JL Holdings Pty Ltd v State of Queensland
[1998] FCA 220
•6 MARCH 1998
FEDERAL COURT OF AUSTRALIA
STATUTES - construction of - Land Act 1962 (Q) ss 343, 345 - whether discretion remaining after approval - Acts Interpretation Act (Qld) 1954 ss 4 and 23(1); Cth 1901, s 33(1)) - power to reconsider
ESTOPPEL - in connexion with discretions or powers to be exercised - characterisation as operational/policy decisions- whether may operate when not substantially hindered
ESTOPPEL - requirements of - quality of representation - reliance - continuous state of affairs
FRAUD - requirements of - whether case as pleaded - whether damage follows
NEGLIGENCE - in connexion with exercise of statutory powers - whether duty of care - representations on serious matter - whether continuing duty to warn - misrepresentation of legality of action
BREACH OF STATUTORY DUTY - requirements of duty - right to have the duty performed - intended ground of liability
MISFEASANCE IN PUBLIC OFFICE - duty to perform - requirement of malice or knowledge - dishonesty
STATUTORY DEFENCES - ss 24(10) Land Act 1962 (Q) - bona fide attempt to give effect to legislation - duty
VARIATION - of lease terms approved by Minister - further terms agreed not approved - effect on claims based on lease - whether remedy available.
LEASE - effect in equity - statutory provision withholding validity
AGREEMENT FOR LEASE - parties to - undisclosed principal - trustee as agent
AGENCY - local authority agent - trustee of Crown lands - whether agency consistent with statutory scheme - authority to be inferred - undisclosed principal
INDUCEMENT TO BREACH AGREEMENT - intention to harm - act constituting repudiation - reckless indifference
BREACH OF LEASE - agreement by estoppel - quality of representations - implied terms - same facts to establish estopped and implied terms.
LOSS AND DAMAGE - loss of commercial opportunity - calculation of hypothetical profits - contingencies - whether viable - contingency of exercise statutory power - reliance damage - wasted expenditure
Statutes
Acts Interpretation Act 1901 (Cth) s 33
Acts Interpretation Act 1954 (Qld) s 23, 24AA, 36
Criminal Code 1899 (Qld) s 366
Crown Proceedings Act 1980, (Qld) s 9
Fauna Conservation Act 1974-1989 (Qld) ss 558B, 53, 56
Harbour Act 1955 (Qld) s 79, 86
Land Act 1962 (Qld)ss 24(10), 334, 343, 345, 349,355
Local Government Act 1936 (Qld)ss 19, 19(4B)
Local Government and City of Brisbane Town Planning Act Amendment Act 1985 (Qld)
Mining Act 1898-1967
Queensland Marine Acts 1958-1963 (Qld)
The Constitution Act 1867 (Qld)
Trade Practices Act 1974 (Cth) s 45D
Trusts Act1973 (Qld)
Cases
Allstate Life Insurance Co v Australian & New Zealand Banking Group (1995) 30 ALR 469 Appl
Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth (1977) 139 CLR 54 Cited
Attorney General (NSW) v Quin (1990) 170 CLR 1 Cited
Bargold Pty Ltd v Mirror Newspapers Ltd [1981] 1 NSWLR 9 Appl
BMG Resources Limited v Pine Rivers Shire Council [1989] 2 Qd R 1 Appl
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 Cited
Brickworks Ltd v Warringah Shire Council (1963) 108 CLR 568 Cited
Byrne v Australian Airlines (1996) 185 CLR 410 Appl
Cudgen Rutile (No 2) Pty Ltd v Chalk [1975] AC 520 Cited
Emerald Construction Co v Lowthin [1966] 1 WLR 691 Dist
Export Development Grants Board v EMI (Australia) Ltd (1985) 61 ALR 115 Refd
Gladstone Town Council v Gladstone Harbour Board [1964] Qd R 505 Appl
Grundt v Great Boulder Gold Mines Ltd (1937) 59 CLR 641 Appl
Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR 648 Cited
In Re 56 Denton Road, Twickenham [1953] Ch 51 Refd
Livingstone v Westminster Corporation [1904] 2 KB 109 Refd
Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 Appl
Minister for Immigration and Ethnic Affairs v Kurtovic (1990) 21 FCR 193 Cited
Northern Territory v Mengel (1995) 185 CLR 307 Appl
Palmdale Insurance Limited v Sprenger [1988] 1 Qd R 414 Dist
Price Higgins Fidge v Drysdale [1996] 1 VR 346 Appl
R v Toohey; ex parte Northern Land Council (1980) 151 CLR 170 Refd
Roberts v Repatriation Commission (1992) 39 FCR 420 Refd/Cited
San Sebastian Pty Ltd v Minister for the Environment (1986) 162 CLR 340 Appl
Sanders v Snell (1997)143 ALR 426 Refd
Scarfe v Federal Commissioner of Taxation (1920) 28 CLR 271 Refd
Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 Appl
Southend-on-Sea Corporation v Hodgson (Wickford) Ltd [1962] 1 QB 416 Dist
The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 Appl
The Commonwealth v Verwayen (1990) 170 CLR 394 Appl
Thorby v Goldberg (1964) 112 CLR 597 Refd
Townsville Hospitals Board v Townsville City Council (1982) 149 CLR 282
Trobridge v Hardy (1955) 94 CLR 147 Appl
Walsh v Lonsdale (1882) 21 Ch D 9 Refd
Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387 Appl
Webster v Lampard (1993) 177 CLR 598 Appl
JL Holdings Pty Ltd v State of Queensland
SG 1 of 1994
Kiefel J
Brisbane
6 March 1998
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
SG 1 of 1994
BETWEEN:
JL HOLDINGS PTY LTD
APPLICANTAND:
STATE OF QUEENSLAND
RESPONDENTJUDGE(S):
KIEFEL J
DATE OF ORDER:
6 MARCH 1998
WHERE MADE:
BRISBANE
THE COURT ORDERS THAT:
The application be dismissed.
Further argument as to costs be adjourned to a date to be fixed.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
SG 1 of 1994
BETWEEN:
JL HOLDINGS PTY LTD
APPLICANTAND:
STATE OF QUEENSLAND
RESPONDENT
JUDGE(S):
KIEFEL J
DATE:
6 MARCH 1998
PLACE:
BRISBANE
INDEX
THE ACTION AND ITS BACKGROUND........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...
THE FIRST PERIOD - 1987 TO DECEMBER 1989........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........
JLH’s proposal and events leading to its acceptance........ ........ ........ ........ ........ ........ ........ ........ .
Cabinet “approval”........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........
Negotiating the leases........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....
The Minister’s “approval”........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......
THE SECOND PERIOD - 2 DECEMBER 1989 TO OCTOBER 1991........ ........ ........ ........ ........ ........ ........ ........ ........ .
Early considerations by the new Minister........ ........ ........ ........ ........ ........ ........ ........ ........ ........
Negotiations with the Minister........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........
Consideration by Cabinet - July to 22 October 1990........ ........ ........ ........ ........ ........ ........ .....
Meetings with the Deputy Premier (November 1990 to 10 April 1991)........ ........ ........ ........ ..
Mr Rudd becomes involved: Plans for the boardwalk........ ........ ........ ........ ........ ........ ........ ....
The Esplanade Project goes to Cabinet........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..
The Minister’s decision........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..
THE CLAIMS AND DEFENCES........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..
The claim of fraudulent conduct........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......
The construction of sections 343 and 345 Land Act - whether a discretion under s 345 or power to reconsider
Whether the Minister could be held obliged to endorse - the case in estoppel........ ........ ........ ..
The claim in negligence........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..
The claim of breach of statutory duty........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......
The claim of misfeasance in public office........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .
The Statutory Defences........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .
The Deed of Variation........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...
Whether lease effective without endorsement under s 345........ ........ ........ ........ ........ ........ .......
The claim on the agreement for lease........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......
The claim of inducement to breach agreement for lease........ ........ ........ ........ ........ ........ ........ ...
The claim of breach of lease........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...
The claim of defamation........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .
ASSESSMENT OF LOSS AND DAMAGE........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....
Approach to assessment of damages - loss of profits........ ........ ........ ........ ........ ........ .......
Loss of profits - method of calculation........ ........ ........ ........ ........ ........ ........ ........ ........ .......
Revenue and expenditure - generally........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....
Revenue - the themed attractions - constraints identified........ ........ ........ ........ ........ ........ .......
Revenue - the food and beverage outlets........ ........ ........ ........ ........ ........ ........ ........ ........ ......
Revenue - the retail outlets........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...
Summary (of Revenue)........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........
Costs and operating profit........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....
Conclusions on project - profit or loss?........ ........ ........ ........ ........ ........ ........ ........ ........ ........
Further constraints as contingencies........ ........ ........ ........ ........ ........ ........ ........ ........ .......
Cost of construction and fitout........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....
Finance........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......
The prospect that the reserves (and their leases) be cancelled........ ........ ........ ........ ........ .......
Whether necessary approvals for the fauna park would have been granted........ ........ ........ ....
Whether approvals for ferry terminals and wharf facilities would have been provided......... ....
Whether liquor licences would have been granted........ ........ ........ ........ ........ ........ ........ ........ .
Whether compliance with the requirement that an alternative boat ramp be provided, was possible
Whether the fauna park and aviary were viable........ ........ ........ ........ ........ ........ ........ ........ .....
Conclusions on the further contingencies........ ........ ........ ........ ........ ........ ........ ........ ........ .......
ALTERNATIVE CLAIM - WASTED EXPENDITURE AND LIABILITIES INCURRED........ ........ ........ ........ ........ .
FURTHER ALTERNATIVE CLAIM - ALTERNATIVE PROJECTS........ ........ ........ ........ ........ ........ ........ ........ ........ ..
ANOTHER APPROACH TO DAMAGES - VALUE OF THE LEASE........ ........ ........ ........ ........ ........ ........ ........ ........
SUMMARY AND ORDERS........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
SG 1 of 1994
BETWEEN:
JL HOLDINGS PTY LTD
APPLICANTAND:
STATE OF QUEENSLAND
RESPONDENT
JUDGE(S):
KIEFEL J
DATE:
6 MARCH 1998
PLACE:
BRISBANE
REASONS FOR JUDGMENT
THE ACTION AND ITS BACKGROUND
In 1987 the Brisbane City Council (“the Council”) acquired freehold land at Kangaroo Point situated at the northern end of the base of the Kangaroo Point Cliffs and adjacent to the Brisbane River. The land and cliffs had been hewn by quarrying activities many years before. A view of the cliffs can be gained from some points in the City of Brisbane. Two buildings had been much earlier constructed on the land, and they had been used as naval stores. This land is referred to in these reasons as “the ONS site” (the Old Naval Stores site).
