Living and Leisure Australia Ltd (ACN 107 863 445) v Commissioner of State Revenue

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2018 0003

LIVING AND LEISURE AUSTRALIA LTD (ACN 107 863 445)	Applicant
v
COMMISSIONER OF STATE REVENUE	Respondent

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JUDGES:	FERGUSON CJ, WHELAN and NIALL JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	9 August 2018
DATE OF JUDGMENT:	17 September 2018
MEDIUM NEUTRAL CITATION:	[2018] VSCA 237
JUDGMENT APPEALED FROM:	[2017] VSC 675 (Croft J)

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LANDLORD AND TENANT – Lease or licence – Agreements relating to ski fields containing reservations in favour of public – Whether grant of exclusive possession – Alpine Resorts Act 1983 s 28 – Radaich v Smith (1959) 101 CLR 209 – Goldsworthy Mining Ltd v Federal Commissioner of Taxation (1973) 128 CLR 199 – Western Australia v Ward (2002) 213 CLR 1 – Western Australia v Brown (2014) 253 CLR 507 – Queensland v Congoo (2015) 256 CLR 239.

TAXATION AND REVENUE – Land tax – Grant of Crown land with significant reservations – Whether grantees hold land as lessees – Land Tax Act 2005 ss 10(1)(b), 79(2)(a).

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr P H Solomon QC with Ms S Gory	PricewaterhouseCoopers
For the Respondent	Mr C J Horan QC with Ms F Cameron	Solicitor for the Commissioner of State Revenue

FERGUSON CJ
WHELAN JA:

We have read in draft the reasons of Niall JA. He has fully set out the statutory context to this application and appeal, the relevant history, the terms of the Falls Creek lease (which the parties agree do not differ in any relevant respect from the Mount Hotham lease), the reasons of the trial judge, the submissions made on the appeal, and the relevant legal principles. We agree with and adopt what he has said on those topics.
On what we consider to be a finely balanced issue, we find that we are unable to reach the same conclusion Niall JA has reached on the critical issue, being whether the relevant instruments are ‘leases’, in that they confer on the ‘lessees’ exclusive possession of the demised land. When we refer to exclusive possession we do so in the sense in which that term is used in the relevant authorities, as referred to by Niall JA.
These reasons assume knowledge of the reasons of Niall JA and we will use the same defined terms and case abbreviations he has used. We proceed on the basis that an analysis of the Falls Creek lease applies equally to the Mount Hotham lease, as did the parties and as has Niall JA. For that reason, while addressing both leases, we will cite the relevant clauses from the Falls Creek lease. In the end, the issue comes down to an assessment of the significance of the public access provisions of the instruments. But before considering those provisions, it is necessary to address the position more generally.
Was exclusive possession conferred, absent the public access provisions?
Absent the public access provisions, a conclusion that the parties intended to enter into leases, intended to confer exclusive possession, and did so, is overwhelming. Everything about the text of the instruments, their context, and their purpose supports that conclusion, with the single exception of the reservation concerning public access (cl 2.1(k)) and the obligation placed on the lessee concerning public access (cl 5.24).
The instruments were entered into by the Governor in Council pursuant to s 28(2) of the Alpine Resorts Act 1983 (‘the Act’) which regulates the granting of leases.[1] Clause 10.4 expressly incorporates the provisions of s 28(4) of the Act. Section 28(5) of the Act characterises the interest of a lessee under an instrument entered into pursuant to those provisions as an interest in the land. As McHugh J observed in Ward, when a statute uses such a well-known legal term as ‘lease’ the natural conclusion is that the term has the common law meaning.[2] Ordinarily, use of the term ‘lease’ is understood as involving the grant of a right to exclusive possession.[3]
[1]All references to the Act are to the version in force as at the time of the entry into of the lease.
[2]Ward (2002) 213 CLR 1, 237 [549].
[3]Lewis v Bell (1985) 1 NSWLR 731, 735.
The terminology employed in the instruments is the terminology of a lease. The terms used are ‘lease’, ‘demise’, ‘rent’, ‘lessor’, and ‘lessee’. The demise itself is in the conventional terms of a lease. It covers not just the surface but the sub-surface to a specified depth. It is for a term of 50 years. Other provisions recognise expressly that what is conveyed is an interest in the land (cl 5.3.1 and cls 10.4–10.5). The lessee covenants to ‘deliver up the demised land’ at the expiration of the lease (cl 9.1). These matters are not determinative,[4] but they are relevant.
[4]Wik Peoples (1996) 187 CLR 1, 117–8 (Toohey J), 152 (Gaudron J); Brown (2014) 253 CLR 507, 524 [43].
The instruments contain obligations of the kind typically found in leases, including obligations which are consistent only with the conferral of exclusive possession. In that respect we refer to cls 5.5.1, 5.6 and 5.7 whereby obligations are placed on the ski lift operators not to ‘permit or suffer’ conduct of specified kinds on the demised land. The implicit assumption is that they have effective control of the land.
The role of the instruments in enabling the ski lift operators to conduct the ski lift businesses authorised to be conducted by their terms, is relevant.
Before the instruments FC Lifts had a permit to operate its ski lift business which expressly gave it exclusivity, and also had a leasehold interest over the strips of land upon which each ski lift was erected and travelled over. MH Skiing had a similar lease of the strips of land, with a right of first refusal in the event the government wanted to install any new ski lifts. Thus, under the earlier arrangements the ski lift operators had exclusive possession of the land which was essential to their businesses and were protected from competition. In the absence of exclusive possession, their position in relation to these matters under the relevant instruments is by no means clear. The trial judge considered that a third party could not construct a new ski lift but that the State or the Commission could.[5] Niall JA concludes that the State could not construct a new ski lift and that it is ‘most likely’ that a third party could not. In our view, the reason why the position was not made clear in the instruments, in contrast to the earlier arrangements, is that it was assumed that the ski lift operators had possession of the land they needed and were protected from competition by virtue of the demise itself, because it gave them exclusive possession of the demised land.
[5]Reasons [41].
Apart from the reservation in favour of public access, and the related obligation imposed on the lessee, the other reservations in the instruments are not such as would lead to a conclusion that exclusive possession had not been conferred.
The public access provisions
There are two provisions concerning public access to the demised land. One is cl 2.1(k), whereby the lessor reserves to itself, out of the interest in the land demised to the lessee, a right for the public ‘to enter upon use and enjoy’ the demised land. The other is cl 5.24, which obliges the lessee to allow the public ‘to have access to all parts of the demised land (excluding buildings and improvements) which are used and enjoyed by the public’. The provisions contain provisos whereby the access provided for must not unreasonably obstruct or interfere with the ski lift operations (cl 2.1(k)) or with the operators’ buildings, equipment, services and facilities (cl 5.24). The obligation in cl 5.24 also has an exception in relation to persons seeking to use the demised land for commercial gain.
The provisions permit the ‘public’ to ‘use and enjoy’ the demised land (subject to limitations). These words reflect one of the objects of the Commission under s 8 of the Act, being to undertake the orderly establishment, continuation and development of alpine resorts with facilities and services ‘which will encourage all persons irrespective of their income to use and enjoy alpine resorts’.
As Niall JA has observed, the public access provisions give effect to one of the Commission’s objectives, and do so in a way not inconsistent with the commercial interests of the ski lift operators.
The reservation in cl 2.1(k) and the obligation in cl 5.24 are obstacles to a conclusion that the ski lift operators have exclusive possession. They are at least as wide as reservations which were held to be significant by the High Court in Wik Peoples, Ward and Brown.[6] They are wider than the reservation in Whangarei Harbour Board.[7] Notwithstanding that position, there are four reasons why we have concluded that exclusive possession was conferred, notwithstanding the width of the public access provisions.
[6]See Wik Peoples (1996) 187 CLR 1, 154; Ward (2002) 213 CLR 1, 126 [178]; Brown (2014) 253 CLR 507, 524–5 [45].
[7]Whangarei Harbour Board [1930] NZLR 554, 556.
First, while the provisions are wide, the access they provide for has limits. Access is for the ‘members of the public’ or the ‘public’. In our view, this confines access to individuals or groups entering in a private capacity. This is confirmed in cl 5.24 by the preclusion of access for commercial gain. The access is for ‘use’ and ‘enjoyment’. Express reference is made to ‘visitors and skiers’ and to ‘any community facility’ in cl 2.1(k). In our view, in the context, access is only for recreational use. The areas to which the public may have access are restricted by the requirements that there be no interference with the ski lift operators’ activities or their buildings, equipment, services and facilities. The operators conduct their activities and can position their buildings, equipment, services and facilities anywhere they choose on the demised land (subject to compliance with the other provisions of the instruments) and public access to any area of the land can be effectively lost as a result.
Secondly, the instruments require the ski lift operators to control the conduct of members of the public on the land. Clauses 5.6 and 5.7, to which we have already referred, provide that the lessee is not to ‘permit or suffer’ conduct which is riotous, disorderly, offensive, improver, illegal, or unlawful. This is consistent only with the ski lift operators having control over who may remain on the land, including members of the public to whom the public access provisions might otherwise apply, indicating that the ski lift operators do have exclusive possession. In a similar vein, the instruments provide that the operators must not ‘permit or suffer’ any noxious, noisome or offensive act, trade, business, occupation or calling on the demised land (cl 5.5.1). Again, this indicates a level of control consistent with the right of exclusive possession, including in relation to members of the public to whom the public access provisions apply.
Thirdly, in our opinion, the High Court decision in Radaich v Smith gives support to the conclusion that the instruments are leases.[8] In that case an instrument granted what was described as a ‘licence’ to supply refreshments to the public in a shop and to carry on the business of a milk bar in that shop. Notwithstanding the terminology employed, the High Court found that exclusive possession had been granted and that a leasehold interest had been created. In substance, the judges reached that conclusion because exclusive possession was necessary in order to carry on the licenced business. McTiernan J observed that the business ‘could only be carried on in reasonable convenience by persons having the exclusive possession of the premises’.[9] Taylor J said that the ‘character of the business was such that it could only be effectively carried on if [the licensee] had exclusive occupation’.[10] Menzies J observed that the obligations to occupy the shop, carry on the business, and give up possession at the end of the term required a conclusion that the occupier had the right of exclusive possession.[11] Windeyer J said that the relevant question had to be resolved by considering the terms of the deed but those terms had to be read ‘in relation to the relevant surrounding circumstances, in particular the nature of the premises, which in this case were a lock-up shop’.[12] Dixon CJ agreed with the other members of the Court.[13]
[8](1959) 101 CLR 209.
[9]Ibid 215.
[10]Ibid 217.
[11]Ibid 221.
[12]Ibid 223.
[13]Ibid 213.
In our view it was essential that the ski lift operators had exclusive possession of at least those parts of the demised land upon which their buildings, infrastructure and equipment were situated. Regulation of potential competition was also important. The instruments addressed both issues by leasing the whole of the demised land. Like the shop lessee in Radaich v Smith, exclusive possession of the demised land was necessary for the ski lift operators in order for them to carry on the businesses provided for by the instruments. They did not need exclusive possession of all land, but they did need exclusive possession of the critical parts of it. The businesses could not be reasonably carried on without exclusive possession of those critical parts, and those critical parts are not fixed or delineated. They might be anywhere on the demised land and they might change from time to time. The whole of the land was demised because, provided public access for non-commercial use and enjoyment was preserved to the non-critical parts of the land, the interests of all could be accommodated in that way.
We recognise that the physical characteristics of the ‘lock-up shop’ in Radaich v Smith, being a confined area which was required to be opened and closed at specified times, are a significant distinction between the position considered by the High Court in that case and the position here, where the demised land is, in large part, open countryside. The two cases are not directly analogous but the decision in Radaich does lend support to our conclusion because it indicates that the requirements of the business which the relevant instrument authorises to be carried on is a relevant consideration. The fact that the ski lift businesses do require exclusive possession of areas of the demised land which were not fixed or delineated, and which might be positioned anywhere on the demised land, does support a conclusion that exclusive possession over the demised land was conferred.
Finally, it seems to us that the conclusion that the instruments are leases is also supported by Mason J’s decision in Goldsworthy.[14] Goldsworthy concerned a ‘lease’ of an area of seabed in the harbour of Port Hedland. The relevant instrument demised to certain mining joint venturers the seabed delineated on a plan to a depth of 45 feet to enable dredging. For reasons related to income tax, it was necessary to determine whether the instrument constituted a licence or a lease. It included a provision whereby the joint venturers were required ‘to permit the Crown and any vessel to use any part of the demised premises for navigation, anchorage or other purposes incidental to shipping’.[15] The joint venturers were also required to consent to the granting of easements or other rights in or over the demised premises as might from time to time be reasonably necessary for ‘the overall development or use of the harbour of Port Hedland’.[16] In relation to these provisions Mason J said:
Although these provisions restrict the use to which the joint venturers may put the premises and impose obligations of an important kind, in my view they are not inconsistent with the existence of a right of exclusive possession in the joint venturers. Indeed the provisions assume the existence of that right. Some of the provisions are novel but their introduction is explicable by reference to the relationship of the premises to the navigable channel which it underlies and to the harbour of Port Hedland.[17]
[14](1973) 128 CLR 199.
[15]Ibid 213.
[16]Ibid.
[17]Ibid.
Mason J recognised, as had the High Court in Radaich v Smith, that when considering whether exclusive possession has been conferred, the terms of the instrument must be read in the context of the nature of the premises and the use to which they are to be put. Restrictions which appear very broad may, in the context, not be inconsistent with the grant of exclusive possession. Mason J held that to be the case in Goldsworthy in relation to restrictions which, in our view, are not dissimilar to those imposed here. Like the joint venturers in Goldsworthy, the ski lift operators here have exclusive possession notwithstanding the public access provisions because those provisions assume the existence of a right to exclude (absent the provisions) and are explicable by the relationship between the operators and the demised land as previously explained. The nature of their occupation and permitted use is such that while they must have exclusive possession of critical parts of the land they can accommodate public access to other parts for non-commercial use and enjoyment.
We are conscious of the fact that our conclusion may be seen to not sit comfortably with aspects of the High Court judgments in the native title cases to which Niall JA has referred, particularly Wik Peoples and Ward. In the relevant respects, those cases dealt with particular kinds of leasing arrangements having particular characteristics. Wik Peoples and Ward, in the relevant respects, dealt with statutory leases with characteristics referable to the circumstances of the early development of agriculture and mining in remote parts of Australia. That is not the case in relation to the lease in Brown, but that decision also dealt with a somewhat unusual type of lease being a mining lease. In that respect we would adopt what was said by Hayne J in Congoo.[18] The relevant enquiry is always one which depends on the terms of the particular restriction in the context of the land and the other provisions of the instrument.

