Penola & District Ratepayers & Residents Association Inc & Butler v Wattle Range Council - [2010] SASC 218

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
PENOLA & DISTRICT RATEPAYERS & RESIDENTS ASSOCIATION INC & BUTLER v WATTLE RANGE COUNCIL
[2010] SASC 218
Judgment of The Honourable Justice Duggan
21 July 2010
LOCAL GOVERNMENT - POWERS, FUNCTIONS AND DUTIES OF COUNCILS GENERALLY - PARTICULAR POWERS AND FUNCTIONS - MISCELLANEOUS POWERS
LOCAL GOVERNMENT - POWERS, FUNCTIONS AND DUTIES OF COUNCILS GENERALLY - POWERS GENERALLY - EXTENT OF POWERS
EQUITY - TRUSTS AND TRUSTEES - POWERS, DUTIES, RIGHTS AND LIABILITIES OF TRUSTEES - LIABILITY FOR BREACH OF TRUST - WHAT CONSTITUTES A BREACH OF TRUST AND WHO MAY BE LIABLE
EQUITY - GENERAL PRINCIPLES - REMEDIES AND PROCEDURE - GENERALLY
The plaintiffs' seek declarations that resolutions made by the defendant council were null and void and an injunction restraining defendant from acting further pursuant to the resolutions – resolutions relate to proposal to construct bypass road which will traverse area of land which defendant held on trust – whether defendant breached duty as trustee by passing resolutions – whether construction of bypass road over land within terms of Trust – whether defendant had power to revoke classification of the land as community land under s 194 of the Local Government Act 1999 (SA) – whether the defendant had power to declare relevant portions of land to be a public road pursuant to s 208 of the Local Government Act 1999 – whether defendant's request to Minister pursuant to s 20(1)(a) of the Highways Act 1926 (SA) contrary to duties under the Trust – whether defendant has power to enter Trust – whether defendant fettered statutory powers by executing Trust – whether Court should exercise its discretion to refuse declaratory and injunctive relief due to delay.
HELD: The land is held for benefit of community within meaning of s194(1)(b) of the Local Government Act 1999 – defendant did not have power to revoke classification as community land – s 208 of the Local Government Act 1999 does not empower a council to declare a road or land to be a public road – power to declare land to be a public road is implied from Local Government Act 1999 – if defendant had fettered its powers by executing Trust the resolution declaring land to be a public road would be contrary to terms of the Trust – defendant’s invitation for Commissioner to exercise powers to acquire land does not constitute breach of trust – assuming defendant had power to enter Trust it cannot be construed as restricting the defendant's powers to declare open public roads – alternatively if defendant purported to fetter its statutory powers in this respect it acted contrary to rule of executive necessity and the Trust, to that extent, would be invalid – delay would not justify refusal to grant declaratory or injunctive relief if otherwise appropriate.
Local Government Act 1999 (SA) s 3, s 4, s 193, s 194, s 208; Crown Lands Act 1929 (SA) s 195; Highways Act 1926 (SA) s 20(1)(a); Roads (Opening and Closing) Act 1991 (SA); Local Government Act 1934 (SA) s 196, s 197, s 36, referred to.
Thompson v Federal Commissioner of Taxation (1959) 102 CLR 315; Central Bayside General Practice Association Ltd v Commissioner of State Revenue of the State of Victoria (2006) 228 CLR 168; In Re Piercey [1898] 1 CH 565; New Plymouth District Council v Waitara Leaseholders Association Incorporate [2007] NZCA 80; Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth (1977) 139 CLR 54; City of Subiaco v Heytesbury Properties Pty Ltd (2001) 24 WAR 146; Rederiaktiebolaget Amphitrite v The King [1921] 3 KB 500, discussed.

PENOLA & DISTRICT RATEPAYERS & RESIDENTS ASSOCIATION INC & BUTLER v WATTLE RANGE COUNCIL
[2010] SASC 218
Civil

DUGGAN J: The plaintiffs, the Penola & District Ratepayers & Residents Association Inc (“the Association”) and one of its members, Duan Butler, seek declarations that certain resolutions of the Wattle Range Council (“the Council”) were null and void. They also seek an injunction restraining the Council from acting further pursuant to the resolutions. The resolutions relate to a proposal to construct a bypass road around the town of Penola which is within the area of the Council.
