Kyme-Hobson v The Minister for Lands - [2021] WASC 8

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   KYME-HOBSON -v- THE MINISTER FOR LANDS [2021] WASC 8
CORAM:   KENNETH MARTIN J
HEARD:   14 DECEMBER 2020
DELIVERED          :   15 JANUARY 2021
FILE NO/S:   CIV 2540 of 2016
BETWEEN:   CAREY KYME-HOBSON
First Plaintiff
CHRISTOPHER PATERSON
Second Plaintiff
AND
THE MINISTER FOR LANDS
Defendant

Catchwords:

Crown Lease - Where lessees breached condition of lease and Minister issued Notice of Intention to Forfeit under Land Administration Act 1997 (WA) (LAA) s 35 - Whether Minister had power to issue Notice under LAA s 35 if no extant breach at date of issue - Whether enforceability of Minister's rights under LAA s 35(1) qualified by Property Law Act 1969 (WA) s 81(1)

Legislation:

Land Administration Act 1997 (WA)
Property Law Act 1969 (WA)
Rules of the Supreme Court 1971 (WA)

Result:

Preliminary questions answered

Category: B

Representation:

Counsel:

First Plaintiff	:	Mr A J Power
Second Plaintiff	:	Mr A J Power
Defendant	:	Mr J M Misso

Solicitors:

First Plaintiff	:	Kitto & Kitto Barristers and Solicitors
Second Plaintiff	:	Kitto & Kitto Barristers and Solicitors
Defendant	:	State Solicitor's Office

Case(s) referred to in decision(s):

Nil

KENNETH MARTIN J:

This action was commenced by writ in September 2016. On 28 October 2020, the parties reached an agreement on the terms of orders for the determination of two preliminary questions prior to the final trial of the action pursuant to the Rules of the Supreme Court 1971 (WA) (RSC) O 32 r 4. The parties' agreement is premised on the basis that if both questions were to be answered in the negative then the plaintiffs' action should be dismissed pursuant to RSC O 32 r 7.
The two preliminary questions ordered for separate determination are:
(i)On the proper construction of the Land Administration Act 1997 (WA), was it beyond the defendant's power to issue the Notice of Intention to Forfeit, signed on 7 October 2014, under section 35 of the Land Administration Act 1997 (WA) if there was no extant or subsisting or ongoing breach of the Crown Lease as at 27 October 2014?
(ii)On the proper construction of:
(a)the Land Administration Act 1997 (WA) and the Property Law Act 1969 (WA); and/or
(b)the Crown Lease,
was the enforceability of the defendant's right of forfeiture of the Crown Lease under section 35(1) of the Land Administration Act 1997 (WA) qualified by section 81(1) of the Property Law Act 1969 (WA)?

The Agreed Facts

For the purposes of the determination of the two preliminary questions, the parties conferred and then agreed upon a series of facts which were to provide the basis for the respective determinations (Agreed Facts). A bundle of documents that accompanied the Agreed Facts were also agreed by the parties (Agreed Documents).
The Agreed Facts were as follows:
1.On 27 August 2012, the first plaintiff and the second plaintiff (Lessees) as tenants in common in equal shares, became the holders of an interest in Crown Land being a lease (Crown Lease) comprising the whole of Lot 3003 on Deposited Plan 46738 (Leased Premises). The defendant was the lessor of the Lease (Lessor).
2.A copy of the Crown Lease was included in the Agreed Documents marked 'A'.
3.A copy of the certificate of Crown Land title in relation to the Leased Premises (the Crown Lease) was included in the Agreed Documents marked 'B'.
4.At all material times the Crown Lease was held subject to conditions and/or covenants, including that the:
(a)Lessees must not use the Leased Premises or allow the Leased Premises to be used for any purpose other than the Permitted Use (clause 5.1(b));
(b)Lessees must put the Leased Premises to use for the Permitted Use from the Commencement Date and continue to do so and use the Leased Premises in accordance with the terms of the Crown Lease and otherwise in a good and workmanlike manner and in accordance with sound business practice (clause 5.1(c)); and
(c)Lessees must not, without the prior consent of the Minister, part with possession of, share possession of or sublet the Leased Premises or otherwise deal with any interest whatsoever in the Leased Premises or the Lessee's estate or interest under the Crown Lease (clause 5.5(a)).
5.From the registration of the Crown Lease on 27 August 2012 until at least 18 August 2014, in breach of the condition and/or covenant set out in paragraph 4(a) above and clause 5.1(b) of the Crown Lease, the Lessees caused the Leased Premises to be used for storing items including equipment, machinery, fencing and accommodation units, being a purpose other than the Permitted Purpose. It is in dispute between the parties whether the breach continued beyond 18 August 2014 and whether and, if so, when, it was remedied.
6.From the registration of the Crown Lease on 27 August 2012 until at least 30 June 2014, in breach of the condition and/or covenant set out in paragraph 4(c) above, and clause 5.5(a) of the Crown Lease, the Lessees, without the prior written consent of the Lessor, shared possession of and sublet the Leased Premises or otherwise dealt with an interest in the Leased Premises or the Lessee's estate or interest under the Crown Lease. This included subleasing portions of the Leased Premises to persons including McConnell Dowell Constructions (Australia) Pty Ltd, Australian Civils Pty Ltd, Highrock Contracting Pty Ltd, Beachfront Villas and Mel Southey. It is in dispute between the parties whether the breach continued beyond 30 June 2014 and whether and, if so, when, it was remedied.
7.It is in dispute between the parties whether the Lessees breached the condition and/or covenant set out at paragraph 4(b) above and clause 5.1(c) of the Crown Lease by not continuing to put the Leased Premises to use for the Permitted Use, and whether the breach was remedied and, if so, when.
8.The Lessor, being of the opinion that there had been breaches of the conditions and/or covenants set out in paragraph 4 above (Breaches) and intending to cause the forfeiture of the Crown Lease under section 35 of the Land Administration Act 1997 (WA) (LAA), gave notice to the Lessees of the nature of the Breaches and of the Lessor's intention to cause a forfeiture of the Crown Lease, by signing a notice (Notice of Intention to Forfeit) and sending it by post to each of the Lessees on or about 27 October 2014.
9.A copy of the Notice of Intention to Forfeit was included in the Agreed Documents marked 'C'.