[18](2015) 256 CLR 239, 277 [75].

The issue is, as we have said, finely balanced. In our opinion, however, the balance falls in favour of a conferral of exclusive possession, so that the ski lift operators are lessees of Crown land.

We would grant leave to appeal, but dismiss the appeal.

NIALL JA:

The Commissioner of State Revenue assessed the applicant for land tax for the 2010 to 2015 tax years on the basis that it was the ‘owner’ of two parcels of land at the summits of Mount Hotham and Falls Creek. The assessments were premised on the applicant holding the land as lessee under two leases from the Crown.

Following unsuccessful objections, the applicant appealed the assessments to the Trial Division.[19] The primary judge held that the instruments conferred exclusive possession and that land tax was correctly levied on the applicant as the ‘owner’. His Honour dismissed the appeals and confirmed the assessments.
[19]The appeals were instituted under s 106 of the Taxation Administration Act1997.

The applicant now seeks leave to appeal to this Court. The ultimate issue in this proceeding is whether the two instruments under which the applicant holds the land are leases. As will appear, resolution of that question turns on whether each instrument gave the applicant exclusive possession of the land to which it relates.

For the reasons that follow, I have come to a different conclusion from that reached by the primary judge on that question. I have concluded that neither of the instruments conferred exclusive possession.

Accordingly, I would grant leave to appeal and allow the appeal.

The statutory context

Although the issue raised by this appeal ultimately turns on the text of the two instruments, it is desirable to commence with the statutory context and some matters of history.

Land Tax Act 2005

The Land Tax Act2005 provides for the imposition of land tax on the ‘owner’ of taxable land.[20] ‘Taxable land’ is defined in the Act to mean ‘land that is not exempt land’.[21]
[20]Land Tax Act 2005 s 8.
[21]Ibid s 3.

Section 10 sets out the persons who are owners of land for the purposes of the Act. Relevantly, ‘a person entitled to land under a lease of Crown land’ is considered an owner.[22]
[22]Ibid s 10(1)(b).

Section 79 deals with Crown land, and provides, among other things, that land is exempt land if it is the property of the Crown in right of Victoria.[23] However, Crown land is not exempt where it is held by a lessee under a lease of Crown land.[24]
[23]Ibid s 79(1)(a).
[24]Ibid s 79(2)(a).

The applicant is a related corporation of Falls Creek Ski Lifts Pty Ltd (‘FC Lifts’) and Mount Hotham Skiing Company Pty Ltd (‘MH Skiing’) (together, the ‘grantees’). Pursuant to s 50 of the Act, the Commissioner elected to treat the applicant, the grantees and certain others as a single corporation for the purposes of the Act.

Alpine Resorts Act 1983[25]

[25]The provisions of the Alpine Resorts Act1983 discussed here are those that were in force at the time the instruments were executed (in 1991 and 1992 respectively).

Section 4 of the Alpine Resorts Act1983 established the Alpine Resorts Commission (‘Commission’). Section 8 of the Act set out the objects of the Commission, which included to plan for and undertake the development of alpine resorts and tourist accommodation and other facilities to encourage all persons to use and enjoy alpine resorts.

Section 19 provided for the Governor in Council to declare Crown lands (other than those in a national park) to be an alpine resort. Section 21 provided that all Crown lands in alpine resorts shall be deemed to be Crown lands permanently reserved as alpine resorts under s 4(1)(v) of the Crown Land (Reserves) Act 1978.

Part V of the Act dealt with the management of alpine resorts. Section 24 provided that the Commission was responsible for the administration, control and management of alpine resorts. Subsections (11) and (12) preserved the operation of any lease, licence, agreement, arrangement or other authority entered into by a committee of management of an alpine resort before the commencement of the section.

Part VI of the Act was entitled ‘Development and protection of alpine resorts’. Section 27(1) reinforced the role of the Commission with respect to alpine resorts by providing that, except in cases of emergency, any person or body having power under any other Act or law to carry out any works or undertakings or to supply any service cannot exercise that power in any alpine resort without the concurrence of the Commission.

Section 28 provided:

28. Lease etc. of land in alpine resorts
(1) Crown lands within alpine resorts shall not be leased or otherwise dealt with except as provided in this Act.
(2)The Governor in Council or, where the term and the value of the improvements to be erected are less than the limits prescribed in relation thereto, the Commission, may grant or renew leases of land in alpine resorts —
(a)for business undertakings for a term not exceeding 50 years or, in any particular case where the Commission certifies that in its opinion any buildings or structures to be erected are of such substantial nature and high value as to justify a longer term, for a term not exceeding 99 years; and

(b) for ski lodges for a term not exceeding 50 years; and
(c)to any public authority for a term not exceeding 50 years.

(3)A lease shall not be granted under sub-section (2) for a ski lodge unless the Commission is satisfied that the ski lodge will be under the management and control of a ski club, co-operative society, incorporated association or other organization and has a membership of not less than 25 persons over the age of sixteen years.
(4)A lease under this section shall be subject to such terms and conditions as are prescribed and to such other covenants, exceptions, reservations and conditions as the Commission thinks fit and may be subject to a condition that the lease may be cancelled if the land the subject of the lease is reasonably required by the Commission for the improvement of the alpine resort.
(5)A lessee of land within an alpine resort shall not transfer, assign or mortgage his interest in the land or any part of his interest in the land without the written consent of the Commission.[26]

[26]This section was repealed in April 1998.

In 1985, Crown lands at Falls Creek and Mount Hotham were declared to be alpine resorts under s 19 of the Act.

Dealings in the demised lands

Before coming to the terms of the instruments, it is useful to set out some history of the dealings in the demised lands.

Falls Creek land

In October 1965, an exclusive permit was granted in respect of an area of land known as the Falls Creek Tourist Area. This permit was subsequently acquired by FC Lifts. The permit authorised the permit holder to ‘operate all existing uphill transport installations for skiers’ and to construct new installations. It was a term of the permit that the Falls Creek Tourist Area Management Committee would not permit any other person to operate (or enter the alpine area for the purpose of operating) any of the uphill transport installations or to construct new installations.

In addition to the permit, the permit holder also entered into instruments, described as leases, in respect of the strip of land underneath each ski lift. These were referred to as tram track instruments and conferred rights in relation to the applicable land.

