Waterways Authority of New South Wales v Coal and Allied Operations Pty Limited - [2005] NSWSC 1285

No judgment structure available for this case.

CITATION:
Waterways Authority of New South Wales v Coal and Allied Operations Pty Limited [2005] NSWSC 1285

HEARING DATE(S): 15/08/05, 16/08/05, 17/08/05
Written submissions: 02/09/05; 16/09/05

JUDGMENT DATE :

15 December 2005

JURISDICTION:
Equity Division

JUDGMENT OF:
Barrett J

DECISION:
See paragraphs 125 and 126

CATCHWORDS:
LANDLORD AND TENANT - covenants - covenant by tenant to remove all structures before expiration of term - in default landlord may "retain the same" or remove at tenant's cost - whether landlord's contractual right to retain or remove was sole remedy where tenant failed to remove - whether failure to remove was breach of contract - EQUITY - equitable remedies - specific performance - damages in lieu of specific performance - whether such damages will be awarded where act to be compelled by order for specific performance is unlawful - time at which lawfulness of act to be considered - LOCAL GOVERNMENT - ENVIRONMENTAL LAW - conspectus of provisions regulating development - specific provisions governing Sydney Harbour, Waverton Peninsula and Balls Head Coal Loader at 31 December 1993 and 17 December 1999 - LOCAL GOVERNMENT - definition of boundaries of local government areas - STATUTES - interpretation - whether inconsistency effects implied repeal - WORDS AND PHRASES - "exclusive control", "relic", "settlement"

LEGISLATION CITED:
Conveyancing Act 1919, s.133A
Environmental Planning and Assessment Act 1979, ss.4(1), 6, 26, 34(1), 36, 75
Environmental Planning and Assessment Amendment Act 1997
Heritage Act 1977, ss.4, 139
Local Government Act 1919, ss.10, 289(f), Ordinance No 37
Local Government Act 1993, ss.4, 10, 68, 69. 72, 205,
Maritime Services Act 2B, ss.2, 6, 13JE, 13JG, 13T
Ports Corporatisation and Waterways Management Act 1995, ss.5, 29, 35, 111, Schedules 3, 4-15
Supreme Court Act 1970, s.68
Sydney Harbour Trust Act 1900, s.33

CASES CITED:
Beaver v The Justices of Williamstown; Ex parte
Hammond (1883) 9 VLR 454
Belle Design Group Pty Ltd v Woollahra Municipal Council (2004) 136 LGERA 1
Black v Director-General of Education [1982] 1 NSWLR 576
Citizens Airport Association v MSB and FAC (1993) 79 LGERA 254
Commonwealth v Yarmirr (1999) 101 FCR 171
Ex parte O’Neill (1892) 13 LR (NSW) 280
Gimtak Pty Ltd v Cathie [2001] V ConvR 54-645
Graham v Market Hotels Ltd (1943) 67 CLR 567
Hornsby Shire Council v Danglade (1928) 29 SR(NSW) 118
Howship Holdings Pty Ltd v Leslie & Anor (1996) 41 NSWLR 542
ISPT Nominees Pty Ltd v Chief Commissioner of State Revenue (2003) 53 ATR 527
James v Hutton and J Cook and Sons Ltd [1950] 1 KB 9
James Paterson & Co Pty Ltd v Melbourne Harbour Trust Commissioners [1961] VR 343
Joyner v Weeks [1891] 2 QB 31
Mills v Ruthol (2004) 61 NSWLR 1
Norton v Angus (1926) 38 CLR 523
Parramatta City Council v Stauffer Chemical Co (Aust) Pty Ltd [1971] 2 NSWLR 500
Re Zis; O’Donnell v Keogh [1961] WAR 120
R v Portus; Ex parte Federated Clerks Union of Australia (1949) 79 CLR 428
Royal Sydney Yacht Squadron v North Sydney Municipal Council (NSWLEC, McClelland J, 18 September 1981)
Starline Drive-In Theatre Ltd v Federal Commissioner of Taxation (1964) 112 CLR 458
Telecom & CPS Community Credit Cooperative Ltd v Heberg Pty Ltd [1993] ANZ ConvR 312
Vopak Terminals Australia Pty Ltd v Commissioner of State Revenue (2004) 55 ATR 1
Woollahra Municipal Council v MacLennon [1969] 1 NSWR 609
Woollahra Municipal Council v MacLennon [1970] NSWR 273

PARTIES:
Waterways Authority of New South Wales - Plaintiff
Coal and Allied Operations Pty Limited - Defendant

FILE NUMBER(S):
SC 5099/99

COUNSEL:
Mr M.L.D. Einfeld QC/Mr J.M. Atkin - Plaintiff
Mr M.C.L. Dicker - Defendant

SOLICITORS:
Dibbs Abbott Stillman - Plaintiff
Allens Arthur Robinson - Defendant

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

THURSDAY, 15 DECEMBER 2005

5099/99 WATERWAYS AUTHORITY OF NEW SOUTH WALES
v COAL AND ALLIED OPERATIONS PTY LIMITED

JUDGMENT

The parties and the leased property

1 By memorandum of lease dated 12 January 1972, the Maritime Services Board of New South Wales granted to J & A Brown Abermain Seaham Collieries Limited a lease of certain land held under the provisions of the Real Property Act 1900, being Lots 1, 2 and 3 in deposited plan 542933 (part of the land in certificate of title volume 5018 folio 1). The rights and obligations of the Maritime Services Board of New South Wales afterwards devolved upon the present plaintiff, Waterways Authority of New South Wales (formerly Marine Ministerial Holding Corporation) but, since relevant events occurred, for the most part, before that devolution, it is convenient to refer to both the Board and the plaintiff, without distinction, as “MSB”. The process of devolution will be described presently. The lessee, J & A Brown Abermain Seaham Collieries Limited (which is the defendant), later changed its name to Coal & Allied Operations Pty Limited and will be referred to as “C&A”.