Preliminary observations

Agreed Facts

Before turning to aspects of some of the Agreed Documents as mentioned in the Agreed Facts, I highlight the following matters:
(a)Albeit not made explicit by the Agreed Facts, the Permitted Use of the Leased Premises was not in dispute. The Permitted Use was for that of 'Stock Holding Yards' (meaning for livestock).
(b)Consequently, as is apparent from par 5 of the Agreed Facts, the Lessees' use of the Leased Premises for storing items was not a Permitted Use.
(c)There is no argument about the subsistence of a breach by the use of the Leased Premises for storing items instead of as Stock Holding Yards in the period of almost two years between 27 August 2012 and 18 August 2014. The factual disagreement between the parties which would need to be resolved by a trial is whether that breach extended beyond 18 August 2014 (see par 5).
(d)Likewise, it is accepted under par 6 that conduct by way of sub‑leasing or sharing possession of the Leased Premises was a breach of cl 5.5(a) of the Crown Lease in the period between 27 August 2012 and 30 June 2014. Again, the only factual disputation between the parties is temporal. There is a dispute over whether that distinct breach identified under par 6 continued beyond 30 June 2014. Again, were it necessary to resolve that factual dispute, that would be a matter for a trial.
(e)There is also a contended factual dispute around the breach relied upon against cl 5.1(c) of the Crown Lease concerning an alleged failure to continue to put the Leased Premises to use for the Permitted Use and the remedying of that breach (see par 7).
(f)As seen from the first of the two preliminary questions submitted for determination, the Notice of Intention to Forfeit pursuant to s 35 of the LAA was signed by the Minister on 7 October 2014 but, as per par 8 of the Agreed Facts, it was only despatched by post to each of the plaintiff Lessees on 27 October 2014.

Preliminary questions

The first of the two questions that is to be determined effectively proceeds upon the basis that it is unnecessary to conduct any factual resolution by way of a trial over a dispute about whether the storing items breach of cl 5.1(b) of the Crown Lease continued on after 18 August 2014 or was instead remedied (as the plaintiffs would factually submit). This is because the Minister contends that even if that breach was so remedied from then, it would not matter. In other words, the Minister contends that such a breach, albeit subsequently remedied, was enough to ground the issuing of a notice of intention to forfeit under LAA s 35.
The second question proceeds upon the basis that even if a fully remedied breach was sufficient to otherwise validly support the issuance of a notice of intention to forfeit, that nonetheless the forfeiture exposure under LAA s 35(1) was qualified by obligations under the Property Law Act 1969 (WA) (PLA) s 81(1) concerning relief against forfeiture and that those provisions qualified the Minister's rights under LAA s 35(1). In other words, the second question is directed towards the application of PLA s 81(1) (the relief against forfeiture provision) in qualifying the power in LAA s 35(1) as regards the issue of the Notice of Intention to Forfeit.
These were the issues posed upon the present preliminary questions. I turn now to examine some more aspects of the documentation in the Agreed Documents.

Agreed Documents

The bundle of Agreed Documents for the determination of the preliminary questions is folio document 81. See also the index to the three documents therein, which is folio document 80.

