Haliotis Fisheries Pty Ltd v D'Ambrosio, Minister for Energy, Environment and Climate Change

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S ECI 2019 03713

HALIOTIS FISHERIES PTY LTD	First Plaintiff
STRAUSS ABALONE PTY LTD	Second Plaintiff
THIRTEENTH MOUNT COPE PTY LTD	Third Plaintiff
CHRISTOPHER CHARLES DANIEL	Fourth Plaintiff
VANESSA INGRAM DANIEL	Fifth Plaintiff
SURCHIN PTY LTD	Sixth Plaintiff
v
THE HON. LILY D'AMBROSIO, MINISTER FOR ENERGY, ENVIRONMENT AND CLIMATE CHANGE	First Defendant
THE STATE OF VICTORIA	Fourth Defendant
MAPA PEARLS PTY LTD	Fifth Defendant
REGISTRAR OF TITLES	Sixth Defendant

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JUDGE:	Cavanough J
WHERE HELD:	Melbourne
DATE OF HEARING:	16, 17 and 18 March 2020. Last written submission filed 15 April 2020
DATE OF JUDGMENT:	2 September 2022
CASE MAY BE CITED AS:	Haliotis Fisheries Pty Ltd & Ors v D'Ambrosio, Minister for Energy, Environment and Climate Change & Ors
MEDIUM NEUTRAL CITATION:	[2022] VSC 517

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ADMINISTRATIVE LAW – Property law – Equity – Application by aquaculture company to Minister for grant of Crown leases over coastal waters – Company assures Minister that exclusive possession neither needed nor sought – Statutory power to grant any Crown lease conditional on proposed lessee publishing notices of proposed lease in the Government Gazette and a newspaper circulating in the district in which the land is situated – Notices not published – No other notice given to plaintiffs and other persons adversely affected by proposed grant – No consideration of interests of persons adversely affected – Grants nevertheless purportedly made – Grants found to be contrary to statute, in breach of procedural fairness and legally unreasonable – Purported leases registered under Transfer of Land Act 1958 – Whether plaintiff’s right to judicial review defeated by registration of the Crown leases – Whether Crown leases indefeasible – Whether plaintiffs have in personam claim against registered lessee – Equitable fraud – Equitable fraud established – Constructive trust established – Bahr v Nicolay (No 2) (1988) 164 CLR 604 applied – Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537 discussed – Land Act 1958 ss 4, 12, 34, 134, 137 – Transfer of Land Act 1958 ss 40, 41, 42, 43, 44, 45.

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APPEARANCES:	Counsel	Solicitors
For the plaintiffs	Mr C J Horan QC with Mr A T Hoel	Strongman & Crouch
For the first and fourth defendant	Mr P G Willis SC	Minter Ellison
For the fifth defendant	Ms G A Costello SC with Mr J Wright	Carbone Lawyers

HIS HONOUR:

Introduction and overview

Counsel in this case were agreed at the trial that they were unaware of any previous case quite like it.[1] Nevertheless, or perhaps for that reason, counsel in their oral submissions (over three days) and in their detailed pre-hearing and post-hearing written submissions, referred me to 115 decided cases. They also referred me to 37 legislative instruments and eight secondary sources. I have since found it necessary to consider as well many other decided cases, legislative instruments and secondary sources. Counsel’s arguments traversed, among other things, constitutional and statutory law affecting Victorian coastal waters, administrative law, statutory interpretation (especially the reconciliation of conflicting statutory provisions), property law (especially ‘indefeasibility’ of title in relation to land under, or sought to be brought under, the Torrens system), the law of obligations and various aspects of equity.
[1]Transcript of proceedings 16 and 17 March 2020 (‘T’) 256; Transcript of proceedings 18 March 2020 (‘T 18 March 2020’) 30–32. See also T 157–158, 162; T 18 March 2020, 17; post-hearing submissions of the first and fourth defendants dated 1 April 2020, [8(d)]. Unfortunately, the transcript for the third and final day of hearing on 18 March 2020 is not numbered consecutively with the transcript of the hearing on 16 and 17 March 2020. Accordingly, it is necessary to refer separately to the transcript of the final day.

The matter arises from an application made in December 2011 to the then Department of Sustainability and Environment (‘DSE’) (on behalf of the relevant Victorian Minister) for a grant under the Land Act 1958 (Vic) of Crown leases over two areas of Victorian coastal waters and subjacent sea-bed.

The application was made by one Gerardus (called Gerry) Menke on behalf of a business then being conducted by or on behalf of the Menke family. At that time the family relevantly comprised Gerry Menke and his wife Mary Menke and their four children, Paul, Brett, Sarah and Anna. The business involved the culturing of pearls within abalone. The abalone were held in cages placed on the sea-bed.

After the application for the grant of Crown leases was made but before it was finalised, the family business was incorporated as MAPA Pearls Pty Ltd. That company is the fifth defendant in this proceeding. It is common ground that everything possessed, done, required to be done or omitted to be done, at any time, by any member of the Menke family or by the family business as a whole or by any entity involved in its ownership or control, in relation to the application for a grant under the Land Act 1958 or otherwise in relation to the subject matter of this proceeding, is to be attributed to MAPA Pearls Pty Ltd, and this notwithstanding that some relevant events occurred before the company itself was incorporated and registered in February 2015. Hereafter, I will use the expression ‘MAPA’ to cover not only the company but also, as far as appropriate, the Menke family, its members, the family business as a whole and those who from time to time have controlled the business. This accords with the way in which all of the parties have proceeded in this case.[2] By the time MAPA’s application for the Crown grant came to be finally considered, the DSE had been amalgamated into a larger Department called the Department of Environment, Land, Water and Planning (‘DELWP’).
[2]See, eg, outline of submissions of the plaintiffs dated 10 January 2020 (‘plaintiffs’ 10 January 2020 outline’), [13], where the plaintiffs say that ‘MAPA Pearls commenced its aquaculture operation in approximately 2005 …’. Similarly, see, eg, the outline filed on 5 February 2020 on behalf of the first and fourth defendants (‘the State defendants’) (‘the State defendants’ 5 February 2020 outline’) where, in [1], the (corporate) fifth defendant is designated ‘MAPA’ and where, in [43], ‘MAPA’ is referred to in relation to matters pre-dating its incorporation in 2015. Similarly, see, eg, the outline of submissions of the fifth defendant itself dated 12 February 2020 (‘MAPA’s 12 February 2020 outline’) in which, in [1], the fifth defendant designates itself ‘MAPA Pearls’ and in which, in [7], it says that ‘MAPA Pearls commenced its aquaculture operations in 1996, when it was granted its first aquaculture licences’. See also T 49.

In statutory terms, MAPA’s application was, or became, an application for two particular purpose (non-agricultural) leases under s 134 of the Land Act 1958. The proposed leases were to cover two offshore sites, close to two islands off the coast of Eastern Victoria, namely Gabo Island and Tullaberga Island. MAPA’s operations were already being conducted at those sites. MAPA had long held appropriate aquaculture licences (and permits) under the Fisheries Act 1995 (Vic) in relation to its operations, but it came to believe that the obtaining, also, of leases of the sites under the Land Act 1958 would provide greater long-term security. However, as will appear, it seems that a more suitable alternative, having regard to the interests of others and to the circumstances generally, may have been renewable 10 year particular purpose licences under ss 138 and 140 of the Land Act 1958.

Throughout the Crown lease application process, MAPA and the relevant government officials regarded the offshore sites as Crown land the disposition or occupation of which was governed by the Land Act 1958. That remains the position of MAPA and of those representing the Victorian Government in this case. This became an issue at the trial, but, for reasons to be explained later, it is not an issue that I should finally determine.

The sites in question include reefs which have for a long time been productive of abalone and sea urchin, being reefs which, prior to the events now in issue, were fished commercially by the plaintiffs and others as part of their own longstanding operations under fishing licences and quota units issued to them by Victorian Government instrumentalities pursuant to the Fisheries Act 1995. In its original written application under the Land Act 1958 for the Crown leases which, as noted above, was made in December 2011, MAPA expressly recognised the established operations of the fishers, and expressly assured the DSE that it did not seek to exclude the commercial fishers, or anyone else, from the sites. This was noted, and treated as significant, in an intra-governmental email sent in December 2012 by the officer of DSE who was then handling the application. In August 2013, MAPA gave a further written assurance to DSE—this time in the course of applying to the Department for a related consent under the Coastal Management Act 1995 (Vic) (‘CMA’)—to the effect that MAPA’s proposal would have no adverse impacts, economic or otherwise, on anyone at all. In my view, as I will explain in due course, MAPA’s assurances to DSE contributed to the fact that at no stage during the lengthy application process were the plaintiffs, or the public generally, notified of MAPA’s proposal. This in turn has considerable significance for the plaintiffs’ attack in this case on the decisions that were ultimately made on MAPA’s application for the Crown leases, and for the plaintiffs’ claims in this case generally.

For a time during the progress of this case, the plaintiffs sought to make something of another aspect of MAPA’s application for the related consent under the CMA. The plaintiffs contended that there was a time-related defect in the ultimate decision of the DSE to grant that consent; and that without a fresh application for, and a fresh grant of, a CMA consent there could be no valid decision to grant MAPA’s application for the Crown leases. In the end, the plaintiffs rightly became unenthusiastic about that last step of their time-related CMA point and did not press it.[3]
[3]See further below.

However, there was another aspect of MAPA’s application for the Crown leases that does bear very significantly on the lawfulness of the Department’s handling of it. This is a matter that intersects with the abovementioned assurances that were given by MAPA to the DSE. Under s 137 of the Land Act 1958, any applicant for a Crown lease has an obligation to notify its application publicly, at least fourteen days in advance of any grant, in a local newspaper and in the Victorian Government Gazette. And, as it happened, Departmental officials told MAPA many times during the application process about this statutory obligation, including the fact that the obligation to carry out the advertising rested on MAPA itself as the applicant. The Department also made it clear to MAPA that this was one of the steps that had to be taken before any Crown lease could be granted.

Plainly, the purpose of the statutory obligation is to inform any interested persons of the proposal for the lease and to facilitate the making of any objections (especially by persons who might be adversely affected by the proposal for the grant).[4] However, MAPA did not publish any such notification. It asserts now that, despite the Department’s numerous prior statements to the contrary, a Departmental official told MAPA at a very late stage of the application process that the Department would publish the notifications on MAPA’s behalf. As surprising as this claim may seem, it is supported by uncontradicted sworn evidence and I am prepared to accept it. However, in my view, MAPA’s claim is a matter of little or no moment, because in fact the Department did not publish the notifications either. Nor did anyone else. Indeed, the fishers were given no notice whatsoever of MAPA’s proposals. Consequently, the particular Ministerial delegates who ultimately determined, separately and at different times, the two parts of MAPA’s application for a Crown grant under the Land Act 1958, completely overlooked the interests of the plaintiffs and of the wider public. In those circumstances, the Ministerial delegates proceeded to purport to grant MAPA the leases sought. Putting aside any overriding Commonwealth legislation or any matters arising from international law, the purported leases would, if valid and effective, confer on the company exclusive possession of the relevant sites, including the sea bed and the waters above.
[4]See also s 34 of the Land Act 1958 relating to the public hearing of objections to proposed Crown grants.

As soon as each purported lease was granted, it was registered under the Transfer of Land Act 1958 (Vic). The first purported lease, which related to the Gabo Island site, was granted and registered in May 2018. The second one, which related to the Tullaberga Island site, was granted and registered in February 2019. Each purported lease was expressed to run for a term of 21 years, with an option to renew for a further term of ten years. It was only in June 2019, after the second purported lease (the Tullaberga Island lease) was registered under the Transfer of Land Act 1958, that MAPA first told the fishers about the purported leases. MAPA then demanded that the fishers cease including the sites in their fishing operations.

