Spencer v Commonwealth
[2018] FCAFC 17
•15 February 2018
FEDERAL COURT OF AUSTRALIA
Spencer v Commonwealth of Australia [2018] FCAFC 17
Appeal from: Spencer v Commonwealth of Australia [2015] FCA 754; 240 FCR 282 File number: NSD 961 of 2015 Judges: GRIFFITHS, RANGIAH AND PERRY JJ Date of judgment: 15 February 2018 Catchwords: CONSTITUTIONAL LAW – appeal from a single judge of the Federal Court of Australia – whether the primary judge erred in holding that State laws restricting native vegetation clearance did not effect an acquisition of property within the meaning of s 51(xxxi) of the Constitution – whether the primary judge erred in holding that the appellant’s property had not been acquired by joint action of the Commonwealth and NSW State governments – whether the Commonwealth was unjustly enriched by any acquisition of the appellant’s property – whether the State of NSW had trespassed on the appellant’s property and was liable to him in an action on the case
PRACTICE AND PROCEDURE – application to adduce further evidence under s 27 of the Federal Court of Australia Act 1976 (Cth) in circumstances where the evidence was not adduced below – whether the respondents would suffer prejudice if the new material was admitted into evidence
Held: appeal dismissed – application to adduce further evidence dismissed
Legislation: Constitution ss 51(xxxi), 96
Federal Court of Australia Act 1976 (Cth) s 27
National Parks and Wildlife Conservation Act 1975 (Cth) s 16
National Water Commission Act 2004 (Cth)
Natural Heritage Trust of Australia Act 1997 (Cth), s 19
Natural Resources Management (Financial Assistance) Act 1992 (Cth), ss 5, 7, 8, 9
State Grants (War Service Land Settlement) Act 1952 (Cth)
War Service Land Settlement Agreements Act 1945 (Cth)
World Heritage Properties ConservationAct 1983 (Cth) s 9
Conveyancing Act 1919 (NSW) ss 87A, 88AB
Crown Lands (Continued Tenures) Act 1989 (NSW) s 6
Endangered Fauna (Interim Protection) Act 1991 (NSW)
Environmental Planning and Assessment Act 1979 (NSW)
Forestry Act 1916 (NSW)
Forestry, Soil Conservation and Other Acts (Amendment) Act 1972 (NSW)
National Parks and Wildlife Act 1974 (NSW)
Native Vegetation Act 2003 (NSW) ss 12, 13, 27, 31, 35, 36, 38
Native Vegetation Regulation 2005 (NSW)
Native Vegetation Conservation Act 1997 (NSW)
Soil Conservation Act 1938 (NSW)
Threatened Species Conservation Act 1995 (NSW)
Convention of Biological Diversity. Opened for signature 4 June 1992, 1760 UNTS 79 (entered into force 29 December 1993)
Kyoto Protocol to the United Nations Framework Convention on Climate Change. Opened for signature 16 March 1998. 2303 UNTS 162 arts 3.3, 3.7, 5, 7. (entered into force 16 February 2005)
United Nations Framework Convention on Climate Change. Opened for signature 4 June 1992, 1771 UNTS 107 (entered into force 21 March 1994)
Cases cited: Alcock v Commonwealth of Australia [2013] FCAFC 36; 210 FCR 454
Attorney-General (Vic); (Ex rel Black) v Commonwealth [1981] HCA 2; 146 CLR 559
Attorney-General for the Northern Territory v Chaffey [2007] HCA 34; 231 CLR 651
Australian Softwood Forest Pty Ltd v Attorney-General for NSW; Ex rel Corporate Affairs Commission [1981] HCA 49; 148 CLR 121
Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480
Bank of NSW v Commonwealth [1948] HCA 7; 76 CLR 1
Beagle v Australian Capital Territory [2017] ACTCA 29
Beaudesert Shire Council v Smith [1966] HCA 49; 120 CLR 145
British America Tobacco Ltd v Western Australia [2003] HCA 47; (2003) 217 CLR 30
Commonwealth v Tasmania (1983) 158 CLR 1
Commonwealth v WMC Resources Ltd (1998) 194 CLR 1
Coulton v Holcombe (1986) 162 CLR 1
Cunningham v Commonwealth of Australia [2016] HCA 39; 90 ALJR 1138
Durham Holdings Pty Ltd v New South Wales [2001] HCA 7; (2001) 205 CLR 399
Esposito v Commonwealth of Australia [2015] FCAFC 160; 235 FCR 1
Fraser v City of Fraserville (1917) AC 187
Georgiadis v Australian and Overseas Telecommunications Corporation [1994] HCA 6; (1994) 179 CLR 297
Gilbert v Western Australia [1962] HCA 7; 107 CLR 494
Grace Brothers Pty Ltd v Commonwealth (1946) 72 CLR 269
Hamod v New South Wales [2011] NSWCA 375
Huddart Parker Limited v Commonwealth of Australia [1931] HCA 1; 44 CLR 492
ICM Agriculture Pty Ltd v Commonwealth [2009] HCA 51; 240 CLR 140
James v Commonwealth [1939] HCA 9; 62 CLR 339
JT International SA v Commonwealth of Australia [2012] HCA 43; 250 CLR 1
Kruger v Commonwealth (1997) 190 CLR 1
Li Pei Ye v Crown Limited [2004] FCAFC 8
Minister of State for Home Affairs v Rostron (1914) 18 CLR 634
Minister of State for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273
Murphyores Incorporated Pty Ltd v Commonwealth [1976] HCA 20; 136 CLR 1
Mutual Pools and Staff Pty Limited v Commonwealth [1994] HCA 9; 179 CLR 155
Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631
Nelungaloo Pty Ltd v Commonwealth (1947) 75 CLR 495
Newcrest Mining (WA) Limited v Commonwealth [1997] HCA 38; 190 CLR 513
New South Wales v Commonwealth (Work Choices Case) [2006] HCA 52; (2006) 229 CLR 1
Northern Territory v Mengel [1995] HCA 65; 185 CLR 307
P J Magennis Pty Ltd v Commonwealth [1949] HCA 66; 80 CLR 382
Pye v Renshaw [1951] HCA 8; 84 CLR 58
RailPro Services Pty Ltd v Flavel [2015] FCA 504
Richard Liford’s Case (1572-1616) 11 Co. Rep. 46b
Sir Francis Barrington’s Case (1616) 8 Co. Rep. 136b
Smith v ANL Ltd [2000] HCA 58; 204 CLR 493
South Australia v Commonwealth [1942] HCA 14; 65 CLR 373
Spencer v Commonwealth (1907) 5 CLR 418
Spencer v Commonwealth of Australia [2008] FCA 1256
Spencer v Commonwealth of Australia [2010] HCA 28; 241 CLR 118
Spencer v NSW Minister for Climate Change, Environment and Water [2008] NSWSC 1059
SZRUR v Minister for Immigration and Border Protection [2013] FCAFC 146; (2013) 216 FCR 445
Telstra Corporation Limited v Commonwealth [2008] HCA 7; 234 CLR 210
Tunnock v Victoria [1951] HCA 55; 84 CLR 42
Victoria v Commonwealth [1975] HCA 52; 134 CLR 338
Victoria v Commonwealth [1957] HCA 54; 99 CLR 575
Victoria v Commonwealth [1926] HCA 48; 38 CLR 399
Water Board v Moustakas (1988) 180 CLR 491
Wurridjal v Commonwealth [2009] HCA 2; (2009) 237 CLR 309
Date of hearing: 27 February 2017 to 1 March 2017 Date of last submissions: 2 March 2017 Registry: New South Wales Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 449 Counsel for the Appellant: Mr PE King Solicitor for the Appellant: McKell’s Solicitors Counsel for the First Respondent: Mr RPL Lancaster SC and Mr C Lenehan Solicitor for the First Respondent: Australian Government Solicitor Counsel for the Second Respondent:
Mr JK Kirk SC and Ms A Rao Solicitor for the Second Respondent: Crown Solicitor’s Office Table of Corrections 21 February 2018 In paragraph 349 “which the Commonwealth” has been replaced with “with the Commonwealth” in the quoted section. 21 February 2018 In paragraph 351 “[sic]” has been removed in the quoted section. 21 February 2018 In paragraph 412 “informal agreement” has been replaced with “informal arrangement”, and “forms they have” has been replaced with “form say of” in the quoted section. ORDERS
NSD 961 of 2015 BETWEEN: PETER JAMES SPENCER
Appellant
AND: COMMONWEALTH OF AUSTRALIA
First Respondent
STATE OF NEW SOUTH WALES
Second Respondent
JUDGES:
GRIFFITHS, RANGIAH AND PERRY JJ
DATE OF ORDER:
15 FEBRUARY 2018
THE COURT ORDERS THAT:
1.The appeal be dismissed.
2.Within 21 days hereof, the parties should seek to agree orders which otherwise give effect to these reasons. If they are unable to reach agreement, including on costs and whether there should be lump sum costs orders, each should file and serve within that time an outline of written submissions not exceeding 10 pages in support of their respective proposed orders. Final orders will then be determined on the papers and without a further oral hearing.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
GRIFFITHS AND RANGIAH JJ:
1. Introduction [1] 2. Primary judge’s reasons for judgment summarised [6] (a) Summary of Mr Spencer’s claims [7] (b) Primary judge’s factual findings concerning Mr Spencer’s land [15] (c) Summary of regulatory history of land clearing in NSW [28] (d) The impugned legislation and intergovernmental agreements [31] (e) The alleged “informal arrangement” [54] 3. Primary judge’s determination of Constitutional law issues [58] 4. Summary of Mr Spencer’s submissions on the appeal [64] (a) “The taking” was also an “acquisition” [72] (b) Mr Spencer’s application to adduce further evidence [101] (c) Joint action by the Commonwealth and State for the purposes of s 51(xxxi) of the Constitution [102] (d) Mr Spencer’s claims for damages [107] (e) Action on the case [110] 5. Commonwealth’s submissions summarised [111] 6. State’s submissions summarised [123] 7. Mr Spencer’s application to adduce further evidence under s 27 of the FCA Act [137] 8. Consideration of the appeal [143] (a) The formal intergovernmental agreements [143] (b) The alleged informal agreement [188] (c) Validity of the State laws [226] (d) Whether the State Laws operated to effect an acquisition of property [236] (e) Unjust enrichment and trespass or action on the case [237] 9. Whether Mr Spencer was offered just terms [245] 10. Conclusion [255] 1. Introduction
Mr Spencer appeals against the judgment and orders of a Justice of the Court (see Spencer v Commonwealth of Australia [2015] FCA 754; 240 FCR 282 (Spencer below)). The case raises issues concerning the nature and extent of s 51(xxxi) of the Constitution, which relates to the acquisition of property on other than just terms.
In broad terms, Mr Spencer complains that his property was acquired as a result of the operation of NSW vegetation clearance laws. He contends that these laws were enacted pursuant to inter-governmental agreements made between that State and the Commonwealth in order that the Commonwealth could meet its targets under the Kyoto Protocol to the United Nations Framework Convention on Climate Change (opened for signature 16 March 1998, 2303 UNTS 162, entered into force 16 February 2005) (Kyoto Protocol) and the State could secure Commonwealth funding under s 96 of the Constitution for environmental reforms. The four agreements, as described in Emmett J’s judgment in Spencer v Commonwealth of Australia [2008] FCA 1256 (Spencer 2008: see [32] below), are:
(a)a bilateral agreement to deliver the National Heritage Trust, made on 31 October 1997 between the Commonwealth and the State of New South Wales (the 1997 NHT Agreement);
(b)the inter-governmental agreement on a “National Action Plan for Salinity and Water Quality in Australia”, made on 3 November 2000 between the executive governments of the Commonwealth, the State of New South Wales and other Australian governments (the 2000 Salinity Agreement);
(c)a bilateral agreement relating to the “National Action Plan for Salinity and Water Quality in Australia”, made on 17 May 2002 between the Commonwealth and the State of New South Wales (the 2002 Salinity Agreement); and
(d)a bilateral agreement to deliver the extension of the National Heritage Trust, made on 14 August 2003 between the Commonwealth and the State of New South Wales (the 2003 NHT Agreement).
In brief terms, in Spencer below her Honour held that:
(a)The two federal laws challenged by Mr Spencer (the Natural Resources Management (Financial Assistance) Act 1992 (Cth) (the NRM Act) and the Natural Heritage Trust of Australia Act 1997 (Cth) (the NHT Act)) were not invalid. They were not laws with respect to the acquisition of property within the meaning of s 51(xxxi) of the Constitution. Furthermore, when considered at a broader level, their practical operation and effect as part of a scheme involving the four intergovernmental agreements, coupled with the NSW vegetation clearance laws, did not give rise to an acquisition of property in contravention of s 51(xxxi) of the Constitution.