The Crown Lease

The first of the documents (marked A) is the Crown Lease to the plaintiffs by the State of Western Australia (noted to be acting through the Minister for Lands, a body corporate under the LAA). The term of the Crown Lease was for 21 years, commencing on 1 July 2011, with an option for a further 21 years thereafter. The two recitals, A and B, to the Crown Lease record that the Minister is authorised by LAA s 79 to grant leases of Crown land for certain purposes and on such terms and conditions as the Minister may determine. As recital B records, the grant to the Lessee is on the basis of being 'on and subject to the provisions of the LAA and the terms and conditions of this Lease'.
Of significance within the conditions of the Crown Lease is cl 2.1, which relevantly provides:
The Lessee and the Lessor agree that:
(a)...; and
(b)the provisions of this Lease do not in any way affect, alter or derogate from the Lessor's or the Minister's rights or powers conferred under the LAA.
It is sufficient to note within the Crown Lease cl 5.1(a) (as to Permitted Use), cl 5.1(b) (as the express prohibition against the Lessee using the Leased Premises or allowing the Leased Premises to be used for any purpose other than the Permitted Use) and cl 5.5(a) (as regards the explicit acknowledgement as to the application of LAA s 18 to the Crown Lease and the injunctions against the Lessee parting with possession, sharing possession or subletting, mortgaging, charging, disposing of, dealing with or assigning or otherwise dealing with any interest in the Leased Premises without the written consent of the Minister).
Also noteworthy within cl 5.5 is subpar (g) therein which provides:
The provisions of sections 80 and 82 of the Property Law Act 1969 are hereby excluded.

PLA s 80, s 81 and s 82

It is worth diverting briefly to mention all these provisions, which are found along with s 81, within Pt VII div 1a of the PLA.
The express exclusion of s 80 by the Crown Lease sees the exclusion of a condition in every lease that contains a covenant, condition, or agreement against assigning or underletting (ie, subleasing) to the effect that consent by the lessor shall not be unreasonably withheld.
Then PLA s 82 explicitly identifies certain genres of assignment or underletting as situations where, unless the contrary is expressly declared in the lease, there would not be a breach of covenant against assigning, underletting, parting with possession or disposing of land by such nominated categories. These categories include in the case of official assignees of a bankrupt, by the liquidator of a corporation, by the sheriff or bailiff under execution or by a personal representative of the deceased pursuant to a bequest in a will.
For present purposes, the significance of cl 5.5(g) of the Crown Lease would look to be in the assumption of the draftsperson to the effect that PLA s 80 and s 82 might otherwise apply to this Crown Lease, unless explicitly excluded. As seen, both s 80 and s 82 do allow for their application to be explicitly excluded by a provision to the contrary. But what then is the position concerning s 81 insofar as it deals with relief against forfeiture? Perhaps the argument sought to be made is that because the draftsperson of the Crown Lease had thought it appropriate to explicitly exclude the application of s 80 and s 82, there was an implicit recognition that if that were not done to s 81, the provision would otherwise be engaged. The corollary to that argument is that s 81 was not excluded and, therefore, can be expected to be engaged as regards this Crown Lease.
The problem with that strain of reasoning, however, is that it is not open for the conditions or covenants within a Crown Lease to be the arbiter of whether or not a statutory provision applies to the lease, unless the legislation itself specifically permits its exclusion. That is the case with s 80 and s 82 - allowing for explicit provision to the contrary. However, that is not the case with s 81 as regards relief against forfeiture. In fact, the exact opposite is the case - by s 81(10), which provides:
This section has effect notwithstanding any stipulation to the contrary.
Thus, the pivotal issue of interpretation underlying the second preliminary question as posed, turns upon the correct understanding and application of s 81 itself, assessed within Pt VII div 1a of the PLA.
Towards understanding the correct sphere of application of this generally stated relief against forfeiture provision under the PLA, it is of assistance to see at the outset that s 81(1) provides as follows:
(1)A right of re-entry or forfeiture under any provision or stipulation in a lease for a breach of any covenant or condition in the lease is not enforceable, by action or otherwise, unless and until the lessor serves on the lessee a notice -
(a)specifying the particular breach complained of;
(b)where the breach is capable of remedy, requiring the lessee to remedy the breach; and
(c)in any case, requiring the lessee to make compensation in money for the breach,
and the lessee fails, within a reasonable time after the service of the notice on him, to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money, to the satisfaction of the lessor, for the breach.
I must observe at this point that PLA s 81(1) by its terms seen above in the preface, is made applicable to rights of re-entry or forfeiture arising under a provision or stipulation for the breach of a covenant or condition that is found, in effect, in the lease itself. That sphere of application is to be distinguished, in my view, from what is a distinct statutory regime established under LAA s 35 - which provides for a statutory notice of intention to forfeit to be given by the Minister. For that case, a forfeiture will be effected by the force of the statute -and not under the force of any provision or stipulation in the lease. That is a fundamental distinction which must be appreciated at the outset. Nor would I find that this distinction is in any way impacted by PLA s 81(6), which provides in these terms:
This section applies although the condition or stipulation under which the right of re-entry or forfeiture accrues is inserted in the lease in pursuance of the directions of any Act.
As will be seen, the Notice of Intention to Forfeit that was issued here by the Minister pursuant to LAA s 35(1), did not seek to engage with the criteria of PLA s 81(6). No condition or stipulation was relevantly inserted in the lease. An LAA s 35(1) given forfeiture notice takes effect by reference to the terms of s 35(1) itself.