Following a proposal by the Victorian government to consolidate part of the land included in the permit into a ‘new consolidated Crown Lease’, the Governor of Victoria and FC Lifts entered into a lease on 7 May 1991 (‘Falls Creek lease’). The lease was in respect of land, including ski fields, within the Falls Creek Alpine Resort.

Mount Hotham land

On 1 January 1981, MH Skiing was granted a ‘Crown lease’ for a term of 70 years. This instrument covered the tram tracks beneath existing ski lifts and gave to the operator the right of first refusal in the event that the government wanted to install any new ski lifts at Mount Hotham.

The Commission subsequently requested that MH Skiing enter into a new Crown lease with amended terms to give effect to, among other things, the alteration of the demised land to include improvements erected by MH Skiing and the inclusion within the demised land of ski slopes associated with MH Skiing’s ski lifts and tows.

On 22 December 1992, the Governor of Victoria and MH Skiing entered into a lease in respect of land within the Mount Hotham Alpine Resort (‘Mount Hotham lease’).

The Falls Creek lease

At this point, it is useful to survey some of the clauses in the Falls Creek lease. Before us, the parties were in agreement that this lease is, in relevant respects, similar to the Mount Hotham lease. Whatever the differences, the parties agreed that the result on the critical issue would be the same in respect of both leases.

The Falls Creek lease was made on 7 May 1991 between the Governor in Council (as lessor) and FC Lifts (as lessee). After reciting some aspects of the history referred to above, the lease states:

WITNESSETH that in consideration of rent and covenants hereinafter reserved and contained and on the part of the Lessee to be paid, observed and performed the Lessor in pursuance of the aforementioned Act DOES HEREBY DEMISE AND LEASE unto the Lessee ALL THOSE pieces or parcels of land coloured red described in the First Schedule hereto down to a depth of 15.24 metres together with the improvements (if any) erected thereon and subject always to the provisions of Clause 4.8 hereof TO HOLD the same unto the Lessee for a Term of 50 years commencing on the 1^st day of January, 1991 and ending on the 31^st day of December, 2040 YIELDING AND PAYING THEREFOR until the Lessor yearly in advance the rent set forth in the Second Schedule hereto.

The lease defines the demised land as:

the land hereinbefore described and where the context so admits any part of the land and includes the structures improvement and fixtures now erected or installed or placed or to be erected or installed or placed thereon during the term of this Lease.[27]

[27]Falls Creek lease cl 1.

Clause 2 sets out a series of exceptions and reservations. It is unnecessary to set out the text of the reservations in cls 2.1(a) to (g). It is enough to note that they reserve to the lessor rights with respect to mining and minerals, water, pipes and related services, and land below 15.24 metres.

Clause 2.1(h) reserves to the lessor the right to construct, lay, maintain, repair, alter and replace any necessary public or community services on the demised land (other than surface/aerial ski lifts). That right is limited by a proviso that the lessor give notice, and that the authorised activities not unreasonably interfere with or inconvenience the lessee. In addition to that right, cl 2.1(i) authorises the lessor to install and maintain ski patrol facilities, shelters, toilets and other infrastructure, including walking trails, cross-country ski trails, roads and all signs, and trail markers on the demised land, all of which remain the property of the State.

The two reservations that are central to the appeal are as follows:

2.1 The following shall be excepted and reserved unto the Lessor out of the demised land:
…
(j)right and authority for the Lessor, its servants, agents, contractors, licensees or grantees of authorities under the Act to enter and remain upon the demised land for so long as is necessary or desirable for the purpose of exercising or enjoying any right, entitlement, interest or legitimate expectation bestowed given or granted to such person by the Lessor (or for the purpose of undertaking any duty or obligation) whether of a contractual or statutory nature on the demised land;
(k)free liberty and authority for all members of the public, including visitors and skiers to enter upon use and enjoy the demised land including rights of access for the public to any community facility whether located within the demised land or not provided that such access shall not unreasonably obstruct or interfere with the permitted uses of the demised land pursuant to the provisions of this Lease.

The parties acknowledged that it is necessary to read cl 2.1(k) together with cl 5.24. Clause 5.24 further addresses the use of the demised land by the public and provides:

5.24The Lessee shall allow the public (save for persons seeking to use the demised land for commercial gain) to have access to all parts of the demised land (excluding building and improvements) which are used and enjoyed by the public except insofar as such access might prevent the Lessee from providing reasonable protection to buildings equipment services and facilities for the time being on the demised land or which might prevent the Lessee from ensuring the safety and good behaviour of persons using such buildings, equipment, services and facilities on the demised land generally.

Clause 2.2 provides:

The Lessor hereby grants to the Lessee subject to obtaining all necessary consents and approvals rights to construct and operate all structures and facilities associated with ski lifts, ski schools, restaurants, shops, accommodation and snow making over those pieces or parcels of land shown cross-hatched on the plans annexed to the First Schedule which land shall not form part of the demised land and to carry out such measures as may be necessary to operate, test, inspect, repair, maintain, alter or replace any such structures and facilities and to enter into and upon the land whether by itself or by its servants agents and contractors and work people for this purpose subject always to the terms conditions of this lease insofar as these are applicable to the grant of these rights.

Clause 4 deals with the ‘rent’ and other payments due under the lease. It obliges the lessee to pay ‘the yearly rental’, the community service and administration charges set under s 30 of the Alpine Resorts Act, rates, taxes charged on the land and charges levied for the provision of services to the land, including electricity, water, sewerage and waste charges.

Clause 5 provides for the permitted use of the demised land by the lessee. It provides that the lessee shall not use or permit the use of the demised land for any purpose other than those stipulated in cls 5.1(a) to (l). In general terms, these clauses relate to the construction, operation and maintenance of ski lifts and ski fields and staff amenities. Clause 5.3 provides, among other things, that the lessee cannot assign or sub-let the land without the consent of the lessor.

Clauses 5.6 and 5.7 set out obligations in relation to improper conduct and illegal or unlawful acts committed by persons on the land. The clauses provide:

5.6The Lessee shall not permit or suffer any riotous, disorderly, offensive or improper conduct in or upon the demised land or permit or suffer any person who is behaving in a riotous, disorderly, offensive or improper manner to be or remain in or upon the demised land.
5.7The Lessee shall not permit or suffer any illegal or unlawful act to be performed or done in or upon the demised land.

The lease prohibits the lessee from doing a number of things without the lessor’s consent, including using the land for advertising,[28] cutting timber or removing vegetation,[29] and erecting fences (other than temporary fencing for the purposes of farming snow and controlling the movement of skiers).[30]
[28]Ibid cl 5.10.
[29]Ibid cl 5.14.
[30]Ibid cl 5.15.

Clause 6.1 requires the lessee to keep all buildings and structures in good repair. Clause 6.3 provides that, with the consent of the lessor, the lessee may construct buildings or structures on the land.

Clause 6.4 authorises the lessor to enter on the demised land at all reasonable times and with notice to inspect the condition of the demised land and assess the lessee’s compliance with its covenants under the lease.

Clause 10 addresses default and termination and provides that the lease is subject to the provisions of the Alpine Resorts Act[31] and terminable in certain circumstances for breach.[32] It is recorded that the lease may be cancelled under s 28(4) if the land is reasonably required by the Commission for the improvement of the resort.[33] In that circumstance, cl 10.5 provides for compensation.
[31]Ibid cl 10.1.
[32]Ibid cl 10.2.
[33]Ibid cl 10.4.

The reasons of the primary judge

The judge observed that the proper starting point is to determine whether, by reference to the rights conferred, the grantees had exclusive possession.[34] In that regard, his Honour observed that the language employed in the instruments, including the use of technical terms such as ‘lease’ and ‘demise’, is relevant but not determinative.[35]
[34]Living and Leisure Australia Ltd v Commissioner of State Revenue [2017] VSC 675 [12] (‘Reasons’).
[35]Reasons [13], [15].

The judge identified that a right of exclusive possession is one that affords to its holder a general right to exclude others, including the grantor, from the subject property, subject to such specific provisions for entry as may be provided for in the lease.[36]
[36]Reasons [20].

After rehearsing a number of authorities, to which I shall later refer in greater detail, his Honour referred to three general matters which he regarded as significant.

First, he considered it important to distinguish between a statutory lease created by, and anchored in, a statute and a statutory power to grant a lease that is governed by the terms of the agreement and the common law.[37] In that context, the judge contrasted the statutory instruments considered in Wik Peoples v Queensland (‘Wik Peoples’)[38] with the present instruments. His Honour observed that the instruments in this case were entered into under a statutory power but they are completely governed by their respective terms.[39] The rights conferred by the instruments were to be analysed in that context.
[37]Reasons [28].
[38](1996) 187 CLR 1 (‘Wik Peoples’).
[39]Reasons [28].

Second, he concluded that the relevant focus should be on the relationship between the reservations and the purpose of the leases. His Honour concluded that ‘there is less of a derogation from exclusive possession if the same use would have occurred in the absence of their formal recognition in reservations.’[40] The judge considered whether the reservations in favour of the general public undermined, or are conducive to, the attainment of the purpose of the leases. The judge observed that the reservations in favour of the general public are ‘conducive to the commercial success of the usage of the Lands which is permitted by each of the purported leases’.[41]
[40]Reasons [30].
[41]Reasons [30].

Third, his Honour said it was critical to determine whether a reservation conferred in favour of the general public reflected a ‘positive and superior right vested in the public to access the land’.[42] In that respect, His Honour relied on two New Zealand decisions: Tonks v Mayor of Wellington (‘Tonks’)[43] and Whangarei Harbour Board v Nelson (‘Whangarei Harbour Board’).[44]
[42]Reasons [33].
[43](1908) 27 NZLR 617 (‘Tonks’).
[44][1930] NZLR 554 (‘Whangarei Harbour Board’).

Having set out those general matters, the judge turned to the terms of the two instruments.

First, the judge identified that one of the commercial purposes of the leases is the prevention of competition in the provision of ski lifts. From that premise, his Honour concluded that it is only if the instruments are construed as leases, rather than as licences, that the grantees would be able to prevent the government or the Commission from building a competing ski lift.[45]
[45]Reasons [41].

Next, his Honour noted the provisions of the leases which oblige the grantees to prohibit misconduct and undesirable behaviour. He concluded that the grantees would be unable to perform those obligations in the absence of a leasehold interest as an absence of exclusive possession would make it practically impossible to enforce these terms, and this would frustrate those provisions of the instruments. He regarded those terms as manifesting an intention to demise a leasehold, but recognised that it was necessary to determine whether that intention had been reflected in the instruments.[46]
[46]Reasons [42].

