Optus Mobile Pty Ltd v Council of the City of Gold Coast

[1996] QSC 211

IN THE SUPREME COURT

OF QUEENSLAND  No. 7692 of 1996

[Optus Mobile Pty Ltd v. Council of the City of Gold Coast]

BETWEEN:

OPTUS MOBILE PTY LIMITED (ACN 054 365 696)
  Plaintiff

AND:

COUNCIL OF THE CITY OF GOLD COAST
  Defendant

REASONS FOR JUDGMENT  -  THOMAS J.

Delivered:1 November 1996

CATCHWORDS:     Summary judgment - Complex question - Dispute which ought to be tried

Injunction - Balance of convenience.

Counsel:Mr P A Keane QC with him Mr J North for the Plaintiff/Applicant

Mr H Fraser QC with him Mr M Hinson for the Defendant/Respondent

Solicitors:Minter Ellison for the Plaintiff/Applicant

Corrs Chambers Westgarth for the Defendant/Respondent

Hearing Date:   23 October 1996

IN THE SUPREME COURT

OF QUEENSLAND  No. 7692 of 1996

[Optus Mobile Pty Ltd v. Council of the City of Gold Coast]

BETWEEN:
  OPTUS MOBILE PTY LIMITED (ACN 054 365 696)
  Plaintiff
AND:
  COUNCIL OF THE CITY OF GOLD COAST
  Defendant

REASONS FOR JUDGMENT  -  THOMAS J.

Delivered 1 November 1996

The plaintiff ("Optus") seeks summary judgment for specific performance against the defendant ("the Council") in respect of four agreements for a lease of land owned by the Council at Mudgeeraba.  Optus also seeks an injunction against the Council restraining it from preventing Optus from obtaining access to a designated part of the land in question.
           At all material times the intention of Optus has been to construct and operate a mobile phone tower at this site.  It is common ground that on 6 December 1995 the mayor and the chief executive officer of the Council executed four leases, each for five years, in favour of Optus over a designated portion of lot 21 on RP 15864.  The leases operate consecutively, and collectively have the effect of a twenty-year lease.
           The leased instruments were lodged with the Department of Lands for registration on 29 December 1995.  In early January 1996 Optus was granted possession and performed preliminary works on the construction of a mobile phone facility on the land.  The preliminary works involved the laying of some foundations and the making of something that has been described as a bunker.  All that remained to be done was to affix a fifteen metre tower which is to be fastened to the bunker.
           Apparently early in February 1996 there was a public meeting at which some concern was expressed as to the desirability of this particular project.  The Council then advised Optus that it preferred that the phone facility be erected on an alternative site.  On 29 February 1996 the Department of Lands issued a requisition notice requiring that the "designation" of the Council's signatories to the lease should be included therein.  There is no dispute about the fact that Mr Stevens (the mayor) and Dr Daines (the chief executive officer of the Council) had signed the leases and that the official seal of the Council had been applied over their signatures.  All that was needed to satisfy the requisition was to cause the word "mayor" to be indicated against Mr Stevens' signature and the term "chief executive Officer" against Dr Daines' signature.  The Council has however refused to cooperate in causing this to be done.  Hence the present action for specific performance.
           On 7 March 1996 the Council requested Optus to cease construction on the facility and construction work ceased six days later.  On 4 June 1996 Optus attempted to recommence work but was denied access by the defendant and this position continues.
           The question in the application for summary judgment is whether there is an issue or question in dispute which ought to be tried.
           One ground which has been raised on behalf of the Council is that the leases were not in conformity with the Council's resolution authorising the grant of the lease to Optus.  The Council's resolution of 8 September 1995 contemplated leases being granted both to Optus and Vodaphone.  The resolution was in the following terms -

"1.that the Council approve the leases to Optus Mobile Pty Limited and Vodaphone Pty Limited on that part of Council freehold land described as Lot 21 on Registered Plan 156864 for an initial period of five years with three options at a base rental of $5000 per annum for each lease subject to CPI adjustment;  and

2.that the leases be in accordance with  Council's leasing policy and all costs of preparation of documents, legals etc. to be at the applicant's expense.

. . ."

No separate lease was granted to Vodaphone, although it is possible that this may have been or still could be arranged between Optus and Vodaphone.  Further, the leases are not made subject to CPI adjustment.  It should also be noted that four actual leases were granted instead of one lease and three options.
           However in my view there was nothing about this transaction to take it outside the rule in Royal British Bank v. Turquand (1856) 6E. & B. 327, 119 ER 886. Optus was entitled to deal with the Council on the footing that there had been a resolution authorising the execution of the leases. Mr H Fraser QC for the Council conceded that unless Optus was aware of the terms of the resolution, Turquand's case was a formidable obstacle to his client raising these objections.  There has been no evidence presented before me that tends to show any such awareness on the part of Optus.  There is evidence that a company J.G. Service, which acted for some purposes as the agent of Optus, would have known that the Council wished to enter into its own style of lease rather than the standard Optus lease, and that Mr Campbell of J.G.  Service might have been in a position to infer that the Council's mayor and CEO signed an Optus style lease under the mistaken impression that it had been approved by the Council's solicitors.  But this falls a long way short of showing or even tending to show that Optus was aware of the terms of the Council's resolution or of disconformity between that and the terms of the lease which was signed.  Mr Fraser relied upon the absence of any affidavit in reply from Mr Campbell but I do not think that this takes the matter very far in the circumstances.  Of course the question of Optus' knowledge is a difficult matter for a defendant to establish at this stage in the action, but the whole thrust of the evidence is that the lease was signed in this form because of erroneous assumptions by the Council's property officer Mr B. Clark, and the evidence does not suggest impropriety on the part of any person as having induced those assumptions.
           In short, whilst I would not expect the Council to produce much evidence pointing in this direction for the purpose of demonstrating that there is an issue that ought to be tried on this matter, I do not think that it has produced anything at all that could be described as more than faint suspicion.  If the matter stopped here, I would not be disposed to let the matter go to trial.
The matter which I think tips the scales in the defendant's favour in resisting summary judgment is a difficult legal question raised by it as to the effect of s.405 of the Local Government Act 1993. It relevantly provides -

"Division 3 - Disposal of land or goods

When tenders or auctions are required

405.(1)  This section applies to -

(a)land (including an interest in land);  or

(b)goods with an apparent value of $1 000 or, if a greater amount is prescribed by regulation, the greater amount.