To the south, upstream and abutting these lands, were vacant lands. In 1976 they had been reserved from Crown lands and set apart for park and recreation purposes under the Land Act 1962 (Qld)under the control of the Council as trustee. Reserve 2721, containing an area of 2.378 ha, adjoined the ONS site. The substantial part of the Kangaroo Point Cliffs lay behind these lands. Reserve 2713, some 2.27 ha in area, continued on from the southern boundary of Reserve 2721 and underneath the Captain Cook Bridge near Ellis Street. The “reserve lands”, as I shall call both reserves, were long, narrow and irregular in shape. Only Reserve 2713 had a road frontage. The ONS site had none, and vehicular access to it was possible only through the reserve lands.
Part of the reserve lands contained a body of water which had been created, in relatively recent times, when an existing depression was opened to the waters of the river. A boat ramp was its only facility. Like the naval stores buildings themselves, it had not been well maintained over the years. This body of water was referred to variously in the proceedings as “the boat basin”, the “boat harbour” and “the naval lake”.
By a process initiated by the Council in 1987, the applicant J L Holdings Pty Ltd (“JLH”) came to be accepted as the “preferred developer” of the ONS site owned by the Council. In January 1989 the Cabinet of the then government gave approval to JLH’s proposed development. The status of that decision, and the nature and extent of the development to which it had regard, is in issue. The possibility of using the adjoining reserve lands, at least to enable vehicular access, had been flagged by the Council in its invitation to tenderers. JLH’s proposal went further and proposed the use of the reserve lands for restaurants, retail uses and carparking, together with use of the boat basin. Its overall proposed development also included a fauna reserve, aviary, and theatres. A ferry from the city was to be provided as one of the principal modes of access.
After Cabinet’s approval, a lengthy period of negotiation followed between the Council, JLH and the Lands Administration Commission, (the “LAC”), the authority charged with administration of reserve lands under the Land Act 1962 (Qld), subject to the Minister. That Act prohibits the leasing of reserve lands by the Council, the trustee, without the approval of the Minister responsible, then the Minister for Land Management. It is alleged by JLH that it was given such an approval either by the Cabinet decision in January 1989 or by the Minister in October 1989. Whether that approval was given, as required by s 343 of the Land Act, is in issue. A letter of 26 October 1989 from the LAC to the Council advised that, subject to some amendments and other requirements, a lease of the reserves would be allowed, and should be lodged with the Minister for his consent. Another section of the Land Act s 345, requires the Minister’s endorsement of approval on the lease itself, and without it a lease is to have no effect. Although JLH points to the possibility that this might have been attended to, no document can now be produced with such an endorsement and JLH concedes that it is unable to establish that it did occur. In December 1989 a change in government took place.
There had been opponents of the project. The new Minister for Land Management in the “Goss government” met with some of them and with Mr Mantle, the driving force behind JLH, in early 1990. Discussions towards some compromise continued. In the process, potential legal problems with the proposed leases of the reserve lands were highlighted. The matter finally came back before Cabinet on 22 October 1990 when it resolved that a restricted form of development could continue downstream from, but not including, the boat basin with only limited use to be made of the reserve lands and that only permits, and not leases, would issue. The prospect of litigation was raised. Negotiations were then held between JLH and the Deputy Premier and continued through to April 1991.
At about the same time a proposal for a development of the river bank, which included a fixed public boardwalk, was being investigated. Those concerned with it included the Deputy Premier and the Director-General of the newly formed Office of Cabinet. In July 1991 Cabinet decided that the “Kangaroo Point Esplanade Project”, as it had been named, ought to proceed and that JLH be advised that approval to its leases would not be forthcoming. These courses of action were not the subject of immediate implementation. Following legal advice JLH was permitted to provide written representations. On about 9 September 1991 the Minister for Land Management is said to have decided to decline the necessary endorsement to the leases of the reserve lands under the Land Act. JLH and the Council were so advised on 4 October 1991.
The central issues in JLH’s case are whether the provisions of the Land Act obliged the Minister to endorse the fact of earlier approval, or whether he might be regarded as having done so by being held to a representation that it had been approved and that endorsement would be forthcoming. The respondent’s answer is that there was a complete discretion under s 345 to refuse and that no estoppel can be raised against the exercise of that discretion. Additionally, and following further leave to amend having been granted, the respondent contends that in any event what was put forward for endorsement was not a document in the terms allegedly approved by Mr Harper in October 1989.
JLH further alleges, in the alternative, negligent misstatement, breach of statutory duty and misfeasance of office on the part of the Minister for Land Management. Damages are also sought on the basis that the agreement for lease between JLH and the Council bound the respondent, as undisclosed principal, to provide the endorsed lease of the reserve lands; alternatively that the Council was induced to breach that agreement; and further that a lease of the reserve lands can be taken to have had effect at law, despite provisions of the Land Act to the contrary, and that the respondent breached that agreement by refusing to endorse approval.
Issues relating to the Minister’s obligations were not pursued at an early point and questions arise out of that. These proceedings were not brought until 1994. JLH counters with a claim based upon the alleged fraudulent conduct of the Premier, the Director-General of the Office of Cabinet and the Department of Lands and the Minister for Land Management, in 1991. It alleges that it was deceived into believing the Minister would consider its representations for endorsement, in circumstances where a decision had already been made that JLH’s proposal was not to proceed and an esplanade project would instead, and that it was being implemented. As a result JLH alleges it was placed in a position where the prospect of successful litigation had been lost, because at the time it was advised of the Minister’s decision, the public works in the esplanade project were about to commence.
In each of these claims JLH is alleged to have lost the opportunity to make profits out of the development. Its claims range between $37M and $48.5M. A number of issues arise in connexion with the prospect of the development being able to proceed, even with a lease of the reserves, and its viability.
Each of the claims referred to was pursued to submissions. A claim for defamation, arising out of statements made by the Deputy Premier concerning Mr Mantle in November 1991 although barely touched upon in the hearing, is also pursued. The only claims abandoned by JLH during the hearing were those for breach of copyright, civil conspiracy and one brought under s 45D Trade Practices Act 1974 (Cth). Proceedings against Southbank Corporation were also discontinued.
As will be observed from this outline, the history of the matter falls into two periods, the division of which is marked by a change in the government. I shall deal with the factual background in that way.
THE FIRST PERIOD - 1987 TO DECEMBER 1989
JLH’s proposal and events leading to its acceptance
When the Council determined to purchase the ONS site from the Commonwealth, it had in mind putting the land to some tourist or recreational use. In order to facilitate such a development it intended to obtain tenure to the adjacent land below the high water mark, including wharf structures, and obtain a practical means of access to the site through the reserve lands. The last mentioned matter was unresolved in August 1987 when the Council issued an invitation to tender for the lease and the development of the ONS site. The lease offered was for 30 years. Tenderers were advised that the use of the site was required to have the river as its focus, to involve cultural, tourist, recreational and entertainment uses and that preference would be given to proposals which provided access to the site by alternative transport, for example by trams or ferry. The successful tenderer was to be responsible for the repair, restoration and ongoing maintenance of the naval store buildings and the wharf structures. With respect to the question of vehicular access to the site, the Council informed tenderers that they were to be responsible for making application to the State Government to obtain a right of access through and carparking on the reserve lands. Although the tender process was never concluded by acceptance of one tender, mention needs to be made of certain conditions of the tender, which are relied on by the respondent as identifying what JLH’s proposal must have incorporated. This has particular relevance to the question of damages. The form of tender was, by the conditions, required to be accompanied by:
“(a)all plans, specifications, documents, drawings and other details necessary to fully and accurately describe to the Council the works proposed to be effected by the Tenderer;
(b)full and accurate particulars as to the nature, extent, quality, standard and construction thereof;
(c)a statement from the Tenderer’s financiers as to the Tenderer’s financial position and the methods by which the works proposed to be effected by the Tenderer will be financed.”
The tenders closed on 2 September 1987.
Prior to tenders being called, and in about June 1987, Mr Mantle of JLH had discussed ideas for the site with the then Lord Mayor, Alderman Atkinson. It is not necessary to detail just how Mr Mantle became interested in the site and a prospective development of it. Mr Job, an architect, had drawn his attention to it and suggested a mix of uses which he considered would provide an attraction different from what was then available. At a meeting with the Lord Mayor, Mr Mantle produced a brochure which contained elements of the ideas. A similar brochure was also included in JLH’s tender documents.
The documents forming part of JLH’s tender were the documents entitled “Tender”, a series of elevations and plans, a videotape and an amended form of the brochure referred to above. The content of a tender is, of course, usually detailed and sufficient to permit a contract to come into existence between the parties on acceptance. JLH’s proposal, whilst wordy and containing many figures and projections, was more in the nature of an outline with respect to the built form. A number of prospective areas and facilities were listed and some, but not much, detail was given of them. Some of them came to be changed later. Just what it was that JLH intended, and was able, to build and provide on site, within the parameters of what had been agreed with the Council and the respondent, is very much in issue in these proceedings.
The plans which were forwarded with the tender comprised a “Development Plan” and what were described as two floor plans of buildings on the site. The former showed the position, in general terms, of the proposed facilities. They included elevated walkways, waterfalls, nocturnal forests, restaurants and retail shops, theatres, fauna reserve, nature park, a koala house or hospital, an adventure playground, a barrier reef theatre, island, picnic and a carpark. The plan also contained an elevation from the city and small sections through four parts of the site. The floor plans of the restaurant, retail and function rooms were indicative.
The construction of the buildings and other facilities was said to cost $20M and to require six months for construction “from vacant possession and approval received from all local and government authorities”. The only reference to the method of financing was the nomination of Development Equity Corporation as either having a vested interest in the tender, or as financing it. In addition to nominating a premium, JLH suggested two alternative approaches with respect to rental. The rental was said to be calculated by having regard to the value and negative and positive aspects of the site. The latter is said to bear upon Mr Mantle’s later evidence as to features of the site. The document observed that the site had poor access but that it was thought that JLH’s treatment of the site could overcome the problem; that it was vulnerable to flood; and that because of the western aspect of the site, it would become very hot, particularly during summer afternoons. As a consequence, it was said, JLH had allowed a substantial budget for landscaping and waterfalls and all buildings were to be airconditioned. In summary, it was said that the site did have some inherent problems, which was probably one reason why the site had not previously been developed. On the other hand, it went on, the site had a superb position, close to the central business district and was accessible from it. The view of the site from the city, with the cliffs behind, was said to be a positive feature, as was the historical significance of the cliffs.
