Minister for Resources v Fortune Island Holding Company Limited

The Minister for Resources applied to the Court for a determination that the respondent’s lease over Double Island in far north Queensland may be forfeited for breach of lease conditions. The respondent held a state lease over the island, which required that it be used for tourism or tourism purposes. The Minister contended that the respondent’s use of the leased island did not comply with this requirement, thereby breaching the lease conditions and triggering the statutory criteria for forfeiture. The respondent argued against the forfeiture of the lease, contending that the term ‘tourism’ should be interpreted broadly in the context of the history of the leased property. The respondent also submitted that the Court had a discretion to declare that the lease may not be forfeited despite the fulfillment of the statutory criteria, or alternatively, that the Court could recommend that the lease should not be forfeited.

The Court first considered whether the respondent’s use of the leased island was for tourism or tourism purposes. The Court found that the ordinary meaning of the term ‘tourism’ should be applied, and that the respondent’s use of the island did not constitute tourism within this ordinary meaning. The Court next considered the respondent’s submissions regarding the Court’s discretion to declare that the lease may not be forfeited despite the fulfillment of the statutory criteria, and the respondent’s alternative submission regarding a power to recommend that the lease should not be forfeited. The Court found that the Land Act 1994 did not confer a discretion on the Court to declare that a lease may not be forfeited despite the fulfillment of the statutory criteria, nor did it provide a power to recommend that the lease should not be forfeited.

The Court granted the Minister’s application, declaring that the respondent’s lease may be forfeited for breach of the lease conditions. The Court found that the respondent’s use of the leased island did not constitute tourism within the ordinary meaning of the term, and that the Land Act 1994 did not confer a discretion on the Court to declare that a lease may not be forfeited despite the fulfillment of the statutory criteria. The ultimate discretion to forfeit the lease was conferred upon a designated person. The Court’s declaration of forfeiture was subject to the right of the respondent to apply for relief from forfeiture under the relevant statutory provisions.

[1] The date of transfer of the lease to the respondent is not relevant to the Court’s determination.