Storey v North Sydney Municipal Council

[1970] HCA 44

HIGH COURT OF AUSTRALIA

Barwick C.J., McTiernan, Menzies, Owen and Walsh JJ.

STOREY v. NORTH SYDNEY MUNICIPAL COUNCIL

(1970) 123 CLR 574

10 November 1970

Local Government (N.S.W.)

Local Government (N.S.W.)—Public reserve—"Public park and any land dedicated or reserved from sale by the Crown for public health, recreation, enjoyment or other public purpose of the like nature"—Proposed lease of land to Boy Scouts' Association—Membership of Association not restricted—Public recreation—Local Government Act, 1919-1965 (N.S.W.), s. 4.

Decisions

1970, November 10.
The following written judgments were delivered:-
BARWICK C.J. In this appeal I have had the advantage of reading the reasons for judgment prepared by my brother Menzies and those prepared by my brother Owen. I am in agreement with their reasons and conclusions and find no need to add anything on my own behalf. In my opinion the appeal should be allowed. (at p576)

McTIERNAN J. I would allow this appeal and restore the decretal order of McLelland C.J. in Eq. (at p576)

2. The words "Local Government Act, 1919, as amended" appearing in the restrictive covenant in question would be satisfied by applying them to the Local Government Act, 1919-1945 (N.S.W.). However it does not seem that it would make any difference to the result of the case to give the words "as amended" an ambulatory operation. (at p576)

3. The full effect of the restrictive covenant is to be ascertained by reading it with s. 4 of the Local Government Act, 1919-1945, which contains the definition of the term "public reserve" mentioned in the covenant. The definition reads thus :

"'Public reserve' means public park and any land dedicated or reserved from sale by the Crown for public health, recreation, enjoyment or other public purpose of the like nature, but does not include a common." (at p576)

4. It is clear that the covenant is not restricted only to prohibiting the use of the leased land for a purpose other than that of a public park. The covenant extends to prevent the land from being used for any purpose which does not pertain to "public health, recreation, enjoyment or other public purpose of the like nature". The concluding words of the definition "but does not include a common" are not relevant in this case. The covenant's phrase "for the purpose of a public reserve" should therefore be taken to attract the terms "for public health, recreation, enjoyment or other public purpose of the like nature". (at p576)

5. Since the Association's use under the lease would clearly not be consistent with the concept of a public park, the question to be determined is whether such use would be for the purpose of "public health, recreation, enjoyment or other public purpose of the like nature". The word "public" obviously qualifies "recreation" and "enjoyment" also. (at p577)

6. It is of course not incompatible with the notions of public recreation and public enjoyment that certain restrictions, both as to time and as to the activity pursued, should be placed on the use made by members of the public of a piece of land : Randwick Corporation v. Rutledge (1959) 102 CLR 54, at p 88; 5 LGRA 127, at p 172 (at p577)

7. In my opinion, the exclusive possession, under a lease, of part of the land in question and the use of such area for the "proper activities of the Boy Scouts" exceeds the limitation of the word "public" in the enumeration of the purposes set forth in the definition of "Public reserve". The word implies use by the general public. It is not compatible with an exclusive right granted to a particular organization which could not be said to be substantially coincident with the general public. (at p577)

MENZIES J. The drafting device of taking a covenant not to use land transferred "other than for the purpose of a public reserve as defined by the Local Government Act, 1919, as amended" has proved to be a troublesome shortcut because, except for a public park, that definition is concerned only with land "dedicated or reserved from sale by the Crown" for certain purposes. The land in question is not such land. However, it is possible, I think, to give the covenant efficacy beyond simply confining the use of the land in question to use as a public park. I think a covenant should be regarded as permitting use as a public park or for the purposes of public health, recreation and enjoyment, or other purposes of a like nature. So reading the covenant, the question to be decided, stated most favourably to the appellant, is whether land that is occupied and used exclusively by the Boy Scouts' Association is used for public recreation. (at p577)

