Piety Developments Pty Ltd v Cumberland City Council

[2023] NSWSC 480

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Piety Developments Pty Ltd v Cumberland City Council [2023] NSWSC 480

Hearing dates:

13 April 2023

Date of orders:

5 May 2023

Decision date:

05 May 2023

Jurisdiction:

Equity - Expedition List

Before:

Parker J

Decision:

See [137]

Catchwords:

LOCAL GOVERNMENT – council lands – land acquired in 1965 by resumption under the Local Government Act 1919 for use as a carpark – whether “subject to a trust for a public purpose”

Legislation Cited:

Land Acquisition (Just Terms Compensation) Act 1991, Pt 2, ss 5, 6, 8, 23(1), 36

Local Government Act 1919, ss 249(cc), 518, 526, 532, 536, 536A, 536B

Local Government Act 1993, Pt 2 Ch 6, ss 25, 26, 45(1), 186, 187, 188, 189

Cases Cited:

Attorney-General v Parramatta City Council (1949) 49 SR (NSW) 283

Bathurst City Council v PWC Properties Pty Ltd (1997) 41 NSWLR 522; 93 LGERA 391

Bathurst City Council v PWC Properties Pty Ltd (1998) 195 CLR 566

Broadcast Australia Pty Ltd v Noonan [2011] NSWSC 1524

Grain Technology Australia Ltd v Rosewood Research Pty Ltd (No 3) [2023] NSWSC 238

Minister for Public Works v Duggan (1951) 83 CLR 424

Mogo Local Aboriginal Land Council v Eurobodalla Shire Council (2001) 54 NSWLR 15

New Cap Reinsurance Corporation Ltd v A E Grant (2008) 221 FLR 164

PWC Properties Pty Ltd v Bathurst City Council (1996) 91 LGERA 344

R&R Fazzolari v Parramatta City Council (2009) 237 CLR 603

Randwick Municipal Council v Rutledge (1959) 102 CLR 54

Rookwood General Cemeteries Reserve Land Manager v Attorney-General NSW [2022] NSWSC 1763

Save Little Manly Beach Foreshore Inc v Manly Council (No 2) [2013] NSWLEC 156

Taheri v Vitek [2014] NSWCA 209

Thompson v Randwick Corporation (1950) 81 CLR 87

Transport Infrastructure Development Corporation v Parramatta City Council [2005] NSWLEC 742

Western Australia v Ward (2002) 213 CLR 1

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Piety Developments Pty Limited (Plaintiff)
Cumberland City Council (Defendant)
Cumberland City Council (Cross-Claimant)
Piety Developments Pty Limited (Cross-Defendant)

Representation:

Counsel:
F Corsaro SC/A Rizk (Plaintiff/Cross-Defendant)
P Tomasetti SC/D Robertson (Defendant/Cross-Claimant)
Solicitors:
Darby Jones Lawyers (Plaintiff/Cross-Defendant)
Clyde & Co Lawyers (Defendant/Cross-Claimant)

File Number(s):

2022/38975

Publication restriction:

Nil

JUDGMENT

1. These proceedings concern land in Sydney owned by a local council. The plaintiff claims to have entered into a specifically enforceable contract with the council to buy the land from it. This judgment addresses a preliminary question about whether the council has power to sell the land.

2. The land in question is known as 13 John Street, Lidcombe. It belongs to the defendant, Cumberland City Council, which is the local council constituted for the area. The defendant is the successor to the Auburn Municipal Council which acquired the land in 1965. For the purposes of this judgment, I will use the term “Council” to refer both to the defendant and its predecessor.

3. On 3 November 2021, the Council resolved to accept a written offer from the plaintiff, Piety Developments Pty Ltd (“PD”), to buy the land. This followed a tender issued by the Council in 2020. The resolution was passed on the Mayor’s casting vote after a tied vote, with seven Councillors in favour and seven against.

4. The Council’s resolution authorised its General Manager to execute, on its behalf, the documents necessary to give effect to the sale. But that did not occur. Instead, a few weeks later, notice was given by two of the Councillors of a motion to rescind the resolution. That motion was adjourned until after the council elections, which took place in December 2021. Preparations were then made for the motion to come before the newly (and differently) constituted group of Councillors for a vote.

Issue for determination

5. The proceedings were commenced in February last year. PD claims orders for specific performance of an alleged contract with the Council in accordance with the terms of its offer. An interlocutory injunction has been granted against the Council proceeding with the rescission motion pending the determination of PD’s claim.

6. One of the defences put forward on behalf of the Council is that it is prohibited by statute from selling the land to PD. The Council contends that the land in question is “community land” for the purposes of the Local Government Act 1993 (“1993 Act”). Subject to exceptions which are not relevant in the present case, the Council has no power under that Act to sell such land. A cross-claim has been filed on its behalf, seeking declarations to that effect.

7. An application was made on behalf of PD for a preliminary hearing on certain specified questions. That was opposed by the Council, but I indicated that the circumstances would warrant an expedited hearing of the Council’s cross-claim for declaratory relief. That was acceptable to both parties.

Summary and analysis of evidence

8. There was no dispute between the parties about the facts. The following statement is taken largely from the Council’s written submissions.

9. The acquisition of the land by the Council resulted from a proposal by the then Mayor in January 1963, or thereabouts, to create a carpark on land behind the Lidcombe courthouse. The courthouse stood next to the police station which was on the corner of John Street and Mary Street. The land on which the courthouse and police station stood was known as “Lot 14 Mary Street” (“Lot 14”), and at the time was owned by the State Government.

10. The land to be used for car parking had previously been used for tennis courts, but by January 1963 was overgrown with weeds. It was described in the evidence as “Lot Pt 13 John Street” (“Lot 13”). The lot belonged to the trustees of a deceased estate and took the form of a battle-axe block, the handle of the battle-axe giving access to John Street.

11. Between February 1963 and January 1964, officers of the Council investigated the Mayor’s proposal. They concluded that it would be feasible to establish a carpark on the site by acquiring Lot 13 and a right of way over a strip of land on the eastern boundary of Lot 14. The idea was to build a one-way access lane with an entrance on John Street and an exit on Mary Street.

12. Reproduced below is a sketch plan prepared for the Council showing the land in question. Lot 13 is edged in red. The proposed access way over Lot 14 (20 feet wide), next to the courthouse, is edged in green:

13. In the course of its internal investigations about the proposal, the Council wrote to the State Government Real Estate Office proposing the grant of an easement for a right of way over the part of Lot 14 shown in the plan. The Public Works Department responded, stating that “there would be no objection” to the resumption by the Council of a slightly narrower strip of land, eighteen feet wide, provided that compensation was paid according to the Valuer-General’s valuation of the land and the Council undertook the necessary fencing and other works at its own expense.

14. In December 1963, the Council wrote to the trustees of Lot 13, stating that the Council had resolved to acquire the Lot “by purchase or resumption for public purposes, and for that purpose, to offer the trustee the sum of £2,800 for the land”. The trustees however responded that there was no power of sale under the deceased’s will.

15. In the light of these responses, the Council decided to proceed by way of resumption. In February 1964, the Council formally resolved to acquire Lot 13 and the relevant part of Lot 14 “under the provisions of ss 532 and s 249(cc) of the Local Government Act for the purpose of providing, controlling and managing a site for the accommodation of vehicles”.

16. The reference in the resolution to the Local Government Act was to the Local Government Act 1919 (“1919 Act”). Section 532 (quoted at [57] below) gave the Council a general power to acquire land for any purpose under the Act, by lease, purchase, appropriation or resumption. Section 249(cc) gave power to the Council “in respect of any public road” to “provide, control and manage sites for the accommodation of vehicles in or near public roads and public reserves”.

17. The resumption was carried out in accordance with the procedure specified by the 1919 Act, including Ordinance No 77 made under that Act (see below at [66]-[68]). In accordance with this procedure, notices were served on the owners of Lots 13 and 14, specifying that the Council proposed to resume the Lots for the “purpose of providing a parking site for the accommodation of vehicles as authorised by section 249(cc) of the Local Government Act 1919”. In July 1964, the Town Clerk forwarded the application for approval of the resumption to the Department of Local Government. The application stated that the Council proposed to acquire the Lots “for the purpose of providing, controlling and managing a site for the accommodation of vehicles near public roads as authorised by section 249(cc) of the [1919 Act]; and the acquisition by resumption is proposed for the reason that Council has been unable to acquire the land by direct negotiation”.