The “strands of income” identified were principally from four sources: the fauna reserve and aviary, the food and liquor outlets, the theatres and the retail facilities. It was considered that some of the regular patronage, such as that to the restaurants, function rooms and tavern, would be independent of the other attractions. Substantial entertainment was proposed and the design was to be of “world class standard”. It appears that a high level of staffing was proposed.
With respect to transport, JLH undertook to build two major terminals for tourist boat operators and ferry operators and was said to be enthusiastic about linking with a full scale tram and other modes of transport.
In the section entitled “features of old naval stores as a major tourist attraction,” it was said that “both in design, construction and on-going management, there will be a commitment to excellence”. What was then listed is pointed to by the respondent as bearing no resemblance to that which is now said by JLH to be the proposal it would have proceeded with. I shall deal with the differences pointed to later in these reasons. In the tender documents there were references to outdoor cooking by experienced chefs; the tavern being the “best venue” of any tavern in Australia; the landscaping and wildlife environment the “finest in Australia”; the theatre being an “omnimax” theatre with software and film especially commissioned for the project; there being a “stunning display” of opals in the opal mine and film theatre and polishing room; a budget of $1.5M being provided for the restoration and furnishings of the naval store buildings; a mini-tram and river ferry being provided and that the facilities would remain open all year. The landscaping was said to include the creation of a “barrier reef island”. There were to be two orientation theatres: a fauna theatre and a barrier reef theatre. A theatre was also to be associated with the aviary which was to contain “up to 2000 species of birds”.
The animals said to be included in the fauna reserve were koalas, platypus, wombats, echidnas, wallabies, possums, dingoes, kangaroos, crocodiles, snakes, lizards and nocturnal animals. Access to the koalas was proposed by walkways into the treetops, so that visitors could be photographed alongside them. JLH was said, however, to be conscious of interaction with koalas such that they would not suffer stress.
The respondent points to the tender documents as promising a level of opulence that is not to be found in what is now costed by JLH as its proposal for the reason, it says, that what is contained within the tender documents could never have been built for the prices upon which JLH based its feasibility studies and projections. For example, in the tender documents, it was said that the function rooms would contain beautifully restored antiques; the tables of the restaurant were to be polished marble and granite; chairs were to be especially designed cast iron chairs; display cabinets were to be faced with curved blocks of granite and marble and drinks - serving bars were to be bullnosed granite or marble.
The brochure submitted as part of the tender documents entitled “A Salute to Brisbane”, contained an artist’s impression of the finished development, and of the modes of transport to and within site - a ferry and tram. Three orientation theatres, with substantial services, were displayed, as was an “experience theatre” which was said to involve more than the visual sense. A musical playground was shown. The brochure tended towards exaggeration. For example the birdlife was said to include not only rare or unusual birds, but also brolgas which were to appear in “wetlands”. The promotional style of the brochure, replete with overstatement, would have been apparent to most. Similar comments could be made about the video which accompanied the tender. More to the point, perhaps, is that it referred to some features which were later jettisoned - for example the opal mine, the experience theatre, the extent of staff and the musical playground. The range of animals to be displayed did not later include dingoes, crocodiles and the like and there was not to be research into koala diseases, although I accept that it may have been hoped that some such features could be included when the final detail of the proposal came to be resolved. Overall the proposal at this point was, I accept, largely conceptual and could be described only in general terms by reference to proposed uses and features of construction.
On 19 September 1987, and before any decision had been made by the Council on the tenders, fire destroyed part of the naval stores buildings. As a result the Council sought tenders again, taking into account the change of circumstance. The second invitation and JLH’s tender in response, made on 10 November 1987, were in substantially the same terms.
The second tenders closed on 11 November 1987. Later that month the Lower River Terrace Committee (the “LRT” Committee) recommended, in its report to Cabinet, that it await Council’s selection of tender before it made recommendations as to the development of the Crown lands nearby. However, the prospect of the Council being able to accept a tender faded. Many of the tenderers had identified the reserve lands as necessary to their proposals, and on 29 December 1987 the Council wrote to the LRT Committee about it. In January it wrote to the LAC and a meeting was arranged.
On 28 January 1988 Mr Mantle wrote to the Chairman of the LAC, Mr Baker, seeking favourable consideration of a suitable leasing arrangement of the reserve lands which would permit his project to proceed. In this endeavour he utilised the services of a firm of lobbyists. On 2 February 1988 an officer of the Council and two officers of the LAC met. In connexion with the indications sought by the Council as to commercial development of the reserve lands, Mr Jones of the LAC advised that there had not been approval of prior proposals involving carparking and access on and through the reserves and that the Brisbane River Committee had previously opposed carparking in this area. Mr Jones advised that he would be reluctant to present the matter to Cabinet again without some new information and suggested that the Council make available to the LAC those parts of the tenders which referred to the reserve lands together with the Council’s views, as trustee, with respect to those uses, and that it request consideration of the matter. Mr Jones then undertook that, if further consideration was warranted, the matter would be brought to the attention of the Minister to consider referral to Cabinet. In accordance with that suggestion the Council wrote on 16 February 1988 enclosing four tenders. It advised that it offered no objection to the concepts of developments contained in them and concluded by saying that the matter was submitted “to your Commission for consideration of the four tenders submitted”.
On 22 February 1988 Cabinet had before it a report of the LRT Committee dated 18 February 1988. It advised that the Council had made no final decision on the tenders since they involved use of the reserve lands and that the views of the Crown were sought. It noted the LAC’s concerns about making available public land in connexion with commercial redevelopment. So far as concerned the LRT Committee’s criteria for redevelopment of the area, only the proposal by JLH and one other met them, although it indicated problems that JLH had with its proposal. Cabinet decided that the LAC ought give consideration to a further submission which was to be made by the Council and that it continue to liaise with other departments concerning any proposed development by a tenderer “chosen by Brisbane City Council” and that a further report then be submitted to Cabinet by the Minister for Land Management.
On 30 March 1988 the LAC wrote to the Council, in response to the latter’s letter of 16 February 1988 advising that the Commission did not wish to influence the Council’s decision-making in selecting a preferred developer, but suggested two options. One involved an alteration of the tenure of that part of Reserve 2721 which was situated north of the boat basin to permit carparking. The alternative was to freehold the land and grant to the Council the balance of the reserve lands, to be retained for public purposes and facilities, and subject to any constructed access through the lands remaining open for public use. These were said to be alternatives which the LAC might recommend and put before the Minister for his consideration.
On 2 August 1988 the Council resolved to reject all tenders but to nominate JLH as the preferred developer “for negotiation purposes with the view to Council seeking approval under s 19(4)(b) of the Local Government Act 1936 (Qld) in due course to allow 30 year development lease of the site” and that prior to Council seeking such an application, JLH was to be given such time, as might be agreed, to make arrangements with the Crown for tenure over the reserve lands. The reference to “19(4)(b)” was to section 19(4B) of the Local Government Act which provided that the Governor-in-Council may on the Minister’s recommendation, grant approval to a local authority to enter into a contract which the Governor-in-Council considers to be for major development works that are proposed on land vested in or under the control of the local authority. JLH and Mr Mantle were advised of this decision by letter dated 15 August 1988. By that letter the Council also advised that it would consent to any changes with respect to the reserve lands and would grant a lease, subject in both cases to Crown approval. Mr Mantle had been informed of JLH’s appointment on an earlier occasion and had written to some Ministers and to the Chairman of the LAC on 29 July 1988 asserting that JLH had been declared the successful tenderer and seeking support for what was described as a major tourist development. On 2 and 3 August 1988 respectively, Mr Mantle’s lobbyist and Mr Mantle contacted the Minister for Land Management with respect to the project, and sought his early consideration of it.
Cabinet “approval”
Some months earlier Cabinet had appointed the Kangaroo Point Cliff Committee (“the Committee”), an interdepartmental committee, to consider a co-ordinated development plan for the whole of the riverbank and cliff face area at Kangaroo Point. On 19 September 1988 that Committee met. Mr Mantle, Mr Job and their lobbyist attended and gave a presentation to the meeting. One question asked of them concerned the number of carparks intended to be provided and Mr Mantle advised between four and six hundred. The development, the Committee was informed, would cost $20M. The height of structures was also discussed by members of the Committee, who appear to have been of the view that they ought to be restricted to the height of the naval store buildings. This had the result that the omnimax theatre could not be included in the proposal. Subsequent to that meeting Mr Mantle engaged a surveyor and had discussions with members of the committee concerning the number of carparks. It was ultimately agreed that there be 250 carparks in stage 1, and that a further 150 be provided for in stage 2, in case of demand. The concept of free ferries running was also raised, according to Mr Mantle’s evidence, in these discussions. The revised plans were said to have been presented to the Committee at the next meeting on 12 October 1988.
On about 23 November 1988 the report of the Committee was provided to Mr Mantle. It advised that the modified design plan submitted by JLH over the reserve lands was suitable and recommended that the Minister for Land Management give approval to the Council to lease these reserve lands under the provisions of the Land Act. The Minister, Mr Glasson, submitted the report to Cabinet together with a recommendation that the Kangaroo Point Association (“the KPA”), which had expressed concerns about the proposal but had not been made aware of the recommendations, be advised of relevant parts of it. That submission was accepted. In the meantime Mr Mantle wrote to the Premier seeking his assistance.
In November 1988, Mr Mantle instructed his solicitor, Ms Hart, to prepare Heads of Agreement. A series of drafts were produced and discussed between JLH and the Council. By the end of November the Council was of the view that agreement in principle had been reached and resolved to apply for both the s 19(4B) approval and that necessary under the Land Act.
On 8 December 1988 the view of the KPA, that the use of the reserve lands as public lands be retained except for some carparking adjacent to the naval store buildings, was put before Cabinet. The Minister for Land Management recommended that the LAC be authorised to negotiate further with JLH for a less intense use of part only of Reserve 2721, which would include elimination of the theatres and waterfalls, with a view to the possible issue of a lease of a minimal area of the reserves in terms of s 343 of the Land Act “from Brisbane City Council as trustee of the reserve to the developer”. That recommendation was accepted.