Crown Lease cl 9.1 and 9.2

Returning to the Crown Lease, also to be noted within its terms are its provisions concerning default for the breach of essential terms under cl 9.1(a) regarding provisions which are identified as essential terms agreed between the parties to the Lease. Of note is cl 9.1(a)(iii) which lists 'Clause 5.1 (Permitted Use)' as being such an essential term.
Next then to be seen is cl 9.2, under the heading 'Termination of Lease'. Clause 9.2 provides:
(a)The parties agree that, in addition to any other ground for termination of law, and subject to s 81(1) of the Property Law Act 1969 if it applies, this Lease may be terminated by the Lessor:
(i)in the event of breach of an essential term of this Lease by the Lessee and failure by the Lessee to remedy the breach within 14 days after service by the Lessor on the Lessee of written notice specifying the breach and requiring the Lessee to remedy it; or
...
(vi)pursuant to the provisions for forfeiture under section 35 of the LAA.
(b)This Lease may be terminated under subclauses (a)(i), (ii), (iii), (iv) and (v) either by the Lessor giving notice to the Lessee or by the Lessor re-entering the Leased Premises without notice.
I render further observations concerning cl 9.2 at [62] below.
I turn now to the Notice of Intention to Forfeit, which is the last of the three documents within Agreed Documents (marked C).

The Minister's Notice of Intention to Forfeit dated 7 October 2014

As seen, the Notice of Intention to Forfeit dated 7 October 2014 provided notice to the respective plaintiffs regarding their Crown Lease M030330 in the following terms:
In accordance with section 35 of the Land Administration Act 1997, you are HEREBY GIVEN NOTICE that in respect of your interest in the above land;

(1) You are IN BREACH of the following condition(s) or covenant(s), and your interest in the land set out above is held subject to these conditions,

(2) The Minister for Lands INTEND [sic] TO FORFEIT your interest in that land [.] The forfeiture may occur at any time 30 days after the date of service of this Notice of Intention to Forfeit on you, unless you lodge an appeal with the Minister for Lands[.]
Note 4 to the face of the Notice under the heading 'Conditions or Covenants' displayed the reference 'See Annexure'. The face page of the Notice carried a signature under the longhand notation:
Hon Donald Terrence Redman

Minister For Lands
The Notice carried what is referred to on the last page reading:

Additional page of Notice of Intention to Forfeit (XE)

CONDITIONS OR COVENANTS
Non-compliance with Lease conditions:
1.Clause 5[.]1(b) in that the Lessee has allowed the Leased Premises to be used for purposes other than the Permitted Use which is 'Stock Holding Yards';
2.Clause 5.1(c) in that the Leased Premises are not being used for the Permitted Use which is 'Stock Holding Yards';

3.Clause 5[.]5(a) in that the Lessee sublet the Leased Premises without the prior written consent of the Minister for Lands.