The proposal contemplates that a section of the bypass road will traverse a parcel of land known as the Penola Commonage Land (“the Commonage Land”). The Council is the registered proprietor in fee simple of the Commonage Land. The possibility of constructing a bypass road around the Penola township has been investigated since the 1970’s, first by the former District Council of Penola and, now, the present Council.
On 6 May 1998 the Council executed a Declaration of Trust (“the Trust”) declaring that it held the Commonage Land (save for an area of 2.46 hectares) for the public use of the residents of the former District Council of Penola “for sporting, agricultural, educational, recreational, community or like purposed (sic) but subject to the conditions specified in or contemplated by [the Trust]”.
In broad terms, the plaintiffs contend that the construction of part of the bypass road over a section of the Commonage Land is not an activity within the terms of the Trust and that the resolutions of the Council which were passed in order to enable the bypass road to traverse this section of the Commonage Land were in breach of the Trust.
The Council was formed on 1 July 1997 as a consequence of the amalgamation of the District Councils of Beachport, Millicent and Penola. It appears that the Trust was executed to ensure that the Commonage Land would continue to be available for the purposes set out in the Trust despite the fact that it was no longer under the control of the former District Council of Penola.
The Commonage Land is immediately to the south west of the township of Penola. The total area of the Commonage Land is 250 hectares. The relevant portion which the bypass would occupy is less than 2.5 hectares in area in the northern part of the Commonage Land.
At present various sections of the Commonage Land are used for a variety of purposes. They include areas used for depasturing stock by certain community groups, an area which serves as a drainage reserve and is used by the Penola Pony Club, and another area used as part of the Penola Community Waste Water Management Scheme.
Section 193(1) of the Local Government Act 1999 (SA) (“the LGA”) provides that, subject to certain exceptions including existing roads, land that is owned by a council is taken to have been classified as community land. Section 194 of the LGA provides a procedure whereby a council can resolve to exclude land from classification as community land. The procedure requires public consultation before a resolution can be made.
Section 194(1) of the LGA also provides that a council cannot revoke a classification of land as community land unless the designated Minister approves the revocation.
The revocation of the classification of land as community land frees the land from a dedication, reservation or trust affecting the land, other than a dedication, reservation or trust under the Crown Lands Act 1929 (SA) (LGA s 195). The exception under the Crown Lands Act 1929 (SA) does not apply to the present circumstances.
On 8 August 2006 the Council authorised its Chief Executive Officer, Mr Brennan, to undertake community consultation and prepare a report on a proposal to revoke the community land classification for the relevant portions of Commonage Land which would be required to construct the bypass. Such a revocation would free the land from the Trust. The report was prepared and published on 13 September 2006. It was open for public comment from then until 13 October 2006.
On 7 November 2006 the Council considered the representations which it had received from members of the public and resolved to submit the proposal to revoke the classification of the relevant portions as community land to the Minister for Transport (“the Minister”). A reply was received from the Minister approving the proposal on 5 March 2007. At a Council meeting held on 10 April 2007, the members of the Council were advised of the Minister’s approval and thereupon resolved to revoke the classification. The plaintiffs claim that the Council had no power to revoke the classification.
On 8 May 2007 the Council passed a resolution declaring the relevant portions of the Commonage Land to be a public road. The Council purported to make the declaration pursuant to s 208 of the LGA. The plaintiffs claim that s 208 does not authorise the Council to declare land to be a public road.
The solicitors for the plaintiffs wrote to the Chief Executive Officer of the Council on 21 October 2008 voicing objection to the Council’s role in the bypass road project and asserting that the actions of the Council thus far would create a reasonable apprehension of bias.
At this point it appears that the Council decided to adopt a different method for enabling the relevant portion of the Commonage Land to be utilised for the purpose of constructing the bypass road.