In letters by Mr Mantle to Ms Nelson of the Brisbane River Committee and by the lobbyist to the Premier in late 1988, reference was made to the considerable monies already expended by JLH, and in particular with respect to architectural planning documents, and they pressed for the matter to “advance to lease determination and Council consideration”. Mr Mantle also made complaints about the LAC. On 23 December 1988 Mr Mantle and Mr Job met Mr Jones of the LAC. Notes of the meeting record Mr Jones as saying, at the outset, that whilst Council was the trustee of both reserves, “the Crown retains control of those lands …”. JLH was recorded as accepting the inevitability of two leases, one with respect to the ONS site and one with respect to the reserve lands, although Mr Mantle had said that it would prefer one landlord. The Cabinet concerns, of which Mr Mantle was made aware, related to the continued use of the cliffs by rock climbers; carparking; the height of buildings; and the size and volume of the waterfalls.
Mr Mantle then travelled overseas. There are claims with respect to the cost of this travel, which was said to be associated with aspects of the project. On 29 December 1988 the Council wrote to the LAC seeking authority, in accordance with sections 343 to 350 of the Land Act, to lease Reserve 2721 and part of Reserve 2713 on terms and conditions to be approved by the Minister for Land Management and advising that an application would be made to the Minister for Local Government for an approval under s 19(4B) for the Council to enter into a 30 year development lease of its own freehold land and the abovementioned reserve lands necessary to contain the development. JLH relies upon this letter as disclosing “the proposal as presently submitted” to Cabinet. In it the Council referred to its earlier resolution, in August 1988 that JLH be nominated as preferred developer in relation to a 30 year development lease of freehold Council property known as the ONS site; that as part of the proposal JLH desired to develop a unique park and environmental reserve on adjoining land held in trust by the Council - the whole of Reserve 2721 and part of Reserve 2713; that negotiations with JLH resulted in agreement in principle as to the desired form of development which, in turn, would conform with town planning requirements; that authority was sought under sections 343 to 350 of the Land Act for approval of a lease for a period of 30 years and that approval under s 19(4B) would be sought.
Mr Jones of the LAC had requested further information for submission to Cabinet and on 10 January 1989 Mr Job provided it. His letter dealt with the carpark, boat ramp, tram, waterfalls and landscaping. This letter was put before Cabinet by Mr Glasson as part of the submission. After outlining JLH’s proposal three options were suggested to Cabinet:
“(a)to reject entirely the concept of commercial usage of the reserved land at the base of the Kangaroo Point cliffs in association with the proposed redevelopment of the Old Naval Stores;
(b)to approve the proposal as presently submitted by the Council and the preferred tenderer; and
(c)if the concept of such usage of the Crown Land is acceptable to Cabinet, for the reasons expressed in this submission, to reject the proposal by the preferred tenderer to enable Council to recall tenders to give an opportunity to other would-be tenderers to include the Crown land in their submissions. The Land Administration Commission prefers this option.”
Mr Glasson said in evidence that he was aware of the extent of opposition to the proposal and he was personally opposed to it because it used public land for private gain. This does not appear to accord with the understanding of officers of the LAC, but nothing turns upon it. In any event Cabinet resolved:
“That approval be given to the proposal as presently submitted by the Brisbane City Council and the preferred tenderer”.
The submission by the Minister to Cabinet detailed the result of discussions had with Mr Mantle and Mr Job. The carpark, which was drawn on a “concept plan” showing Reserve 2721, was to provide initially for 200 cars, with footway and bike track along the riverfront, and barbecue areas and landscaping for public use. Access to the cliff face and roadway through the reserve lands were to be retained as open to the public. The lake in the development was to be formed by sealing off the existing “marina”. JLH was said to propose running “an old Brisbane tram” from the carpark along the river to the naval stores. Earlier documents, associated with the tender, had referred to a scaled down version. Between the naval stores and the lake there were proposed to be some “low profile” buildings, housing, the theatres, gift shops and public toilets. The waterfalls were now to be “soft” and “mist-like”. The area would be heavily landscaped with well advanced trees and it was proposed to spend some $3M on landscaping.
The Cabinet press release with respect to the decision stated that Cabinet had approved the Council issuing a lease over the Crown reserve lands to allow the $20M redevelopment proposal by JLH to go ahead. The respondent’s case is that the decision of Cabinet was only one of political support or an “in principle” decision. JLH refutes this and says that it was this decision which set the whole matter in train. It was the “go ahead” for the development and stood as a representation to it that a lease would be issued. Mr Mantle says that he also believed it meant that all necessary approvals would be forthcoming. If that were the case, many areas of discretion were said to be overborne. Statements made by Mr Mantle, in the course of the negotiations which followed, do not however bear out the existence of such a belief. It may be, of course, that Mr Mantle and Mr Job did not foresee any difficulty with respect to the necessary approvals, in particular because JLH had the support of Cabinet for the proposal, at least until the government changed.
Mr Mantle was interviewed by a local newspaper on 20 January 1989, which reported him as saying that he expected the development to be completed by late 1989 or early the next year “depending on approvals” (which I take to refer to the timing of the approvals and not to the likelihood that they would issue). The letter to JLH from the LAC however advised of the terms of the Cabinet decision and that a draft of Council’s intended lease would soon be lodged with the LAC for due consideration “in accordance with the relevant Land Act provisions”. Mr Mantle said that he believed he had binding agreements in place and that the government was obliged to honour them and proceed. I do not have difficulty accepting that Mr Mantle believed, at this point, that a lease would issue. Mr Mantle held a degree in law, although he had not practised. But regardless of his understanding of legal matters, I consider it less than likely that he turned his mind to whether he had a binding contract with either the Council or the government. There was at this early stage, and when all was going well, no reason to think the project would not be realised.
The letter forwarded by the LAC to the Council on 23 January 1989 was in somewhat different terms and advised that, since Cabinet had approved the proposal, “the Section 343 lease Council proposes is allowed and Council should now proceed to lodge a draft of its intended lease for due consideration of the terms and conditions thereof.” The matters which it went on to list as necessary to be dealt with in the draft were those relating to the carpark and other aspects of the proposal which had been referred to in the Minister’s submission to Cabinet. Most of them were connected with the reserve lands, and no doubt addressed, to some extent, objections made. Mr Mantle said he was shown the letter at the next meeting held with the Council, but I do not think that takes the matter any further. He was sufficiently experienced as a businessman to know that leases which parties were willing to give usually eventuated after discussion of the terms and conditions.
In the case of the reserve lands there is the additional requirement of the Minister’s own approval under s 343 Land Act. This is the subject of submission to be dealt with later. At this point, however it seems doubtful that Mr Mantle had looked into or appreciated just what was involved, and simply accepted that a lease would issue because Cabinet had given its approval to the project. At later points Mr Mantle’s attention was directed to the legal position. As early as 20 February 1989 Mr Mantle had observed a clause in the draft documentation which contemplated the possibility that the Governor-in-Council might terminate the lease of the reserve lands. Whilst accepting the advice that this was unlikely to occur, he noted the need to obtain agreement not to do this.
Negotiating the leases
In February 1989 Mr Mantle and Mr Job visited a tourist attraction in Launceston, Tasmania. This led to their decision to eliminate the barrier reef island in the boat basin and provide, instead, a fort and replica ship. It is also an indication, at this early time, that they considered that the development was able to be altered.
In early March 1989 Mr Mantle forwarded an amended layout and advised measures to be taken with respect to the visual obtrusiveness of the buildings, the deletion of the omnimax theatre, the changes to the waterfall, roads and carpark. At about this time Mr Job advised Mr Mantle of the approvals required for the project which included not only those of a town planning kind, but also those required under various Acts. As I have said, one can accept that Mr Mantle may have thought there would be no difficulty with obtaining them because none had been pointed up by his architect or anyone else.
Draft leases were prepared in February 1989 by the Council and forwarded to JLH’s solicitor. Ms Hart suggested the preparation of a form of agreement for lease, to which a lease of the Council’s freehold land and a memorandum of agreement, with respect to the reserve lands, would be annexed. A copy was executed by JLH and returned to the Council but discussions then took place as to the need to insert a clause protecting the rights of rock climbers to use the cliffs and requiring alternative provisions for a boat ramp, although the ramp came to be dealt with by supplementary Deed.
The Minister’s “approval”
On 3 October 1989 the Council submitted the agreement for lease, to which both the lease of the Council freehold land and the memorandum of agreement concerning the reserve lands were annexed, to the LAC “in accordance with negotiations reached between the parties and further to previous correspondence between the Department and the Council”. It advised that the Council had applied for approval under s 19(4B) Local Government Act. With respect to the memorandum of agreement, it was pointed out that amendment would be required to record the fact that a buffer area was to be situated between the reserve lands and the cliff face for rock climbers and there was enclosed a survey drawing. A supplementary agreement, concerning a boat ramp to be provided but which had not been signed by JLH, was also enclosed. The letter sought early advices “regarding the acceptability or otherwise of the proposed Memorandum of Agreement”. On the same day, the Council advised Ms Hart, by letter, that the Minister’s consideration of the terms of the lease had been requested and that they hoped to be in receipt of the “department’s comments” in the near future. On 6 October 1989 Mr Mantle wrote to the Minister in terms which acknowledged that following Cabinet approval in January 1989, the Council had been required to submit leases to the LAC “for Ministerial approval” but that delays had been encountered. Mr Mantle said in evidence that he wanted Mr Harper to look at the leases so that there could be no dispute that everything had been finalised. This implies, clearly enough, his understanding that the Minister’s approval was necessary to conclude the matter. On 16 October 1989 Mr Mantle wrote to Mr Harper’s secretary seeking approval of the lease as a matter of urgency and asked his secretary to telephone on a daily basis to check on the progress of the matter. Both Mr Mantle and the Council pressed for urgent consideration to the matter, in the case of the Council because of its forthcoming recess. The Council also advised that an approval under s 19(4B) Local Government Act would shortly be forthcoming.