Over time, exclusion of the plaintiffs and other fishers from access to the reefs would be significantly detrimental to their fishing operations. They have paid, and continue to pay, for appropriate licences and quota units under the Fisheries Act 1995 that, otherwise, would authorise them to include both sites in their fishing operations. Never before had there been a Crown grant to a private body enabling the private body to exclude licensed fishers from the areas covered by their licences and quota units. In all of these circumstances, unsurprisingly, the fishers protested to MAPA about MAPA’s reliance on the purported leases. However, MAPA was unmoved. Despite its earlier statements to the DSE to the effect that it did not seek to exclude commercial fishing or to exclude anyone at all, and despite its omission to comply with its statutory obligation to advertise its proposals, MAPA stood on its registered title to the purported leases. And, notwithstanding its own legal and other errors, the State Government in effect supported MAPA as against the fishers.

Hence this proceeding. The plaintiffs apply for remedies in the nature of judicial review under O 56 of the Supreme Court (General Civil Procedure) Rules 2015 in relation to the Departmental decisions to grant the purported leases, together with such further or other relief as may be necessary or appropriate to render those remedies effective. The first five plaintiffs are abalone fishers and the sixth plaintiff is a sea urchin fisher. After some changes to the defendants, the first defendant is the relevant Minister, the fourth defendant is the State of Victoria, the fifth defendant (as mentioned above) is MAPA Pearls Pty Ltd and the sixth defendant is the Registrar of Titles (who has taken no active part in the case and will abide the judgment of the Court). There is no objection to the standing of the plaintiffs to apply for the remedies they seek, nor any objection to any necessary extension of time. No point has been taken about the procedural form of the proceeding (originating motion for judicial review supported by affidavits, as distinct from a writ and statement of claim).

In late 2019, the plaintiffs sought an interlocutory injunction to re-establish their access to the sites pending the hearing. The application was opposed by the State defendants and MAPA. As part of its opposition, MAPA asserted that the plaintiffs’ fishing operations were a threat to its aquaculture operations.[5] In those circumstances, among others, the interlocutory injunction was refused. Now, however, MAPA in effect admits that neither the plaintiffs’ fishing operations—nor even the open public access to the sites that was previously available—represented, or would in future represent, any kind of threat to the company’s aquaculture operations.[6]
[5]MAPA’s outline of submissions on interlocutory relief dated 18 December 2019, [4].
[6]Transcript of proceedings 20 December 2019 (‘T 20 December 2019’) 114, 133; T 18 March 2020 22–23, where senior counsel for the plaintiffs squarely raised that MAPA had not adduced any evidence to substantiate its earlier assertion that its business operations would be at risk if it were no longer entitled to exclusive possession. Cf MAPA’s post-hearing submissions dated 8 April 2020, which did not address the question of whether MAPA would suffer any loss if it were no longer to be entitled to exclusive possession over the sites. MAPA did not adduce any evidence on this question at any stage of the proceedings.

For the final hearing, affidavit evidence was filed on behalf of the plaintiffs, the State defendants and MAPA respectively, although the (only) affidavit filed by the State defendants was largely documentary and did not come from either of the Ministerial delegates who purported to grant the leases or from any officer with principal responsibility for preparing material for the delegates. No objection was taken by any party to the admissibility of any of the affidavit evidence of any other party.

At the final hearing, six main issues were raised by the parties:

(i) Were the areas that were purportedly leased to MAPA under the Land Act 1958 ‘Crown land’ that was covered by that Act?

(ii) Did the (admitted) failure to advertise the proposed leases invalidate the grants?

(iii) Did the (admitted) failure to hear the plaintiffs invalidate the grants?

(iv) Did the (admitted) failure to take into account the plaintiffs’ interests and the interests of the wider public, together with and in the context of MAPA’s assurances, the failure to advertise and the failures to hear the plaintiffs, give rise to legal unreasonableness and to jurisdictional error that invalidated the grants?

(v) Was there a valid and current Ministerial consent under the CMA for the use and development of the sites in question, and, if not, did this affect the validity of the grants of the leases?

(vi) Are the purported leases beyond challenge as a result of their registration under the Transfer of Land Act 1958 notwithstanding the facts and circumstances surrounding their grant?

Ultimately, after lengthy written and oral submissions, including detailed post-hearing written submissions, the State defendants and MAPA effectively conceded that the grants were invalid for each of the reasons mentioned in sub-paragraphs 16(ii), (iii) and (iv) above.

On the other hand, in relation to the issue referred to in sub-paragraph 16(i), those defendants continued to maintain that, when the leases were purportedly granted, the sites were ‘Crown land’ covered by the Land Act 1958. As mentioned above, I consider that it is inappropriate to determine this issue. That is so mainly because of a post-hearing amendment to the Land Act 1958 to which I will come in due course.

The State defendants and MAPA continued to contest the plaintiffs’ claim that there was a time-related defect in the CMA consent that rendered it, and in turn the purported leases, invalid (see paragraph 16(v) above). In the end, as already mentioned, the plaintiffs did not press this particular claim.

As to the issue referred to in paragraph 16(vi), the State defendants and MAPA maintained that the purported leases, having been registered, were effective according to their tenor regardless of the circumstances surrounding their grant. They relied heavily on the so-called ‘indefeasibility’ provisions of the Transfer of Land Act 1958. The plaintiffs responded by relying on various claimed ‘exceptions’ to the principle of indefeasibility and on other related arguments, including, principally, an argument to the effect that the plaintiffs have an ‘in personam’ right against MAPA to have the registration of the purported leases set aside on the basis that, in all the circumstances, and particularly in view of MAPA’s own acts and omissions, MAPA’s reliance on its legal rights (ie on its registered title) amounts to equitable (or constructive) fraud as against the plaintiffs. Thus the indefeasibility point ultimately became the main battleground between the parties.

In short, my conclusions are as follows:

(vii) Having regard to my other conclusions it is unnecessary—and because of the abovementioned post-hearing amendment to the Land Act 1958 it is inappropriate—to determine finally whether the sites in question were covered by that Act.

(viii) The failure to advertise the proposed leases did invalidate the grants.

(ix)The failure to hear the plaintiffs did invalidate the grants.

(x) The failure to take into account the interests of the plaintiffs and of the wider public, together with and in the context of MAPA’s assurances, the failure to advertise and the failures to hear the plaintiffs, did give rise to legal unreasonableness and to jurisdictional error that did invalidate the grants.

(xi)It is neither necessary nor appropriate to decide whether there was a valid and current Ministerial consent under the CMA for the use and development of the sites, because any want of such consent did not of itself go to the legal validity of the grant of the purported leases.

(xii) Whether or not the purported leases would otherwise have been protected by the Transfer of Land Act 1958, the plaintiffs are entitled to ‘in personam’ relief against MAPA for equitable (or constructive) fraud on its part constituted by MAPA’s unconscientious reliance, as against the plaintiffs, on its registered title in the face of its prior assurances mentioned above and in the face of its non-compliance with s 137 of the Land Act 1958, absent which, almost certainly, the purported leases would not have been granted or, at least, would not have been granted in the form in which they were granted (ie without exceptions or reservations to protect the plaintiffs and other established users of the leased areas). As a result, the plaintiffs are entitled to appropriate relief against the State defendants and MAPA which, subject to further submissions, may include orders in the nature of certiorari or declarations that the purported leases were invalidly granted and are of no force or effect, together with (if need be) appropriate injunctions and/or an order directed to the Registrar of Titles that the registration of the purported leases be set aside or cancelled. It is not necessary or appropriate to express concluded views on the other arguments raised by the plaintiffs in response to the reliance by the State defendants and MAPA on the ‘indefeasibility’ provisions of the Transfer of Land Act 1958.

In the result, as a matter of law, the application made by MAPA under the Land Act 1958 will be exposed as uncompleted and undetermined. If MAPA wishes to persist with the application it will need to re-prosecute it in compliance with the Land Act 1958.

I turn now to the relevant facts and events in more detail.

The plaintiffs’ pre-existing operations and their rights under the Fisheries Act 1995

The principal affidavits filed on behalf of the plaintiffs were the affidavits of Christopher Daniel sworn 16 August 2019[7] and 9 December 2019[8] respectively. Mr Daniel is the fourth plaintiff and is the husband of the fifth plaintiff, Vanessa Daniel. There was, ultimately, no challenge to anything contained in Mr Daniel’s affidavits. What follows under the present heading is based mainly on Mr Daniel’s affidavits and on the unchallenged summary of the factual background set out in the written outline of opening submissions for the trial prepared by counsel for the plaintiffs.[9]
[7]First Daniel affidavit.
[8]Second Daniel affidavit.
[9]That is, the plaintiffs’ 10 January 2020 outline.

Under the Fisheries Act 1995, the Victorian abalone fishery is sub-divided into three management zones, namely the Western Zone, the Central Zone and the Eastern Zone. The Eastern Zone stretches from approximately Lakes Entrance in Victoria to the New South Wales border.

Mr and Mrs Daniel are the sole owners and controllers of their family business of abalone fishing in the Eastern Zone. The other plaintiffs, also, though they be corporations, conduct, in effect, family businesses of fishing for abalone or sea urchins in the Eastern Zone.[10]
[10]The information that the corporate plaintiffs’ businesses are in the nature of family businesses is information that I was told by counsel for the plaintiffs from the Bar table, without objection or contradiction. T 18 March 2020, 20.

Commercial abalone fishing has been undertaken in the Eastern Zone since approximately 1965.[11] The plaintiffs hold access licences and/or quota units under the Fisheries Act which entitle them to fish for abalone (in the case of the first to fifth plaintiffs) or sea urchin (in the case of the sixth plaintiff) in the Eastern Zone fishery.[12]
[11]Second Daniel affidavit [5].
[12] Without demur from the defendants, and in a fashion that appears to me to be accurate, counsel for the plaintiffs, in footnote 3 of their written outline of submissions dated 10 January 2020, summarised the legal framework of the plaintiffs’ commercial fishing as follows:

From about 2005 to about June 2019, commercial abalone and sea urchin fishing operations, including those of the plaintiffs, co-existed with MAPA’s operations under its aquaculture licence in what subsequently became the purported Crown lease areas. Those areas also remained open to recreational users, as is implicitly recognised in the conditions of the aquaculture licence.[13] This co-existence and concurrent use continued throughout the period during which MAPA applied for the Crown leases and took other ancillary steps in relation to the lease application and ultimately executed the second of the purported Crown leases (the Tullaberga lease).
[13]See cl 3.2.5, which requires that boundary markers must ‘not pose a risk to people or marine vessels’. Email from Paul Menke enclosing Aquaculture Licence CLA8 dated 16 January 2017, CB 793.

In uncontradicted evidence,[14] Mr Daniel estimated that the continued exclusion of the commercial abalone fishers from the reefs in question would be likely to result, directly or indirectly, in a reduction of about 8 tonnes in the total quantity of abalone available to be fished commercially in the Eastern Zone fishery pursuant to the arrangements in place under the Fisheries Act 1995. I accept that estimate. A substantial share of the burden of the potential reduction would (necessarily) be borne by the plaintiffs. There would also be additional operational costs and difficulties as indicated by Mr Daniel.[15]
[14]First Daniel affidavit [37].
[15]Second Daniel affidavit [21]–[23], [26]–[32]. See also [54].