18. Approval was granted in March 1965 and the notice of resumption was published in the New South Wales Government Gazette in April 1965. The notice recited the Council’s resolution to resume the land, and the approval of the resumption application, in each case referring to the purpose stated by Council. The operative part of the notice stated (emphasis added):

now, therefore, the Council, with the approval of His Excellency the Governor, with the advice of the Executive Council as aforesaid, doth hereby give notice that [the land in question] is hereby resumed by the Council under the provisions of the Local Government Act, 1919, aforesaid and the Council doth hereby also give notice that a plan of such land has been filed in the office of the Auburn Municipal Council … and with the Surveyor-General at the Department of Lands, Sydney, which plans are open for public inspection and the Council doth hereby also give notice that upon the publication of this notice … the land therein described becomes for the purposes of the said Act vested in the Council for an estate in fee simple in possession freed and discharged from all trusts, obligations, estates, interests, contracts, rates, rights of way, or easements whatsoever.

19. The land thus passed into the ownership of the Council. The Council became, and remains, the registered proprietor of the land.

20. The carpark was opened in about April 1965. It has operated continuously ever since. Access is provided by a paved laneway. The police station is still standing (but is apparently no longer used for that purpose). The courthouse has been demolished and replaced by a modern commercial building. The land in its current form is shown in pink in the plan reproduced below:

21. As from 1 July 1993, the 1919 Act was repealed and replaced by the 1993 Act. Part 2 of Chapter 6 of the 1993 Act regulated the classification, management, and use of “public land”, which included land vested in or under the control of the Council. Under ss 25 and 26, all such “public land” had to be classified either as “community land” or “operational land”. Section 45(1) provided (and provides) that “[a] council has no power to sell, exchange or otherwise dispose of community land”. This is subject to certain exceptions that are not presently relevant.

22. Clause 6(2)(b) of the transitional provisions to the 1993 Act (located in Schedule 7 to that Act) provided that, on commencement of Part 2 of Chapter 6, any “land subject to a trust for a public purpose” that was “vested in or under the control of a council” was taken to have been classified as “community land”. Clause 6(3) provided that within one year after the commencement date, a council might “by resolution, classify as community land or operational land, any land that [was] vested in it or under its control” and that was not automatically classified under subclause (2). Land classified as operational land was discharged from any “trusts, estates, interest, dedications, conditions, restrictions and covenants affecting the land or any part of the land” (cl 6(5)) and was not subject to the restriction on sale or dealing with land in s 45(1).

23. In June 1994, shortly before the expiry of the twelve-month period, the Council passed a resolution which purported, for the purposes of cl 6(3), to classify the land in question as operational land. It appears that the land was thereafter treated as operational land by the Council for more than 25 years. It was so described in the Council’s 2020 tender.

Community land

Legislation and authorities

24. Bathurst City Council case: The case was argued around the decision of the High Court in Bathurst City Council v PWC Properties Pty Ltd (1998) 195 CLR 566. That case likewise concerned a council resolution which had purported to classify land used as a carpark as operational land. The High Court ultimately decided that the land was “subject to a trust for a public purpose” for the purpose of cl 6(2). Accordingly, its purported classification as operational land was invalid.

25. The land in question, before its acquisition by the council, had consisted of two lots. One, known as “Lot 21”, belonged to a company named Gurdon Motors Pty Ltd (“Gurdon”). The other, known as “Lot 22”, belonged to PWC Properties Pty Ltd (“PWC”), the respondent in the High Court appeal.

26. In December 1979, a development consent had been obtained, at the instigation of PWC, for the development of a shopping centre on land which adjoined Lots 21 and 22, and to which I will refer as the “Development Land” (the development was to be named the “Payless Plaza Shopping Centre”). The approval was subject to conditions which required the developer to provide 60 off-street carparking spaces. The 60 off-street spaces were to be made up by transferring to the council Lot 21 (which would carry 41 credits for car parking spaces) and Lot 22 (which would carry 14.4 credits). The obligation to provide the remaining 4.6 spaces was to be satisfied by way of cash contribution.

27. Lot 21 was the subject of a sale contract between Gurdon and the council dated February 1980. The consideration payable to Gurdon was $800. The contract was later completed, and the transfer was executed in November 1981. Lot 22 (which had in the meantime been renumbered as Lot 12 in a different deposited plan) was transferred by PWC to the council in 1987 for a consideration of $1. The two lots were referred to by the High Court as the “nominated lots”.

28. The sale contract between Gurdon and the council contained the following special condition:

The purchaser [the council] agrees that it will give the benefit of 41 car spaces to [the Development Land]. The said benefit of car spaces shall accrue to any development application lodged by the vendor [Gurdon] or any purchaser from the vendor or any owner for the time being of [the Development Land] who wishes to develop [the Development Land]. It is agreed that this condition will not merge on completion of this contract.

29. Between mid-1980 and 1986, the council acquired a number of other parcels of land near the nominated lots. The council’s intention in making these acquisitions was to develop the whole site as a public carpark so as to accommodate the increased demand for parking in the area.

30. The council obtained fee simple title to the other parcels of land so acquired. In the course of negotiations with the Bank of New South Wales, which was the owner of one of those parcels, the council explained that it envisaged that later there would be a need for even more parking space, which might require the construction of a multi-storey carparking station. The council wished to obtain a fee simple title to the lands being acquired so as to provide flexibility for the future.

31. PWC became the owner of the Development Land and the shopping centre development was eventually completed. For its part, the council developed the parcels of land it had acquired, including the nominated lots, into a carpark. PWC paid for the costs of placing a hot mix seal over part of the site, and some of the carparking spaces were set aside for patrons of the shopping centre.

32. Following the enactment of the 1993 Act, in May 1994, the council passed a resolution purporting to classify the whole of the carpark site, including the nominated lots, as “operational land”. A question then arose about the possible redevelopment of the carpark site. The council sent correspondence to PWC indicating that redevelopment might lead to the shopping centre spaces in the carpark being moved away from ground level. In February 1996, the council resolved to begin advertising for expressions of interest to purchase and/or develop the site (advertising began in March). As recorded by the High Court at [24], PWC was of the belief that “its shopping centre would adequately be served only if car parking spaces remained on ground level and were thus readily accessible to shopping trolleys”.

33. PWC commenced proceedings in the Land and Environment Court. It sought declarations that the carpark site was “subject to a trust for car parking purposes”, that resolutions re-classifying the land as “operational land” were invalid, and “relocation of the car parking spaces below the basement level or above the first floor level … would be contrary to or result in a breach” of trust.

34. At first instance (PWC Properties Pty Ltd v Bathurst City Council (1996) 91 LGERA 344), Talbot J concluded that the nominated lots and the associated financial contributions were impressed with “an obligation in the nature of a trust” (at 351) to apply those contributions and that land for the purpose of providing public carparking. On appeal (Bathurst City Council v PWC Properties Pty Ltd (1997) 41 NSWLR 522; 93 LGERA 391), the Court of Appeal concluded that there was no express trust. Instead, it found that the nominated lots were held by the council as constructive trustee for the purpose of providing a carpark for members of the public. That conclusion did not, however, extend to the rest of the carpark land apart from the nominated lots. The Court of Appeal made a declaration that the nominated lots were “community land” for the purposes of cl 6(2)(b). The Court of Appeal also restrained the council from dealing with the nominated lots, unless reclassified, otherwise than in accordance with restrictions imposed by the Act on the use and management of community land.

35. On further appeal by the council to the High Court, the council eschewed any suggestion that it was free to deal with the nominated lots completely as it pleased. The council conceded that it “owed obligations in respect of” the lots. But the council maintained that those obligations did not go so far as the constructive trust found by the Court of Appeal.

36. The council’s obligations, as formulated by its counsel, were set out at [32]:

(1) To provide for development of Bathurst by the provision of car parking initially at ground level and ultimately in a building which will either be a car park structure or a component of a joint venture for development of the car park land.

(2) To provide for access to [PWC's] loading dock.

37. The High Court considered that there was “force in the submission by PWC” that the first of these purposes, at least, was a charitable one in the technical sense (at [33]). There were, however, difficulties with the idea that a charitable trust could be imposed constructively. But it was not necessary to decide the question. On any view, no such constructive trust should be imposed if there were other adequate remedies available (see [42]).