2. In my opinion this question should be answered in the negative simply because I do not think that the use of portion of the land by the Boy Scouts' Association for its purposes is use by the public. A scout camp or a scout hall is not, in my opinion, property for public use. It is for use by scouts, or by some scouts. Any further use would be by permission of the scouts and not as of right. (at p577)

3. The lease now in question would make private property, for the time being, of land which must be kept for public use. (at p578)

4. Accordingly, I consider that the appeal should be allowed. (at p578)

OWEN J. In 1945 the Commissioner for Railways, who was then the registered proprietor of certain land in the Municipality of North Sydney, transferred to the council of that municipality portion of the land which is known as Watt Park. The transfer contained a covenant in these terms :

"And the transferee covenants with the transferor that it will not use the land hereby transferred other than for the purpose of a public reserve as defined by the Local Government Act, 1919, as amended. (a) The land to which the benefit of this covenant is appurtenant, is the residue of Lot 1 as shown on D.P. 12668.

(b) The land which is subject to the burden of the said covenant is the land hereby transferred.

(c) The person by whom or with whose consent the said covenant may be released, varied or modified, is the transferor."

"The residue of Lot 1 on D.P. 12668" was also owned by the Commissioner. It adjoins the land transferred by him to the council and the plaintiff in these proceedings is now the owner of it. The council proposes to grant a lease of part of the land which is subject to the restrictive covenant for a term of twenty-one years to the Boy Scouts' Association which proposes to use it for the purpose of the erection of a scout hall and for scouting purposes generally. (at p578)

2. The first problem is to construe the restrictive covenant under which the council undertook not to use the land transferred to it "other than for the purpose of a public reserve as defined by the Local Government Act, 1919, as amended". I have no doubt that this refers to the Local Government Act as it stood at the time when the covenant was given. At that date, s. 4 of the Act defined "public reserve" to mean

" . . . public park and any land dedicated or reserved from sale by the Crown for public health, recreation, enjoyment or other public purpose of the like nature, but does not include a common."

It is obvious that, except for the words "public park", the definition cannot be read literally into the covenant and two courses seem to me to be open. The first is to read the covenant as referring only to the use of the land as a public park, the view which was taken by the learned judge of first instance, McLelland C.J. in Eq., the other is to read it as permitting the use of the land for any of the purposes which the definition mentions, either as a park or for the purpose of public health, recreation, enjoyment or other public purposes of a like nature. This was the construction adopted by the Court of Appeal and, with some hesitation, I have come to the conclusion that it is the correct one. What we are seeking to discover in the covenant is the limited use to which the parties intended the land might be put and, on the whole, I think their intention was to cover all the uses mentioned in the definition. (at p579)

3. It is necessary then to consider whether the grant of a lease to the Boy Scouts' Association which would confer upon it the exclusive right to the use and occupation of the land by its members for twenty-one years would constitute a breach of the restrictive covenant. The Court of Appeal, by a majority, held that it would not since it considered that, in such circumstances, the user of the land would nevertheless be for "public health, recreation, enjoyment or other public purpose of the like nature". With all respect, I do not agree with this view. To grant the proposed lease would result in the total exclusion from the land leased of all members of the public other than those who are members of the Boy Scouts' Association. I do not think that, in these circumstances, it could properly be said that the land was being used for the purpose of "public health, recreation, enjoyment or other public purpose of the like nature". It would not "be, in the relevant sense, open to the public generally as of right", to use the words of Windeyer J. in Randwick Corporation v. Rutledge (1959) 102 CLR, at p 88; 5 LGRA. at p 72 (at p579)

4. I would allow the appeal, set aside the order of the Supreme Court and in lieu thereof order that the appeal to that Court be dismissed with costs against the council. The costs of this appeal should be paid by the council. Neither the appellant nor the council seeks any order for costs against the Boy Scouts' Association. (at p579)