2 The dispute between MSB and C&A centres upon a provision of the lease concerning removal of structures from the leased land. The particular structure is a wharf. That wharf is erected mainly on Lot 2 in deposited plan 542933 which has an area of 3 roods 15½ perches and forms part of the bed of Sydney Harbour. Lot 2 is roughly rectangular in shape. One of the shorter boundaries (being the eastern boundary) is the high water mark on the western side of Waverton Peninsula on the northern shore of the harbour. That peninsula extends in a southerly direction from the vicinity of Waverton village and railway station in the north to the headland at Balls Head in the south. The longer boundaries of Lot 2 are generally at right angles to the western shore of the peninsula. They are accordingly the lot’s northern and southern boundaries. Each of those longer boundaries is more than 480 feet in length. The distance between them is roughly 60 feet. The eastern boundary corresponding with the high water mark is an irregular line. The western boundary is curved. Viewed on a plan, Lot 2 has the appearance of a long test-tube with a curved bottom and a broken and irregular top. The irregular top represents the high water mark on the western side of the peninsula. The curved bottom represents the offshore end of Lot 2.

3 Outside Lot 2 and to the east of its eastern boundary corresponding with the high water mark is a straight retaining wall made of stone. The wall represents, in physical terms, the shore of the harbour, in that the lower part of its western and visible face is submerged and dry land lies against and hides from view its eastern face. The waters of the harbour permanently cover the area between the high water mark and the western face of the retaining wall; so that Lot 2 is at all times surrounded by water and does not adjoin dry land.

4 The wharf with which the proceedings are concerned stands wholly within (and occupies substantially the whole of) Lot 2 except at its shore end where it extends to occupy also the area between the eastern boundary of Lot 2 and the retaining wall (the area I have described as permanently covered by the waters of the harbour). The shore end of the wharf is affixed to dry land at and slightly inland from the retaining wall.

5 Adjoining Lot 2 at its eastern end is other land held under the provisions of the Real Property Act, being the whole of the land in certificate of title volume 5785 folio 172 of which the Crown is the registered proprietor. That land includes the part of the wharf site extending from the eastern boundary of Lot 2 to dry land at and slightly inland from the retaining wall. Contiguous with the Crown’s land and on the harbour shore in positions removed from Lot 2 somewhat to the north and south are the two other lots in the deposited plan in which Lot 2 is included. Those lots (Lots 1 and 3 in deposited plan 542933) are the balance of the land in certificate of title volume 5018 folio 1.

Other physical features

6 C&A formerly conducted coal loader operations on a single integrated site consisting of both the land in Crown ownership comprised in certificate of title volume 5785 folio 172 and all three lots comprised in certificate of title volume 5018 folio 1 (that is, Lots 1, 2 and 3 in deposited plan 542933). A wharf installation separate and distinct from the wharf on Lot 2 with which the proceedings are concerned is constructed along the shoreline to the south of Lot 2. Inland from but adjoining that wharf installation are bunkers. In simple terms, operation of the coal loader involved unloading of coal from ships berthed parallel to the shore at the separate wharf installation adjoining the bunkers, storage of unloaded coal in the bunkers, transportation of stored coal from the bunkers out from the shore along the wharf with which the proceedings are concerned and loading of that coal on to ships berthed parallel to that wharf and therefore at right angles to the shore.

7 The wharf with which the proceedings are concerned is of predominantly timber construction. Numerous timber piles sunk into the bed of the harbour support timber cross members to which surface timbers are attached. Affixed to the timber surface of the wharf is a steel frame or gantry bearing rails along which a crane moved to carry coal to ships being loaded. The crane itself has been removed but the steel gantry remains. As I have endeavoured to describe, the timber wharf structure carrying the steel gantry is almost wholly within Lot 2, but with its eastern end (consisting of so much of the timber and steel as is situated between the eastern extremity of Lot 2 and the point at which the wharf joins dry land) upon part of the Crown’s land abutting Lot 2.

The lease provisions

8 It is common ground that the wharf was in existence when the lease was granted on 13 January 1972. The lease was for a term which expired on 31 December 1989. Subsequent documents executed by MSB and C&A are accepted by the parties as having extended the term to 31 December 1993 on the footing that all the lease provisions continued to apply. By informal arrangement with MSB, C&A in fact remained in possession for a few months after the end of the extended term. It yielded up possession in the second quarter of 1994.

9 It is necessary to quote certain of the lease provisions:

Clause 4 : “That the Lessee shall to the satisfaction of the Board place and at all times during the said term keep the seawalls the reclamations and all other structures now erected or hereafter to be erected on the said demised premises in good and efficient condition and in a thorough state of repair (repair to include such painting and limewashing as may be deemed necessary by the Board) and properly cleansed and maintained in all respects in accordance with the requirements of the Board of Health and all other legally constituted Authorities having jurisdiction in respect of the said demised premises and of the Board and the said demised premises (save as hereinafter mentioned) in such condition and state of repair deliver up to the Board at the expiration or sooner determination of the said term.”

Clause 7: “That the Lessee shall without notice from the Board so to do remove any structure now erected or at any time hereafter to be erected on the said demised premises (other than the seawalls and reclamations) at the cost of the Lessee and without compensation prior to the expiration of the said term or prior to the termination of the said term under clause 26 hereof as the case may be and shall have [sic] the said demised premises clear to the satisfaction of the Board and should any such structure or any part thereof not be so removed the Board may if it so desires retain the same without paying to the said Lessee any compensation whatsoever or itself remove and sell or otherwise dispose of the same and the Lessee shall pay to the Board on demand as and for liquidated damages the cost of such removal less the net proceeds of any such sale if made (the certificate of the Board’s Engineer-in-Chief to be conclusive evidence of the amount so payable).”

Clause 8: “That in the event of the tenancy being determined under the provisions of Clause 27 hereof or for non-payment of rent or non-performance or non-observance of any of the terms covenants provisions or conditions hereof or under the proviso for re-entry hereinafter contained the Lessee shall if called upon by the Board at any time not later than thirty days after such determination so do but not otherwise within six calendar months after such determination remove any structure now erected or at any time to be erected on the said demised premises (other than the seawalls and reclamations) at the cost of the Lessee and without compensation and shall leave the said demised premises clear to the satisfaction of the Board and should any such structure or any part thereof not be so remove [sic] the Board may itself remove and sell or otherwise dispose of the same and the Lessee shall pay to the Board on demand as and for liquidated damages the costs of such removal less the net proceeds of any such sale if made (the certificate of the Board’s Engineer-in-Chief to be conclusive evidence of the amount so payable) AND it is hereby agreed that at the beginning of each month during the said period of six months the Lessee shall pay to the Board such a proportionate part of the rent hereinbefore reserved as the said demised premises then actually occupied bear to the premises hereby demised.”