A Notice of Intention to Forfeit under LAA s 35

LAA s 35 lies within Pt 2 div 3 ('General Administration' and 'General'). It presents under the heading 'Breach of condition or covenant applying to Crown or freehold land, Minister's powers in case of'. Given the importance of s 35(1) to the present proceedings it is necessary to see significant parts of this provision, which read:
(1)If in the opinion of the Minister there has been a breach of any condition or covenant subject to which -
(a)an interest in Crown land is held, the Minister must, if the Minister intends to cause the forfeiture of that interest under this section, give to the holder of that interest; or
(b)the freehold of any land transferred in fee simple under section 75(1) is held, the Minister must, if the Minister intends to cause the forfeiture of that freehold under this section, give to the holder of that freehold,
(the respondent) notice of the nature of that breach and of that intention.
(2)A respondent may, within the period of 30 days after the giving to him or her of notice under subsection (1) or such longer period as the Minister in special circumstances allows, lodge an appeal against the proposed forfeiture with the Minister under Part 3.
(3)If no appeal is lodged within the period referred to in subsection (2) or an appeal is lodged within that period but subsequently lapses, is withdrawn or is dismissed, the Minster may by order cause the relevant interest or freehold to be forfeited.
(4)On the registration of an order made under subsection (3) -
(a)the interest or freehold to which that order relates is forfeited to the State and the relevant land -
(i) becomes unallocated Crown land; or
(ii)if a sublease, caveat or other interest continues to have effect under an exemption granted under subsection (5)(a)(i), becomes or remains Crown land; or
(iii)if it is land referred to in subsection (1)(b) subdivided by a leasehold scheme, remains so subdivided and the freehold reversion in the land is held by the Minister until the termination of the leasehold scheme, when the land becomes Crown land;
and
(b)any moneys paid to the Minister in respect of that interest or freehold cannot be recovered by the respondent; and
(c)any improvement made by the respondent on the land to which that interest or freehold relates become the property of the Crown.
...
(12)An order -
(a)made under subsection (3) in respect of an interest in Crown land; and
(b)registered,
is equivalent to a re-entry and recovery of possession by or on behalf of the Crown within the meaning of any provision for re-entry expressed in, or implied by, the relevant lease or other instrument.
[Section 35 amended: No. 8 of 2009 s. 83(2); No. 23 of 2012 s. 43; No. 30 of 2018 s. 147.]
Having seen those components of s 35, I can render the following observations. In the first place, I note the chapeau to s 35(1) which refers to the opinion of the Minister as to breach of a condition or covenant.
Second, I refer to the past tense used in the chapeau and, in particular, the phrase 'there has been a breach'. The past tense as is used by the chapeau is an influential factor towards my ultimate conclusion upon the first question as posed.
Third, I would observe, by reference to s 35(1)(a), that the Minister is not obliged to cause a forfeiture merely because the Minister is of the opinion that there has been a breach of a condition or covenant subject to which an interest in Crown land is held. The Minister may so act, but is not required to act. However, where the Minister intends to cause the forfeiture of the interest, the Minister must act by reference to the proviso to s 35(1), and so, then give the holder of the interest in Crown land 'notice of the nature of that breach and of that intention' to cause the forfeiture of that interest.
Fourth, I highlight by reference to s 35(2) what is effectively a unique LAA regime providing for the lodgement of a possible appeal within 30 days against the Minister's proposed forfeiture. Such an appeal is by reference to the mechanism as is specifically provided for under Pt 3 of the LAA, which, as seen, commences at s 37, under the heading 'Part III - Appeal to Governor'. See there in particular s 38, which provides:
On receiving notice of an appeal, the Minister must cause a document setting out -
(a)the background relating to the appeal, including the grounds set out in the notice of appeal and the comments of the Minister on those grounds; and
(b)the recommended determination of the appeal,
to be delivered to the Governor.
Note also LAA s 39 and s 40 as to the determination of such an appeal by the Governor and for the outcome of that appeal being notified by the Minister to the appellant in writing.
There is real significance, in my view, in the provision of what is an independent and stand alone specific review mechanism provided for under LAA Pt 3, by appeals to the Governor. Whilst that regime might be cynically termed perhaps a review to Caesar by Caesar, given the extensive ministerial involvement. But it is not the province of the court to observe upon the merits of such an appeal mechanism. That is a legislative choice. It may be, as counsel for the Minister pointed out during argument, that historically LAA Pt 3 displays something of a holding position adopted at a time prior to an arrival of a more plenary regime for reviews de novo to the State Administrative Tribunal (the SAT) (see ts 37). Ultimately, a decision was made to not replace that regime with a right of review to the SAT. That was a policy decision of the legislature. The SAT regime of review would be a more understandable, impartial and transparent appeal route. For present purposes, the significance of s 35(2) in only allowing an appeal to the Governor against a notified forfeiture looks, in effect, to establish a self-contained regime of review.
Finally, I note s 35(3) and (4) which are provisions concerning circumstances where a Minister may by order cause the relevant interest to be forfeited. By s 35(4) it is the 'registration' of the ministerial order made under s 35(3) which by s 35(4)(a) sees the interest to which the order relates, 'forfeited to the State'.

Trial of the two preliminary questions

For the purpose of facilitating the determination of the two preliminary questions the plaintiffs and the defendant each filed written submissions. For the plaintiffs, I hold their written submissions of 25 November 2020 (folio document 82) along with their written reply submissions of 10 December 2020 (folio document 84). For the Minister, there was submitted the outline of written submissions on the two preliminary questions of 3 December 2020 (folio document 83). What follows next is only a brief and non-exhaustive conspectus of the parties' respective submissions.