38. The High Court considered that, contrary to the understanding of the Court of Appeal, the term “trust” in cl 6(2)(b) was “not to be understood wholly in its technical sense” (at [44]). The phrase “for a public purpose” should not be read narrowly (at [48]). In particular, the statutory history showed that the term was not restricted to a charitable trust within the contemplation of the Statute of Elizabeth, and had been used more broadly.

37. The Court stated (at [49]-[50]) (citations omitted):

Here, the nominated lots, as part of the car parking site, were conveyed to and held by the Council ''for'' a public purpose, namely the achievement, or at least the advancement, of the town planning purpose which led to the imposition by the Council of the conditions upon the granting of the development consent on 21 December 1979. That town planning purpose was the acquisition of land for a public car park to accommodate the increased demand for parking which would be created by the surrounding commercial development, including what became the Payless Plaza Shopping Centre.

It is not to the point that, from time to time thereafter and as foreshadowed in its correspondence with the Bank of New South Wales, the Council's perception as to what was required to provide adequate parking facilities might change. The point for the present litigation is that the public purpose which we have identified still endured when the [1993] Act commenced on 1 July 1993.

40. The Court then turned to the interpretation of s 526 of the 1919 Act, which had to be understood in conjunction with s 518. Both of those provisions appeared in Part XXIV of the Act, entitled “Ancillary Powers”.

41. Section 526 provided:

The council may–

(a) accept and hold any real or personal property conveyed, assigned, devised, or bequeathed to it for any charitable or public purpose;

(b) act in the administration of such property for the purposes and according to the trusts for which the same may have been conveyed, devised, assigned, or bequeathed.

42. The Court emphasised (at [52]) that s 526 did not refer to acceptance of property for a “public charitable purpose” (which would have been the proper language for limiting its operations to charitable trusts in a technical sense). Instead, s 526 referred to acceptance of property for any “charitable or public” purpose.

43. The history of s 526 was also significant. The section derived from s 206 of the Sydney Corporation Act 1902. That section, in turn, derived from s 231 of the Sydney Corporation Act 1879. The Court pointed out (at [56]) that s 526 did not refer, as its predecessors had referred, to property accepted by the council “in trust for” any charitable or public purpose; it simply referred to acceptance “for” any charitable or public purpose.

44. Section 518 relevantly provided:

(1) Subject to the provisions of this Act the council may sell or exchange any land or building or other real or personal property vested in or belonging to the council or under its care, control, and management.

(2) Unless otherwise expressly provided, nothing in this Division shall be deemed–

(a) [Repealed in 1945]

(b) to authorise the sale or exchange of any public reserve, public place, or cemetery, or any land subject to a trust.

…

45. The expression “public place” was defined in s 4 as meaning:

[p]ublic road, bridge, jetty, wharf, road-ferry, or other place which the public are entitled to use, but does not include a public reserve.

46. Section 518 was considered by Roper CJ in Eq in Attorney-General v Parramatta City Council (1949) 49 SR (NSW) 283. In that case, the council (strictly speaking, its predecessor) had undertaken the supply of electricity to the municipality. The council then entered into a contract with a private corporation (which, however, had statutory power to supply electricity) under which the council was to sell to the corporation the assets of its electricity undertaking (which included some land) and confer on the corporation a franchise to supply electricity in the municipal area. The Attorney General, contending that the council lacked power to make the agreement with the corporation, applied for an injunction to restrain the council from giving effect to the agreement.

47. One of the contentions made on behalf of the Attorney General was that land used in the council’s electricity undertaking was land “subject to a trust” for the purposes of s 518(2)(b), and therefore not saleable. Roper CJ in Eq said (at 290):

… I think that, as a matter of construction of the words taken with the other words with which the expression is associated, “any public reserve, public place, or cemetery”, the suggestion is to be found in the section itself, that the land referred to is land which came to the council impressed with some form of declared trust. It may be a public trust, for instance, created by a Crown grant or it may be a private trust …

48. His Honour referred (at 290-1) to two provisions of the 1919 Act that in his Honour’s view, assisted in understanding the phrase “land subject to a trust”. The first was s 346. That section dealt with public reserves under any private deed of trust existing within the relevant local government area at the time of the commencement of the Local Government Act 1906. It provided that the council responsible for that area under the 1919 Act was to have the care control and management of the reserve and the property and liabilities of the trust were to be vested in the council. His Honour also referred to s 526. His Honour expressed the view (at 291) that the “reference to land the subject of a trust under section 518(2)(b) is a reference to the land held upon the trust indicated in the section to which I have referred [(seemingly, s 526)] or to land held upon some public trust created by the grant of land itself from the Crown”.

49. It was not suggested that the land in question in the case fell within either of these provisions. His Honour turned (at 291) to the submission that the land was nevertheless held on trust for the purposes of s 518. It was argued that the beneficiary of the trust was the public, or a section of the public, as it would be under a charitable trust. His Honour said (at 291):

I should think that whatever property the council held in its capacity as a council and not subject to any particular trust, was held for the benefit of the municipality and for the purposes of the council under the terms of the Act, and if it can be said that properties held as being assets of a trading undertaking are held upon trust, why cannot it be said that any property held by the Council is held upon trust?

50. His Honour then went on to deal with an argument that in making the agreement in question, the council would be incapacitating itself from carrying out its statutory powers and functions, and this was beyond the council’s power. The Attorney General’s standing to present the argument was challenged, but his Honour considered that if giving effect to the contract was “incompatible with the due exercise of the powers of the council or the due discharge of its duties”, the Attorney General would have standing to obtain an injunction, the action being ultra vires and affecting large numbers of the public (at 291-2). However, his Honour considered that the agreement was not incompatible with the due discharge of the council’s statutory functions, on their true construction.

51. In the Bathurst City Council case, the High Court referred to Roper CJ in Eq’s decision (at [54]). The Court quoted his Honour’s statements that “land subject to a trust” in s 518(2) “included not only a ‘private trust’ but also a public trust, for instance, created by a Crown grant”, and that “the Attorney General had standing to seek orders restraining a council from taking action which was incompatible with the due exercise of [its] powers”. The Court went on to observe that the nominated lots would have been either part of a “public place” (relying on the part of the definition referring to a place which the public are entitled to use) or “land subject to a trust”.

52. The Court observed that the terms “public use” and “public purpose” had a “lengthy and significant history” in New South Wales. The Court referred (at [58]-[64]) to earlier imperial and colonial legislation dealing with the management and control of Crown lands for public purposes, and authorities on the interpretation of that legislation. The legislation and authorities showed that a “public purpose” was not necessarily limited to a charitable purpose in the technical sense.

53. The Court then stated at ([65]):

It is against that background that the recasting apparent in s 526 of the 1919 Act of the earlier legislation is to be understood. In particular, a council might accept real or personal property for a public purpose in the sense of that term, by then long understood in New South Wales, even though that purpose was not a charitable purpose and the property was not transferred to and accepted by the council on trust in the strict sense of that term. The council then would be restricted by s 518 in its dealings with that land, and subject to restraint at the suit of the Attorney-General.

54. The Court concluded at [67]:

The term "trust" in cl 6(2)(b) of Sch 7 is apt to include those governmental responsibilities which, whilst not imposing a trust obligation as understood in private law, may fairly be described as a "statutory trust" which bound the land and controlled what otherwise would have been the freedom of disposition enjoyed by the registered proprietor of an estate in fee simple. The trust was "not a trust for persons but for statutory purposes". It would be no answer to the existence of such a constraint that there was lacking a beneficial owner of the nominated lots with standing in a court of equity to enforce observance by the Council of the dedication of the nominated lots to the provision of parking spaces. It had been within the competence of the Attorney-General to seek to restrain action incompatible with "the due exercise of the powers of the [C]ouncil or the due discharge of its duties”

55. The Court considered that council’s acceptance of the nominated lots for an identified “town planning purpose” gave rise to a “statutory trust” of this type. It followed that the nominated lots fell within cl 6(2)(b) of the transitional provisions of the 1993 Act; it had not been open to the council to resolve to classify the land as operational land. The appeal was dismissed, and the relief granted by the Court of Appeal stood, albeit based on different reasoning.

56. Statutory powers of resumption of land by local councils: The Council’s powers of acquisition and resumption applicable, as at 1965, were contained in Part XXV of the 1919 Act, titled “Acquisition of Land”.