(b)The decision dated July 2007 of the NSW Rural Assistance Authority (the RAA) that Mr Spencer’s farm was not commercially viable because of the effect of the State’s native vegetation clearance laws could be characterised as a “sterilisation” or a “taking” of his property, but that taking was by the State and there was no acquisition by the State nor by any other person of an interest or benefit of a proprietary nature in the bundle of rights Mr Spencer held in his farm (which was called ‘Saarahnlee’).
(c)Even if there had been an “acquisition” of property within the meaning of s 51(xxxi) of the Constitution, Mr Spencer was offered just terms in November 2007 when the State offered to pay the then properly assessed market value for Saarahnlee.
(d)Mr Spencer had not proven the existence of any “informal arrangement” between the Commonwealth and NSW.
(e)Mr Spencer did not have any private right of action in respect of the conduct of the Commonwealth and the State even if that conduct was unlawful or the relevant legislative or executive acts were invalid, nor had he proven any economic or non-economic losses flowing from the alleged unlawful conduct.
It will be necessary to summarise her Honour’s detailed reasoning for these conclusions below.
The relevant State vegetation clearance laws are the Native Vegetation Conservation Act 1997 (NSW) (1997 NVC Act) and the Native Vegetation Act 2003 (NSW) (2003 NV Act).
2. Primary judge’s reasons for judgment summarised
The primary judge gave detailed reasons for her judgment, totalling 227 pages, which reflects the extensive consideration given to Mr Spencer’s claims. In order to understand Mr Spencer’s appeal it is necessary to summarise the relevant parts of her Honour’s reasons.
(a) Summary of Mr Spencer’s claims
The primary judge summarised Mr Spencer’s claims in relation to s 51(xxxi) of the Constitution as follows at [22] in Spencer below.
(1)First, Mr Spencer claims he has three kinds of property rights: fee simple in his property Saarahnlee; a “subset of fee simple”, profit à prendre in relation to carbon stored in trees on his property; and finally perpetual Crown leasehold in the parts of his property which were not held in fee simple, that kind of leasehold being, he submits, “most like fee simple of all other property known to law”.
(2)Second, he submits the respondents “entered into arrangements and contrivances to get around s.51(xxxi)” of the Constitution. He submits the Commonwealth cannot pay the State to make an unjust acquisition of property, without paying compensation, and with the parties “sharing the benefits of the property thus unjustly acquired”.
(3)His property (in the three senses he has used the term) has been acquired for the purposes of s 51(xxxi) because the rights he could exercise over that property and which are bound up with ownership were “effectively sterilised” by the NSW vegetation clearance laws. The Commonwealth obtained a benefit from this sterilisation: namely a costs saving from the avoidance of the need to take other measures to reduce emissions in order to meet the Kyoto Protocol targets.
(4)The “effective sterilisation” occurred through the legislative scheme in the NSW Native Vegetation Act 2003 and the Native Vegetation Regulation 2005 (NSW) made under that Act: an absolute prohibition on clearing without approval, the Minister being the consent authority, and consent depending on the application of a complex environmental assessment methodology – “the myriad onerous, minute and detailed standards” there set out. The Act also reverses the onus of proof in relation to an allegation of clearing without approval, “permits intrusive search without warrant” and “abolishes the privilege against self-incrimination”, all of which combines, Mr Spencer submits, to force farmers such as himself
to bear the costs, by holding our most significant capital goods – our production goods – in a kind of compulsory supposed pre-1788 botanical museum. The Native Vegetation Act stands for the unequal, capricious, discriminatory, disproportionate, unjustified oppression of a minority; and as since ancient times, we come to the Court for justice.
(5)This, he submits, is an acquisition and not an extinguishment of rights because the State
has appropriated to itself the full measure of the use-rights in question, to grant or withhold permission to exercise them, from nought to a hundred percent, in the second respondent’s own discretion, for a purpose determined unilaterally by their own conception of their own management of my property for their own preferred development as defined by them, to effect any result from preservation on the one hand to total extirpation of native vegetation in favour of agriculture on the other, and everything in between, and to arbitrarily benefit whatever political favourites they choose to benefit, and impose the costs by unequally discriminating against any minority target group they choose, which was farmers; subject only to the Environmental Outcomes Assessment Methodology .... So unless the respondents are going to argue that the Environmental Outcomes Assessment Methodology ranks higher than the Constitution, therefore the use-rights have been acquired, not extinguished.
...
... the government has not effected a termination, extinguishment or modification of use-rights; but has by compulsion acquired the use-rights to the land, regards itself as the best and rightful manager, consider that they are deciding the best use and mix of relevant productive factors, consider that they are deciding the best balance of present versus future interests in the resources in question literally into the indefinite future, and regard themselves as running production of what they think best on the land. That’s why it’s called natural resource management for ecologically sustainable development.
...
... they [i.e., the respondents] are using my land to grow native vegetation.
(Emphasis in original.)
(6)Although he submits it is not necessary to prove the Commonwealth obtained a benefit from the acquisition if the State obtained a benefit (as he contends), Mr Spencer contends that nevertheless the Commonwealth did obtain two kinds of benefits. First, a financial advantage in the costs savings from other measures to reduce emissions to meet Kyoto Protocol targets. Second, the “proprietary advantage” of carbon sequestered in native vegetation on Mr Spencer’s land as a result of banning land clearing.
(7)He then submits it is common ground that just terms, or compensation, have not been paid, and declaratory relief should be given in relation to the invalidity of both the Commonwealth and NSW legislation set out at [14] and [15] above.
In addition to declaratory relief in relation to the State and Commonwealth legislation, Mr Spencer also sought damages in tort. The primary judge described Mr Spencer’s pleadings as “wholly inadequate” on this matter.
Mr Spencer described this cause of action as an “action on the case”, citing James v Commonwealth [1939] HCA 9; 62 CLR 339 (James), Beaudesert Shire Council v Smith [1966] HCA 49; 120 CLR 145 (Smith) and Northern Territory v Mengel [1995] HCA 65; 185 CLR 307 (Mengel).
As to the measure of damages claimed, that was put in several ways. First, against the State, Mr Spencer claimed the difference between the value of Saarahnlee with and without the controls under the NSW native vegetation legislation. No precise figure was put on this claim.
Secondly, against the Commonwealth, Mr Spencer claimed that “the measure of damages be the Commonwealth’s own account of the proportion that my land area contribution bore to the whole, in the maximum value or expected value that the Commonwealth attached to carbon in its own carbon accounts”. This was quantified in Mr Spencer’s written submissions:
As per tonnage witness’s agreed carbon retention on Saarahnlee being 3MM Tonnes, price being $24.00 per tonne as per the Carbon Tax legislated price for Kyoto period 1990 Jan to Dec 2012 = $72 million at this rate the lock is as stated in agreement/treaty – perpetual.
Her Honour then summarised at [34] her understanding of Mr Spencer’s principal allegation by reference to the following steps:
(1)Mr Spencer, as the owner of Saarahnlee, held a “bundle of rights” over that property including fee simple in part of it, Crown leasehold in other parts, rights to use and develop the property as he saw fit, and rights in the carbon sequestered in vegetation on Saarahnlee.
(2)In three stages, or by three courses of conduct, both the Commonwealth and the State effected an acquisition of Mr Spencer’s property, contrary to the guarantee in s 51(xxxi) of the Constitution.
(3) Those three stages were:
(a)The Commonwealth enacted the Natural Resources Management (Financial Assistance) Act and the Natural Heritage Trust Act;
(b)Relying on the Commonwealth legislation and s 96 of the Constitution to provide funds to the State, the Commonwealth concluded with the State the “1997 Agreement” to deliver the Natural Heritage Trust (FASOC [14]), the “2000 Salinity Agreement” (FASOC [24]), the “2002 Salinity Agreement” (FASOC [26]) and the 2003 “Trust Agreement” to deliver the Natural Heritage Trust (FASOC [28]). In these reasons I will refer to the Natural Heritage Trust agreements as the “1997 NHT Agreement” and the “2003 NHT Agreement”;
(c)The State, in response to (and induced by) the provision of funds from the Commonwealth, and the imposition of pressure by the Commonwealth, enacted the Native Vegetation Conservation Act 1997 and the Native Vegetation Act 2003, preventing Mr Spencer from clearing any native vegetation on his property without the State’s approval. I interpolate here that the allegations about the “pressure” applied by the Commonwealth to the State may be the highest that, ultimately, the existence of any “informal agreement or arrangement” was put.
(4)There was, in this course of conduct, an “acquisition” of a benefit or advantage of a proprietary character by the Commonwealth, in that it acquired either a financial advantage (not having to fund other ways to meet its Kyoto Protocol targets), or it obtained the benefit of the carbon stored in the native vegetation on Mr Spencer’s land and what would otherwise have been Mr Spencer’s proprietary rights to use or sequester that carbon.
(5)The State also acquired, in this course of conduct, a benefit or advantage of a proprietary character (see FASOC [36A]-[36B] and [63]), which was effectively to control what occurred on, or what was done with, Mr Spencer’s land.
(6)Those courses of conduct, as well as resulting in the invalidity of the federal and state legislation, and the intergovernmental agreements, caused Mr Spencer loss and damage in a way which creates in either or both of the respondents a legal obligation to pay him compensation.
There is a further matter to note. Although in Spencer below a claim for unjust enrichment was raised in [55] of the further amended statement of claim (FASOC), the primary judge noted the undeveloped nature of that claim:
132.This term can be found in several places in various submissions made by and on behalf of Mr Spencer. There was no development of what was meant by it in the context of the claims in this proceeding, and how a private right of this kind was said to arise. I do not propose to consider it further.
The primary judge summarised at some length the lay and expert evidence at [69] to [135] of Spencer below.
(b) Primary judge’s factual findings concerning Mr Spencer’s land
It is convenient to adopt the same headings as those of the primary judge.
(i) General nature of Mr Spencer’s property: Saarahnlee consists of 14 parcels of land located 40 kilometres north-west of Cooma. The total area of the property exceeds 5,000 hectares. The smaller parcels are freehold, but the three largest parcels (Lots 47, 48 and 50) are not. Lot 47 is “conditional purchase” land, which is a form of restricted freehold and remains subject under s 6 of the Crown Lands (Continued Tenures) Act 1989 (NSW) (Crown Lands Act) to recordings in the folio of the Register created in respect of the holding. Lots 48 and 50 (which are by far the largest parcels, measuring 2,191 and 1,680 hectares respectively) were Crown leasehold. Mr Spencer accepted in his evidence that more than half of Saarahnlee was at all times covered with native vegetation that had never been clear felled and that, as at 1990, only 346 hectares had been fully cleared and could be described as “improved”.
(ii) History of the land: At [147]-[148], the primary judge set out various passages from a report prepared by Mr Porter entitled “Application for clearing vegetation under the Native Vegetation Conservation Act 1997 and Farm Management Plan for ‘Saarahnlee’ Shannons Flat NSW”, which described the history of land use on Saarahnlee.
(iii) Mr Spencer’s use of the land: The primary judge found that, prior to mid-1998, when Mr Spencer began making inquiries about developing his land, Mr Spencer’s former wife had made three applications to clear parts of the property.
(iv) Inquiries and assessments about vegetation clearance: In mid-1998, an officer of the Soil Conservation Service of NSW (Mr David Thompson) provided Mr Spencer with an application form for clearing his property. It was about this time that Mr Spencer commissioned Mr Porter to prepare his report, which is dated 1998.
The primary judge accepted evidence given by Mr Dyson, the principal officer from the NSW Department of Land and Water Conservation who was present at a meeting held on Saarahnlee on 10 September 1998, that he and Mr Spencer had discussed the possibility of clearing parts of the land so that Mr Spencer could undertake some of his planned projects, including an orchard. Mr Spencer did not formally lodge any application to clear native vegetation on Saarahnlee at this time, however, between approximately 2000 and 2006 he conducted “an experimental project” on Saarahnlee involving ultra-fine merino sheep.
By 2006, the NSW Government had a specific exit assistance program for farmers who were adversely affected by the State’s native vegetation clearance laws.
The primary judge found at [169] that, as Mr Spencer had himself admitted, he never filled out a vegetation clearance application form. Nevertheless, her Honour observed that there was no dispute that the Murrumbidgee Catchment Management Authority, the RAA and the Nature Conservation Trust continued to treat Saarahnlee as though it was subject to such an application, which had been refused, and acted on that basis up to the making of an exit assistance offer.
Her Honour also described various correspondence which passed between Mr Spencer and the RAA on the topic of exit assistance, including a letter dated 5 July 2007 in which the RAA stated that it “was satisfied that your farming enterprise is not commercially viable and that this position is a result of the inability to clear native vegetation under the Native Vegetation Act 2003.” Mr Spencer was advised that the RAA had forwarded its assessment to the Nature Conservation Trust because it had determined that his property was eligible for purchase under the Farmers’ Exit Assistance Program.