10 The expression “the said demised premises” is not defined and must take its meaning from the operative words:

“… DOTH HEREBY LEASE unto J & A Brown Abermain Seaham Collieries Limited …. ALL THAT piece of land situate in the parish of Willoughby County of Cumberland … [as described].”

11 Clause 26 (referred to in clause 7) reserved to MSB the right to terminate the lease by six months notice if the property or any part of it was required for public purposes. Clause 27 (referred to in clause 8) permitted termination by MSB if the demised premises or any adjoining land owned or occupied by C&A was used contrary to the provisions of the County of Cumberland Planning Scheme Ordinance. I mention these provisions merely to elucidate the scope and meaning of clauses 7 and 8. Neither of them plays any direct part in the present controversy, it being accepted that C&A remained lessee until expiration of the term of the lease on 31 December 1993.

MSB’s claims

12 The wharf was not removed by C&A from the leased land on or before 31 December 1993 or at all. It remains in position in a deteriorating state. MSB claims a declaration that C&A, in failing to remove the wharf, is in breach of clause 7. A claim for an order for specific performance is made but not pressed. MSB does, however, press a claim for damages, making it clear that that claim has its basis in s.68 of the Supreme Court Act 1970:

“Where the Court has power:

(a) to grant an injunction against the breach of any covenant, contract or agreement, or against the commission or continuance of any wrongful act, or

(b) to order the specific performance of any covenant, contract or agreement,

13 The specific performance claim is thus maintained to the extent necessary to create the foundation for an award of damages in lieu of specific performance pursuant to s.68.

C&A’s defence

14 By its further amended defence, C&A denies that its failure to remove the wharf constitutes a breach of the lease provisions. This is in part because clause 7 is, in C&A’s submission, a code carrying within it its own scheme of vindication. C&A further says that it would have been unlawful for it to remove the wharf during the term (and would be unlawful for it to remove it now) and, in that connection, refers to a number of statutory provisions and statutory instruments. C&A says that, even if its failure to remove was a breach of the lease provisions, specific performance would be an inappropriate remedy, damages being an adequate remedy – but MSB has not suffered any relevantly compensable loss or damage since it has not incurred any cost in itself removing the wharf. There is also an estoppel defence.

Construing clause 7 in its context

15 MSB bases its claims squarely on clause 7. Several features of that clause must be noticed. First, the lessee’s obligation to remove structures extends to structures “now erected or at any time hereafter to be erected” on the leased land (except seawalls and reclamations), with the result that it applies to the wharf which existed at the time the lease was granted. The clause is thus not concerned with tenant’s fixtures as such, even though it would extend to any tenant’s fixture properly described as a “structure”.

16 Secondly, clause 7 specifies the time at (or within) which removal of structures is to be effected. Leaving to one side as presently irrelevant the case of termination under clause 26, structures are to be removed “prior to the expiration of the said term”. Clause 7 does not contemplate removal after expiry of the term. In that respect, it is to be contrasted with clause 8 which, dealing with certain classes of termination before the end of the term, contemplates removal of structures by the lessee after the lessee’s right of possession has ended and, to cater for that, creates a special right of occupation for the period during which removal is to be effected.

17 Thirdly, clause 7 deals expressly with the case where a structure is not removed as the clause stipulates (“… and should any such structure or any part thereof not be so removed…”). In that event, the lessor may, according to clause 7, do one of two things, that is, “retain the same” or “itself remove and sell or otherwise dispose of the same”. Clearly enough, this involves a choice by the lessor.

18 As it relates to the wharf, clause 7 deals with a fixture forming part of the lessor’s land. Removal by the lessee would thus involve removing and taking away the part of the lessor’s land that is the wharf. That is something that the lessee would otherwise have no right to do, but the removal requirement imposed upon the lessee by clause 7 must, of necessity, carry with it a right to remove: see Starline Drive-In Theatre Ltd v Federal Commissioner of Taxation (1964) 112 CLR 458. The concept underlying clause 7 is thus not one of the lessee’s recapturing for itself something that is, broadly speaking, its own. Rather, the concept is that the lessee will perform a service for the lessor by providing, at the end of the term, land cleared of structures other than seawalls and reclamations. The lessee’s obligation is, in substance, an obligation to yield up the land in the condition it was in before structures other than seawalls and reclamations were placed upon it. The covenant is, in that sense, a covenant for the doing of certain work upon and in relation to the land before the expiration of the term.

19 The interaction between clause 7 and clause 4 should be mentioned. Clause 4 requires the lessee to place and keep structures “in good and efficient condition and in a thorough state of repair” and to deliver them up at the expiration or sooner determination of the term “in such condition and state of repair” – subject, however, to the qualification arising from the words “save as hereinafter mentioned”. That qualification accommodates and affords precedence to clause 7 in such a way that the clause 4 obligation to deliver up in a thorough state of repair at the expiration of the term does not apply to structures which, having regard to clause 7, the lessee is to remove before that expiration. By definition, things that must be removed beforehand are beyond the contemplation of a provision imposing an obligation to deliver up at the term’s end.

20 While clause 7 is not a covenant to repair or a covenant to yield up in repair, it shares with a covenant of the latter kind the characteristic that it is a covenant for the doing of certain work on and in relation to the land before the term’s end and, to the extent necessary to ensure that the work is duly completed, for the incurring and defraying of all relevant expenditure. The effect of clause 7 is to require the lessee to yield up and deliver to the lessor, at the expiration of the term, land in a particular state, that is, devoid of “structures” other than seawalls and reclamations. It is, in that way, similar to clause 4 which requires the lessee to yield up and deliver to the lessor, at the expiration of the term, land in a particular state, that is, with seawalls and reclamations (being the structures not affected by the overriding operation of clause 7) in good repair. Each provision is a provision by which the lessee is bound to leave the leased property in a particular condition.

