James Point Pty Ltd v The Minister for Transport
[2015] WASC 323
•2 SEPTEMBER 2015
JAMES POINT PTY LTD -v- THE MINISTER FOR TRANSPORT [2015] WASC 323
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 323 | |
| Case No: | CIV:2812/2011 | 31 JULY 2015 | |
| Coram: | MARTINO J | 2/09/15 | |
| 18 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | JAMES POINT PTY LTD THE MINISTER FOR TRANSPORT THE MINISTER FOR LANDS THE STATE OF WESTERN AUSTRALIA |
Catchwords: | Practice and procedure Defendants' application for summary judgment and to strike out statement of claim Limitation of actions Construction of contract |
Legislation: | Crown Suits Act 1947 (WA), s 6 |
Case References: | Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 Bradshaw v Secure Funding Pty Ltd [2012] QCA 52 Collard v The State of Western Australia [No 4] [2013] WASC 455 Cowan v Martin [2014] NZCA 593 General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 Hammond v Minister for Works (1992) 8 WAR 505 Hunter v Shire of Wagin [2010] WADC 13 Jameel (Yousef) v Dow Jones & Co Inc [2005] QB 946; [2005] EWCA Civ 75 Larking v Great Western (Nepean) Gravel Ltd (in liq) (1940) 64 CLR 221 Pedal Patch Pty Ltd v Gallagher [1999] NSWSC 452 Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 Wardley Australia Ltd v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
THE MINISTER FOR TRANSPORT
First Defendant
THE MINISTER FOR LANDS
Second Defendant
THE STATE OF WESTERN AUSTRALIA
Third Defendant
Catchwords:
Practice and procedure - Defendants' application for summary judgment and to strike out statement of claim - Limitation of actions - Construction of contract
Legislation:
Crown Suits Act 1947 (WA), s 6
Result:
Application dismissed
Category: B
Representation:
Counsel:
Plaintiff : Mr N C Hutley SC & Mr M Hotchkin
First Defendant : Mr P D Evans & Mr A Shuy
Second Defendant : Mr P D Evans & Mr A Shuy
Third Defendant : Mr P D Evans & Mr A Shuy
Solicitors:
Plaintiff : Hotchkin Hanly Lawyers
First Defendant : State Solicitor for Western Australia
Second Defendant : State Solicitor for Western Australia
Third Defendant : State Solicitor for Western Australia
Cases referred to in judgment:
Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27
Bradshaw v Secure Funding Pty Ltd [2012] QCA 52
Collard v The State of Western Australia [No 4] [2013] WASC 455
Cowan v Martin [2014] NZCA 593
General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125
Hammond v Minister for Works (1992) 8 WAR 505
Hunter v Shire of Wagin [2010] WADC 13
Jameel (Yousef) v Dow Jones & Co Inc [2005] QB 946; [2005] EWCA Civ 75
Larking v Great Western (Nepean) Gravel Ltd (in liq) (1940) 64 CLR 221
Pedal Patch Pty Ltd v Gallagher [1999] NSWSC 452
Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165
Wardley Australia Ltd v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514
1 MARTINO J: By an application filed on 30 September 2014, the defendants applied for summary judgment under the Rules of the Supreme Court 1971 (WA) (RSC) O 16 r 1(1), alternatively for an order that the statement of claim be struck out under RSC O 20 r 19(1) or in the inherent jurisdiction of the court, and the action be dismissed on the grounds that the statement of claim:
(a) discloses no reasonable cause of action;
(b) is frivolous or vexatious; or
(c) is otherwise an abuse of process of the court.
2 The application for summary judgment was made outside of the time limited by RSC O 16. Reasons for the delay were contained in the affidavit of Andrew Shuy, Assistant State Solicitor, made 26 September 2014. The action concerns complex matters, the statement of claim has been amended many times and the parties have endeavoured to resolve by agreement the matters in dispute between them. The plaintiff did not oppose the defendants being given leave to make the application out of time. I am satisfied that it is appropriate to give leave to make the application out of time.
3 After the application was filed, various directions have been made and the statement of claim has been amended. The most recent statement of claim is the further re-amended third substituted statement of claim dated 8 July 2015. It is in respect of that pleading that the parties have made submissions on the hearing of the defendants' application. When, in these reasons, I refer to the statement claim, I am referring to the pleading dated 8 July 2015.