Section 20(1)(a) of the Highways Act 1926 (SA) (“the Highways Act”) empowers the Commissioner of Highways (“the Commissioner”), subject to the approval of the Minister, to acquire by agreement or compulsory process any land or interest in land for the purposes of present or future roadwork or any other purposes connected with the Highways Act. On 9 December 2008 the Council resolved to approach the Minister and request that the Commissioner acquire the relevant portion of the Commonage Land for the construction of the bypass road pursuant to s 20(1)(a) of the Highways Act.
So far there has been no public response by the Minister or the Commissioner to the Council’s request. Nevertheless, the plaintiffs claim that the Council’s approach to the Minister is contrary to the Council’s duties under the Trust.
In response, the defendant challenges the power of the Council to enter into a trust which fetters its power to exercise statutory rights, and duties, conferred and imposed upon it in relation to planning matters. This issue is addressed later in these reasons. For present purposes it will be assumed that the Council had the power to enter into a trust which imposed such a restriction.
I will discuss the impugned resolutions in turn.
The resolution on 10 April 2007 purporting to revoke the classification of the land as community land
Section 194(1) of the LGA provides as follows:
194 — Revocation of classification of land as community land
(1)A council may (subject to the following exceptions and qualifications) revoke the classification of land as community land in accordance with the following procedure.
This power is subject to exceptions and qualifications. The exception most relevant to the present case is contained in s 194(1)(b) which states:
The classification of land as community land cannot be revoked if the land is required to be held for the benefit of the community under Schedule 8, under a special Act of Parliament relating to the land, or under an instrument of trust.
The Council places reliance on s 195(1) which states:
195 — Effect of revocation of classification
(1)The revocation of the classification of land as community land frees the land from a dedication, reservation or trust affecting the land, other than a dedication, reservation or trust under the Crown Lands Act 1929.
Mr Hayes QC, for the plaintiffs, argued that these sections do not contemplate public charitable trusts, which he said were irrevocable. According to the argument the trust in the present case was a charitable trust, whereas the LGA is concerned only with non‑charitable or private trusts.
In my view this distinction is not contemplated by the legislation. While the effect of the revocation of the classification of land as community land is to free it from a trust affecting the land, there can be no revocation in the first place if the land is held “under a trust for the benefit of the community”. It is obvious that not all trusts are for the benefit of the community. The relevant distinction which is made in the LGA and which allows effect to be given to both s 194(1) and s 195 is the distinction between trusts which are for the benefit of the community and those which are not. Section 194(1) is concerned with trusts for the benefit of the community. Section 195 can only apply to trusts which cannot be described as trusts for the benefit of the community.
The question which then arises is whether the trust in the present case can be said to be for the benefit of the community. Mr Roder SC, for the Council, argued that s 194(1)(b) contemplates a trust for the benefit of the public or community at large and not for the benefit of a local community such as “the residents of the former District Council of Penola” as stated in the Trust.
In my view, there is no justification for reading into s 194(1) a requirement that the trust be for the benefit of the wider community. The objects of the LGA as stated in s 3 are related to the governance and needs of “local communities”.[1] It is unlikely that the aim of preserving a benefit conferred by an instrument of trust which is evident in s 194(1)(b) is intended to apply only if conferred on the broader community as opposed to a local community as defined in the Trust.
[1] Sections 3(b) and (f).
Although I am of the view that while the question under s 194(1) of whether land “is required to be held for the benefit of the community” under a trust is not necessarily to be determined by reference to the definition of a charitable trust, the requirement of a public benefit in the case of charitable trusts provides a useful analogy.
In Thompson v Federal Commissioner of Taxation,[2] Dixon CJ said:
The tendency of the trust must be to benefit the public, a condition that is satisfied if it tends to the benefit of the public at large, or a class or section of the public. The trusts may be limited in their operations by reference to locality, to conditions of people, to their disabilities, defects or misfortunes and by reference to many other attributes of men and things, yet the trusts may retain their “public” character.
In my view there is good reason to apply a similarly broad approach to a trust for the benefit of the community under s 194.
[2] (1959) 102 CLR 315 at 321.
It follows that if the Trust is otherwise valid, the Commonage Land is held for the benefit of the community within the meaning of s 194(1)(b) and the Council had no power to revoke its classification as community land.