Question 1 - requirement for an extant or subsisting breach

The plaintiffs argue that there must be some subsisting or extant breach at the time when a notice under LAA s 35(1) is issued (or served).
They recognise that the Minister's power under LAA s 35(1) is discretionary and is of the nature of granting to the Minister the ability to regulate and manage the use of Crown land. The defendant does not dispute the characterisation. However, the plaintiffs contend it is the discretion which makes the existence of an extant or subsisting breach relevant and required.
As I have discussed, the Minister's discretion, of course, means the Minister could have formed an opinion that there had been a breach, but it did not necessarily follow the formation of such an opinion would lead to the formation of an intent to forfeit. The plaintiffs say that it may be the case that although the Minister formed the opinion there was a breach, that breach may have been of such a nature that it was minor, short lived, non-prejudicial or had been remedied, such that a subsequent intention to forfeit is not then formed. The plaintiffs say that under circumstances such as the present, there could be no such intent formed because the very thing (the breach) that would entitle the forfeit was no longer subsisting when the requisite intent was to be formed. In that circumstance, the lease would be operating as per usual.
The plaintiffs then argue that in the circumstances where a breach has been remedied, before the Minister forms the intent to forfeit, such remedied breaches cannot properly ground the necessary intention. As counsel for the plaintiffs put it in oral argument, there is nothing for the discretion to operate on once the breach is remedied (ts 22).
The plaintiffs say that for such reasons, it was beyond the Minister's power to issue the Notice of Intention to Forfeit on either 7 October 2014 or 27 October 2014 - as there was then no subsisting or extant breach at that time.
The defendant Minister articulates a very different approach to the interpretation and application of LAA s 35. First, the Minister says that there is nothing in the wording of the section to require an extant breach. Further, it is submitted that use of the words 'has been' only requires that there once was a breach, and not that such breach is extant or subsisting. A deliberate use of 'has been', as a matter of proper grammatical tense, does not, it is said, require any present condition of breach. As such, a past breach, even if remedied, may be enough, depending on the nature of that breach, to enliven the power of the Minister under s 35.
The Minister accepts that there may be a variety of matters to be taken into consideration as and when the Minister considers forming an intent to forfeit. The scope of matters considered is only limited by the scope, subject matter and purpose of the LAA. However, the Minister says that the remediation of a past breach cannot be a determinative consideration against the formation of an intent to forfeit by the Minister. Even if wholly remedied, the nature, severity and duration of a past breach would all be considerations which could be taken into account by the Minister, alongside the consideration of remediation. The fact of a redress may not sufficiently ameliorate a prior breach which, of itself, would otherwise warrant a forfeiture of the lease. For example, a prolonged use of a lease for an illegal purpose (see ts 30 - 31), albeit ceased, may still provide a proper basis for the formation of an intention to cause a forfeiture of the lease.
Further, the Minister notes that the LAA specifies a wide range of covenants to which an interest in Crown Land may be subject - both negative and positive (see LAA s 15(4)). The Minister submits that if the phrase 'has been a breach' only incorporated subsisting breaches, the Minister would not be able to form the intent to forfeit for breaches against many such covenants as are provided for within the LAA. The Minister uses the example of a covenant that specified amenity of Crown land be maintained. Whilst a breach may not be subsisting at the time a notice is issued, the breach itself may have caused lasting adverse effects or impact. That situation could not then be adequately addressed and managed by the Minister if the breach was not subsisting - were the plaintiffs' contrary interpretation of s 35 of the LAA to be accepted. That would be directly inconsistent with the purpose of the LAA - being to ensure compliance with all conditions and covenants imposed in respect of interests in Crown land (see LAA s 269(1)). The Minister correlatively submits it cannot be assumed Parliament intended that a s 35 notice could only apply to a certain type of breach.
Further it was submitted for the Minister that it cannot be assessed that Parliament's intention was for there to be an extant breach in order for s 35 to be enlivened, given other provisions of the LAA which explicitly allow for a past breach to enliven a forfeit (see s 269(3)).
As such, the Minister ultimately submits that the first question must be answered in the negative, with the consequence that the Notice of Intention to Forfeit was valid when issued.