4 Submissions made on behalf of the defendants addressed the application for summary judgment and for orders that the statement of claim be struck out on the grounds that it is frivolous, vexatious or otherwise an abuse of process. Counsel for the defendants informed me that the defendants were not pursuing the application to strike out the statement of claim on the ground that it disclosed no reasonable cause of action.
The Operating Agreement
5 A copy of an agreement made 20 December 2000 is annexed to Mr Shuy's affidavit. The agreement is described on its cover sheet and headers as an Operating Agreement. This litigation arises out of the Operating Agreement.
6 The parties to the Operating Agreement are the Minister for Transport (the first defendant in this action), the State of Western Australia (the third defendant) acting through the Minister for Lands (the second defendant) and James Point Pty Ltd (the plaintiff). The plaintiff is described on the first page of the Operating Agreement as the Operator and the third defendant acting through the second defendant is described as the Lessor.
7 The recitals to the Operating Agreement record that the plaintiff had agreed to construct, own and operate a port at James Point and to provide port services at the port on the terms set out in the agreement and that the State of Western Australia would grant to the plaintiff leases and options to purchase in accordance with the terms of the agreement.
8 By clause 2 of the Operating Agreement, the first defendant, pursuant to s 6 and s 7 of the Marine and Harbours Act 1981 (WA), appointed the plaintiff to construct the port and to operate the port as agent of the Department of Transport. Clause 3.1 provided that the appointment of the plaintiff to construct and operate the port under clause 2 was subject to the satisfaction of conditions precedent of the plaintiff satisfying the Department of Transport as to the concept design and the plaintiff providing the security required by the agreement.
9 Clause 4 of the Operating Agreement provided for the design and engineering of the port. Under clause 4.2, the plaintiff was to design the port to be developed in stages as shown in the indicative concept design annexed to the Operating Agreement. Clause 4.3 enabled the plaintiff to apply to vary the development stages and completion dates contained in the concept design subject to the consent of the Department of Transport, which would not be unreasonably withheld. Clause 4.9 provided that no design or drawing, whether annexed to the Operating Agreement or not, created any obligation on the first defendant, the third defendant, the second defendant or the Department of Transport to make land available for inclusion in the port, except as expressly stated in the Operating Agreement.
10 The obligations of the plaintiff were provided for in clause 5. By clause 5.7 the plaintiff was obliged to use its best endeavours to ensure that stage 1 of the port became operational within two years of the Commencement Date, which was defined in the agreement as meaning the date of the last to occur of the conditions precedent contained in clause 3.1, or such later date as may be agreed by the parties. Clause 5.8 provided that if stage 1 was not operational within five years of the Commencement Date then the Operating Agreement would terminate, unless the time had been extended by the parties under clause 4.3. Clause 5.14 provided that the plaintiff 'must promptly and diligently proceed to obtain all required approvals, licences and permits of Government Agencies as may be required from time to time for the construction and operation of the Port and the provision of Port Services'. The term 'Government Agency' was defined in clause 1 as meaning
any government or any governmental, semi-governmental, administrative, fiscal or judicial body, department, commission, authority, tribunal, agency or entity whether State or Commonwealth, including any entity having authority over the activities conducted on the Port Area.
11 Clause 5.15 required the plaintiff to obtain necessary environmental approvals and licenses for the construction and operation of the port.
12 Clause 7 concerned the defendants' obligations. By clause 7.4 the third defendant undertook to provide road and rail improvements required for stage 1 of the port as described in plans annexed to the Operating Agreement or as otherwise might be agreed by the parties. Clause 7.5 was in the following terms:
The State will facilitate the obtaining of all required approvals including environmental approvals and licences of Government Agencies as may be required under the Law from time to time for the construction and operation of the Port but so as not to prejudice the powers and obligations of the relevant Government Agencies.
Overview of the statement of claim
13 Paragraphs 1 to 10J of the statement of claim plead background matters including the identity of the parties, the Operating Agreement, terms of the Operating Agreement, the construction of the Operating Agreement for which the plaintiff contends and matters which the plaintiff contends extended the date by which the Operating Agreement would terminate.