The events leading up to the purported grant of the Crown leases

MAPA had commenced culturing blacklip abalone at the Gabo and Tullaberga sites in about 1996. It appears that, initially, it did so under a general aquaculture permit issued in the name of Mary Menke under the Fisheries Act 1995.[16]
[16]It is not altogether clear that permits existed for the Gabo site at the commencement of the Menke family’s culturing operations: cf affidavit of Paul Menke filed 26 February 2020, [13].

On 12 December 2000, a delegate of the then Minister for Environment and Conservation gave consent to MAPA to use and develop coastal Crown land under s 40 of the CMA.[17] That consent permitted MAPA:[18]

To place twenty cages on the western side of Gabo island and twenty cages on the western side of Tullaberga island for the purpose of growing Black lipped abalone. Each cage will contain approximately 50 abalone.

[17]Affidavit of Sarah Crute filed 4 December 2019, [10]–[11].

[18]SKC-4 to the affidavit of Sarah Crute filed 4 December 2019: Coastal Consent, CB 236.

Certain conditions were attached to the CMA consent given in 2000, including:[19]

…
· The use and development of the subject land must at all times be in accordance with the Aquaculture Licence, issued pursuant to Section 41 of the Fisheries Act 1995.
· The use and development of the subject land must not commence until the Aquaculture Licence [is] granted in accordance with the requirements of the Fisheries Act 1995.
· This consent will expire if the Aquaculture Licence issued under the provisions of Sec 41 of the Fisheries Act is cancelled.
…

[19]Ibid.

For more than a decade, until late 2011, MAPA appears to have been content to cultivate abalone pearls pursuant to the CMA consent granted in December 2000 and the aquaculture licences and permits that were issued to MAPA from time to time under the Fisheries Act 1995.

It is not clear whether any particular event prompted MAPA to seek leases over the Gabo and Tullaberga sites under the Land Act 1958. But in November 2011 MAPA (through Gerry Menke) made inquiries with DSE which caused Timothy Shepherd, Senior Project Officer—Property Management, in the Public Land Division of DSE, to write to MAPA on 30 November 2011. In his letter, Mr Shepherd outlined the process by which a Crown lease of unreserved land adjacent to Tullaberga Island might be applied for, and enclosed a blank ‘Application to use Crown land’ form.[20] On its face, the same blank form could have accommodated either an application for a Crown lease for non-agricultural purposes under Subdivision 1 of Division 9 of Part I of the Land Act 1958, or an application for a Crown licence for non-agricultural purposes under Subdivision 2 of Division 9 thereof.[21] The letter did not mention the Gabo site. Among other matters, Mr Shepherd’s letter stated that approval in principle to any proposed lease would involve:

Publication of a notice of intention in the Victoria [sic] Government Gazette and a locally circulating newspaper for each Crown lease, in accordance with section 137 of the Land Act 1958.

[20]SKC-5 to the affidavit of Sarah Crute filed 4 December 2019: Application to use Crown land and letter from the Department to Gerardus Menke dated 30 November 2011, CB 249–250.

[21]Subdivision 1 includes the abovementioned ss 134 and 137 of the Land Act 1958. Subdivision 2 includes the abovementioned ss 138 and 140 of the Land Act 1958.

Shortly after, on 12 December 2011, MAPA (through Gerry Menke) returned the completed form under cover of a handwritten letter, which read:

HI TIM
PLEASE FIND APPLICATION AS REQUERED [sic].
IT COVERS TWO SITES ONE AT GABO ISL. THE OTHER AT TULLABERGA ISL
HAVE A GOOD CHRISTMAS AND MANY THANKS.
REGARDS.
[signed]
GERRY MENKE

The application itself comprised a pro forma document with hand written answers filled in.[22] Supporting documents were attached.
[22]SKC-5 to the affidavit of Sarah Crute filed 4 December 2019: Application to use Crown land and letter from the Department to Gerardus Menke dated 30 November 2011, CB 238–257.

In section A of the form, under the heading ‘APPLICANT DETAILS’, Gerry Menke’s details were inserted. Section B was headed ‘LAND DESCRIPTION’, and asked for details of the land which was the subject of the application. The hand written description read:

TWO AREAS OF CROWN LAND FOR AQUACULTURE USE, AS PER AQUACULTURE LICENCE CLA8 ‘ONE SITE @ GABO ISLAND, area 6ha, and ONE SITE @ TULLABERGA ISLAND area 3ha’.

At the end of Section B, the form appeared to invite the applicant to attach a sketch plan of the land sought to be leased by the printed words ‘See ATTACHMENT 1 for Sketch Plan of Crown Land’. Below those words were hand written ‘& ATTACHED SURVEYS’. The supporting documents attached to the application were surveys of Tullaberga Island and Gabo Island and the surrounding waters, with the sites marked on the relevant areas of sea, and a copy of the aquaculture licence CLA8.

Section C of the form was headed ‘Non Agricultural Purposes’, and sought specific details of the proposal. Hand written into Section C was the following (my emphasis):

CLA8 already possess aquaculture cages of no/minor significance to the natural environment. Further cages are planned for installment [sic]. The aquaculture cages utilize and blend with the natural environment. The improvements do not impede commercial or recreational use. The reason for application is through advice from Mr Andrew Clark, suggesting a lease provides security of use of land to continue a locally funded and run business without fear of a revoke [sic] of use due to circumstance.
The use of this land is needed for future aquaculture use to continue the aquaculture business. This business benefits the local community through employment, promoting local natural products.

The next part of the form, in Section C, asked ‘Do you propose to have exclusive use of the land? If so, detail the reason for this requirement’. The hand written answer inserted was:[23]

NO NOT EXCLUSIVE AS IT IS IN AN AREA OF COMMERCIAL ABALONE USE.

[23]Ibid CB 241.

The application form was signed by Gerry Menke and dated 12 December 2011.

On 22 October 2012, Mr Shepherd emailed Darryl Burns, Ranger-in-charge, Far East Gippsland, for Parks Victoria seeking advice from Parks Victoria regarding the proposed leases and any special conditions that might be considered for inclusion in the lease. Mr Shepherd’s email attached MAPA’s completed application form. On 23 November 2012, Mr Burns replied saying, relevantly (my emphasis):[24]

·In principal [sic] I support this application for the purposes of abalone aquaculture.
…
·I am aware of debris associated this aquaculture operations washing up/being deposited on Tullaberga Island. I am keen to see a condition in the lease that requires the lease holder to maintain the site and adjacent areas free of debris associated with aquaculture operations.
…
·Does the Aquaculture Lease give exclusivity of the site to the lease? The waters adjacent to Tullaberga & Gabo are utilised by commercial and recreational fishers and divers. I anticipate issues arising from these groups if this is the case.

[24]SKC-7 to the affidavit of Sarah Crute filed 4 December 2019: Emails between Timothy Shepherd and Darryl Burns, CB 263.

Mr Shepherd replied on 3 December 2012. His response included, relevantly (my emphasis):[25]

Site specific conditions can be added to the standard lease document, including requirements for set asides, debris removal and boundary marking.
The details regarding the land status will be identified in a Survey Report to be completed by the Survey-General Victoria to ensure that the lease sites do not encroach on the National Park or reserved Crown land.
By definition, a lease is designed to provide exclusive use of Crown land to a tenant. However, the proposed tenant has indicated that exclusive use is not required in this case as the lease sites are utilised by other commercial and recreational divers. Accordingly, DSE will consider a condition in the lease to maintain public access or alternatively a licence to undertake the aquaculture activities on the sites.

[25]Ibid CB 261–262.

Mr Shepherd appears to have forwarded his emails with Mr Burns to another employee of Parks Victoria, Chantal Allen, on 17 December 2012.[26] On the same day Mr Shepherd sent an email to Chantal Allen which included the following:[27]

Further to our previous emails regarding the proposed aquaculture leases to Mr Gerry Menke adjacent to Gabo Island and Tullaberga Island in Gippsland, please note that Parks Victoria has provided in principle support for the leases providing they do not encroach on the Islands.
Land Administration will advise Mr Menke that a survey report and subsequent survey of the proposed lease sites will need to be conducted.
However, I note that Mr Menke is yet to obtain consent for the aquaculture operations under the Coastal Management Act 1995. Normally for aquaculture reserves, this consent would be progressed by the Department of Primary Industries while establishing the reserve, however as the proposed lease sites are not in a reserve the consent would not have been obtained through this process.
Could you please advise me of the relevant contact from Gippsland Region who will undertake the CMA process ? I’ll then include these details in my letter to Mr Menke.

[26]Ibid CB 261–264.

[27]Ibid CB 261.

The evidence does not reveal any steps taken by MAPA or within Government to progress the lease application between the end of 2012 and August 2013.

On 6 August 2013, MAPA (through Paul Menke) applied in writing for a new consent to use or develop Crown Land under the CMA.[28] MAPA did so by reference to the proposal to lease the two sites.
[28]SKC-8 to the affidavit of Sarah Crute filed 4 December 2019: Application for consent for proposed use and development of coastal Crown land, CB 280–287.

Under part 1 ‘Proposal outline’, the application for consent under the CMA included the following:

Mallacoota Abalone Pearls Australia (MAPA) are at current using the aquaculture site CLA 8 and CLA 9 to culture and harvest quality abalone pearls. Mr Gerry Menke, CEO of MAPA, is the person named on the Aquaculture licence and translocation permit used in these operations. MAPA have been in operation for 5 years and are at current producing stunning local product. To solidify land use for future aquaculture use, MAPA and Mr Gerry Menke wish to lease the land currently in use.

Part 8 of the application form was headed ‘Project description (siting and design, risk)’. It called for responses on, among other things, ‘mitigation of public risk’ and ‘potential impact on coastal processes’ and, most significantly for present purposes, ‘maintenance of public access’. In response, MAPA set out further details of the project, including the following statement:[29]

The area is open to public recreational use. The area is very remote with little to no public usage.

[29]Ibid CB 283.

Part 9(b) of the form required responses as to how the proposal was consistent with certain published coastal and environmental policies of the Victorian Government. As to the item ‘Differing Demands for use of Coast’, MAPA said: ‘MAPA does not affect the surrounding use of the available coast line’. As to ‘Economic Implications’, MAPA said, among other things, ‘MAPA has no negative economic affect [sic].[30]
[30]Ibid CB 284.

On 5 May 2014, some nine months after the application for consent under the CMA was made, Rob Stewart, Program Manager, Public Land, for DSE, signed a memorandum addressed to Grange Jephcott, the ‘approved delegate’ of the Minister, recommending that Mr Jephcott approve and sign the attached ‘Coastal Management Act 1995 Consent’.[31] Under the heading ‘Key Issues’ the memorandum stated:

The proponent is requesting to change his existing licence issued under the Land Act 1958 to a section 134 lease under the Land Act 1958 for the two sites that he current operates for Aquaculture at Tullaberga and Gabo Islands for the longer term financial viability of the venture.

Of course, the ‘proponent’ did not then (or ever) hold a licence issued under the Land Act 1958. Rather, MAPA held a licence or licences (and a translocation permit) granted under the Fisheries Act 1995 and an old, apparently superseded, consent to use and develop coastal land granted under the CMA.

[31]SKC-9 to the affidavit of Sarah Crute filed 4 December 2019: Memorandum from Rob Stewart to Grange Jephcott dated 5 May 2014, CB 289.

Under the heading ‘Context’ the memorandum of Mr Stewart further stated, relevantly:

Due to the change in tenure arrangements from an annual licence to a 25 year lease the proponent was required to obtain a new Coastal Management Act 1995 consent and a revised Native Title Act 1993 Future Act assessment.