Third, the judge noted that the power of cancellation has the capacity to render the tenure precarious, although this factor was diminished in significance by the right in the grantees to compensation in the event of cancellation.[47]
[47]Reasons [43].

Fourth, the judge examined the extent of the reservations in favour of public access. His Honour noted that the rights of the public to access the reserves are extensive but not unlimited. His Honour noted that, in the case of the Falls Creek land, the public must not unreasonably obstruct or interfere with the permitted uses and, in the case of the Mount Hotham lands, the public must not prevent the reasonable protection of buildings, equipment, services and facilities or the maintenance of the safety and good behaviour of persons using them. Importantly, the judge concluded that the reservations must be regarded as ‘limited’ having regard to the nature of the purported demise.[48] It is clear that his Honour was of the view that the reservations are conducive to the purpose of the leases and, on that basis, are compatible with the grant of exclusive possession.
[48]Reasons [44].

Finally, the judge observed that the legislative environment in which the instruments were made is not inconsistent with the grant of exclusive possession. His Honour was of the view that the reservation in favour of the public, and the significant powers of management and control retained by the Crown, are inconsequential because they reflect no more than reasonable regulation of the land, are not inconsistent with the purpose of the leases, and do not confer on the public any ‘positive and superior right’ to access the land.[49]
[49]Reasons [55]–[57].

In the result, the judge held that the regulation and reservations applicable to each of the instruments are not so extensive as to negate the manifest intention to grant leases.[50]
[50]Reasons [61].

The applicant’s submissions

The applicant submitted that, notwithstanding various features of each instrument that indicate that a lease of the land was intended, the rights conferred fall short of the grant of exclusive possession.

The applicant relied on the reservations contained in the instruments, placing particular reliance on the authority reserved to all members of the public to enter upon, use, and enjoy the demised land.[51] The applicant also relied on reservations in favour of the Crown as lessor including:
[51]Falls Creek lease cls 2.1(k) and 5.24. See [53]–[54] above.

(a) the authority of the lessor (including the Commission) to enter under cl 2.1(j);

(b) the reservation to conduct certain mining activities and retain minerals found in or under the demised land;[52]

(c) the rights of access for carrying out certain mining and other operations (for example, using pipes and cables);[53] and

(d) the right to construct public and community services on the demised land.[54]

[52]Falls Creek lease cl 2.1(a)–(c).

[53]Ibid cl 2.1(c)–(f).

[54]Ibid cl 2.1(h).

Relying on a number of authorities from the High Court arising in the context of native title, the applicant submitted that the reservations on the rights conferred on the grantees under the leases are inconsistent with a grant of exclusive possession over the land.

The applicant identified three essential bases on which the judge had decided the case against it. First, that exclusive possession is necessary to protect the grantees from competition by precluding the State from granting a competitor access to the demised land.[55] Second, that exclusive possession is necessary in order for the grantees to discharge the obligation to prevent disorderly behaviour on the land.[56] Third, that the right of public access does not give a positive right of access that is superior to the interest of the grantees.[57] Those three matters were important in a context where the language used in the instruments is redolent of a lease and the reservations are conducive to the business imperatives of the grantees.
[55]Reasons [41].
[56]Reasons [42].
[57]Reasons [55]–[57]

It was submitted that the judge erred in relation to each of those matters. As to the first, protection from competition does not require a lease but could be achieved by a licence containing an implied term not to derogate from the grant. The second matter impermissibly reasoned back from the desirability of a particular remedy to resolve the anterior question as to the correct construction of the instruments. The third imported the concept of superior interest drawn from two New Zealand authorities[58] which is a distraction from the question of whether the instruments conferred exclusive possession.
[58]Tonks (1908) 27 NZLR 617; Whangarei Harbour Board [1930] NZLR 554.

The Commissioner’s submissions

The Commissioner agreed that the essential question is whether the instruments confer exclusive possession but submitted that this is to be answered by reference to the terms of each instrument as a whole read in their broader context. The Commissioner did not contend that a lease from the Crown, for the purposes of the Land Tax Act, could include a statutory instrument styled as a lease that does not confer exclusive possession. In other words, the Commissioner did not argue that a lease made under s 28 of the Alpine Resorts Act could be a lease from the Crown even if it does not confer exclusive possession. That being so, neither party addressed the question of whether a lease under s 28 could be made under that provision even though it does not confer exclusive possession on the grantee.

In his written submissions, the Commissioner did not seek to make anything of the statutory context under which the leases were granted, observing that the leases ‘not being “creatures of statute”, fell to be construed on their own terms’. However, in oral submissions, he relied on the fact that s 28 of the Alpine Resorts Act conferred a power to grant leases and that s 28 referred to the creation of interests in land. In this respect, the Commissioner emphasised that a lease confers an interest in land rather than a personal permission to enter upon and use the land in a particular way or for a particular purpose.[59]
[59]Radaich v Smith (1959) 101 CLR 209, 222.

The Commissioner also relied on the language of the leases which are expressed in terms that strongly connote a grant of exclusive possession. It was said that the use of the words ‘lease’, rent’ and ‘demised land’, and the structure of the instruments, including the need for reservations in favour of the lessor, all support the judge’s conclusion.

The Commissioner contended that, when read together, cls 2.1(k) and 5.24 impose significant limits on the right of public access. The right of access is limited in three respects. First, the parts of the land that may be accessed. Second, the persons who may access the land. Third, the purposes or circumstances in which that access may occur.

It was submitted that, because the right of access does not extend to persons entering for commercial purposes and does not extend to buildings and improvements, the grantees necessarily have a right to exclude, at least to that extent. Because there are limits on the right of access, and because the obligation to provide entry is also limited in some important respects, it follows that the grantees have the authority to exclude at least some persons and that this reflects a right of exclusive possession. It was also submitted that, because the grantees have an obligation not to permit disorderly conduct, they also have the power to exclude persons for reasons of misbehaviour.

It was further submitted that the reservations are consistent with the grantees’ interests and that the grant of exclusive possession over the land protects them from competition in the absence of an express exclusive licence to conduct ski lift businesses at Mount Hotham and Falls Creek. It was observed that the earlier permit granted to FC Lifts had a clause preventing the State from allowing anybody else to construct a lift in the Falls Creek Tourist Area, and that it would not have been intended that there would be a lessening of the grantee’s rights when the lease was made.

Given that the relevant question is whether the grantees have a legal right to exclude others, subject to the exceptions and reservations under specific provisions of the instruments, it is sufficient that the grantees have the power to exclude at least some persons in some circumstances. That power necessarily reflects, so it was submitted, control amounting to exclusive possession.

The relevant principles

The parties did not differ on the identification of the central question or the relevant principles to be applied. It was not in contest that the essential and defining feature of a lease is that it confers exclusive possession of the demised land on the tenant. Possession in this context means the legal right to control the land and, in particular, to control who may come onto the land.

In Queensland v Congoo (‘Congoo’), Gageler J said that the word ‘possession’ on its own connotes a high degree of intentional control over the thing possessed but has never acquired more definite connotation.[60] In the context of English property law, there is authority that exclusivity is of the essence of possession.[61] McHugh J has observed that the adjective ‘exclusive’ does not add to an understanding of the concept of possession.[62]
[60]Queensland v Congoo (2015) 256 CLR 239, 301 [161] (‘Congoo’).
[61]J A Pye (Oxford) Ltd v Graham [2003] 1 AC 419, 445 [70] (Lord Hope of Craighead).
[62]Western Australia vWard (2002) 213 CLR 1, 214–5 (‘Ward’), cited in Congoo (2015) 256 CLR 239, 296–7 [144] (Bell J).

It was also common ground in this proceeding that the Land Tax Act uses the term ‘lease’ in this sense.[63]
[63]See [81] above.

In Fejo v Northern Territory, in the context of considering the rights conferred on an estate in fee simple, the High Court observed that:

Subject to whatever qualifications may be imposed by statute or the common law, or by reservation or grant, the holder of an estate in fee simple may use the land as he or she sees fit and may exclude any and everyone from access to the land.[64]

In Western Australia v Brown (‘Brown’), drawing on that observation, the High Court observed that a ‘right of exclusive possession’ in relation to fee simple grants and leases involves the ‘right to exclude anyone and everyone from the land for any reason or no reason’.[65]

[64]Fejo v Northern Territory (1998) 195 CLR 96, 128 [47] (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ) (‘Fejo’).

[65]Western Australia v Brown (2014) 253 CLR 507, 526 [52] (‘Brown’).

That pure conception of exclusive possession can, and in the case of leases invariably does, accommodate reservations and exclusions that cut down or limit any absolute right conferred on the tenant to exclude any person at any time. A commonplace example serves to illustrate the point. Invariably, a lease will reserve to the landlord the right to enter the demised land for the purpose of ensuring the tenant’s compliance with the terms of the lease. Commonly, the landlord’s ability to enter the land will be conditioned by requirements of reasonableness and the giving of notice, but subject to compliance with those matters the tenant has no right to prevent the landlord entering the land in accordance with the reservation. Clause 6.4 of the Falls Creek lease reflects a reservation of that kind.

It is equally clear that, by reason of their nature and extent, reservations may be inconsistent with a grant of exclusive possession. The existence of reservations on the possessory rights conferred by a lease presents something of a conundrum. On the one hand, the existence of reservations from the rights granted may serve to indicate that the tenant has exclusive possession and that it was intended to limit that right in certain specified respects. On the other, the reservations may be of such a nature as to deny exclusive possession because they leave the putative lessee without the necessary degree of control over the land and, in particular, control over who can enter and remain on it.

The grant of exclusive possession carries with it certain important consequences for the tenant. A tenant has an interest in the land that may be protected by remedies against third parties including for ejectment, trespass and nuisance.[66] The tenant is not confined to enforcing a personal right against the grantor. These consequences follow from the grant of exclusive possession. Merely because such remedies would be of assistance to the putative lessee in enjoying the benefits of the relevant instrument does not mean that exclusive possession should be more readily found.
[66]Radaich v Smith (1959) 101 CLR 209, 222; Brown v Tasmania (2017) 91 ALJR 1089, 1163 [385].

The High Court and lower courts have considered, in various contexts, whether instruments confer exclusive possession. Recently, many of the cases have arisen in native title claims. In that context, it is established that a grant of exclusive possession is inconsistent with the continuance of native title rights.[67] Accordingly, it has been necessary for the High Court to determine whether various tenures granted exclusive possession.
[67]Ward (2002) 213 CLR 1, 126 [177] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).

The Australian courts and courts in New Zealand have examined a variety of different interests, including:

(e) pastoral leases of various kinds (as in Wik Peoples[68] and Western Australia v Ward (‘Ward’)[69]);
[68](1996) 187 CLR 1.
[69](2002) 213 CLR 1.