The primary judge also found that the Nature Conservation Trust instructed a valuer, Mr Sullivan, to prepare a valuation of Saarahnlee as part of the assessment process. Mr Sullivan placed a market value on Saarahnlee, as at 30 August 2007, at $2.17 million.
By an unsigned letter dated 6 November 2007, the Nature Conservation Trust offered to purchase Saarahnlee at that price, as well as to reimburse Mr Spencer for legal expenses, relocation and advisory services. A further signed letter in similar terms was sent to Mr Spencer on 22 November 2007. Mr Spencer objected to the valuation and was given more time to consider the offer. Mr Spencer obtained a valuation from Mr Davies, who valued Saarahnlee at over $9 million. Her Honour found that the Trust offer lapsed because Mr Spencer provided no further response to it.
The primary judge found at [198] that an assessment of Saarahnlee was carried out under the Farmers’ Exit Assistance Program in a way which accorded with the regular operation of that program, that Mr Spencer was assessed as being unable to gain approval to clear native vegetation and that the RAA accepted that there was a “loss of commercial viability”. Her Honour observed that these findings were consistent with Rothman J’s decision in Spencer v NSW Minister for Climate Change, Environment and Water [2008] NSWSC 1059.
The primary judge also observed at [201] that, if she had had to assess damages, Mr Spencer’s decision to refuse the Farmers’ Exit Assistance Program offer would have been relevant to the issue of causation.
(c) Summary of regulatory history of land clearing in NSW
After accepting the State’s submission that the practical and legal operation of the impugned federal and State laws and the four intergovernmental agreements should be understood in the full context of the history of regulation of land clearing in New South Wales, her Honour summarised that history. The primary judge found that native vegetation clearance was regulated in the State well before the enactment of the 1997NVC Act and that, what occurred after 1997, was no different in nature even though the regimes may have been more strict. Her Honour found that forms of State regulation over such clearing had been in existence in NSW since at least 1972 and were designed to advance conservation or environmental interests. Her Honour described the regulation which existed prior to the commencement in 1995 of the State Environmental Planning Policy 46 – Protection and Management of Native Vegetation (SEPP46). In brief, that included regulation under legislation such as the Forestry, Soil Conservation and Other Acts (Amendment) Act 1972 (NSW), the National Parks and Wildlife Act 1974 (NSW), the Threatened Species Conservation Act 1995 (NSW), the Endangered Fauna (Interim Protection) Act 1991 (NSW) and statutory conditions imposed upon Crown leases under the Crown Lands Act.
Her Honour described at some length the contents of SEPP46 and concluded at [229] that SEPP46 applied to the remaining 1,915 hectares of Saarahnlee which were not already protected land under the Soil Conservation Act 1938 (NSW) (Soil Conservation Act). This meant that all of Saarahnlee “was burdened with objectively restrictive State controls over native vegetation clearance, for some time before the enactment of the impugned State and federal legislation, and before the intergovernmental agreements from 1997 onwards” (at [229]).
Her Honour ultimately concluded at [231] that these various State controls over native vegetation clearance, which she found fell short of “acquisition”, have “historically and continuously been exercised over Saarahnlee”. Accordingly, although her Honour found that there was a “taking” of Mr Spencer’s property, she did not accept that this constituted an “acquisition” for the purposes of s 51(xxxi) of the Constitution.
(d) The impugned legislation and intergovernmental agreements
The primary judge outlined the relevant features of the federal and State laws and intergovernmental agreements which Mr Spencer challenged. She explained how, under the Kyoto Protocol (which did not enter into force in Australia until three months after it was ratified in December 2007), Australia’s emissions commitment in Annex B to the Kyoto Protocol was to limit emissions to 108 per cent of 1990 levels for the period 2008 to 2012. By Arts 5 and 7, Australia committed to establishing a system for national reporting of greenhouse gas emissions and removal. Her Honour found at [247] and [248] that, at a level of generality, Australia’s Kyoto Protocol targets were part of the impetus for the intergovernmental agreements and the increase in regulation over the clearing of native vegetation in New South Wales and other parts of Australia.
On the appeal, Mr King (who appeared for Mr Spencer) acknowledged that copies of all four relevant intergovernmental agreements were not in evidence before the Full Court. He was content to rely upon the summary of those documents in Emmett J’s judgment in Spencer 2008. It was also evident, from the way that Mr Spencer’s appeal was conducted, that Mr King placed primary reliance upon the 1997 NHT Agreement, as developed by the 2003 NHT Agreement. Accordingly, it is convenient to concentrate on those two intergovernmental agreements, as summarised by Emmett J.
The 1997 NHT Agreement begins as follows:
Australia, as a Federation, relies upon all levels of government working cooperatively based on their respective roles, responsibilities and interests. The Natural Heritage Trust is a major capital initiative aimed at conserving and managing Australia's biodiversity, land, water, vegetation and sea on an ecologically sustainable basis. This agreement sets out the roles and responsibilities of the Commonwealth and New South Wales for the delivery of the objectives of the Natural Heritage Trust and any associated programs.
The preamble to the 1997 NHT Agreement relevantly provides that the Commonwealth and New South Wales:
·Recognise the need for urgent action to enhance and improve the condition and management of Australia’s natural heritage.
·Recognise that the Natural Heritage Trust provides a basis for further cooperative and integrated approaches to dealing with Australia's environmental problems.
·Note that the Commonwealth’s objectives for the Natural Heritage Trust are to:
(a)provide a framework for strategic capital investment, to stimulate additional investment in the natural environment;
(b)achieve complementary environmental protection, sustainable agriculture and natural resources management outcomes consistent with agreed national strategies; and
(c)provide a framework for cooperative partnerships between communities, industry and all levels of government.
·Agree that the 1997 NHT Agreement establishes a framework within which the parties will work cooperatively towards common and complementary environmental protection, sustainable agriculture and natural resources management outcomes, acknowledging that these outcomes can best be achieved through strategic planning, streamlined administration and integrated implementation.
·Recognise the appropriate and different roles of the Commonwealth and the States.
By cl 3 of the 1997 NHT Agreement, the parties agree to give effect to a number of principles, which underpin the implementation of the Natural Heritage Trust programs and other Commonwealth or State programs agreed by the parties to be covered by the 1997 NHT Agreement. The principles include the following:
·Priority will be given to activities that are derived from strategies to address the fundamental causes of Australia's environmental and natural resources problems.
·The involvement of local communities and regional organisations in relation to Natural Heritage Trust programs should be through State agencies and should be simple, readily understood and based on the “one-stop-shop” concept, that is, a single application form incorporating relevant Commonwealth and State programs, a single assessment process, single payments, and a single evaluation process.
·The parties agree that their cooperation will be focussed on achieving outcomes at the program level.
·Implementation of the 1997 NHT Agreement will occur within the strategic framework of:
- the Inter-Governmental Agreement on the Environment,
- the National Strategy for Ecologically Sustainable Development,
- the National Strategy for the Conservation of Australia’s Biodiversity,
- the National Greenhouse Response Strategy,
- the water reform framework of the Council of Australian Governments,
- the National Water Quality Management Strategy,
- the National Principles For the Provision of Water for Ecosystems,
- the National Forest Policy Statement,
- the Decade of Landcare Plan,
- the Murray-Darling Basin Initiative, or
- other national or State strategies as agreed by the parties.
Clause 4 of the 1997 NHT Agreement establishes a framework under which the parties propose to work cooperatively for the purposes of s 19 of the NHT Act. The 1997 NHT Agreement is to apply to those Natural Heritage Account funds provided to New South Wales for programs set out in the NHT Act and any additional State or Commonwealth programs that are included from time to time in attachments to the 1997 NHT Agreement, as agreed by the parties. Clause 4 expressly provides that the 1997 NHT Agreement allows for the future inclusion of other related programs in the Natural Heritage Trust, additional mechanisms and innovative approaches for the protection and management of Australia's natural heritage, the inclusion of which is agreed by the parties.
Clause 5 of the 1997 NHT Agreement provides for attachments consistent with the 1997 NHT Agreement to be developed and to become part of the 1997 NHT Agreement. Attachment A is to relate to the arrangements for managing particular programs or other activities agreed by the parties, and is to include, but is not limited to, the strategic framework in which progress towards identified outcomes is to be achieved. Attachment B contains provisions for financial assistance to the States in accordance with the 1997 NHT Agreement. Attachment C outlines the approach to integrated delivery in New South Wales. By reason of cl 5.1 of the 1997 NHT Agreement, Attachments A, B and C all form part of the 1997 NHT Agreement itself.
By cl 6 of the 1997 NHT Agreement, the parties agree, in accordance with the principles outlined in cl 3, to plan, develop and support jointly the implementation of strategies to achieve the purposes of the 1997 NHT Agreement. The specific roles of the Commonwealth and New South Wales are set out in cll 6.2 and 6.3 respectively. None of those provisions are concerned in terms with the acquisition of any property or the imposition of restrictions on the use of land or the clearing of native vegetation.
Clause 7 of the 1997 NHT Agreement deals with financial arrangements. Under cl 7.2, financial arrangements are to be determined in accordance with principles therein stated. Clause 8 deals with financial administration. Clause 8.2 provides that financial assistance will be provided in accordance with the provisions of Attachment B.
Attachment A to the 1997 NHT Agreement consists of a description of Commonwealth programs and delivery arrangements. The programs relevantly are as follows:
·Bushcare: The National Vegetation Initiative (the Bushcare Program);
·…
·National Landcare Program;
·…
The national objectives of the Bushcare Program are stated to:
·conserve remnant native vegetation;
·conserve Australia's biological diversity; and
·restore, by means of revegetation, the environmental values and productive capacity of Australia’s degraded land and water.
The national objectives of the National Landcare Program are to:
·assist and enhancing [sic] the long term productivity of natural resources in Australia;
·promote community, industry and governmental partnership in the management of natural resources in Australia;
·assist in establishing institutional arrangements to develop and implement policies, programs and practices that will encourage sustainable use of natural resources in Australia;
·assist in developing approaches to help to resolve conflicts over access to natural resources in Australia; and
·assist in raising the natural resource and business management skills of landholders.
Clause 4.1-4.3 of the Bushcare Program section of Attachment A provides as follows:
[4.1]New South Wales will adopt a state-wide ‘whole of government’ approach to the conservation and sustainable management of native vegetation in the social, economic and environmental interests of the State. There will be a shift from the current situation where there are a range of different existing permit and licensing procedures, to a situation whereby clearing is allowed without a permit if it conforms to a Regional Vegetation Management Plan which has been prepared by stakeholders and approved by the Government. These Plans will be specific to regions, but underpinned by state-wide thresholds, consistent with the approach outlined in Objective 1.2 of the National Strategy for the Conservation of Australia’s Biological Diversity and section 4.2 below.
[4.2]Consistent with relevant legislation and strategies including the national strategies for ecologically sustainable development and biological diversity, New South Wales will:
(a) encourage and promote sustainable native vegetation management;
(b) protect remnant native vegetation of high conservation value;
(c) improve the condition of existing native vegetation;
(d)encourage revegetation of land with appropriate native vegetation; and
(e) prevent inappropriate native vegetation clearing.
[4.3]Measures to be undertaken to achieve the aims of 4.2 include:
(a)enactment of native vegetation conservation legislation which will repeal/rationalise existing native vegetation controls and provide for a coordinated State-wide approach;
(b)promotion of regional vegetation management plans with a biogeographic basis which have legislative status;
(d)ongoing state-wide monitoring program using satellite technology and supplemented by strategic on-ground, assessments which will provide information for monitoring and compliance;
(e)encouragement of a whole property planning approach where native vegetation management is integrated with all relevant aspects of property management;
(f)consideration of property agreements (voluntary) with covenants to qualify landholders for incentive schemes;
(g)assessment and consent for clearing under native vegetation legislation consistent with that proposed in the Integrated Development Assessment system; and
(h)promotion of codes of practice to undertake clearing for particular land uses which specify environmental, social and economic criteria consistent with the aims and principles of State native vegetation legislation.
Clause 4.6(b) of the National Landcare Program section of Attachment A provides as follows:
New South Wales is committed to the conservation and sustainable management of native vegetation. The statutory basis for this will be a new Native Vegetation Conservation Act which will require that native vegetation clearing is subject to comprehensive environmental assessment and permit clearing where consistent with a Regional Vegetation Management Plan.
Attachment B to the 1997 NHT Agreement contains standard terms and conditions of financial agreements between the Commonwealth and New South Wales for the purpose of financial assistance. The 1997 NHT Agreement is described in Attachment B as “the Partnership Agreement”. That term is defined as meaning an agreement made between the Commonwealth and the State under s 19 of the NHT Act of the type referred to in s 19(4) of that Act.