By letter dated 9 May 2014, Mr Jephcott purported to approve MAPA’s application for consent for proposed use and development of coastal Crown land pursuant to the CMA, subject to conditions contained in the notice attached to the letter.[32] At trial, the plaintiffs said that, by virtue of ss 38 and 40 of the CMA, this approval was too late to be valid and effective under the CMA; and, as mentioned above, the plaintiffs contended, at least for a time, that this affected the validity of the later grants under the Land Act 1958 of the purported leases.[33]
[32]SKC-10 to the affidavit of Sarah Crute filed 4 December 2019: Letter from Grange Jephcott to Gerardus Menke enclosing subsequent coastal consent dated 9 May 2014, CB 291–292.
[33]But see above and see further below.

The consent notice accompanying Mr Jephcott’s letter contained the subject line ‘CONSENT FOR: LEASE FOR AQUACULTURE PURPOSES TO MALLACOOTA ABALONE PERALS [sic] AUSTRALIA (MAPA)’. The notice listed certain conditions, which, broadly, related to compliance with the terms of the proposed lease under the Land Act 1958 and with the conditions of the aquaculture licence under the Fisheries Act 1995 and with all relevant policies and guidelines. The notice also set the term of the consent as 25 years; provided that the consent would expire if the aquaculture licence was cancelled; and imposed requirements to remove infrastructure on cessation of the authorisations.[34] No conditions dealt with use of the sites by the public or by persons in the position of the plaintiffs.
[34]SKC-10 to the affidavit of Sarah Crute filed 4 December 2019: Letter from Grange Jephcott to Gerardus Menke enclosing subsequent coastal consent dated 9 May 2014, CB 291–292.

On 22 May 2014, shortly after coastal consent was purportedly granted, Mr Shepherd (of DSE) emailed Andrew Clarke, Manager, Aquaculture, for Fisheries Victoria (a part of the then Department of Environment and Primary Industries (‘DEPI’), about the terms of the proposed lease. Mr Shepherd’s email included the following (my emphasis):[35]
[35]SKC-14 to the affidavit of Sarah Crute filed 4 December 2019, Emails between Timothy Shepherd and Andrew Clarke: CB 313.

…
I’ve also amended the standard aquaculture lease documents for use in this case. Please find the attached document for your reference.
To enable DEPI to progress this lease further, could you please advise whether the following items are relevant to this case and hence should remain in the lease:
·     Survey and navigational mark requirements; (the Site will be determined by survey on a Plan for Lease Purposes OP by the Surveyor-General Victoria)
·     Acceptable Activity Level;
·     Fisheries Reserve and Management Plan; (this could be relevant in the future)
·     Baseline Survey;
·     Further Term; (should the standard re-application process apply rather than a further term option)
·     Guarantor; (does Fisheries Victoria generally request a guarantee)
·     Public Disclosure; (DEPI will need to arrange for the advertising requirements of section 137 of the Land Act 1958 to be satisfied and the lease will be registered at the Titles Office once executed, hence the details will be publicly available).

Why Mr Shepherd would here indicate to Mr Andrew Clarke that ‘DEPI’, as distinct from DSE and as distinct from the proponent (MAPA), would ‘need to arrange for the advertising requirements of s 137 of the Land Act 1958 to be satisfied’ was not explained in the evidence or explored at the hearing. In any event, so far as the evidence shows, no response was received from DEPI, and no steps to further progress the application were taken until the end of 2014.

On 17 July 2014, Gerry and Mary Menke were tragically killed when Malaysian Airlines flight MH-17 was shot down over the Ukraine.

On 31 December 2014, Damian Clarke of Clarke Legal, the solicitors acting on behalf of Gerry and Mary Menke’s estate, sent an email to Mr Shepherd (of DSE) with the subject line ‘Estate of the late Gerardus and Mary Menke’ that included the following:[36]
[36]SKC-13 to the affidavit of Sarah Crute filed 4 December 2019: Emails between Timothy Shepherd and Damian Clarke, CB 307.

We are acting on behalf of the Estate of the abovenamed who were tragically killed in the Malaysian Airlines disaster on 17 July 2014.
At the time Gerry held an Aquaculture Licence being Licence No. CLA8. He was using the Aquaculture Licence for propagation of pearls in abalone.
In support of the Licence he also held a Permit being GA40.
In the lead up to his death, Gerry had made application for transferring the existing Licence to a Coastal Crown Land Lease. We understand from talking with Mr Neilson that consent was given under s.40 of the Coastal Management Act 1995 (this appears to have been done 09/05/14) and then went back to your area for the issuing of the Lease. However we understand that in the interim notification was given as regards to the death of Gerry so matters were put in abeyance.
Under the Estates of Mr & Mrs Menke, the four adult children are the equal beneficiaries, these being Paul, Brett, Sara & Anna.
Brett and Paul are both actively involved in the family business.
We would like to progress matters as a matter of urgency in terms of progressing the Crown Lease for the benefit of the family and a continuation of what their father was doing.
Could you please let us know what is needed.
Additionally we should point out that even though all the Licences have been in the name of Gerry Menke personally, at all times he has been operating them for the benefit of Mollusc Pty Ltd as Trustee for the Menke Family Trust. Is it possible to get everything put in the name of Mollusc Pty Ltd ATF Menke Family Trust?

There is no evidence that licences or leases were ever granted to Mollusc Pty Ltd. The possibility that licences or, indeed, the Crown leases themselves, would be transferred or granted to Mollusc Pty Ltd, as a trustee or otherwise, is not mentioned again in the evidence.

Also around this time, in late 2014, the Victorian Labor Government was elected, and DSE and DEPI were amalgamated to form DELWP.

Mr Shepherd, now acting on behalf of DELWP, responded to Clarke Legal on 7 January 2015 saying, relevantly:[37]

Thank you for your email and please pass on my condolences to the Menke family.
The application for a Crown lease over parts of Gabo and Tullaberga Islands was still in an early stage, and was placed on hold following the tragedy in July 2014.
We are certainly willing to progress the Crown lease to the relevant beneficiaries of the Menke estate providing that the tenant is an appropriate entity to hold the Crown lease and is the same entity which holds Aquaculture Licence CLA8 as the two authorisations will be linked. We will coordinate with Fisheries Victoria to ensure this occurs.
I will review the Crown lease file promptly and prepare correspondence to you to identify the next steps to progress the Crown lease.

[37]Ibid CB 306.

Further emails followed later on 7 January 2015 in which representatives of Fisheries Victoria indicated that renewals of the aquaculture licence and permit under the Fisheries Act 1995 were expected to be ‘signed off’ on 12 January 2015.[38]
[38]Ibid CB 305–307.

At about 1.31pm on 7 January 2015, Mr Shepherd (for DELWP) forwarded to Andrew Clarke and John Vaytauer, both of Fisheries Victoria, Mr Shepherd’s earlier email to Fisheries Victoria dated 22 May 2014 quoted above.[39] About four minutes later, at about 1.35pm, Mr Shepherd emailed the same persons at Fisheries Victoria again, saying:[40]
[39]SKC-14 to the affidavit of Sarah Crute filed 4 December 2019: Emails between Timothy Shepherd and Andrew Clarke, CB 312–315.
[40]Ibid CB 313.

Further to my previous email in May 2014, I’m reviewing the Menke Crown lease file to progress with the new party.
Could you please review the attached draft Crown lease and advise whether the following items are relevant to this case and hence should remain in the lease:
·     Survey and navigational mark requirements; (the Site will be determined by survey on a Plan for Lease Purposes OP by the Surveyor-General Victoria, and Parks Victoria has advised that navigation marks may pose more of a risk to recreational users)
·     Acceptable Activity Level;
·     Fisheries Reserve and Management Plan; (this could be relevant in the future)
·     Baseline Survey;
·     Further Term; (should the standard re-application process apply rather than a further term option)
·     Guarantor; (does Fisheries Victoria generally request a guarantee)

The six dot points in Mr Shepherd’s email of 1.35pm on 7 January 2015 to Andrew Clarke and John Vaytauer (of Fisheries Victoria) are almost identical to the first six dot points in the earlier email (of 22 May 2014) to Andrew Clarke that Mr Shepherd had forwarded to them at 1.31pm. The 7 January email, however, does not reproduce the seventh and final dot point from Mr Shepherd’s 22 May 2014 email, which (somewhat curiously, as already mentioned) read:

· Public Disclosure; (DEPI will need to arrange for the advertising requirements of section 137 of the Land Act 1958 to be satisfied and the lease will be registered at the Titles Office once executed, hence the details will be publicly available).

Andrew Clarke (of Fisheries Victoria) responded the following day (8 January 2015),[41] discussing Fisheries Victoria’s preferences on each of the six dot points in Mr Shepherd’s 7 January 2015 email (at 1.35pm). Mr Clarke’s response does not mention the notification requirements in s 137 of the Land Act.[42] However, those requirements would in due course be referred to again, several times, in various communications.[43]
[41]Ibid CB 312.
[42]Ibid.
[43]See below.

On 3 March 2015, Phil Collins, Senior Project Officer – Land Administration – Land Management Policy Division of DELWP, enters the picture for the first time. It seems that he takes the matter over from Mr Tim Shepherd. Mr Collins writes to Clarke Legal, then acting for MAPA, requesting the details of the proposed lessee and setting out the remaining parts of the process for the grant of the Crown lease. As to the latter, Mr Collins says (my emphasis):[44]
[44]SKC-15 to the affidavit of Sarah Crute filed 4 December 2019: Letter from the Department to Damian Clarke dated 3 March 2015, CB 317–318.

The process to grant each Crown lease will involve the following:
·     Approval of the Minister for Environment, Climate Change and Water;
·     Agreement to the specific Crown lease document which has been developed by the department for use in the occupation and operation of aquaculture sites;
·     Payment of the following statutory fees;
oLease application fee of $18.50 (no GST);
oLease preparation fee of $319.10 (no GST), in accordance with the Land Regulations Act 2006;

·     Preparation of a Plan for Lease Purposes, in consultation with the Office of the Surveyor-General Victoria (OSGV), to clearly define the sites for each Crown lease. I have enclosed for the surveyor’s information a copy of the Guidelines for the Cadastral Survey of Victoria’s Offshore Aquaculture Fisheries Reserve, Fisheries Victoria Management Report Series (2005).
The applicant’s surveyor should contact the OSGV as follows:-
Eddie Cichoki | Manager Cadastral Infrastructure and Standards
Office of the Surveyor-General Victoria
Level 17, 570 Bourke Street, Melbourne Victoria 3000
T: 03 8636 2545 | M: 0429 161 369 | [email protected]
·     Payment of lease rental in accordance with the Leasing Policy for Crown Land in Victoria 2010 as assessed by the Office of the Valuer-General Victoria or its appointed qualified valuer based on the market value of the aquaculture sites, the permitted use and any restrictions or conditions pertaining to the permitted use;
·     Publication of a notice of intention in the Victorian Government Gazette and a locally circulating newspaper for each Crown lease, in accordance with sections 135 and 137 of the Land Act 1958.
Following the completion of the plan for lease purposes, this office will provide you with the appropriate notice for publication;
·     Registration of each Crown lease at Land Victoria, including the production of a Certificate of Title and associated Title Plan for each Crown lease, to identify the leasehold interest in the Crown land.

Mr Collins’ letter appears to have gone unanswered, though Paul Menke deposes that, between March 2015 and February 2016, he followed up with DELWP by phone.[45] It is common ground that DELWP never provided MAPA with a ‘notice for publication’.
[45]Affidavit of Paul Menke filed 16 December 2019, [8].