21 There is, however, a conceptual difference between the two. A property on which there are structures in good repair is, in the absence of exceptional circumstances, more desirable and therefore more valuable than the same property on which there are structures in a state of disrepair. But the same cannot be said of a parcel of land that is devoid of structures, compared with the same parcel on which there are structures. Land in a commercial centre on which there stands an office building in good repair and fully let at market rentals is more valuable than if it were devoid of structures. But the vacant land will have the greater value if the office building is untenanted, useless and condemned.

22 The two types of covenant – a covenant to leave in good repair and a covenant to leave devoid of structures – are also distinguishable because the former, but not the latter, attracts the operation of s.133A of the Conveyancing Act 1919. That section applies to a “covenant to leave or put premises in repair at the termination of a lease”. Its effect is to limit damages for breach of covenant to, in effect, the reduction in value of the reversion occasioned by the breach of covenant. The covenant in clause 7 – a covenant to leave or put the leased property, at the termination of the lease, in a state where it is devoid of “structures” is, of its nature, not a covenant to “leave or put premises in repair”, with the result that the statutory limitation upon damages is not attracted.

23 Where a covenant by a lessee to leave the leased property in a particular condition is not performed by the lessee, there accrues to the lessor a right to sue for damages at common law. The way in which damages are to be assessed in case of breach of a tenant’s covenant to leave premises in good and tenantable repair was explained by Fullagar J in Telecom & CPS Community Credit Cooperative Ltd v Heberg Pty Ltd [1993] ANZ ConvR 312 (there being, in Victoria, no equivalent of s.133A of the Conveyancing Act). His Honour said (at pp. 65,273-65,274):

“Cases in England decided at the end of the nineteenth century establish clearly that at common law the measure of damages for breach of a covenant to repair in the circumstances of the present case is not the diminution in the value of the reversion. For the purposes of the present case the most succinct affirmative statement of the applicable measure of damages that I have found is contained in the small Victorian text book, Brooking and Chernov: Tenancy Law and Practice in Victoria (1st Ed 1972) at 121, in the following passage: ‘At common law the measure of damages, where an action is brought upon the covenant to repair at the end of the term, is such a sum as will put the premises into the state of repair in which the tenant was bound to leave them.’ To apply this measure of damages, the Court looks at the state of the premises at the end of the term. It then has to consider what it is that a landlord - a hypothetical and reasonable landlord wishing to put the premises into the state of repair in which the tenant was bound to leave them - would have to expend in money in order to put the premises into the latter state of repair. I shall call this sum of money the “essential expenditure”. I have called the person concerned a hypothetical landlord because it is immaterial whether the actual landlord wishes to repair the premises or not, and immaterial whether they ever will be repaired by anybody. Save in one respect, it is immaterial to know that the actual landlord has repaired the premises. In a case where the actual landlord has done the breach - necessitated repairs or some of them by the time of the trial, all the repairs he has actually done and the cost of them are material only because they may afford reliable (or unreliable) evidence of what the relevant repairs would have cost a reasonable landlord to do. I have called the person concerned a reasonable landlord, because when the Court is seeking to determine what is the essential expenditure, breach necessitated, it must bear in mind that the hypothetical landlord would be bound to mitigate his loss, in that he would be bound to do the repairs in a reasonable way for a reasonable price and within a reasonable time.

It might or might not be a reasonable course, if breach unrelated operations are also in fact to be done, to do the breach necessitated repairs along with or before or after the unrelated operations; but the enquiry is and remains, in the sense which I have endeavoured to spell out, what is, at the termination, the sum which ‘will put the premises into the state of repair in which the tenant was bound to leave them’. For the word ‘will’ one could as well substitute ‘would’, because the substituted word emphasizes what should be apparent from the text book version, namely that the essential expenditure is a sum that remains constant irrespective of what the actual landlord does or does not do, and irrespective of what the actual landlord intends at any particular time to do or not do.

The measure of damages at common law is the expenditure to be necessarily encountered by a reasonable landlord who put the premises into the state of repair contracted for, whether the actual landlord does those repairs or not.”

24 This measure of common damages is sometimes described as the measure in Joyner v Weeks [1891] 2 QB 31. Lord Esher MR said in that case, at p.43:

“That rule is that, when there is a lease with a covenant to leave the premises in repair at the end of the term, and such covenant is broken, the lessee must pay what the lessor proves to be a reasonable and proper amount for putting the premises into the state of repair in which they ought to have been left.”

25 The correctness of this approach, in an appropriate case, was recognised by the High Court in Graham v Market Hotels Ltd (1943) 67 CLR 567.

26 There may, however, be circumstances in which the cost of putting the premises into the contracted state does not represent the applicable measure of damages. That will be so where, for example, the lessor does not, in reality, want or require premises in the contracted state and is well content to have and enjoy the premises in the state in which they actually exist at the end of the term. As is recognised in cases such as James v Hutton and J Cook and Sons Ltd [1950] 1 KB 9 and Re Zis; O’Donnell v Keogh [1961] WAR 120, such a lessor does not suffer through the breach damages commensurate with the cost of causing the premises to be in the contracted state, although that lessor may suffer damage to the extent of any reduction in the value of the reversion and, if there is no basis on which the court can come to that conclusion, damages will be nominal only.

Is clause 7 a code?

27 In the present case, the covenant to yield up land in a particular state (that is, with all structures other than seawalls and reclamations removed) goes on to deal expressly with the possibility that the lessee may, in fact, yield up land which is not in that state (being land upon which structures in addition to seawalls and reclamations remain). If that happens, the lessee may, in accordance with the contract, “retain” the structures in question or itself remove them. In the latter event, the lessor is entitled, as a matter of contract, to recover from the lessee the cost of removal less the net proceeds of any sale of the removed items. The existence of these contractual rights of the lessee raises the question whether the right of MSB to sue for damages or specific performance is, by the parties’ contract, displaced. C&A maintains that it is. This is the basis on which C&A argues that clause 7 is in the nature of a self-contained code.