Clause 3 of Attachment B provides that payments made to New South Wales will be in accordance with a signed financial agreement as outlined in the pro forma annexed to Attachment B, for defined projects or programs with specified outputs, outcomes and reports. The pro forma attached recites that the agreement is made for the purpose of providing Commonwealth financial assistance to the State under s 19 of the NHT Act, s 16 of the National Parks and Wildlife Conservation Act 1975 (Cth) and s 5 of the NRM Act. It also recites that the agreement is made for the purposes of linking Commonwealth and State priorities and programs agreed between the parties as outlined in Attachments A and C of the Partnership Agreement and for specified activities to enable the State, within the financial assistance provided, to achieve, in part, the outcomes sought in Attachment A.
It is convenient now to return to summarise the primary judge’s analysis of the 1997 NHT Agreement. Her Honour emphasised the provisions in cl 7 of the 1997 NHT Agreement, which dealt with financial arrangements associated with a fund called the Natural Heritage Trust, set up under the NHT Act. The Trust operated through the “Natural Heritage Trust of Australia Account”, which was in large part sourced from the partial sale of Telstra. One of the main objectives of the Account was to conserve, repair and replenish what the primary judge described at [254] as “the value inherent in Australia’s natural environment”.
The 2003 NHT Agreement, which was expressed to be made pursuant to s 19(2) of the NHT Act and s 5 of the NRM Act, built on the 1997 NHT Agreement, the 2000 Salinity Agreement and the 2002 Salinity Agreement. Under it, the Commonwealth would allocate approximately $65 million to the State from the Trust for three financial years commencing 2002-2003. Further details regarding the National Landcare and Bushcare Programs were set out in Attachment 1 to the 2003 NHT Agreement and included limits on clearing through vegetation clearance controls. One of the expressly identified outcomes was “greenhouse gas abatement”.
In his summary of the 2003 NHT Agreement in Spencer 2008 at [81] Emmett J also described cl 4.1, by which the parties acknowledged that New South Wales was significantly advanced in land, water and biodiversity reforms and had strategies that were consistent with the overall national policy approach outlined in the Natural Heritage Trust. At [82] his Honour also outlined how, by cl 4.6, the State agreed to pursue measures:
·to prevent clearance of ecological communities with an extent below 30 per cent of that present pre-1750;
·to assess native vegetation condition; and
·to continue to reducing [sic] the national net rate of land clearance to zero.
Returning to summarise the primary judge’s reasons in Spencer below, her Honour outlined the contents of a report entitled “Report on Native Vegetation Management in New South Wales” dated August 1996 (prepared by the NSW Vegetation Forum) concerning the future regulation and management of native vegetation in the State. The Forum favoured the adoption of legislative reform encompassing a “whole State” approach. This recommendation was adopted in a White Paper which was published about a year later entitled “A proposed model for native vegetation clearance in New South Wales”. It was stated in the Executive Summary to the White Paper that SEPP46 and provisions relating to native vegetation conservation and management in various other Acts, including the Soil Conservation Act, would be repealed and replaced by a Native Vegetation Conservation Act. The primary judge noted at [304] that many of the proposals by the Forum and in the White Paper were adopted in the 1997 NVC Act. The controls under SEPP46 and the Soil Conservation Act were incorporated into one legislative regime, while retaining the concept of “protected land” from the Soil Conservation Act.
The main relevant features of the 1997 NVC Act were outlined by the primary judge at [305] to [309]. A key feature was that clearing of native vegetation was prohibited unless certain consents, plans or practices were in place, with the responsible Minister identified as the consent authority.
Following recommendations made by the Native Vegetation Reform Implementation Group, the 2003NV Act was enacted. It repealed the 1997 NVC Act and simplified the regulatory scheme. One of the express objects of the Act, as stated in s 3, was “to prevent broadscale clearing unless it improves or maintains environmental outcomes”. Again, there was a general prohibition on clearing native vegetation without a development consent, or otherwise than in accordance with a “property vegetation plan” approved by the Minister (see s 12).
Her Honour noted at [323] that the text and context of the 2003 NV Act in particular revealed a “considerable shift in emphasis”. That shift, which the primary judge said was consistent with the aims and objectives of the two relevant federal laws and the four intergovernmental agreements, was that clearing of native vegetation was assessed as having serious adverse consequences and required increased prominence in terms of environmental reform. Her Honour also observed at [325] that the new legislative scheme “may have provided scope for Mr Spencer to use and develop Saarahnlee, albeit in a way which was closely regulated and required him to subject his projects to scrutiny by decision-makers under that scheme”, but that an approach which was dependent upon close bureaucratic supervision was “clearly not to Mr Spencer’s liking”.
(e) The alleged “informal arrangement”
Although the primary judge found that Mr Spencer’s case as presented at trial relied very little on the existence or nature of an alleged informal arrangement, he had pleaded that there was such an arrangement. This, he claimed, was “evidenced by” ministerial committee minutes from the Council of Australian Governments (COAG) from 1993 to 2005, as well as COAG minutes relating to the Kyoto Protocol conference commencing in December 1997. He also relied upon a letter dated in or about 2003 from the Prime Minister or the Minister for Environment to the Premier of New South Wales.
Her Honour described Mr Spencer’s case in respect of the alleged informal arrangement in [326] to [372], which included her Honour’s summary of the evidence given by Dr David Kemp, a former federal Minister for the Environment and Heritage. Her Honour noted that Mr Spencer, who represented himself below, did not put to Dr Kemp for comment many of the allegations he made concerning the existence of an informal arrangement.
Her Honour also described the evidence of Mr Plummer, a farmer, who gave evidence of a letter, a copy of which he no longer had, which was sent by Senator Robert Hill, the then federal Minister for the Environment and Heritage, to the Premier of New South Wales some time in 2000 concerning the Commonwealth’s attitude to land clearing in New South Wales. Her Honour accepted Mr Plummer’s evidence regarding the contents of Senator Hill’s letter which, together with other Commonwealth documents, revealed that the Commonwealth was relying on its grants power as a way to influence policy and reform initiatives over which it did not have exclusive legislative competence (at [370]).
Her Honour ultimately found at [371] that Mr Spencer had not discharged his burden of proof that there was an “informal arrangement” of the kind pleaded by him and that there was “no evidence of any improper or inappropriate, let alone unlawful, collusion or conspiracy of the kind Mr Spencer foreshadowed, nor of any plan to “get around” s 51(xxxi)”.
3. Primary judge’s determination of Constitutional law issues
The primary judge’s reasons for rejecting Mr Spencer’s various Constitutional law claims, which related to both ss 51(xxxi) and 96 of the Constitution, are set out at considerable length in [373] to [604] of her Honour’s reasons for judgment. It will be necessary to describe some aspects of that reasoning in greater detail below. It suffices at this point to set out [383] to [386] of her Honour’s reasons, which summarise her key findings:
383.In summary, I conclude that the two federal laws are not to be characterised as laws with respect to the acquisition of property. It is therefore strictly unnecessary to determine whether they effect an acquisition other than on just terms but, in case I am wrong in my opinion on the first issue, I determine that the valuation regime put in place by New South Wales, and applied to Saarahnlee, meant that Mr Spencer was offered just terms for the “bundle of rights” he held in the property itself. If, contrary to my opinion, it could be established that Mr Spencer’s “carbon rights” had been acquired as a result of the federal laws, then it is clear on the evidence that there was no compensation paid for these rights and therefore no just terms.
384.It appears to be common ground that it is appropriate to characterise the two federal laws as laws with respect to the grants of financial assistance to the States, and at least to that extent supported by s 96 of the Constitution. In my opinion the current weight of authority suggests s 96 is conditioned by s 51(xxxi). That being the case, if the two federal laws had authorised the making of grants of financial assistance, terms of which required the State to acquire property (for itself, or for another) other than on just terms, then the federal laws would be exposed to invalidity, and the intergovernmental agreements and the state legislation which carried through these conditions might be inoperative (at least). It is arguable that Magennis [1949] HCA 66; 80 CLR 382 supports this proposition. I conclude that while the 1997 NHT Agreement, concluded pursuant to the two federal laws, required New South Wales to enact legislation further restricting the clearing of native vegetation on land in New South Wales, this did not effect an acquisition of property. I conclude that the remaining three intergovernmental agreements on which Mr Spencer relies did not impose terms and conditions which required New South Wales to take any steps (whether through exercise of legislative or executive power) to acquire property.
385.As to the informal arrangement alleged to have been made between the Commonwealth and the State, I have found elsewhere (see [326] to [372]) that Mr Spencer has not proven any such arrangement existed. Had he proven such an arrangement, it is arguable on the basis of dicta in ICM [2009] HCA 51; 240 CLR 140 that such an arrangement would also be conditioned by s 51(xxxi). How this occurs without a connection to federal law is not something that is, with respect, clear from the judgments in ICM. If this kind of argument rests on the proposition that s 51(xxxi) conditions executive power exercised under s 61 of the Constitution, this was barely touched on in argument by the parties, and in particular by the respondents. However, even if I had reached this point in my reasoning favourable to Mr Spencer, I would then have concluded that the nature of the arrangement he alleges did not effect, or result in, the acquisition of property by the Commonwealth, the State, or anyone else, because its terms did not differ materially from what can be found in the four intergovernmental agreements themselves.
386.The impact of the state legislation in its 1997 and 2003 forms could be generally characterised as variations on the kind of regulation imposed on Saarahnlee under previous state regulatory regimes, although with a discernible shift in emphasis towards halting vegetation clearance that did not manifest positive environmental outcomes as I have explained earlier in these reasons. Once that impact crystallised in July 2007 with the Rural Assistance Authority’s decision, then it could in my opinion appropriately be characterised as a “taking”. It was not however a “taking” required or achieved by federal law, nor by intergovernmental agreements contemplated by those federal laws. The State chose the form and content of the laws, and chose to implement an exit assistance scheme to deal with the impact of its laws. It chose, it can be said, to respond at least to some extent, to the urging of the Commonwealth to tighten and enhance its control over native vegetation clearance. No doubt at some level, funding from the Commonwealth played a role in its decision-making and the Commonwealth recognised both expressly and implicitly in all four agreements that adverse impacts of clearing controls might require adjustment packages from the State. The Commonwealth did not require those adjustments to be made. The State was able to impose vegetation controls without the constraint imposed by s 51(xxxi). Finally, even if I am wrong in seeing the state legislation as legally independent of the two federal laws and the intergovernmental agreements, there may have been a “taking” in July 2007, but there was no acquisition. If Mr Spencer had accepted the offer and sold Saarahnlee, there would have been. I fail to see how it was an acquisition required for Commonwealth purposes. In any event, as I set out below, the terms of the acquisition were just.
(Emphasis added.)
In examining the relationship between ss 96 and 51(xxxi) of the Constitution, the primary judge closely analysed the High Court’s decisions in Pye v Renshaw [1951] HCA 8; 84 CLR 58 (Pye); P J Magennis Pty Ltd v Commonwealth [1949] HCA 66; 80 CLR 382 (Magennis); Gilbert v Western Australia [1962] HCA 7; 107 CLR 494 (Gilbert) and ICM Agriculture Pty Ltd v Commonwealth [2009] HCA 51; 240 CLR 140 (ICM). Her Honour noted at [462] that both the Commonwealth and the State appeared to accept that the majority in ICM supported the proposition that s 51(xxxi) conditions an exercise of power under s 96. Her Honour concluded at [470] that a purpose shared by the Commonwealth and the State, that the State should acquire property on other than just terms, will not invalidate federal grants under s 96 which may assist a State in achieving that purpose, as long as the terms and conditions of the grant do not purport to require or enforce that outcome.
At [481], the primary judge found that there was no doubt that each of the four intergovernmental agreements “proposed a series of measures to be carried principally by the State, to reduce the clearance of native vegetation and indeed to increase the total cover of native vegetation across New South Wales”. Further, this was done in the context of broader measures to promote natural resources management and, to a significant extent, the Commonwealth and the State shared these purposes and objectives. Her Honour found, however, that, while the NRM Act empowered the Commonwealth to pay financial assistance to the States, none of ss 7 to 9 of that legislation contemplated, let alone required, the State to acquire property, nor did the provisions induce the State to do so. Rather, it was open to the State to accept the Commonwealth’s financial assistance on the terms offered, and if this occurred, the State would be subject to conditions concerning repayment.