On 1 March 2016, Paul Menke received an email from Mr Collins indicating that Mr Collins had received no response to his email to Clarke Legal of 3 March 2015, and asking Paul Menke to ‘please followup [sic] with the solicitors and advise me as to your intentions’.[46]
[46]PWM-3 to the affidavit of Paul Menke filed 16 December 2019: Email exchange with Phil Collins and Jeremy Neilson dated between 1 March 2016 and 24 March 2016, CB 603–604.

According to his affidavit, Paul Menke recalls, and I accept, that, in early March 2016, he called Jeremy Nielson, Acting Program Manager for DELWP, regarding the proposed leases. On 23 March 2016, Paul Menke emailed Mr Neilson asking whether Mr Nielson ‘would be able to help the Menke family continue this application and hopefully satisfy all points noted’.[47] Mr Nielson responded on 24 March 2016 by email, stating ‘I am happy to discuss and assist where I can when you return to the country’.[48]
[47]Affidavit of Paul Menke filed 16 December 2019, [9].
[48]PWM-3 to the affidavit of Paul Menke filed 16 December 2019: Email exchange with Phil Collins and Jeremy Neilson dated between 1 March 2016 and 24 March 2016, 602–603.

Paul Menke deposes that between April 2016 and early January 2017 he had ‘follow up telephone discussions with delegates at DELWP regarding the proposed crown leases’.[49] It may be doubted whether Mr Menke was necessarily dealing with appointed ‘delegates’ on all (or any) of these occasions, but I accept that he was in discussions with Departmental officers.
[49]Affidavit of Paul Menke filed 16 December 2019, [12].

By January 2017, it seems, Mr Collins’ role at DELWP in relation to MAPA’s Crown lease application was assumed by a Mr Daniel Dyson. Mr Dyson was a Project Officer, Land Administration, for DELWP. On 13 January 2017 Mr Dyson asked Andrew Clarke (of Fisheries Victoria), by email, whether aquaculture licence CLA8 had been transferred to another entity. Mr Dyson indicated that DELWP was willing to progress the Crown leases provided that the tenant was the same entity that held licence CLA8.[50] Mr Andrew Clarke replied by email on 16 January 2017, indicating that licence CLA8 was held by Brett Menke and that licence CLA8 listed the sites at Gabo Island and Tullaberga Island. As indicated above, Brett Menke is Paul Menke’s brother and the son of Gerry and Mary Menke.
[50]SKC-18 to the affidavit of Sarah Crute filed 4 December 2019: Emails between Daniel Dyson and Andrew Clarke, CB 327.

On 17 January 2017 Mr Dyson emailed Paul Menke again setting out steps that remained to be taken before the Crown leases could issue. The email included the following (my emphasis):[51]

· There are a number of survey requirements which need to be satisfied to enable a Crown lease to be granted. I have re-submitted the original plans by Robert Webb dated 12/03/2002 to the Surveyor-General Victoria (SGV) to confirm requirements. The standard lease process requires the SGV to prepare a Survey Report that determines the survey and legal requirements of the proposed Crown leases. The Survey Report fee of $1199.01 would need to be met by the applicant. This report informs the final preparation of a Plan of Crown allotment in OP format. I will confirm the survey requirements with you as soon as possible.
· Publication of a notice of intention in the Victorian Government Gazette and a locally circulating newspaper for each Crown lease, in accordance with section 137 of the Land Act 1958.
…
I confirm that DELWP is willing to progress the proposed Crown leases provided that the tenant is the same entity which holds Fisheries Licence – CLA 8. Fisheries Victoria has confirmed that CLA8 is held by Brett Gerard Menke at 5 Howden Crt Mallacoota. Can you please confirm that the lease will be in the name of Brett Gerard Menke?
Once the SGV has clarified survey requirements and you have confirmed the above, I will write formally to progress the matter.

[51]SKC-19 to the affidavit of Sarah Crute filed 4 December 2019: Emails between Daniel Dyson and Paul Menke, CB 330–331.

Later the same day (17 January 2017), Paul Menke replied to Mr Dyson’s email. Mr Menke’s email included the following:[52]

We may also be Changing the aquaculture licence from Brett Menke (my brother) to MAPA Pearls Pty Ltd, a company my siblings and I are involved in with the abalone pearl aquaculture at site CLA8. This will be happening in the next week and should not hold up proceeding with the finalities of the crown land lease application.

[52]Ibid.

Several emails concerning MAPA’s details and other information relevant to the leases followed.

On 23 February 2017, Mr Dyson wrote to Paul Menke. This time, the correspondence was addressed to Paul Menke of ‘MAPA Pearls Pty Ltd’. In his letter, Mr Dyson outlined requirements that needed to be addressed before Ministerial approval for the Crown lease could be sought. Relevantly, the letter included the following (my emphasis):[53]
[53]SKC-15 to the affidavit of Sarah Crute filed 4 December 2019: Letter from the Department to Paul Menke dated 23 February 2016.

Survey
The Office of the Surveyor-General Victoria (SGV) has advised that as it has been 15 years since the original survey work was undertaken, MAPA Pearls’ surveyor should prepare the lease plans in OP format and submit them to SGV for registration as ‘Plan of Crown Allotment’ applications via SPEAR. This will give your surveyor the opportunity to review/update his surveys, and subsequently certify the plans under the current Surveying (Cadastral Surveys) Regulations 2015.
The OP plans should be prepared in general accordance with the requirements of the ‘Guidelines for the Cadastral Survey of Victoria’s Offshore Aquaculture Fisheries Reserves’ (enclosed), except that the current SPEAR OP Plan template is to be used. The non-survey or ‘NS’ OP Plan template is be [sic] utilised so that the appropriate certification can be added by SPEAR to the plan. The surveyor is to add a notation to the Notations panel on each plan describing the GNSS technique used to determine the coordinates, the date of survey and who performed it.
Advertising
In accordance with s 137 of the Land Act 1958 and the Leasing Policy for Crown Land in Victoria 2010, MAPA Pearls Pty Ltd is required to advertise its intention to lease, in both the Victorian Government Gazette and a locally circulating newspaper. Copies of the advertisements must be forwarded to this office when published. A sample advertisement containing the relevant details will be provided once the precise lease area is appropriately defined by survey.

…
Should you wish to proceed in this matter, please provide payment of the enclosed invoice relating to the fees as detailed above.
Ministerial approval to the lease can be sought once the above processes have been completed satisfactorily and the format of lease documentation has been agreed.

On 24 February 2017, Paul Menke responded to Mr Dyson’s letter by email, which set out steps he was taking with surveyors and concluded (my emphasis): ‘[f]rom there we can get approval for the survey and gazette the lease application’.[54]
[54]PWM-4 to the affidavit of Paul Menke filed 16 December 2019: Email exchange with Daniel Dyson dated between 17 January 2017 and 27 February 2017, CB 608.

Mr Dyson replied to Paul Menke on 27 February 2017 saying, among other things (my emphasis):[55]

Any approval-in-principle would be subject to the survey plans being certified by the Surveyor-General and the advertising requirements (gazette/local newspaper) being met.

[55]Ibid CB 607.

On 26 April 2017, Paul Menke emailed Mr Dyson, forwarding surveys of the sites. Several emails followed between Mr Menke and Mr Dyson in which they discussed surveying requirements and valuation of the sites until, on 11 May 2017, Mr Menke sent Mr Dyson an email which included the following:[56]

Do we need to Gazette the lease application soon, or is that the last step after the OK from the surveyor general? If so do you have an example that I could use, as I could get this ready.

[56]PWM-6 to the affidavit of Paul Menke filed 16 December 2019: Email exchange with Daniel Dyson dated between 26 April 2017 and 11 May 2017, CB 619.

Mr Dyson replied later that day. His email included the following:[57]

The Crown allotment details will need to be confirmed by the Surveyor-General Victoria before advertising can be undertaken. I will provide you with the relevant information for advertising at the appropriate time.

[57]Ibid CB 618.

It is common ground that DELWP did not ever send to MAPA ‘the relevant information for advertising’.

On 28 July 2017, the Valuer-General of Victoria wrote separate letters to two officers of DELWP, attaching rental valuation reports for each of the sites. The annual rent for the Gabo site was assessed to be $750 per annum, plus GST.[58] The annual rent for the Tullaberga site was assessed to be $375 per annum, plus GST.[59]
[58]SKC-21 to the affidavit of Sarah Crute filed 4 December 2019: Letter from Robert Marsh to Phil Collins dated 28 July 2017, CB 339–341.
[59]SKC-22 to the affidavit of Sarah Crute filed 4 December 2019: Letter from Robert Marsh to Jo Creswell dated 28 July 2018, CB 343–345.

On 17 August 2017, Will Guthrie, Executive Director, Land Management Policy at DELWP, a delegate of the Minister, gave approval in principle to the grant of the leases.[60] The approval document included what appears to be a front-sheet headed ‘APPROVAL IN PRINCIPLE TO ACQUACULTURE [sic] LEASES AT GABO AND TULLABERGA ISLANDS’, with a space for the delegate to tick boxes representing ‘Approved’, ‘Not approved’, ‘Noted’ and ‘Returned for review’ and a place for the sheet to be signed and dated by the delegate. Under the sub-heading ‘Core message’, it reads:

Your approval-in-principle is sought as delegate for the Minister for Energy, Environment and Climate Change to the grant of two aquaculture leases over unreserved Crown land adjacent to Gabo Island and Tullaberga Islands for the operation of aquaculture sites.

[60]SKC-23 to the affidavit of Sarah Crute filed 4 December 2019: Approval in principle, CB 347–351.

Under the sub-heading ‘Recommendations’, the front-sheet reads:

1. Pursuant to section 134 of the Land Act 1958, provide your approval in principle to the grant of aquaculture leases to MAPA Pearls Pty Ltd for a term of 21 years.

The front-sheet is signed and dated by Mr Guthrie, and the box representing ‘Approved’ is ticked. The footer is signed and dated as having been endorsed by Ms Crute and reviewed by Nick Houlihan, Manager, Land Administration, the day before, being 16 August 2017. The second and third pages of the approval document set out an internal memorandum addressing key information about the proposed leases, their context and consultation that had occurred regarding them. The footer to those two pages indicate they were prepared by Mr Dyson. The copy of the document in evidence contains some hand-written amendments that do not appear consequential. The substantive parts of those pages read (paragraph 2 is italicised by me for emphasis):[61]
[61]Hand-marked amendments to the typed document appear in the quote in underlined and struck-through text as relevant.