It is of some significance, in the history of the matter, that an election had been called and that it was widely believed that a change of government would take place, after many years of coalition government and following a highly publicised inquiry into police corruption. According to some Ministers who gave evidence at this hearing, that perception was shared by most members of the government. Mr Mantle said that he was also of that view and that that was the explanation for the letter of 16 October 1989. In these circumstances it may readily be inferred that Mr Mantle understood and appreciated the importance of obtaining ministerial approval to the lease of the reserve lands. Mr Mantle however denied that he was concerned that a new government might mean that the development might not proceed. He said that he was merely concerned that further bureaucratic delays might occur. I do not accept that. Approval in general terms had been given by this government and he knew that Mr Harper would process the lease if time permitted. What he could not know was what view a Labor government might have. His communications and actions are strong indicators of a sense of urgency to have the present Minister complete the matter and put it beyond doubt. If he had thought he had some agreement arising out of the Cabinet decision, he was clearly concerned to put the matter beyond doubt.
On 20 October 1989 Mr Barnes of the LAC had completed his review of the proposed lease of the reserve lands and had prepared a memorandum for the Minister in which he recommended a lease under s 343 Land Act be allowed on the terms and conditions proposed, subject to some amendments he outlined and of rezoning, on the s 19(4B) approval being obtained. The latter would be necessary in order for the project to proceed and it was later obtained. Mr Jones of the LAC attached this memorandum to one which he had prepared for the Minister and in which he advised that, subject to the matters adverted to by Mr Barnes “the draft lease otherwise meets the requirements of the Land Act and the lease can now be approved in that form”. It reminded the Minister of the Cabinet approval of 16 January 1989, of the extent of the opposition to it, and that provision had been made to meet some of it.
On 23 October 1989 Mr Harper wrote the word “approved” on Mr Barnes’ memo opposite the terms of approval recommended and the words “approved subject to amendments to be submitted to Brisbane City Council” on Mr Jones’ memo.
On 26 October 1989 the LAC wrote to the Council and a copy of this letter was provided to JLH’s solicitor and then to Mr Mantle. It provided that subject to “the following amendments being made to the proposed lease” (amendment of the s 343 lease in the manner outlined in the letter of 3 October 1989) and to rezoning and to s 19(4B) approvals being obtained:
“then such lease will be allowed and the lease copy should be lodged for the endorsed consent of the Honourable Minister for Land Management and for registration”.
In the agreement for lease, there was to be included a provision to the effect that the carpark was to be operated as open to the public and free of charge. In the memorandum of agreement for lease, Appendix B to the agreement relating to the reserve lands, provision was required to be made for the buffer strip at the base of the cliffs; that the uses be limited to those purposes for which the s 343 lease was granted and other uses would be subject to further ministerial approval; that such approval was also required, by the Land Act, to any assignment or transfer of the lease; that the Minister and the Crown should be included as co-insured with respect to the indemnities contained in the claim relating to insurances and that the freehold and reserve leases be conditioned to ensure no separate transfer could take place in the future. The letter concluded by referring to particular requirements for registration, and lodgement of the leases for that purpose.
One further aspect of the documentation ought to be referred to, as relevant to the respondent’s argument concerning changes to the terms of the lease of the reserve lands. At this time the memorandum of agreement itself left blank the commencement date of the 30 year term of the lease relating to the reserve lands. The agreement for lease however provided that it be the first working day immediately following the last of a number of nominated occurrences - the gazettal of the necessary rezoning, town planning or building approvals, the lease of the wharf structures, submission of working drawings, or issue of certificate of classification for the first stage building approval.
The documentation was amended by JLH’s solicitor and returned, executed, to the Council under cover of a letter of 8 November 1989. The solicitor also sought confirmation from the LAC that the amendments were satisfactory, but no response was received. Sometime in November Mr Mantle had obtained copies of the agreement for lease and annexures and delivered them to the Minister’s office. There is some evidence that Mr Harper might have signed or endorsed such a copy. As I have earlier mentioned, however, no such document has been produced and JLH does not contend that endorsement occurred. Mr Mantle’s actions are, once again, indicative of an understanding of what was necessary to be done.
THE SECOND PERIOD - 2 DECEMBER 1989 TO OCTOBER 1991
Early considerations by the new Minister
On 2 December 1989 a Labor government led by Mr Goss was elected. Mr Eaton was appointed Minister for Land Management.
Within a matter of days Mrs Lamb of the KPA communicated with the Minister’s office and on 5 December 1989 she met with Mr Scott of the LAC to discuss the extent of the proposed development by JLH. After this meeting Mrs Lamb raised a number of issues with Mr Scott, and one of them concerned whether the uses proposed were consistent with those nominated for the reserve uses in question under the provisions of the Land Act. This matter had been brought to her attention by Mr McKelvey, a solicitor and a member of the Brisbane Rock Climbers Club, a group which also had an interest in the future of the Kangaroo Point Cliffs. Mr McKelvey contacted the LAC in December and wrote to the Minister. Shortly after the meeting with Mrs Lamb, Mr Scott sought advice from the department’s legal officer, Mr Bailey, as to that question.
On about 12 December 1989 Mr Eaton met with Mrs Lamb. Also present were Mr Peter Beattie MLA, Alderman Quinn, Mr Long of the Department of Lands and Mr Scott. Mr Long’s notes of the meeting refer to two issues being discussed: the extent of the reserve lands necessary for carparking in connexion with JLH’s proposal and future access to, and the use of, the boat basin. Mr Scott recalls the Minister expressing the hope that some agreement might be reached between the interested parties, in the nature of a compromise. Following the meeting, and on 13 December 1989, Mr Scott sought further advice from Mr Bailey as to whether the Minister was obliged to endorse his consent.
It is not clear whether the Minister expressed some definite view at this time, but I think it unlikely. It was contended by the respondent, at one point in submissions, that the Minister ought to be taken as having arrived at a view at this early time, that JLH should not be given approval with respect to all of the lands necessary for its project. It was difficult however to discern just what the Minister’s view of JLH’s proposal was, save that he appeared willing to hear objections to it. An historical summary of the matter had been prepared for him in January 1990, and this explained the approval which had been given by the former Minister, and that the solicitors for JLH were pressing for a response, as to whether the consent of the Minister would be endorsed on the lease. Notes of the meeting of 12 December 1989 had recorded the Minister’s observation that a newly elected government might be held legally liable to commitments made by the former government.
So far as the Council was concerned however, matters were proceeding. On 12 December 1989 it executed the agreement for lease and forwarded copies to JLH’s solicitor under cover of a letter which noted that matters were almost concluded with respect to the lease by the Port of Brisbane Authority (“the port authority”) of lands below the high water mark.
Mr Mantle, on 15 December 1989, received advice from the Registrar of the Licensing Court that the Commission had determined to recommend to the Minister that the project was suitable to be declared a public facility, but that it required some further information so that the terms and conditions which might attach to such a licence could be included in the submission to the Minister. It was also at about this time that Mr Mantle began to reconsider what was necessary in respect of the commencement of the lease, apparently in connexion with what he considered would be financiers’ requirements with respect to securities.
By 18 December 1989 the legal advice received within the Department of Lands, as it was called following its reconstruction, was that the project had earlier been the subject of approval by Cabinet, but that this could not bind a Minister who had the power to approve under s 343 Land Act. The question of inconsistency of purposes was seen as a real one.
In early February 1990 the Department, but more particularly Mr Bailey, sought advice from the Crown Law Office as to the legal liability of the Crown if approval were not granted. The advice of Mr Harwood of that office in response, dated 16 March 1990, was that there were real doubts that the proposed use was consistent with those stated for parks and recreation. As to the question whether the Minister was obliged to endorse his approval under s 345, the view expressed was that the letter of 26 October 1989 to the Council constituted approval under s 343 and that the endorsement under s 345 would appear to follow automatically, there being little, if any, discretion left to the Minister at this point. Whether there would in fact be inconsistency was said to require some further information. Mr Harwood concluded that, in the meantime, the Minister could delay endorsing, given that there was a real question concerning the matter.
Another Minister of the new government showing an interest in the JLH’s proposal at this time was Mr Comben, the Minister for Environment and Heritage. He said, in evidence, that he was concerned at an early stage about the site being too hot for the fauna display proposed and about whether parts of the site, having some heritage value, required preservation. Mr Comben took part in a site inspection on 5 January 1990 in company with Mr Eaton and members of the LAC. The record of conversations taking place on the inspection contain the suggestion that the leases of any reserve lands should not include the boat basin. It may be observed that this is similar to the approach earlier recommended by the LAC in March 1988 when it referred to providing only a limited area, north of the boat basin, for carparking. Mr Comben was sufficiently interested in the matter to take a copy of the proposal and a copy of the Report of the Brisbane River Committee away with him. On 1 February 1990 Mr Comben’s Director-General wrote to Mr Eaton confirming his Minister’s opposition to the alienation and development of land from and including the boat basin but advised that the Minister considered that the balance of the land might be utilised for low-key development.
In the meantime Mr Mantle’s solicitors had received copies of the agreement for lease. By early 1990 JLH had paid some $21,000 stamp duty on those documents and had reimbursed the Council some $8,000 for its legal fees. In January 1990 Mr Mantle received a feasibility study from Horwarth & Horwarth Services Pty Ltd (“Horwarth & Horwarth”), to which reference is made later in these reasons. Mr Mantle had further considered JLH’s need to use the leases, which were to issue, as security for finance for the project. Mr Mantle then caused JLH to request the Council’s agreement to a variation of the agreement for lease with respect to its commencement date. The Council was agreeable and a Deed of Variation dated 20 February 1990 was then executed by those parties. It provided that, notwithstanding the provisions of Clause 1 of the agreement to lease dated 12 December 1989, the date of commencement of the lease in Appendix A, and in the memorandum of lease Appendix B, would be 1 April 1990. It further provided for the times within which JLH was to apply for necessary town planning and building consent approvals, and submit working drawings, and for the payment by JLH of a premium of $150,000. The first rental payment was to be paid by JLH “on the next working day following the day upon which the consent of the Minister for Land Management is endorsed upon the Memorandum of Lease.” Clause 3 of the Deed provided that the parties were to forthwith execute the memorandum of lease and the Council was to “obtain the consent thereto of the Minister for Land Management”.