Her Honour then turned her detailed attention to the 1997 NHT Agreement (see [485]-[490]). Although her Honour found that the 1997 NHT Agreement gave effect to the objectives of the NHT Act, it did not do so in a way which could be characterised as requiring or effecting an acquisition of property. It is desirable to set out [485] to [489] inclusively:
485.The 1997 NHT Agreement gives effect to the objectives of the Natural Heritage Trust Act, but not in a way which can lead to its characterisation as requiring or effecting an acquisition of property. The principles in cl 3 set out how choices will be made about programs and projects to be funded, and the Agreement concentrates in cl 6 on the roles and responsibilities of each party, while filling out the content of proposed programs and activities. It is not surprising that there are clauses which condition the provision of funding by the Commonwealth against the achievement of outcomes and milestones set out in Attachment A to the 1997 NHT Agreement for each of the nominated programs: see in particular cl 7.2(b), which I have set out earlier in my reasons.
486.It is true that in Attachment A, the Bushcare program describes outcomes which involve not only the maintenance, but the increase of native vegetation cover in New South Wales. The Commonwealth submits that cl 4 in the Bushcare program does not suggest the enactment of the Native Vegetation Conservation Act 1997 was a condition of the provision of funding. The Commonwealth points to how well advanced planning was at state level for reform proposals that led to the 1997 Act. It submits it is “inapt” to describe the process as the fulfilment of some form of requirement imposed by the Commonwealth.
487.That submission may be too broad. The clause did seek to describe, in some detail, how the State was to regulate native vegetation clearance. On pain of repayment if the conditions were not complied with (see cl 7.2(b) of the Agreement) New South Wales agreed to “prevent inappropriate native vegetation clearing” (cl 4.2(e) of the Bushcare program), and it was expressly contemplated this would be done by legislation to “repeal/rationalise existing native vegetation controls” (cl 4.3(a) of the Bushcare program), assessment and consent for clearing under native vegetation legislation to be consistent with what was proposed in the “Integrated Development Assessment system” (cl 4.3(g) of the Bushcare program).
488.In my opinion the 1997 NHT Agreement does impose terms and conditions on New South Wales, requiring it to enact legislation to decrease vegetation clearance, and increase retention of native vegetation. However, unlike Magennis, the agreement says nothing about the content of the legislation, and certainly nothing about New South Wales having to acquire property as part of any native vegetation clearance legislative regime.
489. There are no such requirements in the 2000 and 2002 Salinity Agreements.
(Emphasis added.)
The primary judge found that the obligations and commitments under 2003 NHT Agreement were “general and aspirational”, as reflected in provisions such as cll 4.6 and 6.5.
Thus, although the primary judge found that there was a requirement in the 1997 NHT Agreement for the State to enact native vegetation clearance legislation, there were no requirements concerning acquisition, nor did the 1997 NVC Act or the 2003 NV Act have the effect of acquiring Mr Spencer’s property.
4. Summary of Mr Spencer’s submissions on the appeal
At the commencement of the appeal, the Court indicated that it had difficulty understanding Mr Spencer’s outline of written submissions in chief, which he had prepared himself, and that it expected Mr King to address any relevant points in his oral address.
Mr King submitted that the heart of the primary judge’s error was to assume that there was no proprietary relationship between the Crown in right of NSW and Mr Spencer with respect to the leasehold and fee simple holdings in Saarahnlee before and after the enactment of the State’s vegetation clearance laws. He submitted that those laws modified the pre-existing proprietary relationship by imposing easements in gross or restrictive covenants upon Mr Spencer’s use of, and title to, his land with the result that his interest was “sterilised”.
Mr King explained that there were five essential steps in the way in which the appeal was put. First, that the primary judge was correct to find that there was a “taking”, but then erred in not also finding that this amounted to an “acquisition” in the relevant Constitutional sense.
Secondly, in support of Mr Spencer’s case concerning s 51(xxxi) of the Constitution, Mr Spencer would seek to lead further evidence which was not available below relating to the Kyoto Protocol.
Thirdly, the primary judge erred in not accepting Mr Spencer’s case that his property had been acquired by the joint action of the Commonwealth and State governments, citing Magennis. He also contended that the intergovernmental agreements were invalid as being in contravention of s 51(xxxi) of the Constitution.
Fourthly, the Commonwealth was unjustly enriched by the acquisition of Mr Spencer’s property and it should be compelled to disgorge those unjust enrichments. Mr King acknowledged that this matter had been dealt with only “perfunctorily” in the proceeding below.
Fifthly, Mr Spencer contended that the State had trespassed on his property and was liable to him in an action on the case.
These matters were then developed in oral address broadly as follows.
(a) “The taking” was also an “acquisition”
Mr King submitted that the “taking” of Mr Spencer’s property, as was reflected in the offer to pay him compensation by reference to the Farmers’ Exit Assistance Program, also constituted an “acquisition”. This was because it involved a modification of the existing proprietary relationship between Mr Spencer and the State by reference to his rights as a landholder in fee simple and also by reference to that part of his land which was the subject of a Crown lease. Further, the taking of his land amounted to a “mini-nationalisation” of his property, citing Bank of NSW v Commonwealth [1948] HCA 7; 76 CLR 1 (the Bank Nationalisation Case). Moreover, the Commonwealth received an advantage or benefit relating to the use of Mr Spencer’s property, primarily by reference to carbon sequestration rights.
It was submitted that the primary judge erred in the following three respects:
(1)Her Honour’s findings at [564]-[567] that there was no proprietary relationship between Mr Spencer and the State and her Honour’s reliance on ICM, for the proposition that, for s 51(xxxi) to apply, there needs to be a “legal interest”, were said to be in error. It was submitted that the modification of an existing proprietary relationship amounted to an acquisition of property, citing Smith v ANL Ltd [2000] HCA 58; 204 CLR 493 (Smith).
(2)Her Honour erred by stating at [386] of her reasons for judgment, with reference to the RAA’s decision in July 2007 that farming on Saarahnlee was not “commercially viable” because of what could be characterised as a “sterilisation” or a “taking” due to the inability to clear native vegetation under the native vegetation clearance laws, it was not a taking which was required or achieved by federal law nor by the intergovernmental agreements. Her Honour also erred in stating that, alternatively, even if the State legislation was not legally independent of the two federal laws and the intergovernmental agreements, the “taking” which may have occurred in July 2007 was not an acquisition, and that:
If Mr Spencer had accepted the offer and sold Saarahnlee, there would have been [an acquisition].
(3)Criticism was also levelled at her Honour’s finding at [505] that the carbon sequestration rights upon which Mr Spencer relied were “entirely speculative”.
Mr Spencer’s submissions on each of these three matters may be summarised as follows.
(i) No proprietary relationship: It was submitted that the 2003 NV Act created rights of a proprietary character. Reference was made to provisions such as s 12 (prohibiting vegetation clearance except by way of development consent or a property vegetation plan); s 13 (creating the Minister as the consent authority); s 27 (providing for Property Vegetation Plans (PVPs); s 31 (which provided that a PVP runs with the land and is capable of registration with the General Register of Deeds); s 35 (creating rights of entry on to land); s 36 (providing for the right to obtain information); and s 38 (creating the right to carry out remedial work on the land itself, not limited to any vegetation).
It was submitted that ICM strongly supported Mr Spencer’s case concerning s 51(xxxi) because the High Court found that there was a “joint action” between the Commonwealth and NSW and the critical reason for why the case failed was because of the Court’s finding that groundwater was not “property” for the purposes of that provision.
Mr Spencer submitted that the primary judge erred in her understanding of carbon sequestration, which error was said to be manifest in [585] of the reasons for judgment. In particular, it was submitted that, under the Kyoto Protocol, carbon credits were earned by way of abatement in respect of land which was otherwise intended to be cleared, citing Art 3, rule 7. Australia was assisted in meeting its carbon emission targets by way of abatement schemes, such as those created by the NSW vegetation clearance laws. The primary judge erred in not understanding that the scheme operated not by reference to the clearing of vegetation, but rather by preventing such clearance.
Unlike groundwater, so it was submitted, trees are “property”, which was separate from the land on which they grow, citing Sir Francis Barrington’s Case 8 Co. Rep. 136b, Richard Liford’s Case 11 Co. Rep. 46b and Australian Softwood Forest Pty Ltd v Attorney-General for NSW; Ex rel Corporate Affairs Commission [1981] HCA 49; 148 CLR 121 at 130 and 132 per Mason J.
The following additional submissions were made. First, contrary to the primary judge’s finding, there was an existing proprietary relationship between Mr Spencer and the State which relationship was modified by the relevant State legislation. Mr King relied on Smith at [7], regarding the modification of a limitation period which affected the right to bring a chose in action, for the proposition that the modification of a proprietary right can amount to an acquisition for the purposes of s 51(xxxi). The existing proprietary relationship was said to be reflected in the relationship Mr Spencer had with the State in respect of his Crown lease and the radical title in his fee simple interest in the relevant part of the land. The Court was taken to the terms of Mr Spencer’s Crown lease, including clause (d). It was submitted that the primary judge erred in finding that there needed to be a transfer of title for there to be an acquisition, referring to [386] and [564]-[567] of the primary judge’s reasons.
Secondly, Mr King repeated his submission that the events which occurred amounted to a “mini-nationalisation”, citing the Bank Nationalisation Case at 349 per Dixon CJ.
Thirdly, ICM was cited in support of the submission that the State acquired both a “forestry right” and a “carbon sequestration right” within the meanings of those concepts in s 87A of the Conveyancing Act1919 (NSW) (the Conveyancing Act).
(ii) Any “taking” was not an “acquisition”: It was submitted that Kiefel J’s observations in JT International SA v Commonwealth of Australia [2012] HCA 43; 250 CLR 1 (the Plain Packaging Case) at [363] were not inconsistent with Mr Spencer’s case because her Honour said there that a regulatory taking does not “usually” involve an acquisition for the purposes of s 51(xxxi) of the Constitution. Moreover, it was submitted that Mr Spencer’s case did not turn on the characterisation of the State legislation and four intergovernmental agreements as “regulatory”. The primary judge incorrectly applied the Plain Packaging Case at [563]-[564] because the State’s laws operated to enhance the State’s radical title in the land and it was irrelevant how significant that modification was, citing Mutual Pools and Staff Pty Limited v Commonwealth [1994] HCA 9; 179 CLR 155 (Mutual Pools). Mr King was particularly critical of the last sentence in [567] of the primary judge’s reasons for judgment. He submitted that it should be read as a finding that Mr Spencer was obliged to accept the offer of compensation which he had received.
Heavy reliance was placed by Mr Spencer on the primary judge’s observations at [580] concerning the “benefit” which the Commonwealth obtained. It is desirable to set out that paragraph:
580. The problem for Mr Spencer is that although there is little difficulty in characterising this as a “benefit” to the Commonwealth, as one might usually understand that term, and a material one, it has no proprietary character.
It was submitted that the Commonwealth’s benefit was the enhanced ability for Australia to comply with its obligations under the Kyoto Protocol, in particular Arts 3.3 and 3.7. It is desirable to set out both those provisions:
3.The net changes in greenhouse gas emissions by sources and removals by sinks resulting from direct human-induced land-use change and forestry activities, limited to afforestation, reforestation and deforestation since 1990, measured as verifiable changes in carbon stocks in each commitment period, shall be used to meet the commitments under this Article of each Party included in Annex 1. The greenhouse gas emissions by sources and removals by sinks associated with those activities shall be reported in a transparent and verifiable manner and reviewed in accordance with Articles 7 and 8.
…
7.In the first quantified emission limitation and reduction commitment period, from 2008 to 2012, the assigned amount for each Party included in Annex 1 shall be equal to the percentage inscribed for it in Annex B of its aggregate anthropogenic carbon dioxide equivalent emissions of the greenhouse gases listed in Annex A in 1990, or the base year or period determined in accordance with paragraph 5 above, multiplied by five. Those Parties included in Annex 1 for whom land use change and forestry constituted a net source of greenhouse gas emissions in 1990 shall include in their 1990 emissions base year or period the aggregate anthropogenic carbon dioxide equivalent emissions by sources minus removals by sinks in 1990 from land-use change for the purposes of calculating their assigned amount.
Mr King submitted that the Commonwealth admitted that it obtained a benefit as from 1 January 1998, but did not admit that it was of a proprietary character. Mr King did not refer the Court to when or where this alleged admission was made.
The benefit said to have accrued to the Commonwealth was a benefit of a proprietary nature because the vegetation clearance laws prohibited the trees being felled and hence they remained in situ to grow. Mr King claimed that s 87A of the Conveyancing Act was inserted in 1999 (therefore after commencement of the 1997 NVC Act but before the 2003 NV Act), and that it merely recognised that the 1997 NVC Act had given rise to benefits of a proprietary nature. As such, in Mr Spencer’s submission, the mere fact that s 87A was enacted after the 1997 NVC Act did not mean that there was no proprietary right of the sort recognised by Dixon J in the Bank Nationalisation Case. A difficulty with this submission is that s 87A was first inserted in 1986 and was subsequently amended several times, including in 1999.