14 In paragraphs 11 to 31A, the plaintiff pleads breaches of the Operating Agreement. Some of those breaches are described in headings as being 'Breach of Road and Rail Improvements Obligation', 'Breach of Facilitation Obligation - MRS Amendment', 'Breach of Facilitation Obligation - LandCorp Land', 'Breach of Facilitation Obligation - Planning Approval' and 'Breach of Facilitation Obligation - Acquisition of Kwinana Bulk Berth 2'. In each reference to a breach of facilitation obligation, the plaintiff contends that there was a breach of the obligation contained in clause 7.5 of the Operating Agreement.
15 The breach described as 'Breach of Facilitation Obligation - LandCorp Land' is pleaded in paragraphs 18 to 22D. The term 'LandCorp Land' refers to land at James Point owned by LandCorp.
16 There are two aspects to the pleading of the facilitation obligation in respect of the LandCorp Land. They relate to the amendment to the Western Australian Land Authority Act 1992 (WA). Until it was amended with effect from 25 December 2004, s 17A of the Western Australian Land Authority Act required LandCorp to obtain ministerial approval to enter into any transaction by which LandCorp agreed to receive or pay in excess of $1,000,000. Following that amendment, LandCorp no longer required ministerial approval to sell or lease land, but the responsible minister could require the board of LandCorp to consult with the minister and the minister could give LandCorp a written direction to sell or lease land.
17 In paragraphs 21 and 21A, the plaintiff pleads that, until 25 December 2004, the second defendant breached and continued to breach the facilitation obligation contained in clause 7.5 of the Operating Agreement by refusing to approve LandCorp entering into a contract to sell the LandCorp Land to the plaintiff.
18 In paragraphs 22C and 22D, the plaintiff pleads that, until 23 October 2012, when the plaintiff says that the Operating Agreement came to an end, the second defendant breached and continued to breach the facilitation obligation contained in clause 7.5 of the Operating Agreement by failing or refusing to consult with the LandCorp board and, if necessary, giving a direction to LandCorp to facilitate the sale or lease of the LandCorp Land to the plaintiff.
19 The plaintiff pleads in paragraphs 32, 33 and 34 that, by breaching the Operating Agreement, other than the breaches pleaded in paragraphs 21 and 21A, the defendants repudiated the agreement and that the plaintiff has accepted the repudiation by its statement of claim dated 23 October 2012, alternatively that the breaches, other than the breaches pleaded in paragraphs 21 and 21A, entitled the plaintiff to terminate the Operating Agreement, which it did by its statement of claim dated 23 October 2012.
20 In paragraph 35, the plaintiff pleads that, by reason of the pleaded breaches, other than the breaches pleaded in paragraphs 21 and 21A, the plaintiff has suffered loss and damage.
Breach of Facilitation Obligation - LandCorp Land
21 The defendants' application is limited to challenging the plaintiff's plea that there was a breach of the facilitation obligation by failing to facilitate the acquisition by the plaintiff of the LandCorp Land. On the hearing of the application and in supplementary submissions made following the hearing, counsel for the defendants confirmed that, in this application, the defendants do not challenge the plaintiff's claims based on the other pleaded breaches of the Operating Agreement. The defendants contend that the plaintiff cannot succeed in its claim that there has been a breach of the facilitation obligation in respect of the LandCorp Land. The defendants also contend that, even if the plaintiff were to succeed in its claims in respect of the other breaches, it could not recover more than nominal damages if its claim in respect of the LandCorp Land did not succeed.
22 I will now refer to the plaintiff's pleading that there was a breach of the facilitation agreement by failing to facilitate the acquisition by the plaintiff of land at James Point from LandCorp in some more detail. For the purposes of this application, except where I indicate otherwise, the factual matters pleaded in paragraphs 18 to 22D, to which I refer in these reasons, were not disputed by the defendants. The construction of the Operating Agreement for which the plaintiff contends and the claims that the defendants have breached the Operating Agreement are disputed by the defendants.
23 The LandCorp Land was not within the area designated as the Port Area in the Operating Agreement. However, the concept design and the layout of stage 1 of the port in Annexure A to the Operating Agreement contemplated development on the LandCorp Land.
24 In paragraph 18G of the statement of claim, the plaintiff pleads that, on the proper construction of the Operating Agreement, the LandCorp Land was necessary for the construction and operation of the port and that the third defendant's facilitation obligation contained in clause 7.5 of the Operating Agreement required it to facilitate the obtaining of 'required approvals' with respect to the sale or lease of the LandCorp Land by LandCorp to the plaintiff.