57. Section 532 provided:

(1) The council may acquire land within or outside the area for any purpose of this Act by lease, purchase, appropriation, or resumption in accordance with this Part.

(2) In addition to the powers conferred by sub-section one of this section the council may acquire by lease, purchase, appropriation or resumption in accordance with this Part –

(a) any lands of which those proposed to be acquired for any purpose of this Act form part;

(b) any lands adjoining or in the vicinity of any land proposed to be acquired for any purpose of this Act;

...

(3) Without limiting the generality of paragraphs (a) and (b) of subsection two of this section the powers conferred by such paragraphs may be exercised notwithstanding that the lands acquired thereunder—

(a) may or may not be required for or in connection with any purpose of this Act;

(b) may be so acquired for sale or re-sale and applying the proceeds thereof in defraying in whole or in part the expenses incurred by the council in carrying out any work upon lands:–

(i) acquired for any purpose of this Act; and

(ii) of which the lands acquired under paragraph (a) of subsection two of this section form part, or which adjoin or are in the vicinity of land acquired under paragraph (b) of that subsection.

58. Subsections (2) and (3) were inserted by amendment in 1951. As noted by French CJ in R&R Fazzolari v Parramatta City Council (2009) 237 CLR 603 at 616, the amendments need to be understood in the light of the prior law.

59. Before the amendments, s 535 had provided:

Where the council proposes to acquire land for any purpose it may also acquire other land adjoining or in the vicinity.

60. In 1950, the High Court held in Thompson v Randwick Corporation (1950) 81 CLR 87 that councils were limited in their ability to acquire land under s 535. The council in that case proposed to resume several lots, intending to construct a new public road. But not all of the lots were required for that purpose. The surplus lots were being acquired with a view to re-selling them to recoup some of the costs of construction.

61. The council pointed to the general language of s 535 and the council’s power under s 321(d) of the 1919 Act (as then in force) to “undertake the improvement and embellishment of the [municipal] area”. But the Court interpreted s 535 as requiring acquisitions of land adjoining or in the vicinity to be “reasonably incidental to the carrying out of the purpose for which the land is authorized to be acquired under that section” (at 104). This did not include the acquisitions proposed for the purpose of re-sale. Moreover, this was fatal to all of the acquisitions, the Court holding (at 107) that “[i]f it cannot proceed with them all, it has no scheme in relation to any of them”.

62. The High Court declined what was in effect an invitation to depart from its decision in Thompson the following year, in Minister for Public Works v Duggan (1951) 83 CLR 424. That case also concerned acquisitions by resumption. There was no challenge to the proposed resumption of 85 acres of land for park lands, and 17 acres of land for new roads. The challenge, which succeeded, was limited to the proposed resumption of 17 acres of land for re-sale. The Court identified (at 448) “[t]he only purposes within the meaning of s 532” emerging in the case before it as “the purpose of constructing the new road and the purpose of undertaking the improvement and embellishment of the area within the meaning of s 321(d)”. The Court (at 448) was “not prepared to hold that either s 477 or s 535 confer[red] a right to acquire land for the purpose of recoupment as incidental to these or any other express purposes”.

63. In this context, the 1951 amendments to s 532, referred to above, were made, and s 535 was repealed. The amendments expanded councils’ resumption powers. Section 532(2) gave additional powers to acquire, in specified ways, any other part of land within the scope of s 532(1), or lands adjoining or in the vicinity of land within the scope of s 532(1). Subsection (3) non-exhaustively made express that those additional powers could be exercised in two circumstances. First, if the land in question was not necessarily needed for or in connection with a purpose of the Act. Second, if the land was being acquired for sale or re-sale to apply the proceeds to defray expenses incurred in carrying on work on adjoining or other parts of the land that had been acquired for a purpose of the Act.

64. The second circumstance was evidently a response to Thompson and Duggan. Parts of the Second Reading Speech introducing the amendments were summarised by French CJ in Fazzolari (at [36]) (citations omitted):

In the Second Reading Speech it was said, inter alia, that the Bill was designed to ensure that land could be acquired for re-sale and for recoupment in whole or in part of a council’s expenditure on work done on land acquired in the same way, as was believed to be permissible under the existing provisions of the 1919 Act before the decisions of this Court in Thompson and Duggan. The Minister referred to “the principle of recoupment” as “well established in local government law in both England and this country”.

65. Resumption processes as at 1965 were set out in ss 536-536E. They relevantly provided:

536. (1) The council may, from time to time, with the approval of the Governor, cause a notice of the resumption or appropriation of any land, together with a description of such land, to be published in the Gazette and in a newspaper circulating in the area in which the land is located.

(2) A plan of such land showing, as far as can be ascertained, the separate parcels thereof, and the names of the owners of the separate parcels, shall be filed by the council in the office of the council and a copy of the plan shall be lodged with the Surveyor-General at the Department of Lands, Sydney. Such plans shall be open for public inspection.

536A. (1) Upon publication in the Gazette of any such notice and description, the land therein described shall, for the purposes and subject to the provisions of this Act, be vested in the council for an estate in fee simple in possession freed and discharged from all trusts, obligations, estates, interests, contracts, charges, rates, rights of way, or easements whatsoever.

(2) Where at the date of such publication the land resumed or appropriated is Crown lands or land owned by or vested in the Crown or is dedicated or reserved for a public purpose by virtue of any statute, the effect of such publication shall be to withdraw the said land (to the extent resumed or appropriated) from any lease or license or promise thereof, and to cancel, to the like extent, any dedication or reservation of the said land made under the authority of such Act, and to vest the said land to the extent aforesaid in the council for the purposes mentioned and for the estate limited in the notice of resumption or appropriation in respect of the land published in the Gazette as aforesaid.

536AA [Not presently relevant]

536B. The owner of any land so resumed or appropriated, or the person who, but for the provisions of this Act, would have been such owned, shall be entitled to receive compensation for such land.

…

66. Ordinance No 77 (“the Ordinance”) was proclaimed in the Gazette in December 1952 and amended in February 1959. It made reference to Part XXV and ss 575-579 of the 1919 Act.

67. Clause 2 of the Ordinance required the use of a prescribed form when applying for the Governor’s approval to publish a notice of resumption under s 536(1) of the 1919 Act. That form, among other details, had space for the inclusion of: the purpose for which the Council proposed to acquire the land; the authorising section of the Act; and the reason why acquisition by resumption was proposed.

68. Clause 3 of the Ordinance required the Council to serve notices in a prescribed form on all owners of the land proposed to be resumed (allowing them at least thirty days to lodge objections) and on the Under Secretary, Department of Lands (but only for certain types of acquisition). The Minister could waive compliance if satisfied that compliance was impracticable, or if waiver or variation was in the public interest. The form, among other details, had space for the inclusion of the purpose for which the Council proposed to resume the land, and the section of the Act under which this was authorised.

69. Resumption procedures were later overhauled by the Land Acquisition (Just Terms Compensation) Act 1991 (“Just Terms Act”). Part 2 of the Act was (and remains) titled “Acquisition of land by compulsory process”. Divisions 1 and 2 of that Part concern “Pre-acquisition procedures” and “Acquisition procedures” respectively. Division 3 is concerned with “Owner-initiated acquisition in cases of hardship”. Division 4 is titled “Miscellaneous provisions relating to acquisition”.

70. Section 36 is within Division 4 and provides:

Adverse use of acquired land

36. (1) If a person is using, or proposes to use, land acquired by an authority of the State by compulsory process in a manner inconsistent with the public purpose for which the land was acquired, the Land and Environment Court may, on the application of that authority, make such order as it thinks fit to remedy or restrain that use.

(2) Without limiting the powers of the Land and Environment Court under subsection (l), an order made under that subsection may:

(a) restrain the use of any building, work or land; or

(b) require the demolition or removal of any building or work; or

(c) require the reinstatement, as far as practicable, of a building, work or land to the condition it was in immediately before the relevant use.

(3) The Land and Environment Court may, at its discretion, by interlocutory order, restrain the continuation of the relevant use of the land pending the determination of an application under subsection (1).

71. The Act applied, and continues to apply, “to the acquisition of land (by agreement or compulsory process) by an authority of the State which is authorised to acquire the land by compulsory process” (s 5(1), subject to exceptions in ss 5(2), 6; see also s 8). It therefore applied to resumptions under the 1919 Act undertaken after 1991. But it did not apply retrospectively to previous resumptions: see the transitional provision in sch 3, cl 2(1).