(f) mining leases (as in Ward[70] and Brown[71]);
[70]Ibid.
[71](2014) 253 CLR 507.

(g) possession of land by the Commonwealth for defence purposes during wartime (as in Congoo[72]);
[72](2015) 256 CLR 239.

(h) a lease of the seabed in a harbour (Goldsworthy Mining Ltd v Federal Commissioner of Taxation (‘Goldsworthy’)[73]);

(i) a lease of a reserve surrounding the City of Wellington (Tonks[74]); and

(j) a lease of a maritime area and wharf (Whangarei Harbour Board[75]).

[73](1973) 128 CLR 199 (‘Goldsworthy’).

[74](1908) 27 NZLR 617.

[75][1930] NZLR 554

Consideration of those authorities reveal that there is no bright line test that determines the circumstances in which reservations are such as to deny exclusive possession. The Commissioner submitted that the test is whether the reservations are inconsistent with a grant of exclusive possession. The applicant submitted that the correct approach is to reason by analogy from those cases in which exclusive possession has not been found. In that regard, the applicant placed particular reliance on Brown.[76]
[76](2014) 253 CLR 507.

The authorities do suggest that the nature and purpose of the instrument that grants the rights is relevant. That is clearly seen, by way of example, in the context of mining leases. The terms of the reservations are obviously important, but so too is the purpose for which the reservations are included and their relationship to the purpose of the lease.

Pastoral leases

In Ward,[77] the High Court considered three forms of pastoral lease and came to different conclusions in respect of them.
[77](2002) 213 CLR 1.

The Court first examined pastoral leases granted under the Land Act 1898 (WA) and the Land Act 1933 (WA). The plurality noted that the use of language that might be used in relation to a lease between private individuals, such as ‘lease’ and ‘rent’, does not conclusively demonstrate a grant of exclusive possession.[78] The plurality considered that the following features of the pastoral leases were important:
[78]Ibid 127 [180] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).

(k) Pastoral leases are a creature of statute or regulation, not the common law.

(l) Pastoral leases were but one of several forms of interest in land for which provision was made by the Acts and Land Regulations, and not all of those interests find close analogy with interests that could be created at common law.

(m) Although the Acts and Land Regulations provided for both leases and licences as different kinds of interest, various provisions of the Acts and Land Regulations treated leases and licences without distinction as, for example, in provisions dealing with their transfer, their forfeiture and the periodic payment to be made under each as "rent".

(n) The holder of a pastoral lease was entitled to use the land only for the limited purposes referred to as "pastoral purposes" and the holder obtained no right to the soil or the timber except to the extent required for certain limited purposes.

(o) … the interest obtained under a pastoral lease was precarious.[79]

[79]Ibid (citations omitted).

The plurality further noted that no provision was made for the holder of a pastoral lease to bring an action for removal of persons in unlawful occupation but that there were penal provisions that made unlawful use or occupation an offence.[80]
[80]Ibid 127 [181] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).

The plurality concluded that on no view did the pastoral leases in question confer on the holder a right of exclusive possession.[81] That was because there were extensive reservations permitting entry on behalf of the Crown and others in many different circumstances and for many different purposes. The widest reservation reserved a right to any person ‘to enter, pass over, through, and out of any [unenclosed or enclosed but otherwise unimproved part of the land] while passing from one part of the country to another, with or without horses, stock, teams, or other conveyances, on all necessary occasions’.[82]
[81]Ibid 126 [178] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).
[82]Ibid (citations omitted).

Other reservations included very extensive rights of entry ‘for any purposes of public defence, safety, utility, convenience, or enjoyment, or for otherwise facilitating the improvement and settlement of [the] Colony’. Under the Land Act 1933, the Crown retained power to sell, lease or otherwise dispose of any part of the lease at any time, as well as power to reserve or dispose of any part of it for any number of purposes. The reservations contained in the pastoral leases were not qualifications on ‘an otherwise general right to exclude’, with the result that the grantees did not hold exclusive possession.[83]
[83]Ibid 129 [186] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).

Special leases

The plurality in Ward came to a different conclusion in respect of two other types of pastoral lease considered in the case.

The first was a ‘special lease’ granted for a term of 21 years but terminable on six months’ notice by either party. It was for ‘the special purpose of Grazing’.[84] The special lease contained a number of reservations, including the power to resume up to one-twentieth part of the land for works of a public nature and the right to take timber and materials for use in public works. The lessee was forbidden from destroying timber or scrub, and minerals were reserved to the Crown.[85]
[84]Ibid 178 [352] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).
[85]Ibid 179 [354] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).

Although there was a proviso for re-entry, there were significant differences with the pastoral leases. The lease was not precarious. There was no general provision which would determine the lease upon reservation, sale or its other disposal by the Crown. The special lease did not reserve to the Crown the right to de-pasture stock, nor did it give any person the right to pass over any part of the land that was unenclosed or, if enclosed, was unimproved.[86]
[86]Ibid 179 [355] (Gleeson CJ, Gaudron, Gummow and Hayne JJ) (citations omitted).

Importantly, the plurality considered that the purpose for which the special lease was granted was significant to the character of the rights conferred. In that respect, the plurality observed:

Section 116 provided a number of specific purposes for which a special lease might be granted, including taking guano, quarrying, and for sites for various kinds of buildings or other works. Section 116(14) provided that a special lease might be granted for ‘any other purpose approved by the Governor by notice in the Gazette’. In 1934, grazing was approved as a purpose for the grant of a special lease. At least some of the uses specified in the Act (for example, as ‘sites for tanneries, factories, saw or other mills, stores, warehouses, or dwellings’ (s 116(5))) are uses in which it might ordinarily be expected that the user would wish to control access to the land. One of the stated purposes (quarrying) could be the subject of a licence under s 118. Other purposes could not.[87]

[87]Ibid 179–80 [356] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).

Having regard to those matters, and notwithstanding the substantial reservations that did exist, the plurality concluded that the special lease granted exclusive possession.[88]
[88]Ibid 180 [357] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).

Lease of reserves

The plurality next considered a lease of a reserve to a company granted under the Land Act 1933 (WA). The term of the lease was one year, renewable from year to year, but determinable, after the first year, on three months' notice. The lease was for the purpose of grazing. The lease provided that the Crown might resume and enter upon possession of part of the lands for various purposes in the nature of public works. Power was given to the Crown to take timber, quarry, search for minerals, and the like. Minerals and petroleum were reserved to the Crown. There was a proviso for re-entry. The lease was issued subject to the condition that the public should have ‘free and uninterrupted use of the roads or tracks’ on the land and that the lessee not destroy timber or scrub.[89]
[89]Ibid 181–2 [368] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).

The plurality concluded that the lease granted exclusive possession. Importantly, they reasoned that the lease was not a statutory interest in land and its terms were not prescribed by the Land Act 1933 (WA) but were determined by the nature of the agreement reached and the grant made. The Court held that the company held rights as lessee of the land, as that term is understood in the general law, and was thus granted a right of exclusive possession of the land.[90]
[90]Ibid 182 [369] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).

It is convenient at this point to refer to the reasons for judgment of McHugh J who dissented in relation to pastoral leases. His Honour concluded that reservations on the rights conferred on the grantee did not deny exclusive possession. To the contrary, his Honour reasoned that the existence of reservations was indicative of the grantee having the legal right to exclusive possession.[91]
[91]Ibid 237–8 [551].

In this regard, McHugh J pointed up a paradox in relation to reservations and exclusions on the right of the tenant to possession. On the one hand, reservations cut down or diminish the tenant’s right to exclude any person for any reason or no reason. On the other hand, they logically proceed on the basis that, in the absence of the reservation, the tenant would have control over the land and the authority to exclude.

In a passage relied on by the Commissioner, McHugh J said:

The grant under the 1864 Regulations also reserved the right of ‘aboriginal natives’ to enter upon the land ‘for the purpose of seeking their subsistence therefrom in their accustomed manner’. But this reservation did not negative the grant of the legal right to exclusive possession. Indeed, that reservation was about as clear an indication that the pastoral lessee had the legal right to exclusive possession as could be imagined. The reservation was necessary to prevent the lessee from excluding the Aboriginal natives. Unless the lease had given the lessee the legal right to exclude all others, the reservation would be irrelevant. The same comment can be made in respect of reservations that allowed third parties to enter the demised premises for various purposes … Exceptions and reservations are not inconsistent with the right of the grantee to exclude any person who does not come within an exception or reservation. They are not inconsistent with the right of the grantee to bring ejectment or sue for damages for trespass to land. Exceptions and reservations do not put the grantee in the position of a licensee who, by definition, cannot bring an action for ejectment or trespass to land but must depend on his or her contractual rights.[92]

[92]Ibid (citations omitted).

Mining leases

The analysis of the plurality in Ward in relation to mining leases highlights the special nature of such interests which renders them an unhelpful analogy to other land tenures. Their Honours observed that a mining lease is a 'liberty given to a particular individual, for a specific length of time, to go into and under the land, and to get certain things there if he can find them, and to take them away, just as if he had bought so much of the soil.'[93]
[93]Ibid 158 [285] (Gleeson CJ, Gaudron, Gummow and Hayne JJ), quoting Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513, 616 (Gummow J), quoting Gowan v Christie (1873) LR 2 Sc & Div 273, 284 (Lord Cairns).

The relevant Western Australian legislation conferred on the holder of the mining tenement (described as a lease) the authority to work and mine the land for any minerals, to take and remove any minerals found, the right to take and use water, and to do any other acts necessary to carry out mining operations effectually.[94] The Act stated that these rights ‘are exclusive rights for mining purposes in relation to land’.[95]
[94]Ibid 159 [290] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).
[95]Mining Act 1978 (WA) s 85(3), quoted in Ward (2002) 213 CLR 1, 159 [290] (Gleeson CJ, Gaudron, Gummow and Hayne JJ). See also Western Australia v Ward (2000) 99 FCR 316, 457 [551].

These rights were described by the High Court as conferring ‘the right to exclusive possession for mining purposes’.[96] However, this did not constitute exclusive possession of the land. As their Honours explained:

The grant of exclusive possession for mining purposes is directed at preventing others from carrying out mining and related activities on the relevant land. Although the lessee could prevent anyone else seeking to use the land for mining purposes, it does not follow that all others were necessarily excluded from all parts of the lease area.[97]

[96]Ward (2002) 213 CLR 1, 165 [307] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).

[97]Ibid 165–6 [308] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).