A carbon sequestration right is defined to mean:
carbon sequestration right, in relation to land, means a right conferred on a person by agreement or otherwise to the legal, commercial or other benefit (whether present or future) of carbon sequestration by any existing or future tree or forest on the land after 1990.
Thus, Mr King submitted that because the definition extends to rights “conferred by agreement or otherwise” (emphasis added), it included a right conferred by statute, being the right to enter and maintain a crop of trees on Mr Spencer’s land which, in turn, falls within the definition of a “forestry right” in s 87A, namely:
forestry right, in relation to land, means:
(a)an interest in the land pursuant to which a person having the benefit of the interest is entitled:
(i)to enter the land and establish, maintain and harvest (or to maintain and harvest) a crop of trees on the land, or
(ii)to enter the land and establish, maintain and harvest (or to maintain and harvest) a crop of trees on the land and to construct and use such buildings, works and facilities as may be necessary or convenient to enable the person to establish, maintain and harvest the crop, or
(b) a carbon sequestration right in respect of the land, or
(c) a combination of the interest and right referred to in paragraphs (a) and (b).
Mr King in turn relied upon s 88AB of the Conveyancing Act which provided that:
(1) A forestry right shall, for all purposes, be deemed to be a profit à prendre.
(2)If a forestry right consists in whole or in part of a carbon sequestration right, the profit à prendre deemed to exist by subsection (1) in relation to the carbon sequestration right consists of the following:
(a)the profit from the land is taken to be the legal, commercial or other benefit (whether present or future) of carbon sequestration by any existing or future tree or forest on the land that is the subject of the carbon sequestration right,
(b)the right to take something from the land is taken to be the right to the benefit conferred by the carbon sequestration right.
As such, Mr King submitted that the right was registrable under the Real Property Act 1900 (NSW).
Furthermore, as the definition of “carbon sequestration right” refers to rights of carbon sequestration “by any existing or future tree or forest on the land after 1990” (emphasis added), Mr King submitted that the definition “links it straight to the UNFCCC and the Kyoto Protocol, all dating from 1 January 1990. So that’s how it all marries together. Native Vegetation Acts mention the same date”.
Mr Spencer took issue with the primary judge’s findings at [580]-[581], where her Honour said the benefit to the Commonwealth of the prohibitions on clearance of native vegetation was not of a proprietary character and accordingly, on the current state of authority, could not constitute an acquisition. Mr King submitted that the finding of a benefit or advantage to the Commonwealth in terms of compliance with the Kyoto Protocol by reason of the vegetation clearing laws was sufficient for Mr Spencer to succeed on the ground that there was an acquisition. That benefit was said to be in substance a profit-à-prendre. It was not necessary, in his submission, for the international rights to be incorporated into domestic law because they have an economic and measurable advantage for the Commonwealth which suffices to establish that they constitute a proprietary interest.
In this regard, Mr Spencer relied upon the reasons of Hayne, Kiefel and Bell JJ in ICM at [477]ff where four “advantages or benefits” were identified, and of Heydon J at [285] who used the same language. Reliance was also placed upon Mutual Pools at 185 as demonstrating that it is sufficient to constitute an acquisition if there is a deprivation of rights “in relation to property”. The obtaining of at least some identifiable benefit or advantage relating to the ownership or use of property was sufficient.
When pressed to identify where the primary judge said that it was necessary for there to be a transfer of title in order for s 51(xxxi) to apply, Mr King relied on the reference in [386] of her Honour’s reasons to Mr Spencer’s land being sold to the Trust if he accepted the offer of compensation.
In reply, Mr King reiterated his submission that trees were capable of giving rise to proprietary rights, as was the case with minerals, citing ICM at [84] and [145]. He said that the State’s radical title had been enhanced by the acquisition of Mr Spencer’s property. He reiterated that, for s 51(xxxi) to apply, there was no need for a transfer of title or a conveyance, citing Newcrest Mining (WA) Limited v Commonwealth [1997] HCA 38; 190 CLR 513 (Newcrest Mining) at 643-636.
Emphasis was placed on the fact that in ICM at [340] the Commonwealth was refused leave to challenge the correctness of Magennis. Mr King also submitted that the concept of “purpose” in s 51(xxxi) is different from the notion of purpose in s 96 of the Constitution.
In relation to the emphasis placed by the Commonwealth on what was said in ICM at [46], Mr King submitted that this was not a statement of principle and that Magennis at 398 per Latham CJ and at 422 per Williams J, strongly supported Mr Spencer’s case as it related to joint action. He submitted that the words in [46] of ICM were not words of limitation.
Mr King further emphasised the fact that neither of the relevant Commonwealth Acts contained an express provision providing for just terms.
(iii) Were the carbon sequestration rights “entirely speculative”?: Mr Spencer was critical of the primary judge’s findings at [585] concerning the irrelevance of Mr Spencer’s proposed large-scale clearing to the calculation of Australia’s Kyoto Protocol commitments. This was particularly because of Mr Spencer’s own evidence that he would not have cleared his land in such a wholesale way all at once and the lack of any evidence from him about how much he would have cleared, and when. Accordingly, her Honour concluded that what the clearing of Saarahnlee would, or would not, have contributed to in terms of increasing Australia’s greenhouse gas emissions was “entirely speculative”.
In Mr Spencer’s submission, the finding that the operation of the vegetation laws was “speculative” misconceived the way that the Kyoto Protocol operates and is inconsistent with admissions by the Commonwealth. In his submission, the finding wrongly assumed that, unless actual clearing of the land takes place, there can be no benefit conferred upon the Commonwealth. This was because, under the national carbon accounting system which was brought into effect by the National Greenhouse Response Strategy adopted in 1992, the benefits to the Commonwealth in carbon credits from banning land clearing counted as a credit to Australia under Art 3 of the Kyoto Protocol. Thus Mr Spencer submitted that the effect of Art 3.3 and Art 3.7 of the Kyoto Protocol with respect to land use or land use claims is that carbon credits are not conferred where land is cleared but rather where land is not cleared. The credit is, in other words, an abatement credit. Accordingly, a change in the use of land by reason of a prohibition upon clearing has the result that the Commonwealth earns carbon credits. But for those bans on lands, Australia would have been unable to meet its commitment. Thus Mr Spencer submitted that a very significant benefit of a proprietary nature accrued by reason of the vegetation laws banning land clearing, being the carbon credits earned by Australia which saved Australia many billions of dollars.
(b) Mr Spencer’s application to adduce further evidence
Counsel for the appellant focused upon the last sentence of this passage, submitting that:
That wasn’t the case. That isn’t the case. It’s true that perhaps Mr Spencer got slightly emotional – who knows, I wasn’t there – but the case is not about an improper, inappropriate, unlawful collusion or a conspiracy. The case is about something quite different. It’s about what Latham CJ in Magennis said is joint action. That’s all you have to prove. Was there any joint action between the Commonwealth and the State for the purpose, which is admitted in our favour, for the Commonwealth has power to make laws, for the act which had the consequence of an acquisition of property?
However, the appellant’s submission that the primary judge fell into error in posing a test of “unlawful, collusion or conspiracy” is based upon a misreading of the last sentence at [371] (as Griffiths and Rangiah JJ also hold at [209]). The primary judge was not in this passage articulating a principle or test, but rather was rejecting the case of “unlawful, collusion or conspiracy” put by Mr Spencer at trial. So much is apparent from her Honour’s reference to such conduct “of the kind Mr Spencer foreshadowed”.
Secondly, for reasons previously given, the appellant’s submission that it is sufficient to establish “joint action” by the Commonwealth and the State resulting in the State acquiring property on other than just terms must be rejected: see above at [343] – [357]. Section 51(xxxi) will not be engaged unless the terms and conditions of the grant of financial assistance by the Commonwealth require the State to acquire property otherwise than on just terms. As such, her Honour correctly held that where the federal law or agreement leave a choice to the State as to the terms of its legislation, the federal law and intergovernmental agreement will not be invalid notwithstanding that the State may then enact laws acquiring property without just terms. That being so, there is no basis for holding that in the case of an informal agreement or arrangement, something less, whether joint action or some other test, could suffice to engage the constitutional guarantee.
In this regard, the appellant takes issue with the primary judge’s finding at [589]-[595] that ICM did not articulate a new constitutional principle by reference to facts in Gilbert. As her Honour explained at [588] with respect to Mr Spencer’s submission below:
The identification of an argument based on an informal arrangement seems to stem from what was said by some of the High Court in ICM, by reference to the third High Court case about the post-World War II soldier settlement scheme, Gilbert [1962] HCA 7; 107 CLR 494, although it concerned different consequences of the scheme to those considered in Magennis [1949] HCA 66; 80 CLR 382 and Pye [1951] HCA 8; 84 CLR 58.
At [589], having found that the appellant had failed to prove any informal arrangement, the primary judge found that “[i]n any event, what was decided in Gilbert is not the ‘magic bullet’ Mr Spencer (or those responsible for the drafting of some of his pleadings) appears to consider it to be.” On this issue, the primary judge concluded that:
595. The Commonwealth submits that there was no “new principle” being articulated in ICM, by reference to the factual circumstances of Gilbert. I accept that submission. Indeed, the facts of Gilbert illustrate that what occurred, in the end, was a “formal” agreement or arrangement in any event. It is also correct that the kind of arrangement made in Gilbert did not have the invalidating features of the agreement in Magennis.
The appellant argues that, contrary to her Honour’s finding, Gilbert’s case concerned an informal funding arrangement evidenced by an exchange of letters and is therefore on point with the present case. Specifically, Mr King submitted with respect to [595] that:
We respectfully submit that’s in error. ICM accepted that apart from a statutory arrangement of the type where each intergovernmental agreement was scheduled to the state and federal Acts, which is what happened in Magennis, for a formal arrangement whereby intergovernmental agreements authorised by statute or in the exercise of the executive power of either the Commonwealth or the state, there is an informal arrangement of the type evidenced in Gilbert, namely, a funding arrangement with an exchange of letters or some other evidence of the arrangement. What I call in Shakespearean language, money for measures. I will give you the money, you pass the measures I want you to pass for me. If you want some money, you pass the laws I want you to pass. That was what happened in this case.
That submission proceeds on a misunderstanding of the relevant authority. It is inconsistent with the decisions in Pye v Renshaw and ICM rejecting purpose or inducement as a vitiating characteristic, rather than the terms and conditions to which a grant is subject, as I have earlier held. Contrary to the appellant’s submission, the issue left open in ICM and Spencer was only whether such terms and conditions conditioning a grant under s 96 might be imposed in an informal fashion, falling short of a ‘formal’ intergovernmental agreement. The decision in Gilbert did not determine this issue and was not treated as such by the plurality in ICM. Rather, the question left open in ICM at [37] was whether an “assumption” made in correspondence between governments referred to in Gilbert (at 505), was correct, namely, that “the best legal foundation for future action can be provided by means of a grant of financial assistance pursuant to s 96 of the Constitution supplemented by an informal arrangement (in the form say of an exchange of letters) between governments setting out the conditions to be observed” (emphasis added). As the plurality in ICM at [38] explained:
The assumption being made was that the terms and conditions attached to a s 96 grant may sufficiently be disclosed in an informal fashion, falling short of an intergovernmental agreement of the kind seen in this case in the funding agreement.
However, as the primary judge considered, the grant in Gilbert was ultimately not a bare grant under s 96 supplemented by an informal arrangement in the form of an exchange of letters. Rather, Dixon CJ, Kitto and Windeyer J in Gilbert alluded to the correspondence in question only as explanatory of the course of events (at 504) and held that the relevant grant ultimately had a statutory foundation. In particular, at 509-510 the Court held that s 2 of the State Grants (War Service Land Settlement) Act 1952 (Cth) provided for the grant to be subject to conditions determined by the Minister, and that the conditions “attached” to the s 96 grant were those referred to at 509 which had become an agreement.
3.5.2.2Did the primary judge err in holding that the appellant had failed to establish the informal arrangement as a matter of fact?
Applying these principles, her Honour correctly found that, in so far as the appellant maintained his claim of an informal arrangement by final submissions, he had failed to establish the existence of any ‘informal arrangement’ between the Commonwealth and NSW (Spencer below at [5] and [371]-[372]).
First, it is important to bear in mind the following findings by the primary judge:
(1)Despite the pleadings (quoted by the primary judge at [327]-[328] below), Mr Spencer’s case as presented at trial relied very little upon the existence or nature of the informal arrangement (Spencer below at [330]). In his final submissions, the appellant’s focus upon what he alleged was unlawful had shifted almost exclusively to the terms of the 1997 and 2003 NHT Agreements (Spencer below at [372]).