WALSH J. In the Supreme Court of New South Wales McLelland C.J. in Eq. (1968) 16 LGRA 171 granted injunctions against the respondent council restraining it from using certain land by leasing it to the respondent Association. He held that the granting of a lease which the council proposed to grant to the Association would be a breach of a restrictive covenant contained in the transfer by which the council acquired the land. The terms of the covenant are set out in the judgment in this appeal of Owen J. (at p579)

The Court of Appeal (1970) 90 WN (Pt 1) (NSW) 630; 18 LGRA 302, by majority, allowed an appeal from the decision of the learned Chief Judge in Equity and dissolved the injunctions. The members of that Court agreed that the covenant did not restrict the permitted use of the land to use as a public park and agreed that it would not be a breach of the covenant if the land were used "for public health, recreation, enjoyment or other public purpose of the like nature". The words quoted appeared in the definition of "public reserve" which was contained in s. 4 of the Local Government Act, 1919, as amended, up to the date of the covenant. In my opinion, in this respect, the construction put upon the covenant by the Court of Appeal was correct. The definition in the Local Government Act is a definition which describes land. It is not a definition of purposes for which land may be used. Therefore the use of it as a means of describing in the covenant the purposes for which alone the land was to be used was not very apt. But, in my opinion, the terms of the covenant disclose an intention of the parties to incorporate into the covenant the reference in the definition to public health, recreation and enjoyment. The words of the definition cannot be substituted literally in the covenant for the words "a public reserve as defined by the Local Government Act, 1919, as amended". But that does not mean that they should be ignored : cf. Randwick Corporation v. Rutledge (1959) 102 CLR, at p 69; 5 LGRA at p 157 (at p580)

3. In the Court of Appeal, Jacobs J.A. was of opinion that the erection on part of the land of a scout hall and the use of that part for scouting purposes would be a use for the purpose of a public reserve as defined. Holmes J.A. was of opinion that the use of part of the land in that way was not inconsistent with the use of the whole of the land for the purpose of a public reserve within the meaning of the covenant. Their Honours thought that such a use would have the necessary public element. Wallace P. considered that it would not and that it would be, therefore, a breach of the covenant. (at p580)

4. The choice between these opposing views must depend upon a decision as to the meaning in which the parties to the covenant intended the term "public" to be understood when they framed the covenant by referring to the definition of "public reserve" in the Local Government Act which contained the words "public health, recreation and enjoyment". I have come to the conclusion that the view of Wallace P. is to be preferred. This is not because I think that the term "public" has a fixed and definite meaning which would necessarily prevent it from being for any purpose an appropriate description of the objects or the activities of the Boy Scouts movement. But what has to be determined is the meaning of the term in the context in which it was used in this case. In Girls' Public Day School Trust v. Ereaut (1931) AC 12, at p 35 Lord Macmillan pointed out how elusive in meaning is the adjective "public". In Little Company of Mary (S.A.) Inc. v. The Commonwealth (1942) 66 CLR 368, at p 378 Latham C.J. referred to the use of that adjective in many collocations and said that "the meaning varies with the noun with which it is used". (at p581)

5. In determining whether or not a trust is a charitable trust the condition that it must tend to benefit the public may be satisfied if the trust is for the benefit of a class or section of the public, but it may sometimes be difficult to determine what constitutes for the purposes of this rule a section of the public. (See Thompson v. Federal Commissioner of Taxation (1959) 102 CLR 315, at pp 321-322 and Inland Revenue Commissioners v. Baddeley (1955) AC 572) It was decided by Vaisey J. in In re Webber (1954) 1 WLR 1500 that the Boy Scouts' Association and the Boy Scouts movement had objects which brought them within the category of educational charities. I am willing to assume that the requirement of the law of charities that there must be a public element in a valid charitable trust for the advancement of education as well as in other charitable trusts (Oppenheim v. Tobacco Securities Trust Co. Ltd. (1951) AC 297 and Thompson v. Federal Commissioner of Taxation (1959) 102 CLR 315 ) would be satisfied by a trust created to promote the objects of the Boy Scouts' Association or of its New South Wales branch. But it does not follow from this that, in deciding what use of the land is precluded by the covenant, one ought to conclude that the granting of the exclusive possession of a part of it to the Boy Scouts' Association, New South Wales Branch, is permitted for the reason that any use which may then be made of that part of the land will be a use for public health, recreation and enjoyment. If that conclusion were justified, I think there would be no valid ground for denying the council's right to follow the same course in relation to the whole of the land subject to the covenant. But I am satisfied that the taking of that course would be a breach of the covenant. (at p581)