In late February 1990 a newspaper article was published. It was entitled “Council Plan in Peril” and related to the ONS site and the reserve lands. In it Mr Eaton is reported as saying that, whilst a decision would be made in a few weeks, the Council might have to change its plans, that the local member had raised a few objections and that he, the Minister, was required to consider the development with them in mind. The local member was Mrs Warner who was, some evidence suggested, opposed to the development. Mr Mantle read this report and it caused him concern. In January he and Mr Job had received some fee proposals from the consultants they had earlier approached concerning their engagement on the project. Mr Job said that at this time Mr Mantle approached him and asked him to advise the consultants to stop work. Although Mr Job continued to attend meetings and undertook further drawings, there is no cogent evidence that the contracts with these other consultants were ever concluded or that they undertook any professional work connected with the proposal after this time. Mr Mantle’s direction with respect to these consultants is an important indicator of his belief, at this stage, as to whether the new government was likely to cause difficulties.
A few days after the newspaper article appeared, Mr Mantle met with Mr Beattie. Mr Mantle had known him from earlier times. Mr Beattie indicated to Mr Mantle the source of the objections and arranged a meeting between Mr Eaton and Mr Mantle.
On 27 February 1990 the Council forwarded the memorandum of lease relating to the reserve lands to the LAC and requested that the consent of the Minister be endorsed pursuant to s 345 Land Act. The lease document incorporated the terms of the Deed of Variation with respect to the commencement date and the date of the first rental payment. It does not appear, from the letter accompanying the documentation, that the Deed itself was forwarded, but the attention of the LAC was drawn to these particular provisions. The evidence otherwise disclosed that a copy of the Deed of Variation, and an internal memo from the Council concerning it did find its way into the Department of Lands at some point. The officer of the LAC who received the documents, Mr Barnes, had received instructions from Mr Scott that no action was then to be taken with respect to the lease of the reserve lands. As a result he simply noted on the letter from the Council that he had filed the documents. The same day he received a telephone call from a solicitor for the Council whom he advised that the matter of the project was being reconsidered by the present government and that he could not confirm that the lease would be consented to. Mr Barnes explained in evidence that he had been told by Mr Scott, some time between 5 January and 27 February 1990, that the Minister might decline his endorsement. Mr Barnes’ attention was not then directed to a Deed of Variation, nor was he aware of any agreement between the Council and JLH changing the commencement date. The Deed was brought to his attention only some months prior to the commencement of this trial. He said that if he had noticed the changes, he would have referred the matter to the Minister, through Mr Jones, for consideration of a further approval of the commencement date.
Negotiations with the Minister
Mr Mantle and Mr Job met with Mr Eaton for the first time on 6 March 1990. It is a matter of some dispute as to whether Mr Eaton told Mr Mantle on this occasion that, so far as he was concerned, it was all “fully approved”, that there were only formalities to attend to, but that he was obliged to give the objectors a hearing. Mr Mantle also said that Mr Eaton advised him that he would be able to start on site in six to eight weeks. I accept that Mr Eaton may have made statements to the effect that he had no real difficulty with the proposal, or that he generally favoured it. I am however unable to understand why he would say that nothing else needed to be done and that JLH could shortly commence works. He would not have been briefed to this effect by his officers, who were at this time awaiting advice from Crown Law. So far as he was concerned there was opposition to the proposal both from citizens and from within the government and he appears to have been sensitive to it. Legal advice from Mr Harwood, earlier outlined, was not yet to hand. The only legal issue and advice of which the Minister might have been aware related to the inconsistency of purposes, and at this time this was seen as a real issue. A practical solution to it had not yet been devised. Further, it seems to me that if Mr Eaton’s statements had been as definite as Mr Mantle now says they were, Mr Job would have been alert to the real prospect that the project would be commencing shortly. Nothing he did suggests any such belief was held and he did not give evidence of Mr Eaton having made such a statement. His evidence suggests Mr Eaton may have indicated that, speaking for himself, he saw nothing wrong with the proposal. That seems to me to be what Mr Eaton most likely conveyed at this time, but it does not equate with positive assurances that everything was in place so as to enable the project to proceed forward from that point.
The advice of 16 March 1990 received from Crown Law, which I have outlined earlier in these reasons, whilst denying any residual discretion in the Minister as to whether to endorse, acknowledged that there may well be a valid legal objection to the leases because they involved purposes other than those for which the Crown land had been reserved and set apart and recommended, in effect, that the Minister do nothing until that question was resolved. A possible resolution was provided by Mr Lack of the LAC, in his memorandum of 29 March 1990 to Mr Scott, then Acting Assistant Director-General of the Department of Lands. Mr Lack pointed out that there appeared to be three options: to refuse any lease of the reserve lands; to lease only part of the reserve lands north of the boat basin or to lease all of the reserve lands as earlier proposed. The first two, he observed, could result in legal action being taken. The third would require the cancellation of the reserves and the grant of a special lease to the Council under s 203 of the Land Act, together with permission to the Council to sublease to JLH. That option should, he concluded, overcome most grounds for possible legal challenges. Mr Scott reported to Mr Lack in these terms.
By mid-April 1990 Mr Mantle appeared to be concerned to press the matter forward, and he wrote to Mr Eaton, to the Premier, the Deputy Premier and two other Ministers. The assurances said to have been made by Mr Eaton at the March 1990 meeting were not reiterated by Mr Mantle in this correspondence. The letter to Mr Eaton did make the claim that “the bulk of our personal family finance” was now committed to the project. Another claim, of real financial hardship, was also relayed to the LAC. Neither statement was correct.
Towards the end of April 1990 Mr Eaton appeared to be prepared to follow the third option identified by Mr Lack, the grant of a special lease of the reserve lands, with no reduction in area. He endorsed the memo from his officers to this effect and a draft submission to Cabinet, recommending the cancellation of the reserves and the issue of a special lease, was prepared for him. Mr Eaton however rescinded that direction after a meeting held on 22 May 1990. In view of the later lack of support from each of the Premier and Deputy Premier, it is of interest that their Departments, by mid-May 1990, had advised the LAC that what was then proposed by Mr Eaton in the draft Cabinet submission appeared to be in order.
On 22 May 1990 a substantial number of persons having an interest in the ONS site were called to a meeting by Mr Eaton’s principal private secretary. Mr Mantle and Mr Job attended. Notes made of the meeting, with which Mr Mantle largely agreed, recorded the fact of an approval having been given by Mr Harper, that the legality of it had been attacked and had been the subject of legal advice. The recommendation to the Minister about the alternative legal route, via the special leases, was discussed. The meeting took some 2 hours and it seems unlikely that the notes encapsulated every topic raised. It is also likely that they may have been written from the perspective of what was of interest to the Department, and to the officer who made them. Mr Mantle said that the meeting appeared to take the course of “going through the motions”. Insofar as this was intended to confirm his other evidence, of continual support and reassurances given with respect to the project, I am unable to accept it on the basis of his evidence. It is true that Ms Hart recalled the meeting as “positive”, as did JLH’s town planner Mr Brannock. And Ms Hart’s conversation with Mr Scott following the meeting seems to have confirmed this in her mind. In particular Ms Hart recalled little of substance being raised at the meeting. But in the scheme of things this does not convey much. It may amount to little more than recollections that nothing adverse was raised against the proposal, when perhaps that was their apprehension as they approached the meeting. Even so, Mr Mantle’s evidence went a deal further than these other witnesses for JLH, and I was left with the impression that as to this meeting, and others, Mr Mantle’s evidence was unreliable with respect to the extent of assurances conveyed. The meeting ended with Mr Wilson the Acting Director-General of the Department of Lands advising the attendees that a decision would have to be made, and that their views would be taken into account. Some time thereafter the Minister rescinded his approval to the course of action which would have facilitated the development, via the grant of special leases.
The day following the meeting JLH wrote to Mr Eaton making certain offers, or concessions, which Mr Mantle described in his evidence as insubstantial, although he did not so describe them in the negotiations which were then taking place. They included the installation of some public facilities and lighting and their future maintenance.
A further site meeting was held at the end of May 1990 between Messrs Mantle, Job and Eaton, the Director-General of the Lands Department, Mr Eaton’s private secretary and a member of the LAC. Mr Eaton suggested that another meeting be held between Mr Mantle and the KPA, to attempt to reach agreement concerning the extent of the development and although Mantle complained that he had made concessions, he agreed to one more meeting. These statements, together with Mr Eaton’s apparent change of mind concerning the special lease procedure, may be indicative of real concerns held by him as to the level of opposition to the proposal and of a wish that the parties reach agreement. Such a view would have been reinforced by a letter from Mr Burns, the Deputy Premier, to Mr Eaton on 20 June 1990 which recorded Mr Burns’ perception of strong opposition to the proposal in the community. The meeting was held on 31 May 1990, but it was inconclusive.
The following month saw little progress towards a conclusion of the matter. In this period the LAC was involved in gathering background documents and receiving further opinions from other departments for inclusion in a memorandum which it was preparing for the Cabinet meeting to be held on 9 July 1990. The decision to refer the matter to Cabinet, by means of a memorandum and not by submission, was for the reason that the latter was utilised where approval was to be sought from Cabinet for one course of action. A memorandum was used, in the first place, where guidance was to be sought as to a range of options.
It also appears by the terms of a letter sent by Mr Mantle to the Premier on 30 May 1990 that Mr Mantle considered the project required “ratification”, and that it was a matter for Cabinet. Whether Mr Mantle held such a view, or whether he was simply going along with the course dictated by the Minister, is difficult to determine. It is quite possible that, as a businessman, he undertook the latter course of action. Surprisingly, however, for one who appeared receptive to professional or specialist advice, Mr Mantle was said not to have obtained any legal advice as to JLH’s standing in the matter. This is so even given comments which had been made questioning the legality of the proposed leases. Whilst Mr Mantle himself had legal qualifications, the possibility that he might have come to a view himself, as to the respondent’s legal obligations, was never advanced.
It is also unclear, at this point, just what view Mr Eaton had of the proposal. It may be that not a lot turns upon it. It is not apparent that he had decided against it. But the simpler question - whether to endorse or not - had been sidelined by the suggestion that a different procedure appeared to be required and the other options to be placed before Cabinet, in addition to the recommended grant of special lease, were either complete refusal or a restriction of the development. These options were not explained as available courses under s 345. The memorandum for Cabinet did not advert to any legal problems which might arise with respect to JLH or the Council if the last two courses were followed. It noted, however, that if the reserve lands were not made available to the developer, it was doubtful that the project would remain viable.