72. The 1993 Act (as made) set up a different scheme for the acquisition of land. It was dealt with in Part 1 of Chapter 8 (ss 186-190). Those sections relevantly provided:

For what ‘purposes may a council acquire land?

186. (1) A council may acquire land (including an interest in land) for the purpose of exercising any of its functions.

(2) Without limiting subsection (1), a council may acquire:

(a) land that is to be made available for any public purpose for which it is reserved or zoned under an environmental. planning instrument; or

(b) land which forms part of, or adjoins or lies in the vicinity of, other land proposed to be acquired under this Part.

How does a council acquire land?

187. (1) Land that a council is authorised to acquire under this Part may be acquired by agreement or by compulsory process in accordance with the Land Acquisition (Just Terms Compensation) Act 1991.

(2) A council may not give a proposed acquisition notice under the Land Acquisition (Just Terms Compensation) Act 1991 without the approval of the Minister.

Restriction on compulsory acquisition of land for re-sale

188. (1) A council may not acquire land under this Part by compulsory process without the approval of the owner of the land if it is being acquired for the purpose of re-sale.

(2) However, the owner’s approval is not required if the land forms part of, or adjoins or lies in the vicinity of, other land acquired at the same time under this Part for a purpose other than the purpose of re-sale.

No restriction as to area

189. Land may be acquired by a council under this Part even if it lies wholly or partly outside the council’s area.

[s 190 not extracted]

73. Section 188 dealt specifically with compulsory acquisition for re-sale. Section 188(1) introduced an express prohibition on councils acquiring land by compulsory process under Part 1 of the 1993 Act for the purpose of re-sale, absent owner approval. Section 188(2) made clear that owner approval was not required in circumstances akin to those where acquisition for re-sale was expressly permitted under s 532(2)-(3) of the 1919 Act.

74. French CJ discussed the background to the enactment of s 188 in Fazzolari at [37]-[39]. His Honour stated (citations omitted):

Major changes to the law relating to local government in New South Wales were introduced with the enactment of the [1993 Act]. In the Second Reading Speech the Minister for Local Government described as one of the main features of the legislation that it involved “a fundamental shift from prescriptive to a permissive expression of local government law”. This was said to be evidenced by “the conferral of broad general powers on councils accompanied by specific constraints on power – rather than vice versa”.

The acquisition of land was not mentioned in the Second Reading Speech but explanatory notes tabled with the Speech stated, in relation to the Chapter of the LGA which includes ss 186 and 188:

“The chapter begins with setting out the purposes for which council may acquire land. The provisions are generally a re-enactment of the Local Government Act 1919 in that councils may acquire land by agreement or compulsory process in accordance with the Land Acquisition (Just Terms) Compensation Act 1991. However, a major variation occurs in the creation of a limitation on compulsory acquisition by council for the purpose of re-sale. A council may not acquire land by compulsory process without the approval of the owner if it is being acquired for the purpose of re-sale, as re-sale is not strictly a legitimate Local Government purpose.”

The Bill lapsed in 1992 and was reintroduced in a revised form in 1993. However, it was not suggested that any revisions in 1993 relevantly affected s 188 or rendered any less relevant the observations contained in the Second Reading Speech for the 1992 Bill. Importantly, in my opinion, the character of s 188(1) as a specific constraint on a broad power does not preclude the application to it of established approaches for the interpretation of statutes affecting property rights.

75. Transport Infrastructure Development Corporation Case: I was referred in the course of argument to three first instance cases, the first of which was the decision of Bignold J in the Land and Environment Court in Transport Infrastructure Development Corporation v Parramatta City Council [2005] NSWLEC 742. As in this case, the case concerned land owned by a local council which was used as a carpark and had been classified as operational land following the enactment of the 1993 Act. It was contended that, in accordance with the High Court’s decision in the Bathurst City Council case, the land was “subject to a trust for a public purpose” for the purposes of cl 6(2)(b), namely carparking, and was therefore community land.

76. Bignold J distinguished the Bathurst City Council case. His Honour stated (at [48]) that in that case (emphasis in original):

the creation (and hence the existence) of the relevant "trust'' obligation was effected by the manner in which the land had been conveyed to the Council namely for nominal consideration and for the town planning purpose that had been recognised by the imposition of the relevant conditions on the grant of development consent.

77. His Honour contrasted the case before him, stating (at [51]-[53]) (emphasis in original):

[51] In the present case, the only foundation for the creation and existence of such a “trust” obligation binding upon the subject land that is established by the Applicant's case is the long and deliberate use of the subject land for public carparking purposes, and the Council's recognition of the utility (from a town planning perspective) of that use.

[52] But in my judgment. these facts do not provide the requisite foundation for the creation and existence of a relevant trust obligation binding the subject land.

[53] Having regard to the circumstances in which the Council acquired the subject land (by purchase for full valuable consideration) no relevant trust obligation was created upon acquisition, even if (as appears to be the case) the Council purchased the subject land with an intention to use it for public carparking purposes (as it had previously been used when the Council was lessee of the land). It follows that if, following acquisition, the subject land were to become impressed with a relevant trust obligation. that could only occur by a declaration of trust by the Council, as the beneficial owner of the subject land. Neither the pleadings nor the documentary evidence in the present case establish any relevant intention on the part of the Council to create a trust in respect of its beneficial ownership of the subject land

78. In passing, Bignold J referred (at [55]) to s 270Q of the 1919 Act. That provision was introduced in late 1965 and commenced in 1966. His Honour observed that the section only permitted the council to use the land for a free public carpark if it was not “subject to a trust for a public purpose” which would have made the use of the land for carparking impermissible. In view of his Honour’s main conclusion, it was not necessary to consider this particular conundrum. That issue does not arise in the present case, as s 270Q was not in force as of the date of resumption.

79. Broadcast Australia v Noonan: I was next referred to the decision of Bergin CJ in Eq in Broadcast Australia Pty Ltd v Noonan [2011] NSWSC 1524. The case concerned a statutory right to use land as a transmission tower. That right had been acquired by the Commonwealth in 1968, in accordance with the Broadcasting and Television Act 1942-1967. Bergin CJ held that the right amounted to an interest in land. A question consequently arose as to whether, that interest having been acquired for a particular purpose, the land had to continue to be used for that purpose. The defendant submitted that the right in question was “limited to the public purpose for which it was acquired” (at [64]).

80. In dealing with this argument, Bergin CJ referred to the judgment of Dixon CJ in Jones v Commonwealth (1963) 109 CLR 475. That case concerned a notice of acquisition issued under the Lands Acquisition Act 1955-1957 (Cth). The High Court concluded that the notice failed to adequately state the public purpose supporting the acquisition. A declaration was made that the land had not validly been acquired by, nor vested in, the Commonwealth.

81. Bergin CJ stated (at [66]):

The purpose for which the land is acquired “must be stated” in the Notice to validly effect the acquisition: Jones v Commonwealth of Australia (1963) 109 CLR 475 at 483 per Dixon CJ. The Chief Justice referred to a number of reasons why it was essential under the provisions of the statute to express the public purposes including that a “land owner who is compulsorily disposed of his land would seem to have a right in point of justice to know precisely for what it was needed for a public purposes” (at 483). The Chief Justice expressed himself cautiously in suggesting that it “would seem” that the landowner had a “right” in knowing the public purpose. In any event it is not necessary in this case to decide whether such a “right” exists in a landowner. Even if such right exists it does not translate into a prohibition on the Commonwealth from using the land acquired for a purpose other than that for which it was acquired. It will depend upon, inter alia, the terms of the enabling statue.

82. Her Honour went on to note (at [67]) that there was nothing in the Commonwealth Act which expressly authorised the Commonwealth to use the acquired land for a purpose different from that for which it had been acquired. Equally, there was nothing in the Act which expressly prohibited the Commonwealth from doing so. There were however three features of the Act worth mentioning.

83. First, the Commonwealth was authorised to enter and survey the land to ascertain its fitness for the public purpose for which it was to be acquired. This suggested that it had been contemplated that the land would be used for the relevant public purpose (at least as of the point of acquisition). But it did not exclude the possibility of the land being used for additional purposes.

