there was no trespass by WIN until a reasonable time after it was asked by Mr Downing to leave Nooga. There was then a lengthy period of settlement discussions. Mr Downing knew at that time that WIN had sublicensed space to others. Although I do not think that the settlement discussions and the fact that Mr Downing was not insisting that WIN leave during them amounted to a licence to it to stay, there was at least a tacit assumption that WIN would remain while those discussions occurred – at least up until August 2003. As I have said, WIN made a reasonable attempt to reach a settlement. Mr Downing complains that WIN’s conduct in negotiating a lease from Mrs Fitch and seeking council approval to demolish the structures on Mr Downing’s land and build replacements on Mrs Fitch’s was underhand. Mr Downing said in evidence that WIN had “done a runner”. His complaint appears to be that WIN put itself in a position where it could leave Nooga and, in doing so, deprived him of his bargaining position. But none of this shows a contumelious disregard of Mr Downing’s rights. In their letter dated 14 December 1998, Johnson & Sendall had asked WIN to remove all the structures on Mr Downing’s land. Mr Downing could hardly complain about the fact that WIN was taking steps to do so while settlement discussions occurred. It appears from Johnson & Sendall’s letter dated 12 May 2003 that Mr Downing was told in a letter from Maguire & McInerney dated 4 June 2002 that WIN had an opportunity to negotiate with another landowner. Mr Downing did not express any objection to it doing so. Consequently, he could hardly complain when WIN signed a lease with Mrs Fitch on 28 November 2003. Although it is true that WIN did not seek Mr Downing’s consent to the DA lodged on 4 December 2003, as it should have done, I do not think that that involved a contumelious disregard of Mr Downing’s rights in circumstances where what WIN sought to do by the DA was to comply with Mr Downing’s request to remove all its structures from Nooga.

57 The position is perhaps is not as clear after the end of 2003. Precisely why it took WIN another 3 years or so to move to Mrs Fitch’s land is not explained by the evidence, or at least not adequately. At least one cause for the delay was the need to obtain an easement from Mr Downing for electricity. Of course, Mr Downing was not obliged to grant WIN an easement. However, there were some negotiations between the parties in relation to a possible easement and there was some delay on the part of Mr Downing or his solicitors in connection with those negotiations. In fact, Mr Downing put at least two further offers to WIN – one in 2005 and one in 2006. In these circumstances, I am not satisfied that WIN’s conduct involved a conscious and contumelious disregard of Mr Downing’s rights. WIN knew that it had to vacate Mr Downing’s land and was taking steps to do so. It was not interfering with Mr Downing’s enjoyment of the land. It took its time. But during that time, there were sporadic settlement discussions and Mr Downing changed his mind on whether he wanted the structures removed from his property. He remained willing to settle the dispute that would permit WIN to stay on his land, although not on terms that were acceptable to WIN. WIN did ultimately cease using the facilities on Nooga in early 2007. WIN continues to maintain those facilities, but again I do not regard that as high-handed conduct. Rather, it seems sensible that the equipment be maintained until its ultimate ownership is determined by the court.

Is WIN entitled to remove the tower and building?

58 The answer to this question depends on whether the tower and building are fixtures.

59 Whether an item is a chattel or a fixture depends on whether it was placed on the land with the intention that it become part of the land or whether it was placed on the land with the intention that it remain separate from it: Reid v Smith (1906) 3 CLR 656. Of particular significance in determining the affixer’s intention is whether the item has been attached to the land and, if so, the degree of attachment: Australian Provincial Assurance Co Ltdv Coroneo (1938) 38 SR (NSW) 700 at 712-3 per Jordan CJ. An item that is fixed to land may not be a fixture. A typical case is where machinery is attached to land for the more effective use of the machinery rather than with the intention of improving the land: Reid v Smith (1906) 3 CLR 656 at 680-1 per O’Connor J; cf Australian Provincial Assurance Co Ltdv Coroneo (1938) 38 SR (NSW) 700 at 712 per Jordan CJ. Another example of something which is affixed to the land but which is not a fixture is a telephone pole: Anthony v Commonwealth [1972-73] ALR 769; (1973) 47 ALJR 83.

60 In my opinion, the building is a fixture. It cannot be removed from the land without demolishing it. Consequently, the building itself must be regarded as part of the land. WIN does not assert otherwise.

61 I think that the tower itself falls into a different category. It was clearly not put on the land with the intention of improving the land. To the extent that it was affixed to the land, that was done to stabilise the tower, not to improve the land. The tower can be removed without causing substantial damage to the tower or to the land. In those circumstances, I think that it should be regarded as a chattel belonging to WIN.

Orders

62 There should be declarations in the following terms:

a The first defendant is and has since 1 July 1999 been trespassing on the plaintiff’s land;
b The second and third defendants are and have been since 15 June 1998 trespassing on the plaintiff’s land;
c The defendants are not lawfully permitted to access the plaintiff’s land except that the first defendant is lawfully permitted to access the plaintiff’s land during the 28 day period commencing on the date this judgment is delivered for the purpose of removing its transmission tower located on the land and any equipment belonging to it which is located in the building situated on the land;
d The first defendant is not liable to pay the plaintiff exemplary damages in respect of the trespass referred to in declaration a.

63 I will, however, hear the parties on the precise form of the orders that I should make before making them. I will also hear the parties in relation to the question of costs.

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