(2)The focus on when the alleged informal arrangement arose appeared to be more in 2002–2003 when Dr Kemp was the Federal Minister for the Environment and Heritage, referring in particular to Mr Spencer’s “Profile of Case” submissions provided in May 2014 and the submissions made on his behalf on 16 May 2013 (Spencer below at [337]). Dr Kemp was the Federal Minister for the Environment and Heritage from 2001 to 2004, being a period that covered, in particular, the introduction of the NV Act 2003 in NSW (Spencer below at [96]).
(3)Despite the task being made clear to Mr Spencer and his continued reliance on those earlier submissions, “there is no attempt to drill down into any of the documentary evidence to make good the submissions foreshadowed in these earlier documents” (Spencer below at [338]).
(4)More specifically, Mr Spencer did not undertake that task at all in his final submissions with respect to the issue of the alleged informal arrangement, but focused instead upon the 1997 NHT Agreement in respect of which he alleged were the “arrangements to get around the Constitution” in the 1997 NHT Agreement. Mr Spencer did not submit that there was any different or separate arrangement to be found elsewhere (Spencer below at [340]).
Secondly, in holding that Mr Spencer had not discharged his burden of proving an informal arrangement of the kind pleaded, the primary judge held that:
371 … the evidence on which he relies reveals an ongoing (and sometimes tense) working out between Federal and State Governments, and their agencies, about how best to achieve the various environmental goals to which they were each committed, and who should bear the costs of those goals. That process occurred within the context of the four intergovernmental agreements. It is nothing more than the process of government at work in a federation. There is no evidence of any improper or inappropriate, let alone unlawful, collusion or conspiracy of the kind Mr Spencer foreshadowed, nor of any plan to “get around” s 51(xxxi).
Similarly, at [599], her Honour found that:
(2) The documents in evidence surrounding the November 1997 COAG meeting disclose a variety of policy considerations about the nature and extent of Australia’s commitment to the Kyoto Protocol, the apprehended role for the States in decisions about that commitment and about meeting targets Australia might commit to, but all in terms one would expect to see on such an important national issue: namely, the need for the Commonwealth and the States to work cooperatively within their respective areas of legislative and executive power.
(3) The allegations about a second period – 2002 to 2003 (prior to the Native Vegetation Act 2003) – as a possible period during which some kind of informal arrangement was concluded are not supported by the documentary evidence (see my findings earlier in these reasons at [358] to [362]).
These conclusions were reached after a careful consideration by her Honour at [326]-[370] of the material allegedly evidencing the informal arrangement, namely: Council of Australian Governments (COAG) ministerial committee minutes of the National Environmental Protection Council from 1993 to 2005; the special minutes of COAG in a series of meetings convened in November 1997 leading up to and during the Kyoto Protocol conference commencing in December 1997; and a letter between the Prime Minister or the Minister for Environment and the NSW Premier dated in or about 2003.
No error has been demonstrated in her Honour’s consideration of the evidence. The material demonstrates no more than the Commonwealth relying upon the power in s 96 to negotiate with the States to achieve a reversal in the rate of land clearing as part of its greenhouse measures, with an awareness that restrictions on land clearing may render it appropriate for land owners to be compensated. Reliance upon the grants power so as to induce State action in areas of State responsibility, whether by way of legislative reforms or otherwise, does not suffice to engage s 51(xxxi) even if the State then acquires property other than on just terms: Pye v Renshaw at 83; ICM at [36] (discussed above at [345]-[354]). The following examples of material relied upon by Mr Spencer serve to illustrate the point.
(1)The primary judge gave as an example of the kind of material relied upon by Mr Spencer, a document setting out talking points apparently prepared for a COAG meeting. Her Honour considered that the document was likely to have been created for a senior Minister or the Prime Minister in relation to the COAG meeting in November 1997 which was held shortly after the 1997 Agreement was signed (Spencer below at [331]). The talking points referred to updating the meeting on developments in international climate change, and seeking endorsement of the Commonwealth’s position and to “work[ing] cooperatively” with the Commonwealth in implementing the additional greenhouse measures. The kind of comment on which Mr Spencer seized is illustrated by the statement in the talking points that “in many of these areas, the voluntary approach is not giving satisfactory results. Clearly, the Commonwealth would prefer a voluntary approach to these issues, however we cannot allow action to slip unnecessarily” (Spencer below at [333]). However, as her Honour held, such comments have little if any probative weight (at [334]). Not only was there no evidence as to the identity of the author or recipient, but it was not even known if the talking points were delivered or were delivered in this form. Moreover, the comment itself is vague and unilluminating. As such, her Honour rightly held at [336] that a document of this kind is not probative of the existence of any informal agreement or arrangement that the Commonwealth would seek to achieve its Kyoto protocol emissions targets, or those which it was contemplating committing, through State vegetation clearance controls.
(2)The appellant also sought to rely upon broad policy documents, such as the Compendium of Ecologically Sustainable Development Recommendations referring to the appropriateness of paying appropriate compensation where restrictions on land use create financial hardship, and the National Greenhouse Response Strategy referring to a strategy of adopting land use and management matters to conserve sinks including vegetation retention controls, both produced by the Commonwealth in December 1992. Again, however, such documents simply do not evidence any informal arrangement of the kind alleged by Mr Spencer.
(3)Reliance was also placed by the appellant upon an internal government memorandum prepared by the Department of Primary Industries and Energy dated 29 November 1996. However, the document went no higher than to suggest approaches to negotiating stricter state regulation of land clearing with the States, in view of the importance of the issue and constitutional responsibilities for land management.
In addition, the appellant relied upon the primary judge’s acceptance at [367] of the evidence of Mr Plummer in respect of a letter allegedly sent by the then Commonwealth Minister for Environment and Heritage, Senator Robert Hill, to NSW Premier Bob Carr in early 2000 (Spencer below at [73]). Mr Plummer’s evidence was described as one of the “planks” upon which the appellant relied to prove the informal arrangement. In particular, the primary judge accepted at [364]-[365] that:
(1)the letter was sent ahead of the New South Wales Farmers Association meeting with Premier Carr in August 2000;
(2)a copy of the letter was given to Mr Plummer on 24 March 2000 although he no longer had a copy;
(3)the letter stated that if the New South Wales Government did not halt land clearing within the State, the Federal Government would withhold the State’s share of the Natural Heritage Trust funding, which Mr Plummer understood to be funding for the entire Bushcare program; and
(4)at a subsequent meeting in April/May 2000 with the Federal Member for Parks, Tony Lawler, Mr Lawler acknowledged the pressure from the Federal Government and repeated it in a letter sent to Mr Plummer.
However, these matters notwithstanding, the primary judge found that Mr Plummer’s evidence did not support any informal arrangements concerning Kyoto protocols, but only “tends to confirm the contents of the 1997 NHT Agreement, and cl 7.2(b) in particular” (Spencer below at [599(1)]). As the primary judge held earlier in her reasons that [370]:
My acceptance of Mr Plummer’s evidence does not take Mr Spencer’s case about the informal arrangement any further. Essentially what Mr Plummer recalls as the contents of Senator Hills letter is reflected in some of the other Commonwealth documents to which I have referred. What they reveal is the Commonwealth relying on its grants power as a way to influence policy and reform initiatives over which it does not have exclusive legislative competence. That is the working out of the Federal system.
That characterisation of the evidence is plainly correct.
The appellant also sought to rely upon a paper presented by a Mr Farquhar in 1998 on the impact of the Kyoto Protocol on Australia. However that the evidence was hearsay and admitted only for a limited use, namely, the fact that it was prepared.
Finally, the appellant relied upon a statement delivered on 10 October 1997 by Senator Hill to the United Nations General Assembly in which he addressed Australia’s view as to how effective it had been in implementing sustainable development principles adopted at Rio five years earlier. The appellant relied in particular upon the reference in the address to the establishment of the $1.1 billion fund, being the Natural Heritage Trust, to protect Australia’s biodiversity and ensure sustainable use of Australian land and waters, and to a major aim of that Trust being “to reduce vegetation loss and revegetate degraded land, thereby contributing to a better greenhouse outcome.” The appellant also relied upon Australia’s Fourth National Communication on Climate Change: a Report under the United Nations Framework Convention on Climate Change (2005). In particular, he cited information in that Report summarising Australia’s human induced greenhouse gas emissions and sinks and explaining the way that forest sinks are treated under the inventory accounting rules for the 108% Kyoto target for Australia. However, the appellant’s counsel explained that the documents were relied upon to demonstrate (relevantly) the purpose of the arrangements, submitting that “[i]t’s the purpose of the acquisition that matters for section 51(xxxi)…” (emphasis added). As such, the reliance on this material is based on an erroneous understanding of relevant constitutional principles, for the reasons I have earlier explained.
Thirdly, the primary judge found at [599(4)] that the oral evidence of Dr Kemp, the former federal Minister for the Environment and Heritage from 2001 to 2004:
…establishes there was no informal agreement, certainly during the period when he was the responsible Minister, and gives no support to any connection with Kyoto Protocol targets. It was this period that was prominent in the submissions prepared by the applicant’s former legal representatives, and set out in the ‘Profile of Case’ document.
(emphasis added)
In this regard, the primary judge found that Dr Kemp was “a helpful, frank and cooperative witness whose evidence I found reliable” (Spencer below at [98]). His evidence was summarised by the primary judge as follows:
97. Dr Kemp gave evidence that the Commonwealth Government was concerned to reduce emissions in order to meet its Kyoto Protocol targets, that to encourage that reduction the Commonwealth was keen to see broadscale land clearing occurring in Queensland and New South Wales (the principal emitters of greenhouse gases from land clearing in Australia) reduced or stopped, and that that clear Commonwealth objective was communicated to those States. He stated that the Commonwealth was concerned by the lack of effective action in New South Wales at the time and was seeking reform of the way in which the NSW Government managed vegetation clearance, including by way of Commonwealth programs seeking to influence the rate and character of vegetation clearing. He gave evidence that the Native Vegetation Act 2003 was a matter for New South Wales, and that the Commonwealth’s only real concern with the NSW legislation was that it did not prevent the Commonwealth pursuing its strategies and that New South Wales was prepared to cooperate with the Commonwealth in pursuit of those strategies. He stated that compensation was a matter for the States, and that the Commonwealth made a clear distinction between structural adjustment assistance, such as might be provided to assist with resettlement, and compensation to affected individuals.
Importantly, Dr Kemp also gave evidence that:
97. …. In response to the suggestion put to him in cross-examination that there was an informal agreement or arrangement between the Commonwealth and New South Wales made, or extended or amended, around 2003 to acquire Mr Spencer’s property, Dr Kemp gave evidence that all the arrangements involving payment between New South Wales and the Commonwealth were done in writing, and that no informal arrangements existed in this context. He also gave evidence that there was no intention to acquire Mr Spencer’s property other than on just terms.
(See also the evidence of Dr Kemp to similar effect quoted by the primary judge in her reasons at [342].)
There was no challenge to these findings in the amended notice of appeal save for the generalised ground challenging the failure by the primary judge to find that the appellant had proved the existence of an informal arrangement (ground of appeal 6(c)). Nor were any submissions made which attempted to engage with the principles governing the limited circumstances in which the Court will interfere with findings of fact, having regard to the advantages enjoyed by a trial judge: see the recent discussion of principles in RailPro Services Pty Ltd v Flavel [2015] FCA 504 at [78] (approved in Beagle v Australian Capital Territory [2017] ACTCA 29 at [131] (the Court)). Moreover and importantly, none of the appellant’s allegations in the “Profile of Case” or in the 16 May 2013 submissions was put to Dr Kemp despite the importance of his evidence to the appellant’s ultimate focus on the period 2002-2003, and the primary judge explaining the need for Mr Spencer to confront Dr Kemp with evidence and documents he was relying on about the informal arrangement. In these circumstances, no basis has been established for revisiting the findings of the primary judge at [599(4)].
Finally, the primary judge found that there were, in any event, chronological problems with Mr Spencer’s contentions:
600. There are problems of chronology with Mr Spencer’s contentions. Australia’s ratification of the Kyoto Protocol did not occur until December 2007: that is, a decade after the Natural Heritage Trust Act, and 15 years after the Natural Resources Management (Financial Assistance) Act. Australia did not commit to any targets until 2007. By this time, all the events on which the applicant wished to rely to support his allegation of an informal arrangement had well and truly passed. If, as Mr Spencer contends, the Commonwealth was intent on coercing New South Wales into greater rates of native vegetation preservation to meet its targets, then the time at which one would expect to see that pressure exerted is at or after the time at which Australia committed itself under international law to meet those targets: that is, post-December 2007. However there is nothing in the evidence relied on by Mr Spencer which dates from that time. Indeed, by that time, Mr Spencer had already commenced this proceeding.