25 As I have noted earlier in these reasons, until it was amended with effect from 25 December 2004, s 17A of the Western Australian Land Authority Act required LandCorp to obtain ministerial approval to enter into any transaction by which LandCorp agreed to receive or pay in excess of $1,000,000. The Western Australian Land Authority Act does not specify the minister responsible for the Act. In fact, the second defendant was the responsible minister.
26 In paragraph 19A, the plaintiff pleads that, until s 17A was amended, the third defendant could discharge its obligation to facilitate the obtaining of approvals that were required for the construction and operation of the port by the second defendant giving approval to LandCorp to sell or lease the LandCorp Land to the plaintiff and it could not otherwise discharge that obligation.
27 On 22 October 2001, LandCorp recommended in writing to the second defendant that the second defendant approve LandCorp entering into a contract to sell the LandCorp Land to the plaintiff.1 In paragraph 21, the plaintiff pleads that, in breach of the facilitation obligation contained in clause 7.5 of the Operating Agreement, the second defendant refused to grant approval for the sale of the LandCorp Land to the plaintiff and that notice of the refusal was given to the plaintiff by letter from LandCorp dated 24 September 2003. In paragraph 21A, the plaintiff pleads that the refusal of approval was a continuing breach of the obligation to facilitate the obtaining of required approvals which continued until 25 December 2004, and that until that date the second defendant engaged in an act, neglect or default within the meaning of s 6 of the Crown Suits Act 1947 (WA). The defendants describe this as a pleading of the first breach of the obligation to facilitate the obtaining of approvals that were required for the construction and operation of the port pleaded in respect of the LandCorp Land.
28 In paragraph 21E, the plaintiff pleads that, from 25 December 2004, the third defendant was required by the obligation to facilitate the obtaining of required approvals to facilitate the exercise by LandCorp of its statutory power to sell or lease the LandCorp Land to the plaintiff.
29 In paragraph 22B, the plaintiff pleads that the third defendant's obligation to facilitate the obtaining of required approvals required the second defendant to consult with LandCorp and to give written directions to LandCorp to facilitate the sale or lease of the LandCorp Land to the plaintiff, including by granting access to the LandCorp Land for the purpose of such sale or lease.
30 In paragraphs 22C and 22D, the plaintiff pleads that the second defendant failed or refused to consult with LandCorp and to give written directions to LandCorp to facilitate the sale or lease of the LandCorp Land to the plaintiff, that the second defendant thereby breached the obligation to facilitate the obtaining of required approvals which continued until the 23 October 2012 and that until that date the second defendant engaged in an act, neglect or default within the meaning of s 6 of the Crown Suits Act. The defendants describe this as a pleading of the second breach of the obligation to facilitate the obtaining of approvals that were required for the construction and operation of the port pleaded in respect of the LandCorp Land.
31 The plaintiff does not accept that the categorisation of the pleaded breaches of the facilitation obligation in respect of the LandCorp Land as a first breach and a second breach is appropriate. It contends that the conduct pleaded, both before and after 25 December 2004 until 23 October 2012, was part of a continuing failure to facilitate the approval by LandCorp of the disposal of the land.
32 This submission is surprising. James Point does not claim damages in respect of the breach pleaded in paragraph 21A of the statement of claim.
The admissions and contentions in James Point's reply
33 By paragraphs 24(c) and (d) of their further re-amended defence and counter claim dated 17 March 2014, the defendants contend that, by letter dated 12 March 2009, the Minister for Lands wrote to the plaintiff's planning consultants:
(i) noting his understanding that the plaintiff had not yet approached LandCorp to arrange the use of the LandCorp Land;
(ii) suggesting that the entry into a suitable arrangement for the use of the LandCorp Land was a necessary first step in progressing stage 1;
(iii) saying that LandCorp had indicated that it was willing to enter into a long term ground lease of its land on normal commercial terms; and
(iv) recommending that the plaintiff meet with LandCorp to progress commercial and statutory approval matters
and that the plaintiff did not seek or obtain a suitable leasehold interest in the LandCorp Land from LandCorp, but confined its application for development approval to reclamation works in the seabed adjacent to the LandCorp Land so that it did not require LandCorp's signature on any development application form.