84. Second (see [68]), the defendant had referred to provisions in the Act regarding the amount of compensation payable. In determining such, regard needed to be had to the enhancement or depreciation in the value of the claimant’s interest in land adjoining to or severed from the acquired land, due to carrying out, or the proposal to carry out, the public purpose for which the land was acquired. Her Honour noted that the Court was prohibited from having regard to such increases in value but was required to consider decreases. The submission was that this indicated a legislative intention that acquired land would only be used for the public purpose behind the acquisition.

85. Finally (see [69]), provision was made in respect of land vested in the Commonwealth which was “no longer required” or “not required for immediate use” by it. The Commonwealth could dispose of such land or grant a lease or license to occupy it. It could also grant easements or other rights, powers or privileges. As Bergin CJ observed, the relevant provision was not limited to circumstances where “the land was no longer required ‘for the public purpose’ for which it was acquired”. Indeed, her Honour noted that elsewhere in the Act, the Minister was given full power to transfer the land “upon such terms as he directs”, without any public purpose restriction.

86. Bergin CJ’s conclusion is at [70]-[71]:

The provisions referred to above are consistent with the intention that the land would be used for the purpose for which it was acquired. However these provisions do not contain a prohibition on the Commonwealth using the land acquired for purposes in addition to the purpose for which it was acquired or disposing of the land without limitations on the use to which the land may be put. That is understandable particularly where the public purpose relates to use of technology that is changed and updated so rapidly.

On balance I am satisfied that the use of the right (the land) acquired by the Commonwealth in 1968 is not restricted to the public purpose for which it was acquired.

87. Little Manly Beach Foreshore case: The third in the line of cases was the decision of Biscoe J of the Land and Environment Court in Save Little Manly Beach Foreshore Inc v Manly Council (No 2) [2013] NSWLEC 156. The case concerned two residential properties, the rear of which provided access to Little Manly Beach. The applicant sought to prevent sale of the land by the council, on the basis that the land was “community land” under the 1993 Act.

88. One property, referred to in the judgment as “No 34”, had a heritage listed dwelling house on it. In 1977, the property was acquired by the council, by private treaty. In 1988, it was zoned as open space under a Local Environment Plan. This meant it was presumed to be “community land”, pursuant to cl 6(2)(d) of Schedule 7 of the 1993 Act. Biscoe J held (at [42]-[47]) that this presumption was not rebuttable, but added (at [48]) that even if it was, the evidence would not have rebutted it.

89. The relevance of the case for present purpose lies in the other property, referred to in the judgment as “No 36”. This property had been acquired by the council in 1998. The acquisition was owner-initiated: Part 2, Division 3 of the Just Terms Act enabled owners adversely affected by land designated for acquisition by a state authority, for a public purpose, to initiate acquisition.

90. In the same year as it acquired the land, the council passed a resolution classifying the land as “operational land” for the purposes of the 1993 Act. The resolution also indicated that the Council “reaffirm[ed] its intention to reclassify [the property] as community land, and following adoption of a Plan of Management … to review the classification of the land”. The land was eventually re-classified as “community land” in 2008.

91. The applicant challenged the 1998 resolution which classified the land as “operational land”. One challenge was based on s 31(3)(b) of the 1993 Act, which provided:

31 Classification of land acquired after the commencement of this

Division

...

(3) A council must not resolve under this section that land be classified as

operational land if:

...

(b) the resolution would be inconsistent with any other Act, the terms of any trust applying to the land or the terms of any instrument executed by the donor or transferor of the land.

92. Biscoe J considered (at [74]-[75]) that the phrase “any trust applying to the land” in s 31(3)(b) was wider than, and included, land subject to a “trust for a public purpose” as interpreted by the High Court in the Bathurst City Council case. His Honour reasoned that if the narrower test was satisfied, the wider one would be as well.

93. Biscoe J concluded that the land was indeed subject to a trust for a public purpose. He stated (at [76]):

In PWC the trust for a public purpose arose from the terms of a condition of a development consent. In the present case, the question is whether a trust for a public purpose arose from the acquisition of No 36 by agreement as contemplated by the Just Terms Act. In my opinion, it did. No 36 was acquired for a public purpose by agreement as contemplated by the Just Terms Act and the 1988 LEP. Pre-acquisition notices passing between the transferor and the Council pursuant to the Just Terms Act stated that it was acquired for a public purpose, and the Council sought funding from the State Government on that basis.

94. The council relied on Broadcast Australia v Noonan (see above) as authority for the proposition that land acquired by compulsory process for a public purpose was not forever required to be used for that purpose. Biscoe J, however, stated (at [78]-[79]):

Broadcast Australia is distinguishable because in that case (a) the court was not concerned with the interpretation of a statutory provision that gave primacy to a statutory trust over a resolution (such as s 31(3)(b) or cl 6(2)(b) of Sch 7 of the LG Act), but with a different question of actual use; (b) the court was not referred to the PWC decision and did not consider whether the land was subject to a statutory trust; (c) the court was concerned with a different statute; and (d) s 36 of the Just Terms Act empowers this Court to remedy or restrain a "person" (which I think includes the acquiring authority) from using land acquired by compulsory process in a manner inconsistent with the public purpose for which it is acquired.

Under the [1993 Act] a local council may acquire land that is to be made available for any public purpose, but that power is restricted by s 188(1) which provides: "A council may not acquire land under this Part by compulsory process without the approval of the owner of the land if it is being acquired for the purpose of re-sale". The rationale for s 188(1) is that re-sale is not a legitimate local government purpose: R & R Fazzolari Pty Ltd v Parramatta City Council; Mac's Pty Ltd v Parramatta City Council [2009] HCA 12, (2009) 237 CLR 603 at [38]-[39]. Having compulsorily acquired land for a public purpose, it would be anomalous if a council could the next day (or at any time) change its mind and resell it in order to make a profit. This tends to support the proposition that such land is subject to a trust for a public purpose. Although in the present case the acquisition ultimately was by agreement, in my opinion it still attracted a trust for a public purpose. The agreement was joined at the hip to the Just Terms Act and its compulsory process for a number of reasons. First, the Just Terms Act applies to the acquisition of land by agreement or compulsory process by an authority of the State authorised to acquire the land by compulsory process: s 5. Secondly, encouragement of acquisition by agreement is an object of the Just Terms Act: s 3(e). Thirdly, if agreement is not reached, the sanction is that the compulsory process of the Just Terms Act applies. Fourthly, in this case the agreement only came about as the result of an owner initiated acquisition process under the Just Terms Act. Fifthly, in this case the agreement was one contemplated by s 30 of the Just Terms Act for it contained a special condition expressly referable to s 30 ...

95. The council submitted that Bathurst City Council was distinguishable because the acquisition in that case had been for a nominal consideration. It relied on the decision in the Transport Infrastructure Development Corporation Case (see above). Biscoe J dealt with this argument by stating (at [80]):

I agree that PWC was distinguishable but I do not read the PWC decision as turning on the question of nominal consideration. As I have earlier noted, the High Court identified the amount of valuable consideration paid for one of the two lots the subject of those proceedings, and said that insofar as nominal consideration was paid for other lots the vendors received the benefit of a likely increase in value of their retained land. The latter is equivalent to valuable consideration. Transport Infrastructure Development is also distinguishable because it was not concerned with whether an acquisition for a public purpose contemplated by the Just Terms Act could give rise to a trust for a public purpose.

96. Mogo Local Aboriginal Land Council: Counsel for PD also referred me to the decision of the Court of Appeal in Mogo Local Aboriginal Land Council v Eurobodalla Shire Council (2001) 54 NSWLR 15. Although this case pre-dated the three judgments which I have just summarised, it was not referred to in any of those judgments.

97. The case concerned a parcel of land (“Lot 8”) which had been acquired by a local council in 1971, along with other land. The acquisition had been by resumption, under the 1919 Act. In December 1979, the council prepared and registered a plan of subdivision which created Lot 8 and marked it as a public reserve. That marking, followed by registration, attracted the operation of s 340D(1) of the 1919 Act, which provided that upon registration, the land (see [11]):

…shall be dedicated as a public reserve and shall without any further assurance vest in the council for an estate in fee-simple by virtue of such registration and of this Act.