28 Clause 7 bears some resemblance to a lease provision considered by Smith J in Gimtak Pty Ltd v Cathie [2001] V ConvR 54-645. His Honour decided that the particular clause did not have the effect of causing the ordinary right to sue for damages to be overtaken by the contractual right to recover, as a liquidated sum, the net cost incurred by the lessor in effecting the work not done by the lessee. The provision before me differs in an important respect from the provision that was before Smith J.

29 The relevant provision of the lease under consideration in Gimtak was clause 8.2(b). Its effect will be better understood if clause 8.2 as a whole is quoted:

“ 8.2(a) The Lessee shall at the expiration or sooner determination of this lease peaceably surrender and yield up unto the Lessor the whole of the demised premises and every part thereof clean and free from rubbish and in a state of repair order and condition which is in all respects consistent with the covenants on the part of the Lessee herein contained;

(b) If the Lessee shall not have done so as of right under any provision hereof the Lessee shall if required so to do by the Lessor remove from the demised premises within fourteen days from the expiration or sooner determination of the term hereof any fixtures, fittings and floor coverings (to which such requirement shall relate) erected or installed by the Lessee during or prior to the term hereof and shall make good any damage whatsoever caused to the demised premises by such removal and if required by the Lessor shall re-alter any alterations made by the Lessee so that the demised premises shall be converted back to their original condition provided always that the Lessor may at its option itself cause any such fixtures or fittings to be removed and any such damage to be made good and any such alterations to be so re-altered and may recover the costs thereof from the Lessee as a liquidated debt payable on demand.”

30 The respective submissions concerning the meaning and effect of the relevant aspect of clause 8.2(b), as well as his Honour’s decision on the matter, emerge from the following passage in the judgment (at p.62,335):

“ Construction of cl 8.2(b) - pre-conditions to lessor’s entitlement to Compensation

The defendants submit that the parties agreed upon a regime to deal with the consequences of the failure of the lessee to remove fixtures and fittings or to realter alterations when requested to do so under clause 8.2(b). They argue that the plaintiff could require the lessee to undertake such works and that, if it did not, the plaintiff could undertake the works itself and recover the cost as a liquidated debt from the lessees. The defendants submit that as a matter of construction the plaintiff was obliged to incur the cost before it was entitled to recover any compensation from them.

It seems to me that the plaintiff’s response to this argument is correct. Clause 8.2(b) gives the lessor an option, which the lessor may or may not exercise, to remove the fixtures, fittings and floor coverings and realter the alterations. The lessor does not have to do so. If the lessor chooses to do so then the consequences are set out in the words that follow - the plaintiff may recover the costs incurred as a liquidated debt payable on demand. If the plaintiff chooses not to exercise that option the plaintiff is left with its rights under clause 8.2(b) to seek damages for breach of the obligations set out in that clause.”

31 In the present case, clause 7, dealing with the situation where the lessee does not remove the structures as the clause requires, not only allows the lessor to remove them itself and recover, as a liquidated sum, the net cost of doing so but also creates an alternative. The alternative allows the lessor to “retain the same”. There was no equivalent provision in Gimtak. A supposed right of a landowner, as against a lessee, to “retain” fixtures forming part of the landowner’s land is, in reality, not a right at all. Even if the fixtures are tenant’s fixtures, they are the property of the landlord, although subject to a limited right of the tenant to convert them again into chattels, being a right exercisable during the term or during subsequent holding of possession: see Vopak Terminals Australia Pty Ltd v Commissioner of State Revenue (2004) 55 ATR 1.

32 Since, on this basis, a provision allowing a landowner to retain fixtures after the expiration of a lease cannot be said to create in the landowner any right or interest the landowner does not already have, the creation of that permission by clause 7 must be seen to have some other significance. I have already said that a contractual requirement that a lessee remove fixtures must, of necessity, carry with it a right to remove. I have referred in that connection to Starline Drive-In Theatre Ltd v Federal Commissioner of Taxation. The lease in that case required the lessee to remove certain erections and works before the end of the term. The following observation of Kitto J, at p.460, seems to me to be equally relevant to the circumstances of the case before me:

“Bearing in mind that at the time when the leases were executed no one could tell whether removal of the improvements immediately prior to the determination of the term would be more advantageous to the lessors or to the lessee, the sense of the covenants, as I read them, is that the lessee is entitled as against the lessors as well as bound in their favour to remove the improvements, so that the lessors may not prevent the lessee from removing them if he desires to do so. In other words the manifested intention of the parties in each instrument appears to me to be that the implied licence to the lessee to remove the improvements at the stipulated time is not to be revocable at the will of the lessor.”

33 In the present case, the lessee is given an implied licence to remove structures (being a concomitant of the lessee’s contractual duty to remove them) and the lessor is given an express right to revoke that licence. The lessor would invoke that right by electing to “retain the same”. If that election were made, the lessee would no longer have either the duty to remove or the right to remove. And if such a situation arose, there would be no default by the lessee capable of being regarded as a breach of covenant in respect of which an action for damages lay. It is in this respect that the provision before me differs from the provision considered in Gimtak.

34 The true effect of clause 7, it seems to me, is to preclude any right of the lessor to sue for damages if one of two things happens: the lessor elects to retain the structures or the lessor elects to remove the structures. In the first situation, for reasons I have stated, there is a revocation by the lessor of the lessee’s right to remove and therefore a relaxation or forgiving of the lessee’s duty to remove. In the second situation, it simply cannot be the case that the lessor’s contractual right to be paid by the lessee the net cost of removal by the lessor co-exists with a right to sue for damages for breach by the lessee of the covenant to remove. It is inconceivable that the lessor could both recover as against the lessee damages for breach of covenant and, having itself removed the structures, recover from the lessee under clause 7 the net cost of doing so.

35 I have said that the ordinary right to sue for damages is precluded if the lessor resorts to either of the alternatives expressly made available by clause 7. This means that, upon the proper construction of clause 7, there is no breach of contract by the lessee if the lessor acts in either of those ways. But there will be a breach of contract, actionable as such, if the lessor resorts to neither of the alternatives expressly made available by clause 7 – that is, if it does not itself remove the structures and does not take advantage of the part of the clause expressed by the words “may if it so desires retain the same”.