Question 2 - application of PLA s 81(1) to LAA s 35

The plaintiffs' position on the second question is, effectively, that the relief regime of PLA s 81(1) is to be superimposed (by cl 9.2) over what is otherwise required under LAA s 35. The result they say by their reply submissions is that (par 13):
What section 81(1) of the PLA does is to render unenforceable any right of forfeiture under any provisions or stipulation in a lease (for example, clause 9.2(a)(vi) of the Crown lease), by action or otherwise, unless and until the lessor (in this case, the Minister in the Crown lease) serves on the lessee (in this case, the plaintiffs) a notice of the kind described in section 81(1) of the PLA.
As I suggested to counsel for the plaintiffs at the trial, the plaintiffs' construction as to the wider reach of PLA s 81 into the LAA would, effectively, create one last opportunity under PLA s 81(1) to 'save the day' for the plaintiffs (before a forfeiture process could begin under s 35 of the LAA). Rather than a sudden-death-like outcome as to a forfeiture end result under s 35 (subject to a possible appeal to the Governor) being put in place by the issue of a notice of forfeiture and re-entry given under LAA s 35, the added requirements of PLA s 81(1) would allow a last chance to remedy, by conduct or money, any breach before the LAA s 35 pathway to forfeiture was opened to the Minister.
One of the basic assertions supporting the plaintiffs' submission is that the Minister entered the Crown Lease and so, agreed to be bound by cl 9.2. The plaintiffs say that it must be assumed the Minister had cognisance of both the LAA and the PLA and so, of the operative effects of the relevant provisions of each Act.
The incorporation of the words 'if it applies' as seen used in the chapeau to cl 9.2 of the Crown Lease as regards PLA s 81(1), is a deliberate choice of terminology explicable by looking at s 81(2), say the plaintiffs. The plaintiffs then submit that s 81(1) would apply when dealing with, amongst other things, the right of forfeiture for a breach of a condition - which they say that is the case here, relying on the Agreed Facts.
The plaintiffs submit that for this case, a forfeiture result might have been effected under cl 9.2, but was not. By instead relying on the power in LAA s 35, the plaintiffs say the Minister 'circumvented' what was the agreement under cl 9.2, to address the situation by PLA s 81(1) (written submissions par 31). They say that Ministerial action (utilising LAA s 35) was 'conditioned by the requirements of s 81(1) of the PLA' (written submissions par 32).
The plaintiffs say that there is nothing in the LAA or PLA which would prevent s 81(1) applying to the Minister.
The Minister contends differently and says that the answer to the second question should be answered in the negative for, essentially, three reasons. First, it is put generally that the PLA s 81(1) does not bind the Crown. Various submissions were made in this regard including that on the proper construction of Part VII of the PLA, there is no express indication s 81(1) would bind the Crown, by contrast to other provisions of the PLA which do (see s 99(2)). As a matter of statutory context, it is also submitted that at the time when the PLA was enacted, there was another Act (the Lands Act 1933 (WA)) which had specifically bound the Crown as regards the administration of Crown Land. However, as I come to discuss, I do not find it necessary in this case to finally determine the question of whether PLA s 81(1) is generally binding on the Crown or not.
Second, the Minister submits that the proper construction of cl 9.2 of the Crown Lease does not require the Minister to comply with PLA s 81(1). The Minister submits that the true construction of the words 'if it applies' only reflects the draftsperson's awareness of a debate over whether PLA s 81(1) can apply in a situation involving the termination of an interest in Crown Land. The Minister submits that by contrast to the submission of the plaintiffs, it cannot be 'assumed' either party (objectively assessed) when entering the Crown Lease knew if PLA s 81(1) would apply, particularly given arguments the Minister advances above. Use of the words 'if it applies' simply left that question open for these parties.
As a constructional exercise, the Minister also submits that if it was intended that the Minister would be bound by PLA s 81(1), it is unclear why the words 'subject to s 81(1) ... if it applies' would be included. The Minister says given s 81(1) obviously cannot apply to some subclause scenarios under cl 9.2, the parties would not (objectively) have intended that the application of s 81(1) would depend on whether the terms of the section were satisfied.
The Minister also submits that an invocation of the power in LAA s 35(1) was an option the Minister was entitled to deploy under cl 9.2, even if on the facts it would have been open for him alternatively to proceed under cl 9.2. Further, it was put that cl 2.1(b) expressly provides that the provisions of the Crown Lease do not affect, alter or derogate from the Lessor's or Minister's rights or powers as they are conferred under the LAA.
Third, it was submitted that the terms of PLA s 81(1) do not in any event inhibit the Minister's exercise of a right of forfeiture via LAA s 35. The Minister contends that LAA s 35 is not a right of re-entry or forfeiture under a provision of the Crown Lease. Rather, it is a statutory power by the force of its own terms. Therefore, s 81(1) cannot apply for this case as the Minister elected to exercise a statutory right under the LAA and so, not a provision or stipulation in the lease as to forfeiture. I have identified this key distinction earlier in the reasons at [21].
Despite the submissions for the Minister, the plaintiffs reply that there is no reason the PLA s 81(1) and LAA s 35 can be read consistently and operate effectively together. They also submit that arguments as to the statutory construction of PLA s 81(1) are largely irrelevant as here the Minister willingly chose to be bound by such under the terms of the Crown Lease. They say the reasonable and commercially appropriate construction is that PLA s 81(1) is superimposed upon to condition any power the Minister may exercise under LAA s 35 so as to afford the Lessee an opportunity to engage in the relief regime of PLA s 81(1).