98. The appellant land council argued that, at least following the dedication of Lot 8 as a public reserve, the council’s function was that of care, control and management of the land and could not be equated with ownership (see [24]). This contention was rejected by the Court (see [25]). The Court reasoned (at [26]-[28]):

Upon resumption an estate in fee simple in lot 8 was vested in the shire council, as provided in s 536A of the Local Government Act “for the purposes and subject to the provisions of this Act”. But so far as the evidence showed, at the time of resumption there was no specification of use as a public reserve. The copy of the notice of resumption in evidence is not easy to read, but appears to refer to resumption of the land in the schedule “for the purpose of providing a sanitary depot, undertaking the improvement and embellishment of the area, rearranging existing public roads, replanning existing parcels of land, and providing a public road”. What became lot 8 was part only of the land in the schedule, which does not distribute the land according to purpose.

When Deposited Plan 258299 was registered lot 8 was dedicated as public reserve. The dedication was accompanied by a purported vesting in the shire council of an estate in fee simple, but the shire council already held that estate. The estate was held without limitation of the shire council's interest to that required for carrying out its statutory functions in relation to a public reserve.

Thus the foundation of the land council's submissions is flawed. The shire council obtained on resumption an estate in fee simple not confined by statutory functions in relation to a public reserve. The dedication of lot 8 as a public reserve affected how the shire council could deal with lot 8. But it was not a vesting in the shire council of some confined interest — the shire council already held an interest by functions in relation to a public reserve.

99. The Court emphasised (at [30]) that on resumption, the council had acquired full ownership (an estate in fee simple). With that came full power to exercise every act of ownership available to it, subject only to the limitation imposed on the council as a local government body and (after 1979) by the dedication. The Court also noted (at [32]) that, at least prior to the dedication, the council had power to sell lot 8, and referred to s 518 of the 1919 Act. The Court emphasised that the council’s power of sale was a power to sell the interest acquired from the previous owner, namely an estate in fee simple.

Submissions and conclusion

100. Submissions for the Council: Counsel for the Council relied principally upon the High Court’s decision in Bathurst City Council. Counsel submitted that the present case was sufficiently analogous. Counsel characterised the resumption as having been for a public purpose, namely the purpose set out in s 249(cc) of the 1919 Act. Counsel noted that this purpose was expressly stated in the notice of resumption issued by the Council to the owners of Lots 13 and 14, and in the application for approval of the resumption by the Governor.

101. Counsel acknowledged the distinction drawn by Bignold J in the Transport Infrastructure Corporation case between an acquisition in a town planning context and an acquisition by private treaty (see above at [76]-[77]). Counsel accepted his Honour’s conclusion that property acquired by private treaty under s 532 of the 1919 Act was not, by reason solely of that acquisition, “subject to a trust for a public purpose”. Counsel acknowledged that this was so even if use for a specified purpose was the stated reason for the acquisition, as it had been in that case.

102. Counsel submitted however that Bignold J’s reasoning was distinguishable, and the features of the present case were closer to those of the Bathurst City Council case. In this regard counsel relied heavily on the decision of Biscoe J in the Little Manly Beach Foreshore case. Counsel submitted that the decision showed that the power of resumption could only be exercised for a public purpose and that land so resumed was acquired, and had to be held in future, for that purpose.

103. Question for determination: The issue before the Court is one of statutory construction, namely, whether the relevant land was, as at 1 July 1993, “subject to a trust for a public purpose”, so as to fall within cl 6(2)(b) of Sch 7 to the 1993 Act. It is not suggested on behalf of the Council that the land was subject to a trust in the strict or technical sense. The question is whether the land was subject to a “statutory trust” of the type referred by the High Court in the Bathurst City Council case.

104. Elements of a “statutory trust”: The High Court judgment did not spell out the boundaries of what the court meant by a “statutory trust”. But clearly the Court considered that there needed to be some analogy with a charitable trust in the technical sense.

105. In Rookwood General Cemeteries Reserve Land Manager v Attorney-General NSW [2022] NSWSC 1763 at [183]-[211], I analysed some of the authorities concerning the recognition or otherwise, in various different contexts, of “statutory trusts”. Neither party asked me to reconsider my analysis. I will not repeat all that I said, but I think that three features of charitable trusts are of special importance in identifying whether a particular statutory regime is sufficiently analogous to a charitable trust to be treated as a “statutory trust”.

106. First, charitable trusts impose affirmative obligations on trustees to use the trust property, or ensure that it is used, for the nominated charitable purposes. Detailed provisions governing how the trustees are to conduct themselves are usually found in the trust instrument, and, if that is lacking, will be supplied by the court by way of administrative scheme. In a statutory trust, this role is usually played by specific statutory provisions governing the way in which the property is to be used, or a conferral of a power of oversight on some other person or body, or both: see Rookwood at [230]-[231].

107. The second feature is that there is a need for a mechanism to ensure that the trustees use the trust property in accordance with the specified purposes and comply with the terms of the trust. In a charitable trust, this is supplied by the court’s jurisdiction over the administration of trusts which can be invoked by or in the name of the Attorney General. In a statutory trust, as the High Court noted in the Bathurst City Council case, the equivalent role was performed by the Attorney General in the exercise of an administrative law jurisdiction: see also Grain Technology Australia Ltd v Rosewood Research Pty Ltd (No 3) [2023] NSWSC 238 at [140]-[147], [172].

108. The third feature is that there must be some way of dealing with a situation where it is impossible or impracticable to carry out the original purpose. In the case of charitable trusts, this function is performed by the doctrine of cy-près. In the case of statutory trusts, the Parliament can of course intervene; but there may be provision in the statute allowing for the assets to be redeployed for other purposes.

109. In Randwick Municipal Council v Rutledge (1959) 102 CLR 54, Windeyer J described the dedication of Crown land for public purposes as indicating “something binding on the Crown and creating some right in members of the public or of a section of the public” (at 74) and equated dedication with the creation of a “public trust” (at 75-76) with the creation of a “public trust”: the history is discussed at length in Rookwood at [17]-[65] . As I noted at [16], the “lengthy and significant” history to which the High Court referred in the Bathurst City Council case covered the same ground. The Crown Lands Act provisions for the dedication, reservation or setting aside of Crown land may well have been the sort of statutory regime which High Court had in mind in the Bathurst City Council case as giving rise to a “statutory trust”: see in particular what the Court later said in Western Australia v Ward (2002) 213 CLR 1 at [241], quoted in Rookwood at [209].

110. Against this background, I turn to the specifics of the debate in the present case. The relevant points can be organised under three headings.

111. Section 532 of the 1919 Act: The nominated lots in the Bathurst City Council case came into council ownership because they were “accepted” by the council under s 526 of the 1919 Act. That section is not relevant in the present case. The land in question here was “acquired” by the council under s 532 of the 1919 Act.

112. Counsel for PD drew attention to the different terminology in ss 526 and 532, s 526 referring to “acceptance” and s 532 referring to “acquisition”. Counsel submitted that, in accordance with the ordinary principles of statutory construction, it should be assumed that by using different language the Parliament intended to refer to different concepts.

113. This assumption is certainly available, although in general it is only a weak guide to construction: see Taheri v Vitek [2014] NSWCA 209 at [124]. But I think there is another textual point.

114. Section 526 expressly referred to acceptance of property “on trust” and s 518(2) also referred to property “held on trust”. It was a short step to conclude that these references to “trust” property were intended to be picked up by the reference to a “trust” in cl 6(2)(b) of Sch 7. The High Court expressly made this point in the Bathurst City Council case at [52].

115. Section 532, however, only referred to “acquisition” of property. It did not use the word “trust” at all. The term “acquire” may include receipt of property on terms which subject the recipient to trust obligations, but the acceptance or imposition of trust obligations is not inherent in the term.

116. In making the point (see [77] above) that the council in the Transport Infrastructure Corporation case had not complied with the requirements for a valid declaration of trust over the land, Bignold J may have gone too far. It is clear that the trust of which the High Court spoke in the Bathurst City Council case need not have been a trust in the strict sense. But this does not affect his Honour’s conclusion that an acquisition by private treaty, even for a stated purpose, did not give rise to a trust in the relevant sense. Nor does it call into question the concession made on behalf of the Council that that conclusion is correct.

117. Once it is conceded that acquisition of property by private treaty under s 532 did not give rise to a “trust”, even if undertaken for a specified purpose, there is no reason to think that resumption under the same section should have been any different. Resumption involved compulsion, but it was still a compulsory purchase, and it still involved payment of the market value of the land (albeit determined by a statutory process rather than actual voluntary sale).

118. The facts of the present case illustrate the artificiality of drawing a distinction between purchase and resumption under s 532. If the trustee of Lot 13 had had a power of sale, then the Council would not have had to exercise its power of resumption at all. The power was only used as a shortcut. Similar comments apply to the acquisition of the part of Lot 14.