(2)A local government may dispose of the land or goods only -

(a)by auction;  or

(b)after inviting tenders in the way mentioned in section 398(2) (When tenders are required).

. . ."

This section appears in the context of Part 3 of the Act which deals with contracts and tendering. Division 3 is a special division dealing with "disposal of land or goods.". For the plaintiff it is submitted that s.405 does not apply to a lease of land. The submission is that when an owner of land grants a lease, there is the creation of a new estate or interest rather than a disposition of any estate from a disponor to a disponee. The most relevant supporting authority referred to is Rhyl Urban District Council v. Rhyl Amusement Ltd [1959] 1 WLR 465. It may be arguable however that the Local Government Act is not drawn with conveyancing precision and that irrespective of the creation by an owner of land of new interests by the granting of a lease, such a grant is the equivalent of a disposition of an interest in the land. Section 36(2) gives general power to a local government to "acquire, hold, deal with and dispose of property". Counsel for the defendant submitted that s.405(2) is a specific provision which confines the general powers of local government conferred by s.36. However the terminology of s.36(2) and s.405(2) is not uniform. The former includes the power to deal with property whereas the latter refers only to disposal.
           I have considered other cases which have adverted to the possible meanings of "dispose", including Ord Forest Pty Ltd v. FCT (1973) 130 CLR 124, 147-148, Re Mal Brewer's Macquarie Electrical Centre (1974) 1 NSWLR 254 and Duncan v. Ramsay 7 Macph 64. It is highly arguable whether the words "dispose of the land" in s.405(2) of the Act encompass the grant of a lease by a local authority, and the cases give no authoritative guidance.
           Whilst I am grateful for the submissions which both counsel have provided to me on this point, I have a perception that upon the hearing of an appeal on this particular question, additional layers of argument would emerge.  A closer analysis of the nature of the powers of local authorities, as now conferred under the Local Government Act, would assist in the correct reading of ss. 36 and 405.  Further, no argument was addressed to the circumstance that as the lease is of a designated part only of a parcel of land, arguably a subdivision has been effected within the definition of that word in the Local Government (Planning & Environment) Act 1990. It is true that each lease is of five years only, but collectively they are of a period of twenty years. There are no doubt arguments available to both parties on these points, but they highlight the nature of the excision of interest which the Council has made by reason of this transaction, and the actual nature of the transaction would seem to have some relevance to the question whether the Council has in fact thereby disposed of land within the meaning of s.405(2).
Supplementary points on this issue include whether the requirements of s.405 are directory or mandatory. On that point, it is curious that there is no sanction for any breach or any other provision to make the direction effective. It is unnecessary however to pursue these supplementary submissions at this point.
           Without further discussion of these questions, I am satisfied that the issues are of sufficient complexity to make it undesirable to proceed to grant summary judgment.  It is sufficient to note that there was a further submission that the parties were not ad idem;  and that the parties expressly agreed not to raise before me any issue arising from any lack of town planning approval.

Injunction
           Whilst I have denied Optus summary judgment in this matter, the previous discussion makes it clear that Optus has at least a serious question to be tried in relation to its entitlement to the lease.  The question whether an injunction should be granted in its favour will therefore depend on the balance of convenience.  I did not understand counsel for the Council to submit otherwise.
           In my view the factors relevant to balance of convenience heavily favour Optus.
           Substantial outlays were incurred by Optus, apparently in good faith, before the obvious change of heart on the part of the Council.  Optus is in a highly competitive commercial situation at a critical stage of attempting to achieve a high percentage of the mobile phone coverage of Australian consumers and has a limited time in which to achieve this.  The Gold Coast is a key area and generates more mobile phone traffic per head of population than any other part of Queensland.
           The tower is to be fifteen metres high, and the evidence suggests that to obtain the same coverage from some alternative site would require considerably higher towers, probably up to sixty metres high.  The construction of the concrete shelter which is to house the necessary equipment, and the base for the pole is complete.  Expenditure to date exceeds $200,000.  No single suitable alternative site has been located at this stage, and current opinion is that two sites would be necessary in order to obtain the equivalent of the present one, each at a cost of approximately $400,000.
           The further expense necessary to complete construction is minimal.  The necessary tower has already been prefabricated and all that is involved is its affixation and some associated landscaping.  Perhaps even more importantly, the additional structural work which the proposed injunction would permit to occur can be as easily dismantled.  In short, the effect of the injunction is reversible at relatively small cost, and Optus has given all necessary undertakings to remove the additional structures if it is ultimately determined that it is not entitled to its lease.
           There is no corresponding prejudice that would be suffered by the Council through permitting Optus to resume possession until the parties rights have been determined.  Indeed it is difficult to identify any relevant prejudice, financial or otherwise.
           Upon Optus undertaking to remove the tower and any further works erected by it, within one month of any final determination that Optus is not entitled to the lease the subject of these proceedings, and upon Optus further undertaking within that time to cause existing structures to be covered over and to regrasss the site, I shall grant injunctions in terms of the notice of motion.
           I shall hear submissions on form of order and costs.