The resolution on 8 May 2007 purporting to declare part of the Commonage Land a public road
On 8 May 2007 the Council declared the relevant portions of the Commonage Land to be a public road. Notice of this declaration was given in the South Australian Government Gazette of 17 May 2007.
A council has powers to open and close roads pursuant to the Roads (Opening and Closing) Act 1991 (SA) (“the Roads Act”). Part 3 Division 1 of the Roads Act sets out an elaborate procedure for opening new roads and closing existing roads which is referred to as a “road process”.
At a meeting on 9 December 2008 the Council resolved to commence the process provided for in the Roads Act in relation to a number of sections of the proposed bypass road. However, this process was not invoked in the case of the relevant portions of the Commonage Land.
It is stated in the minutes of the meeting of 8 May 2007 and the Gazette of 17 May 2007 that the declaration was made pursuant to s 208 of the LGA.
Section 208 provides:
208 — Ownership of public roads
(1)All public roads in the area of a council are vested in the council in fee simple under the Real Property Act 1886 (and any land so vested that has not been previously brought under that Act is automatically brought under that Act without further application).
(2)When land vests in a council as a public road under this or another Act, the land is discharged from all mortgages, charges, easements and other encumbrances, and all other rights, privileges, trusts, limitations or restrictions (unless provided otherwise by this or another Act).
(3)Subsection (2) does not operate so as to discharge any easement that the council resolves to preserve under this subsection.
(4)A council must cause a copy of a resolution declaring a road or land to be a public road, or preserving an easement under subsection (3), to be published in the Gazette.
(5)A resolution declaring a road or land to be a public road will not take effect until publication under subsection (4).
The section does not authorise a council to declare a road or land to be a public road. Section 208(4) does no more than provide for publication in the Gazette of a copy of a resolution making that declaration. However, it might be inferred from s 208(4) that the Council is empowered by the LGA to declare land to be a public road.
The definition of “public road” in s 4 of the LGA is as follows:
public road means—
(a)     any road or land that was, immediately before the commencement of this Act, a public street or road under the repealed Act; or
(b)     any road—
(i)that is vested in a council under this or another Act; or
(ii)that is placed under a council’s care, control and management as a public road after the commencement of this Act,
but not including an alley, laneway, walkway or other similar thoroughfare vested in a council; or
(c)     any road or land owned by a council, or transferred or surrendered to a council, and which, subject to this Act, is declared by the council to be a public road; or
(d)     any land shown as a street or road on a plan of division deposited in the Lands Titles Registration Office or the General Registry Office and which is declared by the council to be a public road; or
(e)     any land transferred or surrendered to the Crown for use as a public road that was, immediately before the transfer, held by a person in fee simple or under a lease granted by the Crown,
(and includes any such road that is within the boundaries of a public square)
(Emphasis added)
It would seem that the circumstances in the present matter come within para (c) of the definition. The land is owned by the Council and there was a declaration by the Council that it was to be a public road. Although the Council resolution refers to the declaration being made pursuant to s 208, this would not be sufficient to invalidate it.
There is no section in the LGA which specifically empowers a council to declare land that it owns to be a public road. Although the LGA is vague in this respect, it is my view that such a power can be implied from the definition section. The fact that para (c) of the definition section requires the land to be owned by the Council would explain why the procedure for the declaration is not as detailed as the procedure for opening roads pursuant to the Roads Act.
The question is then whether, if the Council is bound by the Trust, it acted in breach of the Trust by declaring the relevant portions of the Commonage Land to be a public road. The Council argued that the declaration was not contrary to the terms of the Trust.
The relevant clause in the Trust requires the Trustee:
To hold the Subject Land for the public use of the residents of the former District Council of Penola (in its configuration as at 30 June 1997) for sporting, agricultural, educational, recreational, community or like purposed (sic) but subject to the conditions specified in or contemplated by this instrument.

Mr Roder acknowledged that this was a charitable trust and submitted that the provision of a public road has always been regarded as one of the categories of a charitable trust.[3]
[3] Central Bayside General Practice Association Ltd v Commissioner of State Revenue of the State of Victoria (2006) 228 CLR 168 at [170].
It is trite to observe that simply because a trust can be categorised as charitable does not mean that any of the activities which come within the well‑recognised categories of charitable trusts are thereby authorised in the case of a particular trust. The activity must fall within the terms of the particular trust and that is a question of construction.