Key information
1. In December 2011 MAPA Pearls Pty Ltd applied for two leases over unreserved Crown land adjacent to Gabo Island and Tullaberga Island in Gippsland for the operation of aquaculture sites. The application was held in abeyance for a number of years due to a tragic event. The estate of the applicant has now re-commenced the process to apply for the leases on behalf of MAPA Pearls.
2.In applying the principles of the Crown Land Leasing Police 2010 to this application, Land Administration has considered the following:
·     it is clear beyond reasonable doubt that MAPA Pearls is the only prospective tenant due to it holding a Fisheries Licence to operate at these sites.
·     MAPA Pearls will be required to undertaken a public notification process to ensure an open, fair and impartial lease application process.
·     Land Administration therefore recommends that a lease by direct negotiation is the preferred method of allocation.
3. MAPA Pearls has prepared survey plans in general accordance with the ‘Guidelines for the Cadastral Survey of Victoria’s Offshore Acquaculture [sic] Fisheries Reserves’ (Attachment 1). Subject to your approval-in-principle the plans will be lodged at the Office of the Surveyor-General Victoria for certification.
4. The Department of Economic Development, Jobs, Transport and Resources (DEDJTR) Fisheries has been consulted and has no objection to the grant of the leases. Fisheries has confirmed that MAPA Pearls holds the appropriate Aquaculture Licence to operate at the proposed lease sites.
5. Fisheries adviseds that as the aquaculture sites are not located within an aquaculture fisheries reserve, the Department of Environment, Land, Water and Planning (DELWP) should progress a standard market rent assessment for the Crown lease.
6. The Valuer-General Victoria has determined a market rent of $375 plus GST for the Tullaberga Island site and $750 plus GST per annum for the Gabo Island site.
7. The leases will be for a term of 21 years for the purpose of operation of aquaculture sites.
8. DELWP’s Gippsland Forest Fire and Regions (FFR) has no objection to the grant of the leases. The proposed terms and conditions of the leases will be determined in consultation with Gippsland FFR and Fisheries. Documentation will be in the standard aquaculture section 134 Land Act format.
9. Gippsland FFR has confirmed that there are no procedural rights under the Native Title Act 1993 (Cth) relating to the grant of the leases.
Context
10.On 9 May 2014 the Delegate for the then Minister for Environment and Climate Change provided coastal consent to MAPA Pearls to use or develop the coastal Crown land for aquaculture, pursuant to the Coastal Management Act 1995.
11. Parks Victoria manages Gabo Island, as the appointed committee of management under the Crown Land (Reserves) Act 1978, and Tullaberga Island, as part of the Croajingalong National Park under the National Parks Act 1975, and has provided in-principle support to the proposed Crown leases provided that they do not encroach onto the islands.
Consultation

Land Administration Unit has consulted with the following people during preparation of this briefing:
·Paul Menke, MAPA Pearls Pty Ltd;
·Offices of the Surveyor General and Valuer General Victoria; and
·Andrew Clark, Manager Aquaculture, Fisheries.

Of course, the plaintiffs would challenge the assertion in the document that ‘it is clear beyond reasonable doubt that MAPA Pearls is the only prospective tenant due to it holding a Fisheries Licence to operate at these sites’. And it is clear that MAPA did not ever engage in a ‘public notification process to ensure an open, fair and impartial lease application process’.

By a letter dated 23 October 2017 attached to an email of that date, Mr Dyson notified Paul Menke (for MAPA) that approval-in-principle to proceed with the matter had been granted.[62] In his covering email, Mr Dyson indicated that the ‘Surveyor-General has advised that the survey plans should be finalised by COB Friday 3 November 2017’, and in the meantime attached the ‘letter of lease offer outlining the major terms of the proposed leases and process required to finalise the matter’. The attached letter enclosed the proposed lease documents for both the Tullaberga Island site and the Gabo Island site. It stated that ‘the document is in the Department’s standard format for aquaculture leases under Sec. 134 of the Land Act 1958’. Importantly, the letter also included the following (my emphasis):

In accordance with section 137 of the Land Act 1958, MAPA Pearls is required to publish a notice of intention to lease in the Victoria Government Gazette and a locally circulating newspaper. The notices are to be lodged in this office once published. The instructions for publication will be provided upon finalisation of lease plans from the Surveyor-General Victoria.

[62]PWM-7 to the affidavit of Paul Menke filed 16 December 2019: Email and letter from Daniel Dyson to Paul Menke dated 23 October 2017, CB 624–627.

It is common ground that DELWP did not ever provide to MAPA any ‘instructions for publication’;[63] and that MAPA did not ever lodge with DELWP any published notices.[64]
[63]See affidavit of Paul Menke filed 6 December 2019, [26].
[64]See affidavit of Sarah Crute filed 4 December 2019, [47].

On 16 and 17 January 2018, Paul Menke exchanged emails with Mr Dyson. In the email exchange, Mr Dyson told Mr Menke that the Surveyor-General had identified a need to amend the survey plan for the proposed Crown lease areas.[65]
[65]PWM-8 to the affidavit of Paul Menke filed 16 December 2019: Email exchange with Daniel Dyson dated between 13 November 2017 and 17 January 2018, CB 629–632.

Paul Menke deposes that he recalls calling Mr Dyson in early April 2018 to ask about the Crown leases, and telling Mr Dyson that he ‘did not know what the Government Gazette was, or what was required to undertake the public notification’.[66] He deposes that Mr Dyson responded with words to the following effect: ‘The advertising will be handled on our end’.[67] As a result, Mr Menke deposes, he ‘assumed that DELWP took care of the public notification’.[68] Mr Paul Menke was not required for cross-examination, either by the plaintiffs or by the State defendants. No evidence contradicting these statements of Mr Paul Menke was adduced by any party. In particular, there was no evidence from Mr Dyson. The fact that Paul Menke was not cross-examined and that his claim on this point is uncontradicted is not conclusive[69] but, as surprising as the claim may be, I accept it as true. Of course, the ‘assumed’ public notification did not lead to any objections. Mr Menke apparently did not wonder about that. Presumably, he assumed that the public notification would have been of a proposal for non-exclusive rights.
[66]Affidavit of Paul Menke filed 16 December 2019, [27].
[67]Ibid.
[68]Ibid [28].
[69]Amaca Pty Ltd v Cleary [2022] NSWSCA 151, [33]–[38] and cases there cited.

On 16 April 2018, Mr Dyson emailed to Paul Menke a copy of the final proposed Crown lease for Gabo Island.[70] Later that day, Paul Menke and his sister, Sara Menke, signed the lease document on behalf of MAPA Pearls Pty Ltd and returned signed copies to DELWP by post.[71]
[70]PWM-9 to the affidavit of Paul Menke filed 16 December 2019: Email from Daniel Dyson to Paul Menke dated 16 April 2018, CB 364.
[71]Affidavit of Paul Menke filed 16 December 2019, [30].

On 8 May 2018, Peter Beaumont, Executive Director, Land Management Policy, at DELWP, another of the Minister’s delegates, purported to grant the proposed lease over the Gabo Island site. The grant document[72] was again in the form of a front-sheet. It was headed ‘GRANT OF LEASE—GABO ISLAND’ with boxes for the delegate to tick for ‘Approved’, ‘Not approved’, ‘Noted’ and ‘Returned for review’ and a place for the sheet to be signed and dated by the delegate. Under the sub-heading ‘Core message’, the front-sheet read:

On 17 August 2017 the Executive Director Land Management Policy provided approval-in-principle, as delegate for the Minister for Energy, Environment and Climate Change, to the grant of a new lease to MAPA Pearls Pty Ltd at Gabo and Tullaberga Island (Attachment 1).
MAPA Pearls has agreed to lease terms and conditions for a lease at the Gabo Island site and has executed the lease document which is now submitted for your execution, as delegate for the Minister (Attachment 2).

[72]SKC-26 affidavit of Sarah Crute filed 4 December 2019: Decision brief signed by the delegate (Gabo Island), CB 374–375.

Below the quoted passage, the delegate has ticked ‘Approved’ underneath the following two recommendations:

1. Approve the terms and conditions of a lease over Crown allotment 2004, Parish of Gabo to MAPA Pearls Pty Ltd, under section 134 of the Land Act 1958.
2. Execute and initial the lease document (in duplicate) where indicated (Attachment 2).

Again, the second page of the approval document sets out material under the headings ‘Key information’, ‘Context’ and ‘Consultation’. The information provided does not mention the public notification requirements or the interests of the commercial fishers or the interests of the wider public at all.

Apparently by way of explanation of the bifurcation of the process into an approval for the Gabo Island lease and a separate approval for the Tullaberga Island lease, the following appeared:

The lease over the Tullaberga Island site is pending further survey work, which is being coordinated between the Surveyor-General Victoria and MAPA Pearls. A subsequent brief will be prepared for your approval once the survey matters are completed at Tullaberga Island.

The footer to the second page indicates that it was prepared by Mr Dyson.

Three days later, on 11 May 2018, the lease over the Gabo site was registered.[73] It was confirmed at the oral hearing that the lease had been submitted to the Registrar of Titles by the Department rather than by MAPA.[74]
[73]Affidavit of Sarah Crute filed 4 December 2019, [51]. The registered Gabo Island lease is Exhibit SKC-27 to the affidavit, CB 377–417.
[74]T 18 March 2020 16.

On 8 January 2019, Cameron McKenzie, Senior Project Officer, Direct Leasing Unit, DELWP, emailed to Paul Menke the final version of the proposed lease documents in respect of the Tullaberga site.[75] On about 22 January 2019, Paul Menke and his sister Anna Cowen signed the proposed Tullaberga Island Crown lease on behalf of MAPA Pearls Pty Ltd and returned signed copies to the Department by post and email.[76]
[75]PWM-10 to the affidavit of Paul Menke filed 16 December 2019: Email from Cameron McKenzie to Paul Menke dated 8 January 2019, CB 679.
[76]Affidavit of Paul Menke filed 16 December 2019, [32].

On 7 February 2019, Annie Volkering, Acting Executive Director, Land Management Policy for DELWP, a delegate of the Minister, approved the proposed Tullaberga lease.[77] The front-sheet of the grant document was headed ‘GRANT OF LEASE—TULLABERGA ISLAND’ and was in substantially identical terms as the front-sheet of the equivalent document relating to the Gabo site, save that it referred to the Tullaberga site, instead of the Gabo site. Ms Volkering appears not to have ticked the boxes to approve the leases, though she signed and dated the bottom of the front-sheet, and the copy of the registered lease that is in evidence is signed by Ms Volkering.[78] The second page of the grant document is very similar to the equivalent part of the Gabo site grant document, though its footer indicates that it was prepared by Mr McKenzie, not Mr Dyson.
[77]SKC-27 to the affidavit of Sarah Crute filed 4 December 2019: Decision brief signed by the delegate (Tullaberga island), CB 419–420.
[78]See SKC-29 to the affidavit of Sarah Crute filed 4 December 2019: Registered Tullaberga Island lease, CB 458.

Again, there is no reference to the public notification requirements, to the interests of commercial fishers such as the plaintiffs or to the interests of the wider public.

The Tullaberga Island lease was registered on 13 February 2019.[79] Again, the lease was submitted to the Registrar of Titles by the Department.[80]
[79]Ibid, CB 422.
[80]T 18 March 2020 16.

As indicated above, each of the purported Crown leases purports to confer on MAPA exclusive possession of the leased area, albeit only for the purposes of the aquaculture licence. As the plaintiffs emphasise,[81] it is common ground, now, that exclusive possession was not (and is not) necessary for MAPA’s operations under the aquaculture licence; exclusive possession was expressly disclaimed by MAPA when MAPA was applying for the leases, in recognition of existing commercial and recreational abalone fishers; the purported Crown leases would create the only privately owned blocks ever created in the Eastern Zone fishery; and, despite all this, the purported Crown leases were granted without any prior notice being given to the public or to affected interest holders, including the plaintiffs.
[81]Plaintiffs’ 10 January 2020 outline, [4]–[5].

Further, as mentioned above, MAPA has dropped the suggestion that it raised at the interlocutory injunction hearing to the effect that the resumption of the previous access arrangements would hamper or prejudice or threaten its aquaculture operations.[82] MAPA had every opportunity between the time of the interlocutory hearing and the time of the trial to find any evidentiary material that might have justified a submission based on prejudice to its operations. Apparently it could find none.

The first main issue: were the relevant areas covered by the Land Act 1958?

[82]See above n 6.