The appellant’s submissions did not seek to address this difficulty in any meaningful way. As Mr Lancaster SC for the Commonwealth submitted, the chronological problems identified by her Honour provide a further and powerful reason as to why the contention as to the existence of the alleged informal arrangement could not succeed. Indeed, as her Honour observed at [603], it is this difficulty in the chronology, and the lack of prominence of matters relating to climate change in the four intergovernmental agreements, which appear to have prompted the appellant to rely on an alleged “informal” arrangement as the source of the alleged intended acquisition of his property in order to contribute to the Commonwealth meeting its Kyoto Protocol targets.
3.5.3Conclusion on the alleged informal arrangement between the State and the Commonwealth
For the reasons set out above, the primary judge correctly held at [604] that Mr Spencer had failed to establish the existence of any informal arrangement or agreement in 1997 and extended or continued in 2003 between the Commonwealth and NSW in order for the Commonwealth to meet its Kyoto Protocol targets. Rather, as the primary judge held, the evidence went no higher than demonstrating consideration at the federal and State levels of the problems arising from climate change and greenhouse emissions as far back as the early 1990’s and about which both governments were co-operating (at [603]; see also at [371]). This does not suffice to establish the alleged connection between an intended acquisition of Mr Spencer’s property in order to contribute to the Commonwealth’s compliance with its Kyoto Protocol targets, as the primary judge held.
In this regard, I also accept that the State legislation after SEPP 46 and, in particular, the NV Act 2003, revealed a considerable shift in emphasis. I further agree that this was consistent with the objectives of the two Commonwealth laws and the intergovernmental agreements with respect to the increased prominence to be given to the clearing of native vegetation and negotiations as to the matters to be addressed legislatively by the State (Spencer below at [323]-[324]). That notwithstanding, the steps leading to the enactment of the NV Act 2003 demonstrate unequivocally that it was “a NSW process": see above at [286]-[319] and in particular at [301]-[306] and [310]-[316]. As the primary judge held:
324. … There was a joint federal and state determination, albeit arrived at through different and independent processes and inquiries, to halt native vegetation clearance and encourage revegetation. Effects on landholders were recognised, and the need to bring landholders on board with reforms formed part of the delivery of these reforms. The likelihood of adverse impacts on some farmers being sufficiently serious to warrant “structural adjustment”, or compensation by way of the State purchasing properties, was recognised expressly in the two Salinity Agreements and by the reports leading to the state legislative reforms. It seems an obvious inference to draw from the terms and context of the 1997 and 2003 NHT Agreements that the Commonwealth recognised the State may choose to put such structural adjustments programs in place.
As such, neither the impact of the 1997 and 2003 State legislation, nor the decision in July 2007 by the Rural Assistance Authority which her Honour characterised as a “taking”, was on any view a “taking” required or achieved by federal law, the intergovernmental agreements, or by any informal arrangement. As the primary judge concluded at [386]:
The State chose the form and content of the laws, and chose to implement an exit assistance scheme to deal with the impact of its laws. It chose, it can be said, to respond at least to some extent, to the urging of the Commonwealth to tighten and enhance its control over native vegetation clearance. No doubt at some level, funding from the Commonwealth played a role in its decision-making and the Commonwealth recognised both expressly and implicitly in all four agreements that adverse impacts of clearing controls might require adjustment packages from the State. The Commonwealth did not require those adjustments to be made. The State was able to impose vegetation controls without the constraint imposed by s 51(xxxi).
3.6 The finding that s 51(xxxi) is not engaged disposes of the remaining grounds of appeal
It follows for the reasons given above that the primary judge correctly held that:
(1)neither of the impugned Commonwealth laws imposed terms and conditions requiring the acquisition of property on other than just terms contrary to s 51(xxxi) or could otherwise be characterised as laws with respect to the acquisition of property on other than just terms;
(2)nor was any such condition imposed by any of the impugned intergovernmental agreements; and
(3)the appellant failed to prove the existence of the alleged informal arrangement between the Commonwealth and the State.
Further, given that it was only in respect of those Commonwealth measures that s 51(xxxi) would potentially have been engaged, Mr Spencer’s claims were bound to fail at this anterior point: see ground 3A, Commonwealth Amended Notice of Contention.
It follows therefore that, first, it was strictly unnecessary for her Honour to address the question of whether the State legislation had the effect of acquiring Mr Spencer’s property as s 51(xxxi) imposes no limitation upon State legislative or executive power. In so holding, I would not in any event have considered that the appellant had established any basis on which to doubt her Honour’s careful and thorough consideration of this issue, including her conclusion that no carbon sequestration rights had come into existence and could not therefore attract the protection s 51(xxxi); nor her Honour’s findings as to the sufficiency of the offer made to Mr Spencer in any event (which I consider below).
Secondly, the findings summarised at [434] above were also a complete answer to Mr Spencer’s “action on the case”. As the primary judge held below:
25. As I understand it, Mr Spencer’s claim is that, if he is correct that the respondents (or either of them) effected – through the intergovernmental agreements and the identified federal and state legislation – an acquisition of his property contrary to s 51(xxxi) of the Constitution, he has a cause of action of the kind set out in Mengel [i.e. Northern Territory v Mengel [1995] HCA 65; 185 CLR 307], which he has described as an “action on the case”.
(emphasis added)
See also Spencer below at [618]-[619].
As her Honour concluded with respect to this claim:
642. Mr Spencer has never alleged a duty of care was owed to him by officers of the Commonwealth, or the State, nor that there was a breach of any such duty. He has not alleged that particular officers exercised powers against him in a way which they knew exceeded those powers and which caused him foreseeable harm (Mengel).
643. Rather, the “unlawful act” he identifies is the taking of his property (his bundle of rights in Saarahnlee, and his carbon rights) contrary to s 51(xxxi) of the Constitution. If he fails to prove an unlawful act, his claim in tort fails at the first hurdle. I have found that none of the federal or state legislation is invalid on the basis that it infringes the protection of s 51(xxxi), and I have found there is no invalidity in the intergovernmental agreements for the same reason. There is, accordingly, no unlawful act.
Equally, the finding that none of the federal or State legislative or executive conduct infringed s 51(xxxi) disposes of the appeal with respect to Mr Spencer’s claim for damages. This is because, as her Honour held, the damages claim also “stems, on Mr Spencer’s case, from conduct of the Commonwealth and, by inducement and complicity, the State, conduct which is said to be contrary to s 51(xxxi) of the Constitution. That conduct is partly legislative, and partly executive” (Spencer below at [652]). Again in so finding, even if Mr Spencer had established invalidity, her Honour was plainly correct in holding at [644] and [654]-[655] that there is no support in the authorities for the proposition that legislative or executive acts held invalid by reason of a contravention of s 51(xxxi) of the Constitution give rise to any private cause of action for loss or damage: see e.g. Kruger v Commonwealth (1997) 190 CLR 1 at 46-47 (Brennan CJ), 93 (Toohey J), 125-126 (Gaudron J) and 146-148 (Gummow J); and British America Tobacco Ltd v Western Australia [2003] HCA 47; (2003) 217 CLR 30 at [40] (McHugh, Gummow and Hayne JJ).
Finally, counsel for the appellant argued that the primary judge had erred in not holding that the Commonwealth, by a suite of measures, was unjustly enriched at the expense of the appellant. On this issue, the primary judge held simply that:
132. This term [i.e. unjust enrichment] can be found in several places in various submissions made by and on behalf of Mr Spencer. There was no development of what was meant by it in the context of the claims in this proceeding, and how a private right of this kind was said to arise. I do not propose to consider it further.
This finding was not challenged in the amended notice of appeal; nor indeed is there any mention of unjust enrichment in any of the grounds of appeal. Furthermore, the appellant made no real attempt to demonstrate that this claim was, contrary to her Honour’s finding, seriously in issue below. Contrary to the appellant’s submission, the fact that the appellant was self-represented at trial does not demonstrate otherwise. In any event, to the extent that this claim was mentioned in documents below, it relied also upon the allegation that the Commonwealth had been unjustly enriched pursuant to “a ‘scheme’ or ‘joint venture’ between the Commonwealth and the State to use state laws as ‘the instrument of acquisition for a Commonwealth ‘purpose’ … namely the satisfaction of its obligations under the UNFCCC … and Kyoto Protocol’” (Spencer below at [19]). As such, the finding at [434] above was in any event a short answer to any such claim.
3.7 Just terms
Finally, the appellant argued that the primary judge erred in holding at [386] that, if there had been an acquisition of his bundle of rights in Saarahnlee, he was offered just terms in November 2007 by the State’s offer to pay the then properly assessed market value for Saarahnlee: see the earlier discussion of the just terms requirement above at [341]-[342].
In this regard, I note a number of features of the Farmers Exit Assistance program pursuant to which the offer was made. First, the scheme was for NSW to acquire property assessed as commercially unviable because of the NV Act 2003, criteria for which included that the farmer had been unable to gain approval to clear native vegetation on part of her or his land and, as a result, suffered financial disadvantage. The scheme was not established to compensate for the impact of the NV Act 2003 simpliciter. Secondly, the scheme was for the voluntary acquisition of land by NSW upon the farmer making an application. It was not a scheme for the compulsory acquisition of land. Thirdly, the scheme was not established by statute but under a so-called Business Plan: see above at [272]. Fourthly, no argument was directed to the legal status of an offer made under the Business Plan and the capacity, if any, for such offers to be subject to judicial review or otherwise subject to challenge in the courts as to their adequacy. I note in this regard that the offer itself was not the subject of the challenge in the judicial review proceedings in the Supreme Court: see above at [280]. How these aspects of the scheme might have interacted with the requirement to afford just terms under s 51(xxxi), if that requirement were engaged, was not addressed by the parties and I make no further comment upon them.
Rather, the appellant made three submissions in support of his contention that the primary judge erred in finding that he had been offered just terms:
(1)the State’s valuations “were on an impaired basis; that is, after the application of the property laws and restrictions”, as opposed to the valuation given by Mr Davies who was the valuer called by the appellant;
(2)the offer by the State made no provision for Mr Spencer’s lost profits or lost net revenue as a result of the alleged acquisition; and
(3)the offer was not “just” because it was a “one-off offer [on] the basis of unjust terms” and should have been renewed or monies paid into Court.
The first of these submissions fails to grapple in any meaningful way with the finding below at [572] accepting the State’s submission that “there is no objective evidence upon which it can be found that either of the impugned State Acts had any impact upon the market value of Saarahnlee, and Mr Connolly’s unchallenged and reasoned conclusion is to the contrary” (emphasis added): see also Spencer below at [119]. Again there is no attempt by the appellant to engage with the principles by which it is determined whether a court on appeal should interfere with findings of fact at first instance having regard to the advantages available to the trial judge: see also above at [428]. In this regard, despite being invited to cross-examine Mr Connolly and the primary judge explaining at some length the necessity for Mr Spencer to put his arguments to Mr Connolly, Mr Spencer declined to do so (Spencer below at [120]). Furthermore:
(1)the primary judge held that Mr Connolly’s evidence was reliable and that his criticisms of the valuation by Mr Davies were cogent (Spencer below at [121]);
(2)the primary judge also regarded Mr Davies’ evidence as “problematic”, and found that he was unable to give a rational explanation for his valuation of $9m for a property that the other expert valuers had placed at between $2m and $2.5m (Spencer below at [115]); and
(3)in his evidence, Mr Spencer accepted Mr Sullivan’s valuation at $2.17m as at 30 August 2007 as representing market value at the time (Spencer below at [183]).
Counsel for the appellant did not explain in any comprehensible way why this Court should interfere with any of these findings.
With respect to Mr Spencer’s second proposition, after reviewing the evidence her Honour found at [727] that “there is in fact no expert evidence supporting the contention of Mr Spencer that the projects which he had commenced, and had planned, for Saarahnlee could be factored into the value of the property in any way. Not even Mr Davies did this.” Furthermore, it was Mr Connelly’s unchallenged evidence that the potential projects on the land of which Mr Spencer gave evidence did not add any extra value to it (Spencer below at [117] and [183]). Nor, her Honour found at [729], was there any evidentiary basis on which Saarahnlee could be given any other value, with the “improvements” approach of Mr Davies, in the sense of structures on and alterations to the land, as well as the timber treatment on the land, suffering from serious flaws rendering his opinion unreliable. Again there was no basis demonstrated by the appellant for revisiting those findings.
Finally, with respect to Mr Spencer’s third proposition, he has not directed any reasoned argument as to why the offer which accorded with the Business Plan should have been left open or renewed. As earlier mentioned, the offer was made to Mr Spencer under a voluntary scheme to purchase his land and, by letting the offer lapse notwithstanding the extension, Mr Spencer effectively declined the offer.
4. CONCLUSION
It follows for these reasons that the appeal must be dismissed. I agree with the proposed orders by Rangiah and Griffiths JJ.
I certify that the preceding one hundred and ninety-four (194) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perry. Associate:
Dated: 15 February 2018
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