The same conclusion applies to Mr Roder’s further submission that a trust expressed to be for a charitable purpose generally is a valid trust and allows the trustee the discretion to apply the property to any charitable purpose.[4] Although that proposition is correct, the present Trust is not expressed to be for general charitable purposes. The objects of the Trust are specifically identified and, as stated, their scope is to be determined by a proper construction of the words of the Trust.
[4] See e.g. In Re Piercey [1898] 1 CH 565 where the testator directed his trustees to apply a portion of a fund to “such charitable institutions and objects as my said trustees may determine”.
It is true that community purposes cover a wide range of activities, but this description is to be read in conjunction with the descriptions of the other activities included as objects of the Trust. Whereas the activities referred to are diverse, they are stated to be for the public use of the land by the residents in the enjoyment of the land. The Trust contemplates that the activities identified will take place on the land. In my view the “community” purpose contemplated would involve activities of a communal nature associated with the use of the land by the residents.
The bypass road might be said to be for the benefit of the community, but the fact that a section of it traverses the relevant portions of the Commonage Land is not something which comes within the description of the public use by residents of the land for a community or like purpose.
In turn if, by executing the Trust, the Council effectively fettered its power to declare the relevant portion of the Commonage Land to be a public road, its resolution of 8 May 2007 would have been contrary to the terms of the Trust.
In any event, it appears that the Council decided not to rely on the declaration which it made on 8 May 2007 in purported reliance on s 208 of the LGA, but instead resolved to invite the intervention of the Commissioner.
The resolution on 9 December 2008 to request the Commissioner of Highways to acquire the relevant portions of the Commonage Land
Section 20(1)(a) of the Highways Act provides as follows:
20 — General powers of Commissioner
(1)Subject to the provisions of this Act, the Commissioner in his corporate name may—
(a) subject to the approval of the Minister, acquire by agreement or compulsory process any land or interest in land for the purposes of present or future roadwork or any other purposes connected with this Act…
The definition of “roadwork” in s 7 of the Highways Act includes the construction of a road.
Reference has been made to the resolution of the Council on 9 December 2008 to approach the Minister and request that the Commissioner acquire the relevant portion of the Commonage Land for the construction of the bypass road.
Mr Hayes argued that, as it is the duty of a trustee to adhere rigidly to the terms of a trust,[5] the Council acted contrary to its duty to preserve the land for the purposes stated in the instrument of trust by passing the resolution of 9 December 2008. According to the argument it followed that the Council’s request for the Commissioner to exercise his power to acquire the land was a breach of trust.
[5] Jacobs, Law of Trusts in Australia, (7^th ed), [1704].
In response Mr Roder referred to New Plymouth District Council v Waitara Leaseholders Association Incorporate.[6] In that case a local council wished to sell land which was subject to a statutory trust in that it held the land pursuant to legislation which required it to use the land for “harbour purposes”.
[6] [2007] NZCA 80
The Council decided to sell the land to the Crown on terms which included an undertaking that the Crown would legislate to provide that the land be set free of all statutory trusts.
The Court of Appeal held that the legislation did not create a charitable trust, but that the land was held under a statutory trust of a public character.
One of the questions which arose for consider by the Court was whether the Council had acted in breach of statutory or trustee obligations in making its decision to sell the land. In a joint judgment the Court rejected the trial Judge’s view that the Council decision was contrary to the terms of the statutory trust and that the Council had acted for an ulterior purpose. O’Regan, Arnold and Ellen France JJ said:[7]
... Taking the harbour improvement land as an example, the Council held that land under statutory restrictions. The Council was also the principal organ of local government in the district. It was entitled to seek the removal of the statutory restrictions for what it perceived to be the broader good of the community. Ultimately it would be up to Parliament to determine whether the restrictions should be removed. If they were not, the Council would be obliged to deal with the land in terms of the 1940 Act. But there is no requirement that the Council act within the framework of the 1940 Act when it seeks to have the restrictions imposed by that Act removed.
[7] [2007] NZCA 80 at [66].