Resolution

Save for the fact that I do not accept it is necessary to determine any wider question concerning the contended non-application of PLA s 81 to the Crown generally, I am otherwise of the view that essentially, the submissions of the defendant Minister are correct and must be accepted on both issues.
Generally, I would accept the Minister's submissions as to the sphere of application of PLA s 81(1). Particularly, I accept that the phrase deployed in the chapeau to cl 9.2(a) of the Crown Lease, 'if it applies', used in reference to PLA s 81(1), is explicable on the basis of the draftsperson exhibiting some caution towards s 81(1), for circumstances where there is absolutely no case authority on this point, as I was informed was the case (ts 15 and 33).
On my assessment, however, it is not necessary to deal with that presently unresolved wider question of application. Here, it is possible to adopt, as I would, a narrower reading of cl 9.2(a), which I favour.
My view, in effect, is that cl 9.2 of the Crown Lease identifies a number of different mechanisms under which that lease might be terminated. One of these, for instance, is for the breach of an essential term, under cl 9.2(a)(i) or under cl 9.2(a)(ii) or (iii). For that situation, the lessor may choose to terminate for such breach circumstances by a utilisation of the provisions for termination, as are explicitly provided for by the terms of the Crown Lease itself.

However, the range of potential termination mechanisms for a breach, as identified under cl 9.2, may extend beyond what might be referred to as a mere contractual remedy under the provisions of the Crown Lease itself.
So then, above and beyond mere contractual forfeiture remedies, there also subsists an explicitly identified further basis of potential termination via the forfeiture provisions of LAA s 35, as explicitly recognised under cl 9.2(a)(vi). And that would still be the case even if there was no explicit identification of the unique statutory termination route via LAA s 35 in the Crown Lease itself.
The words of the chapeau seen used in reference to PLA s 81(1) 'if it applies' simply render an acknowledgement of what would be their non-application where a Notice of Forfeiture Termination is given by the Minister pursuant to LAA s 35.
By that reading, questions as to whether PLA s 81(1) has any potential further application, say, to a different termination of lease scenario effected as a purely contractual termination concerning a Crown Lease, may be left to be resolved, if necessary, on another day.
On my view, this differentiation is supported by cl 9.2(b). As seen, it omits the situation of (vi) from situations that are otherwise identified as terminations under notice given by the lessor to the lessee or by a re‑entry without notice.
In other words, cl 9.2(b) of the Crown Lease, read with cl 9.2(a)(vi), acknowledges what is the distinct regime of a potential statutory termination by the Minister given under LAA s 35. For that particular situation, the words of the chapeau 'if it applies' are permissive - in the sense of recognising at least one genre potential lease termination where PLA s 81(1) does not apply.

Question 1

So then, as regards the first question, I am of the end view that the words 'has been' used in the chapeau to LAA s 35(1), do not require a subsistence of an extant breach at the time of issue or service of the Notice of Intention to Forfeit the Crown lease. In particular, I agree that the scope of matters that may be taken into account by the Minister in forming the intention to forfeit is limited only by the scope, subject matter and purpose of the LAA. Clearly, the facts of different breach scenarios concerning Crown leases may be infinitely various. They will range from the trivial to the very severe. Hypothesise, for instance, a situation of the lessee engaging in a non-permitted criminal activity by using the premises for an illicit methylamphetamine manufacturing plant, or as a terrorist training facility. A plenary contention of the plaintiffs that fully remediated breaches can never provide a basis for the issuance of a Notice of Intention to Forfeit under LAA s 35(1), simply cannot be accepted.
As such, I answer Question 1 in the negative.

Question 2

As to the second question, as now discussed above, I favour a narrower approach towards the work of the words used in the Crown Lease under cl 9.2, namely, 'if it applies'. As explained, for the unique termination situation of a statutory Notice of Intention to Forfeit given by the Minister under LAA s 35(1), PLA s 81 has no application. Essentially, I reach that view on the basis that s 81 by its terms is made applicable to the situation of a right of re-entry or forfeiture that is held under a provision or stipulation in a lease - what might be termed a contractual termination for a breach of covenant or condition. That situation, however, is not akin to an LAA s 35(1) statutory termination leading to the potential registration of an order under s 35(4)(a), then resulting in the forfeiture of the interest to the State. That genre of Crown Lease forfeiture is statutory, not contractual. It is not a circumstance that is addressed by s 81 of the PLA.
The LAA, under Pt 2 and under Pt 3 within div 3, direct what, on my assessment, is effectively a self-contained regime of Ministerial termination by notice and appeal rights. That regime, as I assess it, is unique and isolated. It is also wholly inconsistent with the argued overlay of any contended qualification by reference to PLA s 81(1). In short, there is no scope for PLA s 81(1) to intrude upon the LAA s 35 potential forfeiture and the self‑contained appeal regimes.
I answer Question 2 in the negative as well.

Conclusion

Consequently, I have determined that each question as has been submitted for separate determination to the court must be answered in the negative.
I will hear the parties if necessary concerning further and consequential orders, including as to costs, upon the publication of these reasons. I will allow 14 days for the parties to confer upon appropriate orders giving effect to these reasons and as to costs. Absent agreement, the defendant as the successful party should submit a minute of proposed orders and I will resolve any further issues on the papers if they cannot be agreed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
DW
Associate to the Honourable Justice Martin
15 JANUARY 2021