36 It follows that, in my opinion, clause 7 is not a “code”, in the sense for which C&A contends. I do not accept the contention of C&A that there can never be a complaint of breach of contract in relation to failure by C&A to remove structures and that the only remedy available to MSB in that eventuality is the self-help remedy made available by clause 7 itself. The correct characterisation, as I see it, is that a breach of contract will be seen to have been committed by C&A (and to be actionable accordingly) if two conditions are satisfied after the end of the term (C&A having failed to remove structures during the term): first, MSB did not act in accordance with the part of clause 7 contemplating removal of structures by it; and, second, MSB did not act in accordance with the part of the clause expressed by the words “may if it so desires retain the same”.

Has MSB elected to retain the wharf?

37 It is clear on the facts that the wharf is in place. A factual finding that MSB has not removed it and, to that extent, has not resorted to the alternatives made available by clause 7 necessarily follows. But does it also follow that MSB has taken advantage of the part of the clause expressed by the words “may if it so desires retain the same”?

38 In my opinion, the mere fact that the wharf continues to exist upon and as part of the MSB’s land does not mean that MSB has elected to retain it. Such an election would be seen to have been made only if some relevant conduct of MSB were established. The conduct would have to be conduct evidencing the formation and implementation of MSB’s “desire” to “retain the same”.

39 Both during the term and after its expiration, MSB demanded that C&A remove the wharf. A letter from Mr Lonie of MSB to Mr MacLeod of C&A dated 10 November 1992 said, “All structures and equipment should be removed and the land returned to its pre-existing condition …. All costs in respect of the removal of the structures and the undertaking of the survey shall be borne by Coal and Allied”. A letter from Mr Booth of MSB to Mr Mackrill of C&A dated 13 June 1995 said that MSB held C&A “responsible for the removal and reinstatement in accordance with the lease, and for any liability which may arise from the continuing presence of the structure on MSB lands”. MSB also provided its consent, as owner, to C&A’s lodging a development application with the North Sydney Council in connection with demolition of the wharf in a letter from Mr Lonie to the Council dated 7 September 1993:

“[T]he Board as owner consents to the application being lodged.”

40 In the period between the expiration of the term and the commencement of these proceedings, MSB liaised with C&A to progress the removal of the wharf by C&A; and C&A, in turn, took steps towards removal, including by obtaining quotations from contractors and liaising with the NSW Heritage Office at least until 24 March 1999.

41 It is relevant to quote from the cross-examination of Mr MacLeod, the responsible officer of C&A at the time:

“Q. You understood that, by its letter of 13 June 1995, the Maritime Services Board was maintaining that your company was responsible for the removal of the wharf, correct?
A. That’s correct.
Q. And your company did not respond to that letter in any way, did it, denying any such responsibility?
….

Q. … You didn’t respond to that, did you, and say, ‘No, hang on a minute, we are not liable to remove the wharf’?

A. I didn’t respond to that particular letter from the Maritime Services Board, no.

Q. To your knowledge, no-one else at Coal and Allied responded to the Maritime Services Board by asserting that Coal and Allied was not liable to remove the wharf?

A. No.

Q. Indeed, to the contrary, you subsequently to 1995, on more than one occasion, sought to obtain a quotation for the cost of removing at least the timber structures from the wharf?

A. That’s correct.

Q. Particularly the timber structures because you understood that the MSB was most concerned about the timber part of the wharf which was deteriorating, is that right?
A. I think that the quotations I obtained included the whole of the wharf.

Q. They divided up the timber from the steel?
A. That’s correct.

Q. Because you knew that the MSB was particularly concerned to have the timber part removed because it was physically deteriorating, is that right?
A. No, because there was different value. The timber you had to dispose of. The steel you could sell.

Q. In any event, you were still obtaining quotations so that Coal and Allied could remove the wharf well after – during 1995, correct?
A. If my memory serves me correct, it was in response to discussions with the Maritime Services Board.

Q. And if perhaps you would look at page 157 of the bundle, exhibit D, you will see a company called Fielder Engineers provided to you a quotation for the demolition of the wharf as late as May 1996, is that right?
A. That’s correct.”

A. That’s correct.

Q. … you wouldn’t have contemplated obtaining quotations for removal of the wharf would you, if you regarded Coal and Allied’s obligations to remove the wharf at an end when you locked up in April 1994, correct?

A. Correct.

Q. And that same position continued when you sought and obtained later quotations, in particular if you have a look at page 171, tell me whether you agree?

A. I organised for that, yes.”

Q. You would not have been obtaining quotations in the late 1990s or writing to the Heritage Office about demolition of the wharf if you didn’t regard Coal & Allied as having a continuing obligation to remove it?

A. That’s correct.”

42 Quotations for the removal of the wharf were obtained by C&A from Blue Water Barge Hire Pty Ltd (9 May 1996) and Fielder Engineers Pty Ltd (22 July 1998). Communications between C&A and the NSW Heritage Office are in evidence. Mr MacLeod of C&A wrote to the Director of the Heritage Office, Ms Strong, on 28 August 1998. There is also an undated letter from Mr MacLeod to Ms Strong stamped as having been received by the Heritage Office on 3 September 1998, as well as a letter from the Heritage Office to Mr MacLeod dated 25 September 1998.

43 It was only in 1999 that C&A sought to deny or disclaim responsibility for the removal of the wharf. A letter from Mr Street of C&A to Mr Taylor of the Ministry of Forests and Marine Administration dated 24 March 1999 said that C&A was “of the view that given the passage of time and the failure by the Lessor/Licensor to obtain any necessary consents to demolish the wharf, the Lessee/Licensee has no further obligations under the expired Lease/Licence”. Mr Taylor replied to the secretary of C&A by letter dated 7 May 1999 saying that the matter has been referred to the Office’s solicitors for advice. These proceedings were commenced by MSB by statement of claim filed on 17 December 1999.

44 The conduct of MSB in the period between the expiry of the term and commencement of proceedings would not support any finding that MSB had expressed or otherwise manifested any “desire” to “retain” the wharf, as contemplated by clause 7 of the lease. It is true that MSB has, since the expiration of the lease, made some use of the wharf. But that cannot, in my view, displace the clear conclusion that, as between lessor and lessee, there was never any conduct on the part of MSB inconsistent with its stated desire that C&A remove the wharf in accordance with the lease.