Although the circumstances of that case differ from those of the present case, the authority is of some use by way of analogy. In the present case the Council invited the Commissioner to exercise powers which exist under the Highways Act. In my view the mere invitation to the Commissioner to consider the exercise of his powers in relation to the land does not amount to a breach of trust. Even if it did constitute a breach of trust, this would not prevent the Commissioner from considering the compulsory acquisition of the land for the purposes of constructing a road.
The conclusion which I reach as to whether the Council has fettered its statutory powers by executing the Trust is also relevant to this issue.
The power of the Council to execute the Trust
The Trust was executed at a time when the Local Government Act 1934 (SA) (“the LGA (1934)”) was in operation. There was no specific power in that Act authorising a council to execute a trust in circumstances such as those existing in the present case.
Mr Roder pointed out that it was stated in the resolution to hold the land on trust that the Council relied on ss 196 and 197 of the LGA (1934). As he observed, these sections authorise councils to enter into trusts and partnerships for the purpose of carrying out projects. They do not authorise a council to enter into a trust of the type under consideration in this case.
Mr Roder also referred to s 36 of the LGA (1934) which dealt with the nature and general powers of a council. The section stated:
36.(1)    A council consists of the members appointed or elected to the council in accordance with this Act.
(2)     A council bears the name assigned to it by or under this Act.
(3)     A council—
(a)is a body corporate;
(b)has the powers, functions and duties conferred on it by or under this or any other Act;
(c)subject to this or any other Act—
(i)may acquire, deal with and dispose of real and personal property (wherever situated), and rights in relation to real and personal property;
(ii)may sue and be sued;
and
(iii)may enter into any kind of contract or arrangement;
and
(d)has power to do anything else necessary or convenient for, or incidental to, the exercise, performance or discharge of its powers, functions or duties under this or any other Act.
(4)     No contract with a council is void by reason of any deficiency in the council’s juristic capacity but this subsection does not prevent an action to restrain a council from entering into such a contract.
(Emphasis added)
The power of the Council to enter into a trust in circumstances such as this is far from clear. However, the issue was not pursued by either party and I am prepared to hold that the nature of the Council’s role, its powers with respect to property generally and the incidental powers with which it is equipped provided the authority for it to enter into the Trust.
The fettering of statutory powers
I turn to a further argument which Mr Roder addressed in relation to the powers of the Council. He argued that the Council could not fetter the future exercise of its statutory powers and, in particular, the power to declare new roads. He relied on the rule of executive necessity and referred to Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth.[8] In that case Mason J referred to:[9]
… a general principle of law that a public authority cannot preclude itself from exercising important discretionary powers or performing public duties by incompatible contractual or other undertakings (Ayr Harbour Trustees v. Oswald[10]).
Later in his judgment Mason J said:[11]
It has been held that a resolution or undertaking by trustees that they will never in the future exercise powers in relation to certain land, powers which under the statute they might exercise at any time in the future, was incompatible with the statutory purpose for which the land was acquired and was therefore not binding on the trustees (Ayr Harbour Trustees v. Oswald; see also Paterson v. Provost of St. Andrew’s; and British Transport Commission v. Westmorland County Council). It was with respect to cases of this class that Lord Birkenhead said in Birkdale District Electric Supply Co. Ltd. v. Southport Corporation, [at p. 364]: “if a person or public body is entrusted by the Legislature with certain powers and duties expressly or impliedly for public purposes, those persons or bodies cannot divest themselves of these powers and duties. They cannot enter into any contract or take any action incompatible with the due exercise of their powers or the discharge of their duties.”
Furthermore it has been decided in town planning cases that a local or planning authority cannot by contract fetter in an anticipatory way its future discretion to approve or reject applications after proper consideration in accordance with the prescribed procedure (Ransom & Luck Ltd. v. Surbiton Borough Council, [at pp. 195, 198]; see also Southend‑on-Sea Corporation v. Hodgson (Wickford) Ltd.; Rocca v. Ryde Municipal Council).
(Footnotes omitted)
[8] (1977) 139 CLR 54.
[9] (1977) 139 CLR 54 at 74.
[10] (1883) 8 App. Cas. 623.
[11] (1977) 139 CLR 54 at 75.