In the result, the mining licence did not confer exclusive possession, even though the holder could exclude those persons from parts of the land necessary for the exercise of its right to mine.[98]
[98]Ibid 165–6 [306]–[309] (Gleeson CJ, Gaudron, Gummow and Hayne JJ). See also Congoo (2015) 256 CLR 239, 282 [92] (Kiefel J).

In Brown,[99] the High Court returned to the issue of mining leases in the context of extinguishment of native title.
[99](2014) 253 CLR 507.

The agreement under consideration in that case provided that:

ALL THAT piece or parcel of land [identified in the instrument] and all those mines, veins, seams, lodes and deposits of iron ore in on or under the said land (hereinafter called 'the said mine') together with all rights, liberties, easements, advantages and [appurtenances] thereto belonging or appertaining to a lessee of a mineral lease under the MINING ACT, 1904 ... or to which the JOINT VENTURERS are entitled under the [State] Agreement TO HOLD the said land and mine and all and singular the premises hereby demised for the full term of twenty one years ... for the purposes but upon and subject to the terms, covenants and conditions set out in the [State] Agreement and to the Mining Act (as modified by the [State] Agreement) YIELDING and paying therefor the rent and royalties as set out in the [State] Agreement.

As in Ward, the issue was whether the grant of the tenure, described as a lease, extinguished native title over the land. The State, arguing in favour of extinguishment, advanced two contentions. First, native title rights and interests were wholly extinguished over the whole of the area of the mineral leases, either because those leases conferred on the holders a right of exclusive possession or because the rights granted by the leases and the State Agreement were inconsistent with all of the native title rights and interests. Alternatively, the native title rights and interests were extinguished ‘in respect of those lands ... on which the [joint venturers] exercised their rights to develop and construct mines, a town and associated works’.[100]
[100]Ibid 520 [29].

The High Court rejected the first contention and held that the lease did not confer exclusive possession. In reaching that conclusion, the Court made three points.

First, the nomenclature of the instrument was not dispositive.[101]
[101]Ibid 524 [43].

Second, the grant of rights was for the purpose of conducting mining operations. Consistently with what was said in Ward, the Court held that the instrument gave the joint venturers liberty to go into and under the land, during the currency of the mineral lease, and to get and take away the iron ore that they found there.[102]
[102]Ibid 524 [44].

Third, the Court noted that the instrument did not expressly provide for possession or the right to exclude any and everyone from that land for any reason or no reason at all. Rather, the agreement expressly obliged the grantee to allow third parties access to the land provided that the access did not ‘unduly prejudice or interfere with’ the joint venturers' operations. The Court held that this reservation precluded a finding of exclusive possession.[103]
[103]Ibid 524–5 [45].

Having regard to those three matters, the Court held that the lease did not confer exclusive possession on the grantee. That conclusion followed even though the grantee could prevent anyone else from using the land for mining purposes and could use any part of the land for the extraction of iron ore or for any of the associated purposes described in the State Agreement (such as building a town, roads and railway).[104]
[104]Ibid 525 [46].

Possession of land by the Commonwealth for defence purposes

Congoo[105] was another case that arose in the native title context. In that case, the High Court considered whether the Commonwealth had exclusive possession of land pursuant to a succession of orders made under the regulations to the National Security Act 1939 (Cth).
[105](2015) 256 CLR 239.

Regulation 54(1) of the National Security (General) Regulations 1939 (Cth) authorised the Minister for the Army to take possession of any land on behalf of the Commonwealth if it appeared to the Minister to be necessary or expedient in the interests of public safety, defence, or the maintenance of supplies and services. Pursuant to reg 54(2)(a), while the land was in the Commonwealth’s possession, the Minister was authorised to do anything which a person having an unencumbered fee simple interest in the land would be entitled to do. Regulation 54(2)(b) provided that the Minister could, by order, prohibit or restrict the exercise of rights relating to the land enjoyed by any person, whether by virtue of an interest in land or otherwise.

The Full Court of the Federal Court had, by majority, held that the Commonwealth had assumed, through the making of the orders, exclusive possession of the land for a limited purpose, for a limited time and on the premise that all underlying rights and interests should continue.[106] The rights taken by the Commonwealth were said to not be inconsistent with the continued existence of native title rights.[107]
[106]Congoo v Queensland (2014) 218 FCR 358, 376 [53] (North and Jagot JJ).
[107]Ibid.

In separate judgments, three of the six High Court Justices concluded that the Commonwealth had a right of exclusive possession over the land. Hayne J held that the orders constituted an ‘assertion by the Commonwealth of rights over the land’.[108] His Honour noted that, while any person could ask for permission to go onto the land, ‘that permission could be refused for any reason or no reason.’[109] His Honour distinguished the case before him from Ward and Brown where the holders of the mining interests had only the right to search for and win minerals on the land.[110]
[108]Congoo (2015) 256 CLR 239, 271 [55].
[109]Ibid 271 [56].
[110]Ibid 277 [75].

Kiefel and Bell JJ also concluded that the Commonwealth had a right of exclusive possession. Kiefel J held that reg 54 provided a right of exclusive possession in the nature of a property right for an indefinite period.[111] Bell J noted that the fact that the right was conferred on the Commonwealth by legislation, and not as an incident of a grant of an estate in land, did not affect the nature of its possession.[112]
[111]Ibid 284 [99].
[112]Ibid 298 [149].

French CJ, Keane and Gageler JJ found that the Commonwealth did not have a right of exclusive possession of the land. In their joint judgment, French CJ and Keane J distinguished between exclusive possession, which is ‘a logical incident of actual, factual or physical possession’, and a right of exclusive possession, which involves the right to exclude anyone and everyone from the land for any reason or no reason at all.[113] The statutory powers conferred on the Commonwealth as an incident of the grant of possession under the orders were broad, but were to be exercised in accordance with the scope, subject matter and purpose of the National Security Act and the regulations.[114] Their Honours said that the text of reg 54 suggested that it was concerned with actual possession and did not confer on the Commonwealth a right of exclusive possession.[115] In that respect, their Honours observed that the powers granted by reg 54(2) would be otiose if it were intended that the Commonwealth would have a right of exclusive possession.[116]
[113]Ibid 254 [8], citing Fejo (1998) 195 CLR 96, 128 [47] (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ) and Brown (2014) 253 CLR 507, 522 [36].
[114]Ibid 254 [8].
[115]Ibid 255 [12].
[116]Ibid 256 [12].

Gageler J said that there was no reason to equate ‘possession’ as used in the regulation with ‘exclusive possession’.[117] His Honour described the Commonwealth’s right to possession as a ‘qualified right’ valid against everyone who could not show a prior or better right to the land.[118] The Commonwealth’s right did not constitute a power to exclude anyone from any or all of the land for any purpose.[119] To the extent that such persons could be excluded, it would only be through the making of an order of prohibition or restriction under reg 54(2)(b).[120] The Commonwealth’s right to exclude was therefore, at most, a limited purposive right indistinguishable from that conferred on the lessees of mining leases, as considered by the Court in Ward.[121]
[117]Ibid 301 [161].
[118]Ibid 302 [162], quoting Minister for the Army v Dalziel (1944) 68 CLR 261, 285 (Rich J), quoting Pollock and Wright, An Essay on Possession in the Common Law (1888) 93.
[119]Ibid 303 [168].
[120]Ibid 302 [165].
[121]Ibid 303 [168].

As the Court was equally divided, the decision of the Full Court of the Federal Court was affirmed.

Leases of the seabed

In Goldsworthy,[122] Mason J, sitting as a single Justice, examined whether a dredging lease that gave rights over the seabed in Port Hedland Harbour was a lease for the purposes of income tax. It was submitted that the reservations from the grant and the absence of an express covenant for quiet enjoyment were inconsistent with exclusive possession.[123]
[122](1973) 128 CLR 199.
[123]Ibid 213–4.

The relevant instrument was in the form of a lease and described the demised premises as ‘so much of the surface of the sea-bed of the harbour of Port Hedland and approaches thereto as exists at the date of the commencement of the … lease’.[124]
[124]Ibid 207–28.

The terms provided that the instrument ‘demises and leases’ the ‘demised premises’ for ‘the term’ of seven years at a ‘yearly rent’ of one peppercorn. The instrument contained a covenant that the joint venturers would not assign, mortgage, charge, sub-let or dispose of the demised premises or any part of it, and they would yield up possession at the expiration or sooner determination of the premises. The Minister or his agents had the right to enter upon the demised premises for certain purposes, including to inspect and to execute works which the joint venturers have failed to carry out in accordance with their obligations.[125]
[125]Ibid 212.

There were significant reservations from the grant. The Crown, its agents, invitees and licensees had the right and liberty to pass and re-pass and to navigate vessels in or over the demised premises. The right to all minerals and petroleum on or below the surface of the demised premises were reserved. In addition, the joint venturers were required to permit the Crown and any vessel to use any part of the demised premises for navigation, anchorage or other purpose incidental to shipping, and to consent to the granting of easements or rights in or over the demised premises as may from time to time be reasonably necessary for the overall development or use of the harbour.[126]
[126]Ibid 213.

Mason J concluded that the reservations were not inconsistent with the existence of a right of exclusive possession in the joint venturers. That was because the provisions assumed the existence of that right. Their introduction was explicable by reference to the relationship of the premises to the navigable channel which it underlay and to the harbour of Port Hedland.[127]
[127]Ibid.

Tonks and Whangarei Harbour Board

Tonks[128] and Whangarei Harbour Board[129] were decisions of the New Zealand Supreme Court which each concerned a putative lease which reserved to the public a right to enter the demised land.
[128](1908) 27 NZLR 617.
[129][1930] NZLR 554.

In Tonks, the deed of lease reserved to the inhabitants of the City of Wellington a full and free right at any time to enter upon and walk over any part of the land demised for the purposes of recreation and exercise. That right was subject to the proviso that the inhabitants not do any wilful or avoidable damage, and not be accompanied by any dog.[130]
[130]Tonks (1908) 27 NZLR 617, 618.

On an action by the respondent to recover rates in respect of the land, the appellant contended, among other things, that he was merely a licensee of the land.

Cooper J noted that the deed, although expressed as a lease and containing the ‘usual words of demise’, demonstrated that it was not the parties’ intention that exclusive occupation be given. Rather, the appellant’s occupation of the land was subject to the superior right of the public to enter upon and use the land for certain (limited) purposes. Accordingly, his Honour held that the deed was not a lease.[131]
[131]Ibid 619–20. I note that Cooper J found that the appellant was not an occupier of the land within the meaning of the Ratings Act 1894 (NZ) on the basis that his occupation was not for a tenancy for six months certain, as required by that Act. However, his Honour held that the appellant was nonetheless liable to pay rates pursuant to a covenant contained in the deed.