34 The plaintiff replies to paragraphs 24(c) and (d) in paragraph 8B of its amended reply and defence to counterclaim dated 1 August 2014. It admits the paragraphs and says that:
1. it wished to purchase the LandCorp Land;
2. it had proceedings on foot to compel its sale to James Point; and
3. the terms of any long term lease could not be negotiated while the defendants refused to acknowledge James Point's right to operate a container port on the land, because without a container port it was not economically viable to construct or operate a port.
The defendants' contentions on this application
35 On this application, the defendants make two contentions concerning the pleaded breaches of the facilitation obligation in clause 7.5 of the Operating Agreement in respect of the LandCorp Land:
1. that any breach is barred by s 6 of the Crown Suits Act 1947 (WA); and
2. that the plea of the second breach is based on an untenable construction of the obligation in clause 7.5.
36 The defendants contend that the pleading of those breaches should be struck out and that the action should not be permitted to continue because the plaintiff has admitted2 that without the LandCorp Land, the port was not economically viable and so the plaintiff could not recover other than nominal damages even if it were to succeed on its other claims of breaches of the Operating Agreement.
Principles to be applied on an application to determine an action summarily
37 A court should not determine proceedings in a summary way except in the clearest of cases. Ordinarily, a party is not to be denied the opportunity to present a case before the court in the ordinary way. Before a case is dismissed summarily, there must be a high degree of certainty about the ultimate outcome of the action if it were allowed to go to trial.3 The caution that needs to be exercised before dismissing a claim summarily applies whether the application is made on the basis that the pleadings fail to disclose a reasonable cause of action, that the action is frivolous or vexatious, that the action is an abuse of process or that summary judgment should be granted.4 However, the exercise of the jurisdiction summarily to dispose of a claim is not reserved to cases where argument is unnecessary. Argument may be necessary to demonstrate that a party's case is so clearly untenable that it cannot possibly succeed.5
38 It is undesirable that limitation questions be decided in interlocutory proceedings, except in the clearest of cases.6
The Crown Suits Act 1947 (WA)
39 Section 6 of the Crown Suits Act 1947 (WA)was repealed on 15 November 2005, but continues to apply to causes of action that accrued before that date.7
40 Until its repeal, s 6(1) was in the following terms:
(1) Subject to the provisions of subsections (2) and (3), no right of action lies against the Crown unless -
(a) the party proposing to take action gives to the Crown Solicitor, as soon as practicable or within 3 months (whichever of such periods is the longer), after the cause of action accrues, notice in writing giving reasonable information of the circumstances upon which the proposed action will be based and the name and address of the party and his solicitor or agent; and
(b) the action is commenced before the expiration of one year from the date on which the cause of action accrued,
and for the purposes of this section where the act, neglect, or default on which the proposed action is based is a continuing one, no cause of action in respect of the act, neglect or default accrues until the act, neglect or default has ceased but the notice required by paragraph (a) may be given and an action may thereafter be brought while the act, neglect or default continues.
42 Whether or not the categorisation of the pleading as two breaches is appropriate if there were to have been a breach that continued after 15 November 2005, then the cause of action would not be barred by s 6 of the Crown Suits Act.
43 A continuing neglect or default is a continuing omission to comply with a continuing duty to act, such that a fresh cause of action is created each day such omission occurs. What constitutes a continuing duty to act is not capable of being answered by a ready definition. It depends upon the nature of the duty. In the case of a contractual duty, the parties' intention will be inferred from the nature and terms of the duty; relevant factors are whether it is to be performed within a time capable of determination, and whether it is capable of being determined over a continuous period.8 If the obligation is to be completely discharged by a single act, the failure to perform gives rise to only one cause of action, although that failure to perform may continue indefinitely.9
44 The defendant's contention that any breach of clause 7.5 is barred by s 6 of the Crown Suits Act and their second contention that the plea of the second breach is based on an untenable construction of the obligation in that clause both turn on the construction of the clause. The first contention relies upon there being a high degree of certainty that the clause is to be construed as creating an obligation that was to be completely discharged by a single act. The second contention relies upon there being a high degree of certainty that the pleading of the breach of the facilitation agreement in respect of the LandCorp Land is dependent upon a construction of the clause which is not open.