The rule of executive necessity was discussed in City of Subiaco v Heytesbury Properties Pty Ltd.[12] The appellant council leased premises to the respondent. There was a quiet enjoyment clause in each of the four leases. The respondent claimed that the council subsequently procured amendments to the town planning legislation, the effect of which were to prevent the respondent from carrying on a manufacturing business on the leased sites. It was claimed that this was contrary to the council’s obligations under the quiet enjoyment clauses.
[12] (2001) 24 WAR 146.
Ipp J (Malcolm CJ and Wallwork J concurring) referred to cases in which the rule had been applied in the case of local government authorities. After referring to the statement of the rule by Rowlatt J in Rederiaktiebolaget Amphitrite v The King,[13] Ipp J said:[14]
[13] [1921] 3 KB 500 at 503.
[14] (2001) 24 WAR 146 at [44]-[46].
Earlier, in Ayr Harbour Trustees v Oswald (1883) 8 App Cas 623 the House of Lords had expressed similar views. In Birkdale District Electric Supply Co v Southport Corporation [1926] AC 355 at 364, it was held that a local authority, entrusted by the legislature with powers and duties for public purposes, cannot divest itself of those powers and duties, and cannot enter into any contract or take any action incompatible with the due exercise of its powers or the discharge of its duties. Mason J in Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 cited Birkdale District Electric Supply Co v Southport Corporation as authority in saying (at 74):
“There is a general principle of law that a public authority cannot preclude itself from exercising important discretionary powers or performing public duties by incompatible contractual or other undertakings.”
Triggs v Staines Urban District Council [1969] 1 Ch 10 is a helpful example of the rule. A local authority reserved property owned by Triggs as proposed public open space but agreed with him that the land should be released from reservation if it did not purchase the land by a certain time. The local authority also agreed that so long as the land was occupied by the existing tenants, it would not purchase the land either voluntarily or compulsorily during a certain period and would not make any claim for betterment. When Triggs died, his executor claimed declarations that the agreement was ultra vires the authority and void ab initio. Cross J agreed, saying (at 18):
“The council could not effectively contract not to exercise its statutory powers or to abdicate its statutory duties.”
Hence, Cross J found, following Birkdale District Electric Supply Co v Southport Corporation, that the promises made by the local authority were void and unenforceable against it.
The rule of executive necessity is of application in the present case as, at the relevant times, by s 7 of the Town Planning and Development Act 1928 (WA), the City had the power, to be exercised in the public good, to make or amend a town planning scheme, and the term contended for by Heytesbury and upheld by White J would impinge on the City’s freedom of action in so exercising its powers. That is to say, were the leases to be construed so as to contain a promise by the city that the lessee would have the quiet enjoyment of the leased premises for the purpose of conducting a manufacturing business thereon, the City would have committed a breach of contract by procuring the enactment of the Town Planning Amendment.
Mr Roder’s argument gives rise to two issues requiring consideration. The first is whether, upon a proper construction of the Trust, the Council expressly or impliedly agreed to fetter itself in relation to the future exercise of its statutory powers insofar as that exercise might be incompatible with the terms of the Trust. The second is whether, if the Council did undertake to fetter its powers in this way, it was entitled to do so.
In City of Subiaco v Heytesbury Properties Pty Ltd, Ipp J observed that:[15]
…any contractual fetter or limitation of any kind upon executive discretion would have to be clearly and expressly stated before a court would construe a contract as qualifying freedom of executive action.
[15] (2001) 24 WAR 146 at [55].
The terms of the Trust do not specifically prevent the Council from exercising any of its statutory powers and I am not prepared to read into the wording of the Trust an implied undertaking by the Council to fetter its powers in this way. The Council undertook to hold the Commonage Land for community or like purposes, but it did not undertake to do so to the extent of denying to itself powers conferred on it by statute for the performance of its duties.
If the plaintiffs’ argument is correct, the Council has undertaken to fetter its exercise of important statutory powers, including those relating to planning and, in particular, its right to declare public roads.
It must be acknowledged that the history of the rule of executive necessity is controversial and its limits are not clearly defined. However, it is my view that the public policy considerations which underpin the rule would require its application in the present circumstances so as to deny the fettering of its statutory powers.