Was it unlawful for the defendant to demolish the wharf during the term?

45 The findings to date make it necessary to consider whether performance by C&A of the obligation to remove the wharf not later than the expiration of the term would have involved the doing of something that was unlawful for C&A to do at that time. The only conceivable illegality would have been statutory. It is therefore necessary to consider the state of legislation affecting the matter as it existed at the expiration of the term on 31 December 1993.

46 Specifically, the matter needs to be addressed by reference to the Local Government Act 1993, the Environmental Planning and Assessment Act 1979 (together with relevant environmental planning instruments) and the Heritage Act 1977, these being the measures identified in submissions as potentially relevant. The versions considered are those in force on 31 December 1993. Later amendments or repeals affecting the legislation, regulations and environmental planning instruments and the introduction of the State Environmental Planning Policy No 56 are thus left to one side at this stage.

Local Government Act 1993, s.68 - submissions

47 C&A submits that it would have been unlawful for it to demolish the wharf on 31 December 1993 because of the impact of s.68 of the Local Government Act 1993. Several propositions combine to give rise to that submission: first, that the wharf fell within the area administered by North Sydney Council; second that demolition of the wharf would have constituted an activity that required prior council approval under s.68 of the Local Government Act 1993; third, that that Act overrode the Maritime Services Act 1935 to the extent of any inconsistency because (a) MSB was a statutory body representing the Crown and the Local Government Act 1993 bound the Crown; and (b) the Local Government Act, being a later Act, and therefore impliedly repealed the earlier inconsistent Acts (leges posteriores priores contraries abrogant).

48 MSB’s submissions are as follows:

1. The earlier Sydney Harbour Trust Act 1900 and Maritime Services Act were not affected by s.68 of the Local Government Act 1993 because a general statute does not derogate from a specific statute ( generalia specialibus non derogant ). By s.33 of the Act of 1900, “exclusive control of the port and of … wharves … is vested in the commissioners” ( Sydney Harbour Trust Act , s.33), and that control was transferred to MSB by the Maritime Services Act , s.6; and the wharf constitutes an “installation” and a “structure” for the purposes of the Maritime Services Act and thus fell within the control of MSB.

2. Even if s.68 of the Local Government Act 1993 was applicable, MSB, as a statutory body representing the Crown, was exempted by s.69. The effect of this exemption, as applying in relation to demolition of the wharf, was to shield C&A as well as MSB since C&A, in effecting demolition pursuant to the lease, would have been acting “for the benefit and in the interest of” MSB (and thus the Crown): Citizens Airport Association v MSB and FAC (1993) 79 LGERA 254; R v Portus; Ex parte Federated Clerks Union of Australia (1949) 79 CLR 428 at p.435 (Latham CJ) and p.438 (Dixon J).

3. Alternatively, C&A could have sought MSB’s consent to lodge an application with the Council on behalf of MSB. The application would have been a Crown application (covered by s.72 of the Local Government Act 1993) and the Council could not refused it except with the written consent of the Minister administering the Local Government Act .

Statutory provisions

49 It is necessary, before addressing these submissions, to set out a number of statutory provisions. First, there is s.68 of the Local Government Act 1993 as in force on 31 December 1993:

“ What activities, generally, require the approval of the council?
(1) A person may carry out an activity specified in the following Table only with the prior approval of the council, except in so far as this Act, the regulations or a local policy adopted under Part 3 allows the activity to be carried out without that approval.

TABLE
APPROVALS
Part A – BUILDINGS, TEMPORARY STRUCTURES OR MOVEABLE DWELLINGS
…

2. Demolish a building

50 Section 69 as then in force should also be quoted:

· to erect a building

· to demolish a building

· to do anything that is incidental to the erection or demolition of a building.”

51 The Dictionary to the Local Government Act 1993 defined “building” to include “part of a building and any structure or part of a structure”.

52 The provision of the Sydney Harbour Trust Act 1900 of relevance and in force on 31 December 1993 is:

53 I refer next to provisions of the Maritime Services Act 1935 as in force at the relevant time:

“ 2. (1) In this Act, unless the context or subject-matter otherwise indicates or requires:

‘Installation’ includes any fixed, floating or movable structure for the berthing, docking, slipping, or repairing of vessels, or the handling of passengers, cargo, supplies or fuel, any pipe-line, conveyor or loading or unloading apparatus, and anything whatsoever erected, constructed, moored or stationed in, on, or in the vicinity of any port or navigable waters by the Board or by any person for the purpose of conducting, facilitating or regulating in any way the operation of such port or the use of such waters. ”

“ Sydney Harbour Trust Commissioners
6. (1) Upon the appointed day the powers, authorities, duties, functions and obligations which theretofore were exercised and discharged by the Sydney Harbour Trust Commissioners shall be transferred to and shall thereafter be exercised and discharged by the [Maritime Services] Board. The [Maritime Services] Board shall be in law the successor of the Sydney Harbour Trust Act 1900 and any other Act the execution of which is by law committed to the Sydney Harbour Trust Commissioners immediately before the appointed day.

“ Removal of unauthorised works
13JG.(1) A person who makes use of any work carried out in contravention of section 13JE (a) … after the expiration of the time specified in a notice from the Board served upon him requiring him to remove the work is liable on summary conviction to a penalty not exceeding 4 penalty units.

(2) The Board may remove, or authorise the removal of, any work carried out in contravention of section 13JE (a) … .

(3) The Board may at its option cause or authorise any work or any part thereof removed in pursuance of subsection (2) to be destroyed, stored or sold, or may sell the work on condition that it be removed.

“ Obstructions and encroachments in waters
13T. (1) In this section, “structure” includes any post, pile, stake, fence, pipe, chain, cable or wire, that is fixed to the soil or to anything fixed to the soil, any rubble or reclamation, and any other article, material or thing that is so fixed.

(2) For the purposes of this section a reference to the bed of any waters vested in or controlled by the Board includes a reference to any land which, but for the existence of a structure, would be covered by any such waters.

(3) Any person who erects any structure in, upon or over the bed of any waters vested in the Board without first obtaining the permission of the Board, or who makes use of any structure in, upon or over the bed of any such waters after the expiration of the time specified in a notice from the Board served upon him requiring him to remove the structure, shall be liable to a penalty not exceeding 4 penalty units.