Whether there was a continuing obligation under clause 7.5
45 Counsel for the defendants has cited Larking v Great Western (Nepean) Gravel Limited,10Hammond11 and Collard v The State of Western Australia [No 4]12 as examples of cases where the breach of an obligation once and for all has been characterised as giving rise to only one cause of action.
46 In Larking, the obligation was to erect and maintain fences and a gate. No time was specified for the construction of the fences and the gate. The obligation was interpreted as being an obligation to erect the fences and gate within a reasonable time. The failure to erect the fences and gate within a reasonable time was not a continuing breach but a breach once and for all.
47 In Hammond, the Minister was under an obligation to refer to the Governor an application by a person entitled to apply for an option to purchase land which had been resumed for public works but was not being used for that purpose. The Minister's obligation was held to be an obligation to do an act capable of solitary performance within a reasonable time. As the obligation was capable of being completely discharged by a single act, the failure to do so gave rise to only one cause of action.
48 In Collard, the State had a fiduciary duty to the plaintiffs which required the State to provide them with legal advice about possible breaches of fiduciary duties owed to them while they were under the care of the Child Welfare Department. Once the plaintiffs were no longer under the care of the Child Welfare Department the fiduciary duty to provide legal advice would have been met by a single act of engaging a legal practitioner to provide them with legal advice or representation. The failure to do that single act was not a continuing breach of the fiduciary duty to provide the plaintiffs with legal advice.
49 In this case, the obligation in clause 7.5 was an obligation to 'facilitate the obtaining of all required approvals'. The verb 'facilitate' means 'to make (an action, process, etc) easy or easier; to promote, help forward; to assist in bringing about (a particular end or result)'.13
50 In my view, an obligation to facilitate the obtaining of all required approvals is arguably not an obligation that could be completely discharged by a single act. If:
1. on one day the State could do an act which would facilitate the obtaining of a required approval;
2. it did the act;
3. the approval continued to be required; and
4. on the next day the State could do a different act which would facilitate the obtaining of the same required approval
it is arguable that the act done on the first day did not discharge the State's obligation and that the duty to facilitate the obtaining of all required approvals continued to exist on the second day.
51 I am not satisfied to a high degree of certainty that clause 7.5 is to be construed as creating an obligation that was to be completely discharged by a single act.
Whether the plea of the breach of clause 7.5 in respect of the LandCorp Land is open
52 The obligation to facilitate the obtaining of all required approvals was an obligation to make easier or assist in the obtaining of those approvals. In paragraph 18H of the statement of claim, the plaintiff pleads that the exercise by LandCorp of its statutory power to sell or lease the LandCorp Land to the plaintiff was a 'required approval' for the purposes of clause 7.5 of the Operating Agreement.
53 The plaintiff then pleads that, prior to 25 December 2004, the obligation to facilitate the obtaining of required approvals required the second defendant to give approval for the sale of the LandCorp Land to the plaintiff14 and that, after 25 December 2004, it required the second defendant to consult with the LandCorp board and, if necessary, give a written direction to sell or lease the LandCorp Land to the plaintiff.15
54 Counsel for the defendants contends that the pleading of the facilitation obligation in that way is not open because:
1. the obligation to facilitate did not include an obligation to exercise a statutory power of sale or lease;
2. if the parties had intended that facilitation of approval meant grant approval that would have been in impermissible fetter on statutory discretions; and
3. clause 7.5 must be interpreted in the context of clause 4.9 so that in the absence of an express obligation to make the LandCorp Land available the Operating Agreement cannot be interpreted as creating an obligation to do so.
55 The Operating Agreement is to be interpreted objectively having regard to the text, the surrounding circumstances known to the parties and the purpose and object of the agreement.16 The obligation to facilitate was not expressed as an obligation to do a particular act. That does not mean that the obligation should necessarily be interpreted as not including the doing of an act. The obligation to facilitate necessarily had some content. What the content was in a particular situation depends upon the facts of that situation.
56 If, on one construction of clause 7.5, the State was required to do an act to facilitate the obtaining of a required approval, it would not necessarily be an answer to a claim for breach of contract based on the State's failure to do the act that the Operating Agreement did not expressly require the act to be done.