At the trial, the plaintiffs contended that the Minister had had no power under the Land Act 1958 to grant a lease over the Gabo site or the Tullaberga site to anyone. They submitted that the areas purportedly leased, insofar as those areas were comprised of waters beyond the low water mark, and therefore beyond the territorial limits of the State of Victoria, were not covered by the Land Act 1958. The plaintiffs called this their ‘narrow ultra vires point’.

The plaintiffs acknowledged[83] that, following the decision of the High Court in New South Wales v The Commonwealth (‘the Seas and Submerged Lands Act case’),[84] in which it was held that the boundaries of the former Australian colonies ended at the low water mark and that the States and Territories had no sovereign or proprietary rights in respect of the territorial sea or subjacent soil, the Commonwealth enacted the Coastal Waters (State Powers) Act 1980 (Cth) (the State Powers Act) and the Coastal Waters (State Title) Act 1980 (Cth) (the State Title Act). The plaintiffs further acknowledged that the State Powers Act, by s 5, relevantly confirms that the legislative powers of each of the States extend to the making of all such laws as could be made by virtue of those powers if the coastal waters of the State were within the limits of the State. ‘Coastal waters of the State’ is defined in ss 3(1) and 4(2) of the State Powers Act, and relevantly comprises the territorial sea within the adjacent area in respect of the State out to a distance of three nautical miles, and any sea on the landward side of the territorial sea but not within the limits of the State. So far as the State’s relevant proprietary rights are concerned, s 4 of the State Title Act provides:

The trial judge referred questions of law to the Full Court. King CJ delivered the leading judgment. His Honour analysed Logue v Shoalhaven Shire Council and concluded that all three members of the Court in that case agreed that mere retention of the land with knowledge that the notice was a nullity would not give rise to an equity that would defeat registered title.[225] His Honour also found on the facts that there was no question that Shea had engaged in fraud, oppression, bad faith or a breach of duty as considered by Mahoney JA in Logue v Shoalhaven Shire Council. Indeed, his Honour found:

There is no doubt about the power of the State of South Australia to acquire the land compulsorily. The entire error lay in acquiring the land through the wrong officer of State. Although the registered proprietor is the Director-General, whose name now appears on the title, the proprietor is in reality the State of South Australia.

[225]Ibid 433.

His Honour concluded:

When the arguments are analysed, it appears that the case for the plaintiff can be put no higher than the proposition that in utilizing the machinery of the Land Acquisition Act and in procuring himself to be registered as the proprietor, the Director-General has incurred an obligation in equity enforceable in personam to restore the land to the dispossessed owner, or, to put the matter another way, holds the land as constructive trustee for the dispossessed owner. In my opinion, this proposition stands in plain contradiction of the principle of indefeasibility of the Torrens system title as authoritatively expounded by the cases to which I have referred. It is really an assertion of a claim in equity based upon nothing more than the previous ownership. The basis of such a claim is destroyed by the indefeasibility provisions in ss 69 and 70 of the Act.

Williams J agreed with the Chief Justice. Wells J dissented.

Again, nothing in King CJ’s judgment stands for the proposition that an in personam right enforceable against the registered proprietor of land could never arise from a breach of a statutory process. The basis for his Honour’s judgment was, instead, the proposition that mere notice of a prior unregistered interest cannot impugn registered title. Section 42 of the Transfer of Land Act 1958 on its clear terms would preclude such a claim. The plaintiffs in this case made no argument to the contrary.

Tyre Marketers

Tyre Marketers[226] is a case to which I have already referred on another issue. The plaintiff company was a wholly owned subsidiary of Pacific Dunlop Olympic Ltd, which had formerly been called Dunlop Olympic Ltd. In 1986 it took a lease of certain land from the Crown and registered the lease. In 1987 the defendant company, Alstergren, purchased the freehold of the land from the Crown. Alstergren sought to evict the tenant on the basis that the tenant’s lease was void because it had not complied with s 137 of the Land Act 1958 in 1986 in the course of applying for the Crown lease. The alleged non-compliance was that, in the notice published under s 137, the proposed lessee was wrongly referred to as ‘Dunlop Olympic Limited’ rather than as Tyre Marketers (Australia) Pty Ltd.
[226](Supreme Court of Victoria, Marks J, 10 March 1989).

Marks J expressed doubts as to whether the error could have invalidated the lease, but proceeded on the assumption that it did.[227] On that assumption, his Honour held that the lease was not invalidated by the mistake for two reasons. The first was that a Crown lease could not be attacked other than at the instance of the Crown or, at least, in proceedings to which the Crown was a party. The Crown not having been joined, his Honour held, the lease could not be impugned. Of course, the present case is different from Tyre Marketers in that respect.
[227]Ibid 3.

The second reason the lease was not invalid, in his Honour’s view, was that the lease was registered and indefeasible. After expressing the view that the references to Mahoney JA’s dissent in Logue v Shoalhaven Shire Council by the High Court in Bahr v Nicolay did not go so far as to overrule the majority in Logue, his Honour said of Alstergren’s in personam rights claim:

It is true, I think, that in his dissenting judgment in Logue Mahoney JA found the appellants had an ‘equity’ arising from what he held was a defective statutory notice to pay rates leading to forfeiture of the land and its subsequent registration in the name of the transferee. But even such a circumstance has no parallel with those with which I am here concerned because it might at least be thought that what transpired in Logue was between the parties themselves, the forfeiture being a consequence of the nature and content of written communication by the respondent to the appellants with defective notice (according to Mahoney JA but not the majority) of the rates owing.
The invalidity in this case is said to have stemmed solely from failure to comply strictly with a statutory requirement which did not in any way bear on the agreement comprised by the lease, its terms or any understanding, arrangement or communication between the parties. Moreover, the non-compliance relied on was of very little consequence to anyone as the principal object of s 137 is to ensure notice to the public, particularly those likely to be interested, of the dealing in Crown land. The particulars actually published substantially met that object, the only defect of consequence being that Dunlop Olympic Ltd was said to be the proposed lessee rather than the plaintiff, its subsidiary.
In my opinion, the circumstances here are analogous with those of Assets Company, Boyd, Frazer v Murphy [sic: Walker], and Breskvar which held title of the registered proprietor was indefeasible notwithstanding the registration was consequent on void instruments or invalidity of procedure.

Yet again, as is clear from the above, the proposition that statutory non-compliance could not give rise to an in personam right against Tyre Marketers formed no part of his Honour’s reasoning. Rather, Alstergren’s claimed right in personam failed because it amounted, in effect, to an assertion that the lease was invalid, and no more. That is to say, Alstergren simply failed to make out a recognised basis for an in personam claim.

Canada Bay Council v Bonaccorso Pty Ltd

Neither the State defendants nor MAPA relied on Canada Bay Council v Bonaccorso Pty Ltd (‘Bonaccorso’)[228] in their written arguments on in personam rights. But senior counsel for the plaintiffs addressed the case in oral submissions.[229] So it is desirable for me to deal with it.
[228][2007] NSWCA 351.
[229]T 18 March 2020 46–53.

In that case, a council sold land and the purchaser registered the transfer under Torrens legislation. Section 45(1) and cl 6 of Sch 7 to the Local Government Act 1993 (NSW) together had the effect that the council lacked power to dispose of ‘community land’. The owners of nearby land, Bonaccorso, sought orders amending the Register to show that the council remained the registered proprietor of the land. Bonaccorso succeeded before the Land and Environment Court. The council appealed.

The Court of Appeal held that the land was ‘community land’, and the transfers invalid. Nevertheless, the council submitted, registration of the land despite the invalidity of the transfer rendered the titles indefeasible.

The Court of Appeal considered the critical question was whether the Local Government Act 1993 prevailed over the Real Property Act 1900 (NSW). That is, on the proper principles, did the transfer of land in breach of s 45(1) of the Local Government Act 1993 deny the conclusive nature of the transferee’s title to the land? The Court considered that, on a proper application of the principles of implied repeal, it did not.[230] The Court said:

Thus although the appellant acknowledged that s 45(1) of the Local Government Act had the effect of invalidating the transaction between it and the third respondent, it submitted that any person could have moved the Land and Environment Court for orders restraining the third respondent as transferee from registering the transfer from the appellant and otherwise setting the transaction underlying the transfer aside. However, once the Registrar-General registered the transfer, the indefeasibility provisions of the Real Property Act were engaged and prevented that occurring.
In our view this submission should be accepted. The authorities are clear that a court should read statutes together if it possibly can. Thus we can accept the word ‘sequential’ adopted by Kirby J in Hillpalm insofar as the statutes do have effect sequentially, that is, that up until registration the transaction or transfer is null and void but on registration, as Breskvar v Wall holds, there is virtually a new Crown grant of the fee simple in the land, so that from that moment the transferee obtains a new clean title (see at 438 [45] supra). The result is that the transferee’s title is wholly derived from the act of registration by the Registrar-General and not upon the transfer or the antecedent transaction which gave rise to the transfer.

[230]City of Canada Bay Council v F&D Bonaccorso Pty Ltd [2007] NSWCA 351, [75].

There is a sense in which Bonaccorso does not lock horns with the arguments of the State defendants with which I am presently dealing. The Court, in that case, was not asked to decide whether Bonaccorso (or anyone else) had a right in personam against the transferees as registered proprietors. That question could not have arisen, because the party challenging the transferees’ registered title did not claim entitlement to any private law interest in the land at all. The case concerned only whether statutory non-compliance alone was sufficient to defeat indefeasibility. In that regard, it falls to be considered with certain other cases including Travinto Nominees Pty Ltd v Vlattas,[231] Hillpalm Pty Ltd v Heaven’s Door Pty Ltd,[232] and Horvath v Commonwealth Bank of Australia.[233]
[231](1973) 129 CLR 1.
[232](2004) 220 CLR 472.
[233][1999] 1 VR 643.

As mentioned above, the plaintiffs in the present case did make an argument to the effect that non-compliance with s 137 alone was sufficient to defeat MAPA’s registered title. They said, in written submissions filed before the hearing:[234]

If the decisions to grant the Crown Leases were beyond power or affected by jurisdictional error, the decisions are a nullity and the Crown Leases are void. If there is no valid lease granted under s 134, no interest in land has been created that is capable of being brought under the Transfer of Land Act. The purported leases cannot be transformed into valid leases and made indefeasible simply by the registration of a void instrument. The stream cannot rise higher than its source. Any other conclusion would potentially raise significant constitutional questions.
The position can be illustrated by some examples. If a statute conferred power on a Minister or other agent of the Crown to grant a lease only for a maximum term of 2 years, and the Minister or agent purported to grant a lease for a term of 99 years, it cannot be seriously suggested that the registration of the purported 99-year lease would confer an indefeasible title on the grantee.
…
There are several possible approaches to avoid such unsatisfactory (and possibly unconstitutional) outcomes. One direct approach is to treat the absence of power to grant the lease as going to the root of the interest in respect of which registration is sought, and as an anterior issue to the application and effect of any provisions of the Transfer of Land Act. The operation of the Transfer of Land Act in relation to the initial registration of a purported Crown grant can be distinguished from the application of the indefeasibility provisions to the registration of subsequent dealings in a validly granted title.

[234]Plaintiffs’ 10 January 2020 outline, [97]–[99].

As I have foreshadowed, I consider the plaintiffs in this case have an in personam right enforceable against MAPA. That finding is sufficient to dispose of the case. Accordingly, it is not necessary that I decide this point, though I confess that I find the plaintiffs’ submissions on this point to have at least some superficial attraction. Whether or not the relevant provisions of the Land Act 1958 could be said to effect an implied repeal of the indefeasibility provisions of the Transfer of Land Act 1958 would, of course, fall to be determined on a close analysis of the interaction between those statutes, on their proper construction.