Shortly prior to the memorandum being placed before Cabinet, and in addition to Mr Eaton receiving the letter from Mr Burns as to his perception of opposition in the community, the Director-General of the Department of the Environment also wrote to Mr Eaton suggesting that the interests of “public amenity” required that any development be allowed only downstream of the boat basin. That view is consistent with that which had been stated earlier by Mr Comben.
Consideration by Cabinet - July to 22 October 1990
Cabinet at its meeting on 9 July 1990 decided to defer consideration of the options whilst further information was obtained. Mr Wilson, participated in the gathering of that information. Mr Goss recalled, as a background to that meeting, that there had been public debate about the intensity of the development, although it seems he and one other Minister were not then personally opposed to it and saw some possible benefits flowing from it. Mrs Warner and Mr Comben remained implacably opposed to it. Mr Burns said that some Ministers viewed the matter as one which had been “rushed through” by the previous government, from which I infer that some members of Cabinet may have regarded it as in some way tainted, or have been sceptical about its worth. As I have said, however, just what Mr Eaton thought at this time is not clear. I was not assisted by his attempts at recollection in the course of his evidence. The matters which Cabinet adverted to in its decision, as requiring clarification, were: the economic viability of JLH’s proposal, a matter which Mr Burns raised on at least one occasion; the position of the Crown should JLH’s proposal not be approved in whole or in part (which clearly enough referred to its legal liability); whether the developer was likely to accept some compromise; arrangements for the tenure of the Crown lands and the revenue which might be returned to the State from them; public interest and amenity matters such as public access “including any boardwalk proposals”, visual amenity and the likelihood of obtaining fauna licences.
In this respect it submits that even if the port authority had secured title to the land in question, it had no ability to transfer the land to JLH without the permission of the Governor-in-Council: s 79 Harbour Act, 1955 which requires the permission of the Governor-in-Council for the transfer of any land to JLH. The alternative procedure, special lease to the port authority, also required approval of the Governor-in-Council on the recommendation of the Minister administering the Queensland Marine Acts 1958-1963 (Qld) and the Minister for Land Management. The submissions for the respondent rested upon Cabinet being antithetical to the whole proposal and the relevant Ministers, for that reason, being inclined to refuse any request or recommendation on that basis. No evidence was led to that effect. Moreover, it was never made plain to me on what proper basis the necessary permission under s 79 Harbour Act could have been refused. That is not to say there could not be some, but they were not adverted to, save for the suggestion that it would have hindered the boardwalk proposal. These alternative submissions, as to contingencies, proceed however on an assumed basis that a lease became effective. If it had, the boardwalk could not have proceeded. I am not satisfied that approvals would have been withheld, although I suppose one would need to allow something for the contingency that some valid reason may have been pointed to. I turn then to consider whether ferry terminals could have been approved and constructed.
Issues generally concerning the operation of ferry services largely disappeared during the hearing. After some time it appeared that the experts differed only with respect to the speed of travel of ferries, the distance they would travel and some individual components of operating costs.
There were to be two ferry terminals, one near the end of Edward Street in the City and the other at the Riverside complex. JLH could not use the existing council ferry terminal at Edward Street. The experts were agreed that JLH’s proposal required the exclusive use of a ferry terminal. Mr McGuckin of the port authority said that the provision of another terminal, upstream from the existing Edward Street terminal, would require the relocation of two moorings. His evidence was to the effect that the port authority would need some convincing about this, in particular because it would lose revenue. This was however only some $1000 per annum for each mooring. It was apparent that the prospect of approval depended much upon the attitude and consent of the adjoining land owner, which in this case was the Council as trustee of the Botanical Gardens. One would have thought that the prospect of the Council granting access through its lands to a terminal to enable a development it had approved on its other site would be high, unless there was some legal or practical impediment.
The most likely position for the downstream terminal was at Waterfront Place. The likelihood that a ferry terminal could have been provided here depended upon the use of two pontoons which were then utilised as berths for yachts. The commercial property manager of the owner of the pontoons suggested that some arrangement would have resulted, as the marina was not fully utilised and it would, of course, have been interested in the best return from its property. The question really seems to be what price would have to be paid by JLH were it obvious that the pontoon was essential to its proposal.
Section 86 of the Harbours Act required an approval for the ferry terminals, but Mr McGuckin of the port authority, which made the necessary recommendation for approval, said that the port authority supported the development. The approving authority was not, as was suggested at one point, the Minister or the Governor-in-Council. In connexion with these approvals, at the relevant time, it was a senior officer in the Department of Environment and Heritage. There is nothing to suggest that a recommendation would have been refused.
Whether liquor licences would have been granted
JLH initially applied for a “tourist park” licence but subsequently received legal advice that a “public facilities” licence ought to be applied for. The reasons for that are irrelevant to my considerations. JLH was also advised to engage an acoustics engineer and a town planner, both of whom produced reports which were submitted to the Licensing Commission.
There are two issues which arise in connexion with approvals of a liquor licence. The first is as to whether a public facilities licence would have issued in any event; and the second is as to whether the hours of operation would have been granted to 3am in the first place or whether it might later have been extended to that time.
The regime under the relevant legislation concerning liquor licences was as follows: a liquor licence is obtained on the recommendation of the Licensing Commission to the responsible Minister, who in turn makes a recommendation to the Governor-in-Council. If approval is given the Licensing Court itself then issues the licence. The Court and the Commission are responsible for the administration of it.
The respondent puts its contentions on two bases. In the first place it submits that because there were matters outstanding before the Commission, and which were never finalised, one could not say that the Commission would make the recommendation necessary. This topic is fairly readily disposed of in favour of JLH. The second basis for discounting the prospect of an approval issuing was said to be because of the likelihood that Cabinet, being against the proposal, would not have given the necessary approval. Once again, I take it that this suggests that the relevant Minister, who did not give evidence, would have given effect to a Cabinet decision without consideration of questions proper to be addressed with respect to a licence. I can see no basis for concluding that would have occurred, or that that situation would have prevailed.
JLH applied for the licence in question on 31 October 1989. On 15 December 1989 the Registrar of the Licensing Court wrote to JLH advising that the Commission had determined to recommend to the Minister that the licence be approved. There were two matters outstanding and which were said to require attention. The first was the provision of detailed layout plans. The second related to information about the company JLH. JLH responded to that enquiry by a letter of 10 January 1990. Ms Maconachie said that the officer responsible for examination of the plan had still required further detail. The purpose of this however was to enable officers of the Commission to negotiate with JLH as to the amount to be paid for the licence, and to determine the appropriate hours of operation. A closing time of midnight had been provisionally noted. There is nothing to suggest that these matters would not have been satisfactorily concluded.
As to whether the question of an extended licence to 3 am, Mr McKnoulty, who was then the Chairman of the Commission, gave evidence that it was likely, in the first instance, to approve such a request and then to assess how it was managed. JLH’s town planner also thought that it would have been obtained. The only evidence which weighed against this prospect was from persons associated with the nearby Mt Olivett Hospital, who were concerned as to whether noise nuisance would result. There was, however, nothing to indicate whether those concerns were well based and indeed it would be difficult, I imagine, to assess noise impacts until the buildings were constructed or at least properly designed. Ms Maconachie said that if there was a difficulty, soundproofing would have been required. It must, nevertheless, be said that there remained a prospect that a licence for the extended hours might not have continued. This would impact, to some uncertain extent, on the income of the tavern or other nightclub facility.
Whether compliance with the requirement that an alternative boat ramp be provided, was possible
The letter from the LAC to the Council of 26 October 1989 identified, as conditions of approval of the lease of the reserve lands, those identified in the Council’s letter of 3 October 1989. That letter had included, relevantly, a requirement that a boat ramp be provided for public use, given that that available at the site was to be lost to JLH’s proposal. The Council and JLH dealt with this condition by separate agreement, dated 12 December 1989. Preamble (b) provides:
“(b) The parties acknowledge that a condition of the approval for the Lease of the lands forming Appendix B to the Agreement for Lease is the provision a substitute boat ramp facilities to those presently situated on part of the land agreed to be leased with such facilities to be located in Council parkland within the central city area; “
The terms of the agreement were as follows:
“1. Subject to the Lessor following investigation advising the Lessee of a suitable location for the establishment of boat launching facilities in Council parkland in the central city area the Lessee will forthwith prepare the necessary plans, specifications and drawing as the case may be for the provision of such boat launching facilities and following preparation submit same to the responsible Council Department for its approval.
2. Following approval by the Manager of the responsible Department or Departments the Lessee will within the time provided in the Council approval to the aforesaid plans, specifications and drawings as the case may be, undertake at its cost all necessary works required to construct the alternative boat launching facilities and complete same to the satisfaction of the Manger (sic) of the responsible Department or Departments of the Lessor. Should the Lessee require the Lessor to carry out all or any of the necessary works it undertakes to meet the Lessor’s cost thereof, including usual charges for supervision and administration.
3. Should the State Government of Queensland in providing its approval to the Memorandum of Agreement for Lease of the Crown Land the subject of Appendix B to the Agreement for Lease impose conditions attaching to the provision of alternative boat launching facilities then the Lessee will comply in full to the satisfaction of the Minister for Land Management with those conditions.”
Although dealt with by way of supplementary agreement, the obligation was clearly one connected with the agreement for lease. Both the preamble and the terms of the agreement proceed upon the assumption that a suitable location would be found, and that the Council would identify it. The evidence was, however, that that may have proved to be a task of some difficulty. Mr Bendall of the port authority whose task it was, for a time, to find the land in question, did not locate any. When the esplanade project was undertaken the boat ramp was lost in any event, but no alternative was provided. The Department of Administrative Services Department paid the Council some monies, on the basis that it would find a suitable location and provide the facilities itself.
This does not, to my mind, render conclusive the prospect that there were no suitable lands for the purpose. To the contrary, it appears to assume that the Council might have uncovered them if it had determined to do so. In any event, the respondent’s argument requires the obligation to be seen as one upon which the other rights flowing from the agreement for lease were conditioned. Neither the terms of that agreement nor the supplementary agreement are to the effect that the alternative facilities were to be ascertained first, and it is difficult to see that a process which, in the parties’ contemplation, may have taken some time after the lease was finalised and after steps had been taken towards development, was to bring the leases to an end. Non-fulfilment of the condition might have put the parties in a position where some other obligation was to be assumed in its place, or compensation provided. I do not however consider that the whole of the agreement for lease and whatever benefits it provided, to have been contingent upon fulfilment of this obligation.