The reservation considered by the Supreme Court in Whangarei Harbour Board was expressed in the following terms:

6. The lessees will also at all reasonable times allow picnic parties and excursionists to land upon the beach of the said land and to remain upon the portion of the said land not occupied by buildings or machinery for the purposes of such picnic or excursion parties Provided however that the lessees or their representatives shall be at liberty at any time or times to remove such picnic or excursion parties or any member or members thereof who in the opinion of the lessees or their representatives shall not be exercising all reasonable care in preventing damage or spoliation to the said beach the trees growing or being upon the said land or any building plant machinery wharf or premises erected thereon[132]

[132]Whangarei Harbour Board [1930] NZLR 554, 556.

Ostler J concluded that the relevant instrument conferred exclusive possession of the land. He found that the reservation to the public was not inconsistent with the enjoyment of exclusive possession because the reservation allowed the public only a ‘limited right to enter upon a specific part of the land for a defined purpose.’[133] His Honour distinguished the case before him from Tonks in which ‘the grant was made subject to a superior and pre-existing ... right in the public.’[134]
[133]Ibid 560.
[134]Ibid.

Consideration

It is possible to pull together a few threads from that survey of the authorities.

First, the touchstone of exclusive possession is a general power to exclude persons from the land. The existence of a general power to exclude must be found in the language of the instrument and having regard to its nature and purpose. Reservations are an exception to that general power and a limited right of entry under a reservation is not inconsistent with exclusive possession.

However, as Brown demonstrates, a reservation may be so extensive that it precludes a finding of exclusive possession.

The distinction between being in possession and being an occupier or mere user of the land is not always easily to discern. In order to be in possession, the person must have effective control of the land and any other use of the land must be with permission or pursuant to a specific, limited, or defined right such as an easement, profit-à-prendre or reservation on a lease.[135] Control is relevantly measured by the presence of a general power to exclude.
[135]Wallis’s Cayton Bay Holiday Camp Ltd v Shell-Mex and BP Ltd [1975] QB 94, 103 (Lord Denning MR); Hunter v Canary Wharf Ltd [1997] AC 655, 703.

In assessing whether a putative lease confers a right of possession, it will be necessary to have regard to the nature of the land and the manner in which land of that nature is commonly used or enjoyed. It will be relevant to inquire whether the use is one in which it might ordinarily be expected that the user would wish to control access to the land. In the case of instruments created by statute, the statutory context will be critical and there will be less room for importing general precepts of property law.

As expressed by the plurality in Ward, ‘the proper order of inquiry is first to examine what are the rights granted and only then to classify the grant.’[136] Any examination of the rights conferred by the instruments in this case requires consideration of both the terms of any positive grant and the nature and extent of any reservations.
[136]Ward (2002) 213 CLR 1, 128 [186] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).

There are many features of the instruments that point to a grant of exclusive possession. They include the following.

As noted above, s 28 of the Alpine Resorts Act conferred a statutory power on the Governor in Council to enter into a lease over land within an alpine resort. Section 28(5), which prohibited a lessee from assigning or mortgaging its ‘interest in the land’ without permission, confirms that s 28 contemplated the giving to the lessee of a proprietary interest in the land.

Consistently with that statutory language, the wording and structure of the instruments, with the use of the words ‘lease’, ‘demise’ and ‘rent’, point to an intention to lease the demised land and, although not determinative, that language is consistent with conferring an interest in the land carrying with it a right of exclusive possession.[137]
[137]Lewis v Bell (1985) 1 NSWLR 731, 735 (Mahoney JA).

In the case of the Falls Creek lease, the demise is for a term of 50 years which provides a degree of tenure that is consistent with a lease. The grantee’s interest is not precarious even though it could be cancelled. The demised land extends to a depth of 15.24 metres, and, as the Commissioner pointed out, interests in the sub-surface better accord with a lease than a licence to conduct a business on the land.

The fairly typical reservation in favour of the lessor over minerals and for mining purposes would be unnecessary if it was not intended to confer an interest in land. Similarly, the power given to the lessee to construct buildings and improvements on the land and the obligation to pay charges such as rates, taxes and services more often attach to a tenant with an interest in the land rather than a licensee.

It is noted that the instruments do not expressly confer a right of exclusive possession or a right of quiet enjoyment. However, as Mason J observed in Goldsworthy, although the absence of such a covenant may be relevant to the question of whether a particular instrument is a lease or a licence, it is not determinative of that question in circumstances where other provisions of the instrument make clear that the grantee was intended to have a right to exclusive possession.[138]
[138]Goldsworthy (1973) 128 CLR 199, 214.

Notwithstanding those indicia, the parties’ submissions focused on the nature and extent of the reservations contained in the instruments to contend for their respective positions.

The Commissioner relied on the following four matters:

(p) the ‘carve outs’ from the reservations entail at least some measure of exclusive possession;

(q) the reservations are consistent with the purpose of the leases;

(r) the enjoyment of the covenants and the ability to discharge the obligations imposed by the leases require that the grantees have exclusive possession; and

(s) the extent of the reservations are explicable by the regulatory and statutory context.

‘Carve outs’ from the reservations

The introductory words to cl 2.1 provide that the matters set out ‘shall be excepted and reserved unto the Lessor out of the demised land’. With the exception of cl 2.1(k), the clause makes reservations in favour of the lessor.

The reservations in cls 2.1(a) to (g) in relation to minerals, water, services and sub-surface land are consistent with a grant of exclusive possession.

The reservations in cls 2.1(h) to (k) are of a different kind. Clause 2.1(j) confers a further right on the lessor to enter and remain on the demised land. However, it requires the lessor to identify an existing duty or obligation, whether contractual or statutory in nature, to be on the land. Ultimately, this clause is neutral because it depends for its operation on the lessor having some existing right or obligation to enter.

Taken together, cls 2.1(h) and 2.1(i) give significant rights to the lessor to enter and construct and maintain facilities on the land. The ability to construct walking trails, cross-country ski trails and roads is plainly intended to complement the general right of access given to all members of the public to enter, use and enjoy the land. The rights conferred by cls 2.1(h) and 2.1(i) are not consistent with a general right to exclude persons from the land.

The focus in the parties’ submission was on the reservation in favour of the public contained in cl 2.1(k). That reservation is very broadly expressed, and confers ‘free liberty and authority for all members of the public’. It includes rights of access for the public to any community facility, whether located within the demised land or not. The single proviso is that access by the public must not unreasonably obstruct or interfere with the permitted uses of the demised land pursuant to the provisions of the lease.

The terms of cl 2.1(k) are, in a sense, disconnected with the opening words of cl 2.1 in that they do not relate to a reservation in favour of the lessor. Nonetheless, cl 2.1(k) is clearly intended to ensure that the grantee accommodates the freedom of all members of the public, including visitors and skiers, to enter upon, use and enjoy the land at any time.

The Commissioner submitted that it is necessary to construe cl 2.1(k) together with cl 5.24, and to a certain extent cl 5.24 cuts down the operation of cl 2.1(k). Those two clauses are directed to the same general subject matter, access by the public to the demised land, but do so in different ways. The former is a reservation from the rights conferred on the grantee, while the latter is an obligation on the grantee to allow access subject to certain exceptions. The combined effect of the two clauses entails that members of the public do not have a right of access to buildings and improvements, nor the right to enter for the purpose of engaging in a commercial activity.

The Commissioner submitted that because every person cannot access the land for any reason they choose, there must be at least some level of exclusive possession. In my view, the approach proposed by the Commissioner inverts the test. The relevant question is whether the putative lessee can exclude any person for any reason, rather than whether every person has a right of access regardless of their reason for being on the land and regardless of their behaviour. The focus of enquiry is on the extent of control that the putative lessee enjoys over the land.

Unlike the pastoral leases considered in Ward, the access rights that are reserved, and the corresponding obligation on the grantee to allow access, are not limited to freedom of movement across the land. They extend to the use and enjoyment of the land by all members of the public. To pick up the language of Gageler J in Congoo, the grantee’s right to possession of the land is ‘qualified’ and does not involve a power to exclude anyone from any or all of the land for any purpose.[139] The public has a general right of access to the land, subject to limited provisos. The qualifications on the rights of the grantee to control access to the land are of such a nature as to be inconsistent with the conferral of a general right to exclude.[140]
[139]Congoo (2015) 256 CLR 239, 302 [162], quoting Minister for the Army v Dalziel (1944) 68 CLR 261, 285 (Rich J), quoting Pollock and Wright, An Essay on Possession in the Common Law (1888) 93.
[140]See Wik Peoples (1996) 187 CLR 1, 122 (Toohey J), 154 (Gaudron J).

The applicant relied heavily on Brown.[141] In that case, the High Court unanimously held that a reservation that required the grantee of a mining lease to grant access to third parties, provided that the access did not unduly interfere with the grantee’s operations, precluded a right of exclusive possession.[142] Brown can be distinguished on the basis that a mining lease has particular, and well-understood, characteristics that are not consistent with a grant of an interest in land. However, in my opinion, the breadth of the reservation considered in Brown was an independent reason why there was no grant of exclusive possession. In my view, the same result applies here.
[141](2014) 253 CLR 507.
[142]Ibid 524–5 [45]–[46].

The reservations contained in the instruments are broader, both in terms of the range of persons who may benefit and the rights of access the clause confers, than any of the comparable reservations considered in the authorities surveyed above. The reservation in favour of all members of the public to enter and enjoy the land at any time is inconsistent with the existence of a general right to exclude. I do not accept the submission of the Commissioner that the reservations provide only a limited right of entry in the sense used by Windeyer J in Radaich v Smith.[143]
[143](1959) 101 CLR 209, 222.

The reservations are consistent with the purpose of the leases

Section 28 of the Alpine Resorts Act authorised the granting of leases to ‘business undertakings’. The leases do not, in terms, specify the nature of the business of the grantees, but it is sufficiently clear that their business is the construction, operation and maintenance of ski fields (including ski lifts) in the two alpine resorts, principally for operation during the snow season.

The permitted uses under cl 5.1 revolve around the construction, operation and maintenance of ski lifts, the maintenance and grooming of ski fields (including through the making of artificial snow), and the construction, operation and maintenance of buildings (including for use as workshops, places for refreshment and accommodation, a ski school, and office facilities and ticket sales outlets).

Plainly enough, the operation of the business requires people to enter the ski field and, as explained in evidence before his Honour, the lift operator ‘would not have wanted to limit or restrict public access given that without such access its business would have failed and given that, especially in relation to the slopes, the land was, by and large, free of assets it might have wanted to protect.’