119. Section 518 of the 1919 Act: Counsel for the Council emphasised that in the Bathurst City Council case the High Court appears to have contemplated that, if not held on trust, the nominated lots would have been “public land”. Counsel submitted that the land in question in this case would likewise have been unsaleable because of s 518.

120. This conclusion may be accepted for the purposes of the argument. But I do not think that the restriction on alienation of certain types of land in s 518 of itself gave rise to a “statutory trust”. It is one thing for a statute to restrict or even prevent the sale of land. It is quite another for that statute to impose affirmative obligations on the land holder to use the land for a particular purpose.

121. In the Parramatta City Council case, Roper CJ expressly decided that the land used for the council’s electricity undertaking was not land which was “subject to a trust” for the purposes of s 518(2). There is no sign in the Bathurst City Council judgment that the High Court thought that Roper CJ had been incorrect in taking that view. The report of the Parramatta City Council judgment does not indicate how the land in question was acquired by the council. It seems more than likely that the land would have been acquired under s 532 rather than accepted under s 526. It is, however, unnecessary to pursue this question further. There is certainly nothing in the judgment to support the Council’s argument in this case.

122. Resumption under the 1919 Act: In the Bathurst City Council case, the council’s stated objective was the establishment of a carpark. But it is clear from the High Court’s decision that this was not sufficient to give rise to a “statutory trust”. Nor was the subsequent use of the property as a carpark. There had to be something more. The High Court found that additional element in the acceptance of property pursuant to development conditions imposed by the council in fulfillment of a “town planning purpose”.

123. In my view, resumption (at least under the provisions of the 1919 Act which applied in 1965) was quite a different process. It is true that there were requirements for the purpose of the application to be given when the resumption application was notified to the owners and to the public. No doubt the purpose of those provisions was, as Dixon CJ suggested in Jones, to provide information to the owner, and other affected parties, in aid of a potential challenge. But if no challenge was made, it is difficult to see that the provisions had any ongoing significance.

124. In my view, it is notable, as counsel for PD pointed out, that the actual notice of resumption, following the language of s 536A of the 1919 Act, did not oblige the notice of resumption to specify the purpose, and only stated that, upon resumption, the council became the owner in fee simple of the land, to the extinguishment of any previous interests. Of course, as counsel for the Council pointed out, that is not inconsistent with the resumption imposing some fresh obligation. But there is no sign of that in the statutory language and I cannot see a basis for any such implication (which would also be an implied limitation on the council’s express power of sale under s 518(1)).

125. Counsel for the Council submitted that the authority of the decision of Bergin CJ in Eq in Broadcast Australia was reduced because her Honour was not considering the question of a statutory trust under the principles in the Bathurst City Council case, or the application of the local government legislation. I cannot agree. Of course, as her Honour said, whether land acquired by compulsory acquisition for a particular purpose must continue to be retained and used for that purpose ultimately depends on the relevant statute. But her Honour’s decision makes clear that the mere fact that the statutory power allows acquisition for a particular purpose does not necessarily compel the conclusion that the property must thereafter be used for that purpose. In my view, the decision is entirely consistent with the Mogo Local Aboriginal Land Council case in that regard.

126. To conclude that land which had originally been resumed for specified purposes was impressed with a “statutory trust” for those purposes and therefore could not be classified as “operational land” for the purposes of the 1993 Act would create practical difficulties. The council might, as in the present case, have acquired the land decades before. The land held by the council might be the result of the acquisition of various different parcels, some of which had been resumed and some of which had been acquired by private treaty or in some other way. It is difficult to imagine that the Parliament would have thought that the valid classification of the land would require a potentially complex historical enquiry of the type which would be necessary to determine the purpose or purposes for which the land (or some parts of it) had been originally resumed.

127. It must also be emphasised that a “statutory trust” arising from the resumption of land for specified purposes would not merely have prevented the relevant council from disposing of the land in question. It would have imposed positive obligations on the council to use, or ensure the use of, the land for those purposes. Furthermore, on the Council’s case, any “statutory trust” came into existence when the land was resumed in 1965. In the present case, the Council would have been obliged from 1965 onwards to continue to make the land available as a public carpark indefinitely, even if its policies towards the provision of public carparking changed, and irrespective of the expense and difficulty (or perhaps even impossibility) of doing so. The 1919 Act contained no mechanism for the terms of any such obligation to be adjusted in the light of such factors.

128. As Roper CJ in Eq pointed out in the Parramatta City Council case (49 SR at 292), conferral of a power on a council did not mean that, once exercised, the power had to continue to be exercised by the council for all time. Yet that in practice was what would have been required if the Council’s argument in the present case were upheld. Again, I find it impossible to attribute to Parliament an intention to create such a result.

129. I do not think the decision in the Little Manly Beach Foreshore case stands in the way of the views I have expressed. If there is any inconsistency between the reasoning of Biscoe J and that of Bergin CJ in Eq in Broadcast Australia, I think I would have to defer to that of Bergin CJ in Eq which I see as being consistent with the Court of Appeal’s reasoning in the Mogo Local Aboriginal Land Council case. But it is not necessary to go that far. That is for two reasons.

130. First, Biscoe J’s presently relevant comments were obiter, despite the submission to the contrary by counsel for the Council. His Honour expressly stated as much at [82].

131. Second, the Little Manly Beach Foreshore reasoning is distinguishable. The resumption provisions in the 1993 Act (and in particular s 188(1), referred to by Biscoe J at [79]) are not the same as those in the 1919 Act which applied to the acquisition of the land in question in this case. Nor was there any equivalent to the owner-initiated acquisition provisions in the Just Terms Act (which depend on designation for acquisition “for a public purpose”: s 23(1)). Most importantly, there was no equivalent under the 1919 Act, as it stood in 1965, to s 36 of the Just Terms Act.

132. There may be room for further argument about whether s 36 supports the conclusion that a resumption of land governed by the terms of the Just Terms Act gives rise to a “statutory trust”, as Biscoe J thought (see [94] above). On any view, s 36 only confers standing on the acquiring authority to prevent the land being used for a purpose other than that for which it was resumed. The section does not confer open standing in favour of the general public, or, at least expressly, on the Attorney General. It is, however, unnecessary to consider this any further.

100. Conclusion: For these reasons, I consider that the acquisition of the land in question by resumption pursuant to s 532 of the 1919 Act did not give rise to a “statutory trust” in the sense used by the High Court Bathurst City Council. Accordingly, the land so acquired was not the subject of a “trust for public purposes” within the meaning of that phrase in cl 6(2)(b) of sch 7 to the 1993 Act. The Council’s cross-claim fails.

101. Finally, I note in passing that the Court of Appeal in the Bathurst City Council case concluded that the land acquired for carparking by the council, other than the nominated lots, was not the subject of any trust for the purposes of cl 6(2)(b). Some of that land was acquired by way of resumption (see 93 LGERA at 399). There is nothing in the High Court decision to suggest that the Court of Appeal’s decision concerning the other carpark land (which appears to have been acquired, one way or another, under s 532 was incorrect. Moreover, the effect of the Court of Appeal’s decision must be considered as a matter of precedent.

102. The Court of Appeal was, of course, proceeding on the basis that the “trust” meant trust in a technical sense, and not on the wider basis which commended itself the High Court. But the fact remains that the Court decided that the parcels of land resumed for carparking purposes did not fall within cl 6(2)(b). That decision was not challenged and still stands. It may be arguable that the decision is still binding as a matter of precedent irrespective of whether it is consistent with the subsequent decision of the High Court: see New Cap Reinsurance Corporation Ltd v A E Grant (2008) 221 FLR 164 at [71]. But as I have independently reached the conclusion that the land in question in this case was not caught by cl 6(2)(b), I do not need to consider the question further.

Orders

136. The Council’s cross-claim, so far as it concerns declaratory relief, must be dismissed. I will relist the proceedings before me so as to see what remaining issues there are in the case and how they should be resolved. If there is any dispute about costs, it can be ventilated on that occasion.

137. The orders of the Court are:

1. Dismiss the prayers for relief in paragraphs 1 and 2 of the defendant’s cross-claim.

2. Reserve costs.

3. List the proceedings for further directions on 12 May 2023.

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Amendments

08 May 2023 - Image re-alignment

Decision last updated: 08 May 2023