South of Perth Yacht Club (Inc) v Jacob MLA

The South of Perth Yacht Club (Inc) sought relief from the Supreme Court of Western Australia in relation to a decision of the Swan River Trust (the Trust) approving a development application for the respondent to build a pontoon at a location on the Swan River. The Trust had attached a condition to the approval that the applicant enter into a new lease with the Trust. The applicant challenged the validity of this condition on the basis that it was imposed for an improper purpose, namely to obtain an increase in the rent to be paid under the lease. The Trust responded that the condition was imposed for the proper purpose of ensuring that a contemporary lease was in place to provide for the environmental management of the riverbed lease area.

The court had to decide whether the Trust had acted beyond its statutory powers by imposing the condition and whether that condition was imposed for an improper or extraneous purpose. In determining whether the condition was imposed for an improper purpose, the court noted that it is not necessary for the ulterior purpose to be the sole purpose of imposing the condition. It is sufficient if the ulterior purpose is a substantial purpose. The court considered that there was clear evidence that a substantial purpose of the Trust's decision was to increase the rent payable under the lease in line with what was said in 2006 to have been the original intention of the lessor and with rents being paid by other yacht clubs on the Swan River which had agreed to new leases. This was evidenced by the 1985 lease, the Ministerial briefing note, and the Trust's preference for a deed of variation of the lease which could implement best practice environmental standards.

The court concluded that the Trust had acted beyond its statutory powers by imposing the condition. The court found that the Trust had imposed the condition for an improper purpose, namely to obtain an increase in the rent to be paid under the lease. The court made an order that the decision of the Swan River Trust approving the development application be quashed. The court also made an order that the Swan River Trust pay the applicant's costs of the proceedings.