6. In my opinion no real assistance is to be obtained in resolving the question under consideration by referring to s. 348 of the Local Government Act, which empowers a council to provide grounds "for public health, convenience, enjoyment, or other public purpose of a like nature", including children's playgrounds, drill grounds and sports grounds, and empowers a council to provide them either in public reserves or on other lands of the council. It may be urged that this section demonstrates, first, that a ground provided for children or for drill or sports is provided for public health, recreation, convenience, enjoyment, etc. and, secondly, that it is lawful for a council to use a public reserve for such a purpose. But I do not think that these propositions can be treated as leading to the conclusion that the proposed lease would not be in breach of the covenant. The covenant refers to a definition in s. 4 and not to all the provisions of the Act. Its purpose was to restrict the rights and powers which otherwise the council would have had in relation to the use of the land. What the council proposes to do is not to provide upon the land subject to the covenant a playground to which all children may come or a drill ground or a sports ground available to any club or group which may wish to engage in the particular recreation for which the ground is designed. What it proposes to do is to lease part of the land for a long term to one Association to the exclusion of all persons who are not members of that Association and to the exclusion of the council itself. In my opinion, this would not be a use for the purposes to which the covenant restricts its use. (at p582)

In Randwick Corporation v. Rutledge (1959) 102 clr 54; 5 LGRA 127, one of the questions considered by the Court was whether land was used for a public reserve, within the meaning of s. 132 (1) (c) of the Local Government Act. Because of the definition in s. 4, the question was regarded as requiring the Court to consider whether it should be found that the land was used for public recreation and enjoyment. In his judgment, which had the assent of other members of the Court, Windeyer J. said (1959) 102 CLR, at p 88; 5 LGRA, at p 172 that "for land to be used for public recreation and enjoyment, so as to be in some sense akin to a public park", and to be on that account exempt from rating, two conditions must be fulfilled. His Honour stated those conditions in these words: "The land must be, in the relevant sense, open to the public generally as of right; and it must not be a source of private profit." I think that this statement is of importance for the purposes of the present case. Although the facts were different and although that was a rating case, it was the definition to which the covenant in this case refers that was under consideration. The elements of private profit and advantage loomed large in that case and they are absent from this. But it was held that two conditions must be fulfilled, one of them being that the land must be open to the public generally as of right. I do not propose to set out the explanation which Windeyer J. gave of what he meant by that condition. In that explanation, as well as in other decisions, it is recognized that regulatory and restrictive conditions, imposed upon the right of access to land or to parts of it and upon its use by members of the public, may be compatible with its being described as a place used for public recreation and enjoyment. But in my opinion the reasons in Rutledge's Case (1959) 102 CLR 54; 5 LGRA 127 afford strong support for the conclusion that if the proposed lease were granted that would involve a breach of the covenant. It would not then be possible to say of the land that it was in the relevant sense open to the public generally. The land, the subject of the lease, would be open only to members of a particular Association. (at p583)

8. My conclusion is that the injunctions were properly granted by the Chief Judge in Equity. No objection has been raised to the form in which these were expressed. Therefore, the appeal should be allowed and the orders made by McLelland C.J. in Eq. (1968) 16 LGRA, at p 175 should be restored. (at p583)

Orders

Appeal allowed. Respondent council to pay the appellant's costs of this appeal. Order of the Supreme Court of New South Wales set aside and in lieu thereof order that the appeal to that Court be dismissed. Respondent council to pay the costs of the appellant in that appeal.