Notwithstanding that alignment of interest, the fact that the reservation in cl 2.1(k) allowing access to the public is not inconsistent with the commercial interests of the grantee is of little present significance for three reasons.

First, cl 2.1(k) is not limited to persons who are or who may become customers of the grantee. The clause confers rights of access, use and enjoyment on persons who may have no intention of utilising the commercial operations on the land. It could not reasonably be seen as a clause tailored to the commercial imperatives of the operator.

Second, the reservations in favour of the general public are explicable by the statutory context in which they were made. Section 8 of the Alpine Resorts Act required the Commission to maximise access by the general public to alpine resorts. Conformably with that statutory objective and the terms of the lease, the public is allowed to enter, use and enjoy the land, and the grantee is obligated to allow such access. As noted above, with the exception of cl 2.1(k), the reservations in cl 2.1 are reservations in favour of the lessor. It would be a striking construction to approach them on the basis that they were intended to reflect or advance the interests of the grantee. The same point can be made about cl 5.24, which imposes a cognate obligation on the grantee to allow members of the public access to the demised land, regardless of whether those persons seek to utilise the commercial operations of the grantee or not.

Third, the relevant question is not whether the reservation is consistent with the interests of the grantee or conducive to the performance of its business on the land. Rather, the question is whether the reservation is consistent with the grant of exclusive possession. The two are quite different.

The fact that the reservation in cl 2.1(k) was a matter that the grantee was willing to agree to and that its presence in the lease is not inconsistent with, and to an extent may advance, its commercial operations may reflect no more than that the grantee’s business operations do not require that it have exclusive possession. That is unsurprising given that both parcels of demised land cover a broad area of unfenced alpine land, with the fixed infrastructure operated by the grantees occupying only a relatively small proportion of the land. The grantee is able to limit access to its commercial operations not by having exclusive possession over the demised land, but through ticketed access to the ski lifts that it operates and limitations on access to confined and defined parts of the land.

Although styled as, and in many ways in the form of a lease, the instruments were ‘peculiar to, and apt for, the conditions of the countryside described’ and the purposes of the grantees.[144]
[144]Wik Peoples (1996) 187 CLR 1, 246 (Kirby J).

Enjoyment of the covenants

In relation to enjoyment of the benefits under the leases, the Commissioner submitted that exclusive possession is necessary to give the grantees security of tenure and to preclude competition.

The judge concluded that, while the terms of the instruments would prevent competition from all third parties if construed as licences, it is only if the instruments are construed as leases that the grantees would be able to prevent the government or the Commission from building a competing ski lift.[145] As I understand, the point being made is that a tenant could exercise the rights of exclusive possession to prevent anyone from entering the land for the purposes of constructing a competing ski lift operation.
[145]Reasons [41].

The leases contemplate that the grantees may, with the consent of the lessor, construct and operate significant infrastructure on the demised land, including ski lifts.[146] Although the physical infrastructure occupies only a very small proportion of each parcel of demised land, it may reasonably be assumed that the construction or operation of the equipment is likely to require substantial investment.
[146]Falls Creek lease cls 5.1, 6.3.

In part, the Commissioner’s submission was founded on the argument that the instruments that preceded the leases took the combined form of permits and / or the tram track leases, and that these instruments conferred exclusive possession over the tram tracks beneath the ski lifts and the land on which the infrastructure was erected. It was contended that the new leases were not intended to result in any decrease in security of tenure but that they were to simply cover a larger surface area.

To my mind, the difficulty with that submission is that, for so long as the land was confined as it was under the earlier instruments, there was no significant or material interference with the public’s right of access to the alpine areas. As the land area covered by the leases increased, the public right of access was secured by the reservations. Viewed objectively, the increase in the size of land was accompanied by extensive reservations in favour of the public that cannot be reconciled with a general right to exclude strangers being given to the grantees.[147] Those reservations are, as I have observed, inconsistent with a general right to exclude.
[147]Wik Peoples (1996) 187 CLR 1, 195 (Gummow J).

Further, and contrary to the view taken by the primary judge, exclusive possession is not the only means by which the grantees could be protected from competition by new entrants to the ski fields. It is noted that the reservation in favour of the lessor in cl 2.1(h) permits the lessor to construct public or community services (other than surface/aerial ski lifts). Read with the other provisions of the lease, this would prevent the lessor from entering for the purpose of constructing competing lifts. Further, the terms of the lease would most likely impair the ability of the Governor or the Commission to grant another lease or interest under s 28 to a competing lift operator.

It is not necessary, however, to determine whether the leases protect the grantees from competition by precluding the State from permitting another entity to construct and operate ski lifts within the two alpine resorts. That is because whether or not the lessor is so inhibited does not depend on whether the grantees are given exclusive possession but depends on the terms of the instrument read in the statutory context. It is notable that, on any view of the present issue, a s 28 lease could be cancelled under s 29(2) where the land is reasonably required for the improvement of the alpine resort.

There is no impediment in principle to the grant of an exclusive licence. In Radaich v Smith, Windeyer J noted that a licence may grant sole occupation of premises but not at the same time confer a right of exclusive possession.[148] It will be recalled that in Ward, the relevant mining lease conferred exclusive mining rights but not exclusive possession.[149]
[148]Radaich v Smith (1959) 101 CLR 209, 223.
[149]Ward (2002) 213 CLR 1, 165 [307] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).

Further, the issue of security of tenure is not affected by whether the instruments confer personal rights or a proprietary interest in the land, but rather the term of the grant and the ability of the parties to terminate it. Regardless of whether the instruments are leases or licences, security depends on those matters.

In my view, exclusive possession is not necessary to preclude competition (assuming that this is a term of the instruments) or to secure the full term of the lease.

Ability to discharge the obligations imposed

The ability of the grantees to discharge the obligations imposed by the leases is the flip side of the benefits. The Commissioner submitted that, notwithstanding broad rights of access, there are clearly some contexts in which it was intended that the grantees could exclude persons from the demised land and that this is an incident of exclusive possession.

More specifically, the Commissioner contended that exclusive possession is reflected in cls 5.6 and 5.7 which oblige the grantee not to permit or suffer any riotous, disorderly, offensive or improper conduct and to ensure that persons guilty of such conduct are not permitted to be or remain in or upon the demised land. This, it was contended, necessarily connotes the power to exclude.

The judge observed that, if the instruments were licences, the grantees and members of the public would be on similar footing which would frustrate the provisions that oblige the grantees to not permit certain behaviour. His Honour rejected the suggestion that members of the public could be controlled by the terms and conditions of tickets for the ski lifts, saying that the grantees ‘would need a broader power, to exclude, for example, members of the public who had deliberately caused safety issues in the past and who sought to use the Lands without contracting with the Grantees.’[150]
[150]Reasons [42].

It is clear that there are some remedies or means of enforcement in respect of interference with land which are only available to persons who have an interest in the land. For example, a claim of ejectment requires that the party bringing the action have exclusive possession. Similarly, an action for private nuisance may give a remedy to an occupier of land for certain interferences with the occupier's use or enjoyment of the land. The plaintiff must have a right over or an interest in the land that has been affected by the nuisance of which complaint is made.[151] The plaintiff must be more than a mere licensee or a person merely present on the land.[152] For example, the plaintiff may have a right over the land as ‘owner or reversioner, or be in exclusive possession or occupation of [the land] as tenant or under a licence to occupy’.[153]
[151]Brown v Tasmania (2017) 91 ALJR 1089, 1163 [385] (Gordon J), citing Elston v Dore (1982) 149 CLR 480, 488 and Hunter v Canary Wharf Ltd [1997] AC 655, 724.
[152]Ibid, citing Hunter v Canary Wharf Ltd [1997] AC 655, 692, 694–5, 724.
[153]Ibid, quoting Hunter v Canary Wharf Ltd [1997] AC 655, 724.

It is important not to reason back from the assumption that the putative lessee has the capacity to bring an action in ejectment or in nuisance. Those remedies are a product of an anterior finding of an interest in land.

In any event, the fact that a grantee holds a licence rather than a lease does not mean that it has no remedy against persons who interfere with the enjoyment of the rights under the licence. As was observed in Ward, ‘[t]here are many examples of the exercise by equity of its jurisdiction to enjoin interference with the enjoyment by the plaintiff of rights (not necessarily proprietary in nature) conferred upon it by or under statute.’[154]
[154]Ward (2002) 213 CLR 1, 160 [291] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).

In my view, the proper approach is to determine whether the rights conferred by the leases are consistent or compatible with a finding of exclusive possession. The nature and extent of the rights of the general public to enter, use and enjoy the land at any time and subject to very limited exceptions, which are consistent with the enjoyment of a right of a licensee or of a tenant, are not capable of being reconciled with a finding of exclusive possession.

The statutory context

Finally, the statutory context does not mandate a particular outcome to the question in issue. The primary judge correctly recognised that extensive regulation of the use of land is common and that, given the nature of land in an alpine resort, it is to be expected that there would be a measure of control retained by the State over the land. His Honour approached the reservations in favour of the general public in that light.[155] The judge was influenced by his assessment that the members of the public do not have a ‘positive and superior right’ to access the land and that such access rights as they do have are derived through the State.[156]
[155]Reasons [55]–[57].
[156]Reasons [55].

In my view, the question is not to be approached by ranking the rights that are conferred on the grantees and those conferred on the public in order to determine which is superior. None of the High Court authorities considered above suggest that such an analysis is required or helpful. No doubt, the grantees obtain substantial rights to use the land for their commercial undertakings and any access that the public enjoys is conditioned on the requirements that it not be disruptive or for commercial purposes. But that conclusion does not assist in determining whether the grantees have a general right to exclude persons, subject only to limited rights of entry in favour of the lessor or third parties.

The statutory context is relevant to the construction of the instruments and explains why the reservations are found in the instruments, but it is of no assistance in resolving the critical question.

Conclusion

Although there are aspects of the instruments that suggest a lease, there is no express grant of exclusive possession and the enjoyment of the covenants and the performance of the obligations does not depend on exclusive possession. Ultimately, the nature and extent of the reservations in favour of the general public preclude construing the instruments as giving exclusive possession. The fact that, to some extent, the reservations suit the grantees does not alter that conclusion.

The grantees therefore did not hold the land under leases from the Crown. Accordingly, the applicant is not the ‘owner’ of the land for the purposes of the Land Tax Act.

I would grant the application for leave to appeal and allow the appeal.

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[2018] VSCA 237

17 September 2018