57 The exercise of a power of sale would not, ordinarily, be described as an approval. However, it does not seem to me to be so unusual that I can have high degree of certainty that it could not be included within clause 7.5
58 Clause 4.9 provided that no design or drawing created any obligation to make land available for inclusion in the port, except as expressly stated in the Operating Agreement. The fact that no design or drawing could create any such obligation does not necessarily mean that the obligation to facilitate the obtaining of a required approval could not create such an obligation.
59 I am not satisfied to a high degree of certainty that clause 7.5 cannot be construed as creating an obligation to take the action pleaded in paragraphs 19A and 22B of the statement of claim.
60 The defendants have not established that they are entitled to summary judgment or to have the statement of claim struck out.
Whether action should be dismissed if only nominal damages could be claimed
61 I have concluded that the defendants' application should not succeed. In the course of argument on the hearing of the application, I raised with counsel whether it would be appropriate to dismiss the action if the plaintiff could be entitled to recover nominal damages. At my request, supplementary submissions were filed by the parties on the point.
62 At the hearing, counsel for the plaintiff said that, if I were to be satisfied that the plaintiff could only recover nominal damages, he was sure that the plaintiff would not wish the court to be engaged in hearing a claim for only nominal damages. That was not the position taken by the plaintiff in the supplementary submissions that were filed after the hearing.
63 The plaintiff commenced an earlier action in this court against the same defendants, also arising out of the Operating Agreement - CIV 2529 of 2003. On 23 November 2012, that action was discontinued by a consent order which provided that the costs of that action be costs in the cause in this action. In its supplementary submissions, the plaintiff submitted that a finding in this action that the plaintiff is only entitled to an award of nominal damages would imply that, but for the discontinuance of the earlier action, the plaintiff could have obtained the declaratory and injunctive relief sought in the earlier action, subject to discretionary considerations. The plaintiff submitted, in effect, that even if it were only to be entitled to claim nominal damages, it should be entitled to pursue the claim so that it can argue that it is entitled to the costs of the earlier action.
64 Courts' resources are limited. Courts need to ensure that those resources are used effectively.17
65 There have been cases such as Pedal Patch Pty Ltd v Gallagher18 where courts have expressed the view that it is appropriate to allow a party to pursue a claim for nominal damages. However, this is no longer consistent with the need for courts to ensure that their limited resources are used effectively. The defendants have cited three cases where courts have concluded that claims should be dismissed unless the plaintiff could demonstrate an ability to recover more than nominal damages: Hunter v Shire of Wagin;19Bradshaw v Secure Funding Pty Ltd;20 and Cowan v Martin.21
66 It is my view that those views are consistent with the need to ensure that the court's resources are used effectively. If I were satisfied to a high degree of certainty that the plaintiff could recover only nominal damages in this action, then it would be an abuse of process for the action to be pursued. The fact that if the plaintiff recovered nominal damages it would wish to argue that it would then be entitled to costs of the earlier action would not alter that conclusion.
67 However, for reasons that I have expressed I am not satisfied to that standard that the plaintiff's claim is so limited.
1 Statement of Claim [20].
2 Statement of Claim [18G] and Reply [8B].
3Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 [57].
4Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 [24].
5General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125, 130.
6Wardley Australia Ltd v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514, 533.
7Limitation Amendment and Repeal Act 2005 (WA) s 8(2).
8Hammond v Minister for Works (1992) 8 WAR 505, 511.
9Hammond v Minister for Works (1992) 8 WAR 505, 516.
10Larking v Great Western (Nepean) Gravel Ltd (in liq) (1940) 64 CLR 221.
11Hammond v Minister for Works (1992) 8 WAR 505.
12Collard v The State of Western Australia [No 4] [2013] WASC 455.
13Oxford English Dictionary.
14 Statement of Claim [19A].
15 Statement of Claim [22B].
16Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 [40].
17Jameel (Yousef) v Dow Jones & Co Inc [2005] QB 946; [2005] EWCA Civ 75 [54], [70]; Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 [111].
18Pedal Patch Pty Ltd v Gallagher [1999] NSWSC 452 [11].
19Hunter v Shire of Wagin [2010] WADC 13.
20Bradshaw v Secure Funding Pty Ltd [2012] QCA 52.
21Cowan v Martin [2014] NZCA 593.
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