Whether the fauna park and aviary were viable
I take the respondent in these submissions to contend that, in the situation where the development had been constructed, the fauna park and aviary would have failed at some point. The difficulties experienced, historically, by these attractions in Australia in achieving high profitability have been the subject of earlier reference in these reasons. That tended in my view to support a conclusion that, even with the other facilities, the development was unlikely to make sufficient to enable it to continue as profitable. This argument goes further. Its starting point is the proposition, which I do not think can be doubted, that zoos and fauna displays are difficult and risky ventures. JLH’s own witness, Mr Spittall, qualified his opinion that such was the case only by reference to ventures being “handled properly”. At the least that underscores the need for sufficient levels of staffing and for experienced managers.
There are a number of factors which would militate, to some extent, against the success of JLH’s proposed venture into this area. On the one hand it was likely to have had the assistance of Mr Spittall and Mr Bullen as consultants, at least so long as profits permitted. That is itself a question. There is not, however, a large body of persons having this level of experience to call upon in the event that either of those gentlemen withdrew their services at any point. Most of the other problems centred upon the koalas. There were potential problems with respect to the availability of food, although the respondent’s case did not establish the complete unsustainability of the Pullenvale land. Even so, the amount that could be produced was quite limited and considerable numbers of staff would have been necessary to forage for browse farther afield. The small size of the site meant that animals would need to be rotated and rested at a spelling facility. In turn this required the use of transport which has its own problems for wildlife. Dr Carrick was of the view that the extremes of temperature on the site would have been difficult, if not impossible to overcome, with severe consequences for the animals. This had been a concern of the Minister, Mr Comben, but was not, apparently, one shared by his departmental officers, nor by Mr Spittall. In the result, it seemed to me no such conclusion could be reached, at least in absence of expert evidence as to climate, its effects and the limitations upon measures such as landscaping to mitigate its effects.
It is possible to conclude that there was some inherent risk in such a venture, and that to reduce it, it was necessary that a body of experienced staff be available at all times. This does not sit comfortably with the exercise undertaken by the management consultants, which assumed the need to reduce costs, including salaries. The impact, once again, is then on its profitability.
Conclusions on the further contingencies
I have taken account of some factors operating as constraints upon the projects profitability. The respondent has not established that finance was, in any significant sense, unlikely and it has not been shown that the construction and fit-out budget would have been substantially exceeded. I have not accepted that many necessary permits and licences would have been refused, on account of Cabinet’s expressed disapproval of the project, in a situation where a lease had to be given. I am however satisfied that the power to cancel the reserves would have been exercised although, in my view, this point would never realistically be reached. In this event it must be concluded that there would only be a faint prospect that JLH would have had the opportunity to take up the lease. I would put it at no more than 5 per cent. The only other factors established as diminishing JLH’s prospects, the continuation of a 3 am licence and maintenance of the fauna park, can be seen to further affect its profitability and do not fall to be determined in connexion with whether it would have been able to avail itself of the opportunity which it says it was denied.
ALTERNATIVE CLAIM - wasted expenditure and liabilities incurred
By this approach JLH sought to recover monies paid, or obligations incurred, but which it says have been rendered futile or unnecessary by the respondent’s breach of agreement. The claim, so far as it relates to monies actually paid, and with the addition of two amounts omitted from the Schedule to the statement of claim, extends to $543,595. Much of this was paid for, and remains owing to, the company Jimmy’s on the Mall Pty Ltd. In addition, JLH claims to owe that company a considerable sum for the services of its director, Mr Mantle, its staff and facilities. This was the subject of an alleged agreement between the two entities, the subject of a letter dated 6 September 1988. I will not set it out in full. It provided for a fee for services to be earned by Jimmy’s on the Mall Pty Ltd at the end of the engagement, at the rate of $250 per hour for its director and $150 per hour for support staff and recoupment of outlays. It was in the nature of a success fee. In each case the amount to be finally paid was subject to a multiplier of respectively, five times, four times and five times, but a ceiling on the total amount payable was set at $9M. This followed advices which Mr Mantle had obtained much earlier, in connexion with a possible float of Jimmy’s on the Mall Pty Ltd, which involved the creation of a large realisable debt. Taking into account the multiplier, the total amount claimed for the amounts already expended and this liability was some $11.4M. In the form it took, and for what other purposes it may have been useful, it does not strike me as remotely likely that the debt was to be called upon by Jimmy’s on the Mall Pty Ltd unless some advantage were to be obtained by doing so. None was pointed to. In these circumstances, even were the claim recognised by the law, I would reject it as an opportunistic claim for expenditure absent credibility. It is difficult to believe JLH could have been advised to pursue it.
The additional claims for liabilities said to have been incurred do not fare much better at a factual level. They were said to be for the further architectural services of Mr Job ($978,467) and for the merchant banking services of Dartnell Pacific Pty Ltd ($300,000).
In the case of the fees for Mr Job’s future services I am unable even to accept that that would have been the fees charged by him, given that all further consultants’ fees allowed for by Concrete Constructions Ltd were limited to 8 per cent of the capped construction costs and there is nothing to show how the fee he now suggests as appropriate could have been accommodated. It could not, in any event, be said that any liability had been incurred in the event that the project proceeded. The suggestion that such a payment might be made arose from Mr Mantle’s enquiry of Mr Job, with litigation in prospect, as to what he might consider was owed to him. It partakes of the nature of a success fee in litigation. A similar view may be taken of the fee said to be owed to Dartnell Pacific Pty Ltd. Neither are recoverable as damages.
The respondent also submitted that the claim for wasted expenditure is misconceived and that The Commonwealth v Amann Aviation Pty Ltd, upon which JLH relies to support the claim, was concerned with reliance damages. Here, the submission proceeds, those expenses which were actually incurred were not incurred in reliance upon the performance by the respondent of its contractual obligations (Amann, 80; 104; 130; 135). My earlier findings as to reliance dispose of this. Further, as is pointed out in Amann (see in particular 85-6) such a claim cannot in principle be established in a case where it can be shown that the expenditure could not be recovered as where no, or insufficient, profit could have been made to permit the recoupment the law assumes.
FURTHER ALTERNATIVE CLAIM - alternative projects
JLH alleged, in its statement of claim, that had it known in about 1990, that the proposed restoration and redevelopment was not to proceed, it would have invested in another major project to the like or similar value and achieved the same anticipated return. The evidence does not however disclose what form such an investment might have then taken and what return was likely. JLH’s reliance on its primary claim to establish what profits could have been made, was wholly misplaced.
ANOTHER APPROACH TO DAMAGES - value of the lease
Regardless of the conclusions I have reached, had a lease been endorsed and registered, and not rendered nugatory by rescission of the reserves, it might be said to have had some value to another developer or investor. Such a claim was not however, pleaded and the evidence did not permit it to be raised. Mr Lonergan considered the lease had a value of some $17.7M at February 1990, but this was on the basis of his view of its profitability, which I have rejected. The evidence did not disclose what an investor might have paid for what opportunities the lease or the rezonings represented. The valuer called by the respondent, Mr Willington, concluded that the value would be less than construction costs, from which one might infer this development would not proceed. That however was upon the figures established by the respondent’s experts, which might not have been the view taken by another developer. In the absence of further evidence and of submissions on the point, I cannot take the matter further.
SUMMARY AND ORDERS
The applicant’s case fails both in proof of liability on the part of the respondent and in proof of damage. I have concluded that the Minister in question was not obliged, by reason of the provisions of the Land Act, to endorse the lease with the approval which had earlier been granted, thereby enabling the lease to take effect at law. Further, the Minister retained the power to reconsider the question of that approval at least where issues affecting the public interest arose. Such issues were considered by a number of Ministers and by Cabinet through 1990 and 1991. The decision of Cabinet in July 1991, which led to the ultimate refusal for the project, was based upon such considerations, including the preferred development and construction of a river boardwalk. Any promise to endorse and complete the process must be understood within that framework, which is to say that, whilst the Minister might conceivably be held estopped from resiling from such a promise, that could not be the case where issues affecting the public interest arose. The Minister could not be heard to say that he would deny their existence and the need to address them. In any event, JLH’s case based upon estoppel fails at a factual level, for the reason that it could not be taken to have relied upon any such promise. The only representation fulfilling that description was made in October 1989 when the Council and JLH were told that the lease of the reserves had been approved and that the Minister would endorse that approval. Mr Mantle of JLH however, knew that the promise was made by the Minister of the then government and that a change of government might bring a change of attitude. His concerns were realised. JLH’s claim in fraud was not well-based and fails. I shall refrain from further observation at this point in view of the need to afford the legal representatives for JLH the opportunity to make submissions as to how this matter came to be pleaded and pursued to conclusion, submissions which will be necessary at least in connexion with the question of costs. It is not necessary for me to detail the other numerous claims which were not well-founded.
Even had JLH established liability for damages on some basis, nevertheless it did not prove that its project could have operated at a profit for a sufficient period to enable the conclusion that it provided an overall benefit which could have been translated to an award of damages. Further, the opportunity lost, to pursue the development the agreement for lease contemplated, was subject to the real contingency that the reserves would have been rescinded and the lease thereby terminated, such that it could be said to have little real value. It did not establish any alternative claim.
This case was protracted. There were many claims brought, and there were also many points of defence taken, some of which were unsuccessful. The result was a hearing extending over some 76 days, involving 87 witnesses, 6016 pages of transcript and 1430 exhibits including experts’ reports of some thousands of pages. In such a situation there are likely to be differences of approach to the question of costs, and I shall adjourn further hearing on that issue to allow the parties to prepare submissions.
Putting the question of costs to the parties to one side, there remains the question of the impact of “complex” or lengthy trials upon the administration of justice. It is a matter of concern and one which, I believe, needs to be addressed. However, since the expression of my views may reflect upon the legal representatives or the parties in this case, I consider that
I ought to hear their submissions as to the conduct of the case before doing so.
I certify that this and the preceding one hundred and sixty-one (161) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel J
Associate:
Dated: 6 March 1998
Counsel for the Applicant: Mr T Gray QC and Mr T Matthews Solicitor for the Applicant: Minter Ellison Counsel for the Respondent: Mr R Hanson QC, Mr J McKenna and Mr R Derrington Solicitor for the Respondent: Crown Law Date of Hearing: 18 February 1997 to 27 June 1997 inclusive Date of Judgment: 6 March 1998
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