So too with the plaintiffs’ argument, also indicated in the passage from the pre-hearing submissions extracted above and pursued orally and in further written submissions, to the effect that an invalid original grant of Crown land, without more, may not be protected by the Torrens provisions,[235] although an invalid transfer of already-registered Crown land may be protected. It is not necessary for me to deal with that argument, either, although the drastic consequences such a finding might have for the conclusiveness of the Register would seem to tell against it.
[235]The plaintiffs relied in particular on s 8 of the Transfer of Land Act 1958, which provides that ‘[a]ll unalienated land of the Crown shall, when alienated in fee or by way of perpetual lease or for years, be under the operation of this Act’. The plaintiff’s suggestion was that, because of s 8(1), the other provisions of the Transfer of Land Act 1958 only apply to land that has been validly alienated by the Crown.

For present purposes, it is enough to observe that nothing in Bonaccorso stands or could stand for the proposition which the defendants sought to pursue, namely, that a statutory failure can never give rise an in personam right enforceable against the registered proprietor of land.

It follows that I can find no basis in the provisions of the Transfer of Land Act 1958 or the cases on which the defendants relied that would support the defendants’ contention that an in personam right enforceable against the registered proprietor of land can never arise out of a statutory breach.

The plaintiffs’ in personam right

It might perhaps be said that, so far, the analysis above has been unduly narrow in that it has focussed mainly on the State defendants’ conduct, rather than MAPA’s conduct. But that is because it has been necessary to deal with the State defendants’ arguments that the State’s conduct, being conduct of a third party, could not create a right in personam in the plaintiffs against MAPA’s registered interest, and that no such claim could arise out of a breach of statutory duty. As discussed above, in my view, neither of those arguments can succeed.

MAPA’s additional argument, that it could not be held responsible for the State defendants’ administrative law failures, was really another version of the State defendants’ first argument that the Crown was a third party. It also fails as outlined above.

To fully assess whether the plaintiffs can raise an in personam claim enforceable against MAPA’s registered title, it is necessary to examine MAPA’s conduct more closely, in the context of the State defendants’ (now admitted) administrative law failures.

In my view, taken in this way, MAPA’s conduct does give rise to a good in personam claim in the plaintiffs. In particular, in my view, the facts fall within the principles set out by Brennan J in Bahr v Nicolay.[236] I have already extracted relevant portions of his Honour’s judgment in that case above, but they bear repeating. His Honour said:

A registered proprietor who has undertaken that his transfer should be subject to an unregistered interest and who repudiates the unregistered interest when his transfer is registered is, in equity’s eye, acting fraudulently and he may be compelled to honour the unregistered interest. A means by which equity prevents the fraud is by imposing a constructive trust on the purchaser when he repudiates the unregistered interest. That is not to say that the registration of the transfer to such a proprietor is affected by such fraud as may defeat the registered title: the fraud which attracts the intervention of equity consists in the unconscionable attempt by the registered proprietor to deny the unregistered interest to which he has undertaken to subject his registered title.

[236]And see, generally, William Gummow, ‘The In Personam Exception to Torrens Indefeasibility’ (2017) 91 Australian Law Journal 549.

MAPA made and pursued its application to the Department acknowledging that the plaintiffs and other persons in the position of the plaintiffs held rights and interests in relation to the Gabo and Tullaberga sites that would be adversely affected if MAPA were to acquire exclusive possession and MAPA assured the Department that, for that very reason, it did not claim an interest conferring exclusive possession.

The fact that the plaintiffs were not afforded an opportunity to be heard was, at least in substantial part, due to MAPA’s failure to discharge its statutory obligation under s 137. That the State may have indicated that it would discharge MAPA’s obligation for MAPA, but failed to do so, is neither here nor there. By its failure to comply with a statutory obligation owed to the public at large (including to persons in the plaintiffs’ position), MAPA acquired an interest to which it would never have become entitled had it discharged the obligation. And, as already mentioned, I am comfortably satisfied, as a matter of factual causation, that MAPA would not have been granted CMA consent without those assurances; and that, without CMA consent, MAPA would not have been granted the purported leases.

In my view, MAPA’s own acts and omissions amount to a sufficient undertaking by MAPA to the Department not to take the Crown leases without proper notice having been given to parties in the position of the plaintiffs, to fall within the principle described in the extract from Brennan J’s judgment in Bahr v Nicolay extracted above. If it is necessary to find that MAPA’s undertaking involved an obligation on MAPA vis-à-vis the plaintiffs and persons in their position to publish the notices required by s 137, then, as already indicated, I would find that, by force of the statute, such an obligation existed. In my view, it makes no difference that the relevant undertaking has a statutory basis. Equity regards MAPA’s repudiation of the undertaking as unconscientious nevertheless. Certainly, none of the cases to which I was referred by the parties form a basis for saying that the plaintiffs’ in personam claim cannot arise in this way.

That is sufficient to dispose of the remainder of this proceeding. However, some further observations seem to be in order.

Whilst it is often difficult to characterise the different categories of equitable fraud, and equitable principles are by their nature and design flexible,[237] the passage extracted above from Brennan J’s judgment in Bahr v Nicolay appears to align most closely with what has been called the ‘fourth category’ of equitable fraud mentioned in Earl of Chesterfield v Janssen,[238] namely:

A 4^th kind of fraud may be collected or inferred in the consideration of this court from the nature and circumstances of the transaction, as being an imposition and deceit on the other persons not parties to the fraudulent agreement.

[237]See generally, Andrew Phang, ‘Equitable fraud—Some personal reminiscences and reflections’ (2019) 13(1) Journal of Equity 114.

[238](1751) 28 ER 82, 100–101. This principle was recently applied by the Court of Appeal in Argyle Building Services Pty Ltd v Franek [2020] VSCA 196, [55]–[57], [185]–[190].

Although other passages in Brennan J’s judgment appear to suggest that his Honour relied, at least in part, on other categories of equitable fraud, including the one mentioned below, the following passage is to similar effect:[239]

Therefore, although a purchaser who secures registration of a transfer of the fee simple merely with notice of a third party’s right to purchase acquires on registration of his transfer a title freed of any obligation to the third party which equity would otherwise impose, a purchaser who has undertaken—whether by contract or by collateral undertaking—to hold his title subject to a third party’s right to purchase remains bound by his undertaking after registration of his transfer. If he should repudiate the third party’s right to purchase, equity imposes a constructive trust so that the registered proprietor holds his title on trust for the third party to the extent of the third party’s interest.

[239]Bahr v Nicolay (No 2) (1988) 164 CLR 604, 655.

In my view, MAPA’s conduct also falls within another recognised category of equitable fraud. In particular, I consider that the conduct falls within that category of equitable fraud associated with unacceptable use of a statute, and on which Mahoney JA appeared to rely in Logue v Shoalhaven Shire Council.[240] His Honour said, in that case:

The basis for the application of the principles of equitable or constructive fraud in such a case as the present was, in my opinion, stated by Fry J in Kettlewell v Watson[241] … Fry J, in stating the relevant principles, said;[242]
The ground upon which the Courts have relieved against registered conveyances, or even against a prior legal title, seems to me to be fraud. The Court will not allow a man to avail himself of a legal estate which he has recovered, or of the right which he may have under a registered conveyance, when he, at the time he took the legal estate, or at the time of the registration of the conveyance, knew a fact which made it unconscionable for him to take the legal estate or to effect the registration. That unconscionable act requires, of course, the coincidence in the same person of the knowledge and of the act, because, if A knows a thing, and B does something inconsistent with A’s knowledge, there is nothing fraudulent in the Act; but, if A knows something which renders it unconscionable for him to do the act, and he does it, then there is fraud.

[240][1979] 1 NSWLR 537, 553–565.

[241](1882) 21 Ch D 685, 704.

[242]Ibid.

Here, MAPA knew, at least, that it had an obligation to notify under s 137 of the Land Act 1958. Hence, MAPA knew that persons in the position of the plaintiffs had, at least, a legal right to be provided with the requisite statutory notice before any Crown lease could legally be granted to it. Knowing what it did, MAPA’s insistence on the rights it acquired on registration of the lease, was unconscientious and even unconscionable. That conduct was equitable fraud, and gave rise to a constructive trust in favour of the plaintiffs.

The following additional observations of Mahoney JA in Logue, in my view, are apposite. His Honour said:[243]

Coke’s maxim that a man may not take advantage of his own wrong: see Broom’s Legal Maxims, 10^th ed, p 191, bears on this question. It is fully recognized in courts of law and of equity. It is not so much a principle of law as a principle which informs the law, and assists in determining how the principles of law are to be applied in an instant case. It may, in particular, affect the operation or, at least, the interpretation of a statute, and lead to the imposition of rights in equity which, on the face of them, are inconsistent with the right which otherwise would be produced by the statute. In Molton v Camroux[244] the grantee of an annuity sued for the consideration paid for it and alleged, inter alia, that the grant was void. She relied on a statute which provided that, if the annuity was not enrolled, it was void. This was rejected. Patteson J, giving judgment in the Exchequer Chamber, said:[245] ‘The first ground was, that no memorial of the annuity had been enrolled. The case of Davis v Bryan[246] decided, that it was the duty of the grantee to procure the memorial, and that he cannot take advantage of his own neglect to treat the grant as void.

[243]Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537, 557. This principle is quite commonly applied to the construction of legislation: see D Pearce, Statutory Interpretation in Australia (LexisNexis Butterworths, 9^th ed, 2019) [2.61] and the cases there cited.

[244](1849) 4 Exch 17.

[245]Ibid 18.

[246](1827) 108 ER 591.

Here, of course, the plaintiffs rely upon, and have proved, much more than neglect on the part of MAPA. Equity, a fortiori, will not allow them to take advantage of their own wrong.

Conclusion and orders

The practitioners for the parties are invited to consult with each other and to provide to the Court, within 14 days, an agreed form of judgment or order to give effect to these reasons for judgment, and to dispose of the proceeding, including in relation to costs. If full agreement is not reached and communicated to the Court within 14 days, the matter will be listed for a short oral hearing to deal with the outstanding matters.

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Access licences are dealt with by s 38 of the Fisheries Act. The Abalone Fishery (Eastern Zone) Access Licence is a class of licence created by reg 12(c) of the Fisheries Regulations 2009 (Vic) (Fisheries Regulations), which authorises the activity specified in reg 248, including the taking and possession of abalone for sale. Section 38 of the Fisheries Act provides that it is an offence to take fish for sale unless authorised under the Act. Quota units are dealt with largely under ss 65A and 65B. Pursuant to the Fisheries Act, an annual quota for the relevant species is declared by the Minister or delegate for each zone in Victoria (known as the ‘quota order’ or ‘total allowable commercial catch’ (TAC)): see generally Fisheries Act, ss 64, 64A, s 64AB and s 64B; see also s 66C in respect of abalone. Persons holding access licences or quota units in the given zone are permitted to fish the same proportion of the TAC as they hold units of in that zone: see eg Fisheries Act, s 66.

Mr Daniel deposes, at [19] of the First Daniel affidavit, and I accept, that the sea urchin industry is regulated in a fashion that is broadly similar to the way in which the abalone industry is regulated. And see, generally, my judgment in Port Phillip Scallops Pty Ltd v Minister for Agriculture [2018] VSC 589 [30]–[42]; cf Bienke v Minister for Primary Industries & Energy (1996) 63 FCR 567 at 584–585.

[2022] VSC 517

2 September 2022