There is a further consideration. If the power of the Council to execute a trust in these circumstances is to be derived in part from s 36(3)(d) of the LGA (1934), it could hardly be said that a fetter on the Council’s statutory powers was, in the words of s 36(3)(d), “necessary or convenient for, or incidental to, the exercise, performance or discharge of its powers, functions or duties under this or any other Act”.
In summary, therefore, the Trust cannot be construed as restricting the Council’s powers to declare open public roads. Alternatively, if it could be construed in this way, the Trust would be ineffective to the extent that it purported to deprive the Council of its statutory powers in relation to planning in general and road opening in particular.
Delay
The resolution to revoke the classification of the relevant portions of the Commonage Land as community land was passed on 10 April 2007. The resolution of the Council deciding that the relevant portions were acquired for the bypass road was made on 8 May 2007. The Council argues that no explanation has been advanced for the delay in taking action to challenge these actions of the Council. Although it is conceded that judicial review is not sought, it is argued that the Court should exercise its discretion to refuse declaratory and injunctive relief by reason of the delay.
The summons seeking declarations that the actions of the Council on 10 April 2007 and 8 May 2007 were ultra vires and void was issued on 18 March 2009.
Mr Duan Butler, the second plaintiff and an executive member of the first plaintiff, sets out the history of the matter relevant to the issue of delay in his affidavit filed on 8 July 2009. He said that he gave instructions to solicitors to act in the matter on behalf of the first plaintiff in October 2008. According to the affidavit a letter was sent to the Council by the solicitors on 21 October 2008 alleging bias on the part of the Council in its dealings in relation to the bypass.
It is not difficult to understand why the steps taken by the Council in relation to the land may have been confusing to a lay person outside the Council. Originally the Council appears to have decided on a course which was directed towards declaring the relevant portions of the Commonage Land a public road under the LGA. This was preceded by the purported declaration that the relevant portions were no longer community land. It is unlikely that the purpose of that declaration and its effect on the trust would have been evident to a lay person.
After making the above declaration, the Council made the further declaration under s 208 of the LGA. Then a “road process” under the Roads Act was commenced in relation to land associated with the bypass, but not in the case of the relevant portions of the Commonage Land.
On 9 December 2008 the Council resolved to approach the Minister to take action under the Highways Act despite the fact that there was a purported declaration which had already been made under the LGA. Then there appears to have been little done on the project for over 12 months prior to the decision to approach the Minister.
In the meantime, the Mayor made public statements in October and November 2008 which suggested that the decision whether the bypass road would be constructed had not been finally determined. These statements are referred to in the affidavit of Mr Butler sworn on 22 June 2009.
The question of prejudice to the Council is relevant in deciding whether declaratory and injunctive relief should be ordered. There was evidence that approximately $175,000 had been spent on planning and investigation with respect to the project. However, it is my view that this would not tip the scales against this Court granting relief if it was otherwise justified.

The present proceedings were commenced approximately three months after the Council wrote to the Minister requesting that action be taken under the Highways Act. In my view the submissions made with respect to delay would not justify a refusal to grant declaratory or injunctive relief if such relief was otherwise appropriate.
Summary
In summary, I have reached the conclusion that the Council did not undertake pursuant to the Trust to fetter its statutory powers to open new roads. Alternatively, if the Council did purport to fetter its statutory powers in this respect, it would have acted contrary to the general principle which prevents a public authority from giving such an undertaking and the Trust, at least to that extent, would be invalid.
I have also found that the Council had no power to revoke the classification of the land as community land by its resolution of 10 April 2007.
In my view the Council had the power under the LGA to declare the relevant portion of the Commonage Land to be a public road. If, contrary to my view, the Council was bound by the Trust to the extent that it was prevented from exercising its statutory powers with respect to the opening of roads, its resolution of 8 May 2007 would have been contrary to the terms of the Trust.
Finally, I have concluded that the Council’s invitation to the Commissioner was within its powers, and even if the Council was bound by the terms of the Trust, the approach to the Minister would not have constituted a breach of the Trust.
I will hear the parties as to the orders which should be made in light of these reasons.