(4) The Board may remove or authorise the removal of any structure erected without its permission in, upon or over the bed of any water vested in it or not removed in accordance with any notice given under subsection (3).

(5) Any person who, without lawful authority, erects any structure in, upon or over the bed of any waters controlled by the Board, not being waters vested in the Board, or who, without lawful authority, makes use of any structure in, upon or over the bed of any such waters after the expiration of the time specified in a notice from the Board served upon him requiring him to remove the structure shall be liable to a penalty not exceeding 4 penalty units.

…

Was the wharf within the North Sydney Council area?

54 The Local Government Act provisions in force on 31 December 1993 will be of relevance only if the wharf can be seen to have been in a location governed by that Act and amenable to powers of North Sydney Council arising from the Act.

55 Section 205 of the Local Government Act provides:

“ Land taken to be included in an area
(1) The land and water between high-water mark and low-water mark on the foreshores of an area is taken to be in the area.

56 The Local Government Act contains no definition of “foreshore” or “foreshores”. At common law, the inter-tidal zone is treated as the shore or foreshore – that is to say, “the land lying between the ordinary flux and reflux of the tide between the mean high water mark and the mean low water mark of ordinary tides occurring between the spring and the neap (that is, ordinary) tides, which is alternatively covered and left dry by the flux and reflux of the ride”: Commonwealth v Yarmirr (1999) 101 FCR 171 at p.221 per Beaumont J and von Doussa J. On this basis, the low water mark represents the outer boundary of the foreshore, viewed from the shore. When s.205(3)(b) refers to land that “is on the foreshores of the area and beyond low-water mark”, it must have in contemplation land that has two characteristics: first, that it is between high water mark and low water mark in the way referred to in Commonwealth v Yarmirr (above); and, second, that it is “beyond low-water mark” when viewed from the shore. Land having the first characteristic only is within s.205(1) and included in a local government area accordingly. If the second characteristic also exists in relation to a parcel of the land, that parcel is not within the local government area unless included by s.205(3). To be so included, it must also satisfy one of the concluding criteria in s.205(3), that is, it must be privately owned or have a structure erected on it.

57 The wharf with which this case is concerned extends from dry land for some 480 feet into Sydney Harbour. It is therefore erected on three relevant portions of land. Part of it is on land above high water mark. Part of it further into the harbour must be on land between high water mark and low water mark. The remainder is on land beyond low water mark. The first part is within the local government area of North Sydney without any assistance from s.205. The second and third parts, taken as a composite whole, are within paragraph (b) and the concluding words of s.205(3), “has a structure erected on it”.

58 It follows that the whole of the land occupied by the wharf is comprehended by s.205 of the Local Government Act 1993, with the result that the powers of North Sydney Council under that Act extended to the wharf as at 31 December 1993. The applicability of prohibitions imposed by that Act is therefore a matter necessary to be explored further.

Did the Local Government Act regulate demolition of the wharf?

59 Section 68 of the Local Government Act, as in force on 31 December 1993, required a person to obtain council approval before demolishing a building. The definition of “building” clearly extended to the wharf as a “structure”.

60 Section 4 of the Act provided that the Act bound the Crown “except to the extent that the Act otherwise provides”. Under section 69, the Crown was exempt from requiring council approval to demolish a building. It is not disputed that MSB was a statutory body representing the Crown and that s.69 applied to it. Although MSB was thus exempt, C&A was bound by s.68 because the prerogative of the Crown and its freedom from interference by a council in the matter of building operations does not extend to Crown lessees or licensees: Hornsby Shire Council v Danglade (1928) 29 SR (NSW) 118 and Ex parte O’Neill (1892) 13 LR (NSW) 280. In Danglade, the council obtained orders requiring the defendant lessees of Crown land to demolish and remove buildings that had been erected without council approval contrary to the Local Government Act 1919. In Ex parte O’Neill, the court held that a licensee of land vested in the Crown was bound by a by-law and thus liable for failing to notify the council before blasting rocks on the land.

61 Based on Citizens Airport Association v MSB and FAC and R v Portus; Ex parte Federated Clerks Union of Australia, however, MSB submits that C&A would have been acting “for the benefit and in the interest of” MSB and thus “on behalf of” the Crown, in demolishing the wharf at MSB’s request, with the result that C&A would have been exempted by s.69 from the impact of s.68 regarding demolition of the wharf. The cases mentioned consider the concept of “on behalf of a public authority” within definitions of various statutory terms appearing in other legislation. The phrase “on behalf of” does not appear in the relevant sections of the Local Government Act 1993. It therefore seems immaterial whether C&A would be acting “on behalf of” the Crown in relation to the demolition of the wharf. I am, in any event, not satisfied that the circumstance that demolition by C&A would be pursuant to a contract with MSB would cause C&A to be acting “on behalf of” MSB.

62 It follows that, subject to the impact of other legislation, demolition of the wharf could not lawfully have been carried out on 31 December 1993 in the absence of an approval of North Sydney Council under the Local Government Act 1993.

The powers of MSB in relation to the wharf

63 Section 33 of the Sydney Harbour Trust Act 1900 (as in force on 31 December 1993 but repealed in 1995) vested in the Sydney Harbour Trust Commissioners “exclusive control of the port [of Sydney] and of … wharfs”. The Commissioners’ powers were subsequently transferred to and became exercisable by MSB: Maritime Services Act, s.6.

64 The reference to “wharfs” in s.33 of the Sydney Harbour Trust Act 1900 are sufficient to cause that section to apply to the wharf with which these proceedings are concerned. That wharf, in any event, falls within the definition of “installation” and “structure” in the Maritime Services Act (see paragraph [53] above). By the legislation as in force at 31 December 1993, MSB therefore exercised control over the wharf as an installation used in connection with trading vessels (defined in s.2), in the sense that the erection or use of installations in the vicinity of any port or navigable waters required the written permission of MSB and had to accord with any condition of the permission (s.13JE). A person who used any unauthorised installation would be liable to pay a monetary penalty (s.13JG(1)) and the Board was empowered to remove and dispose of an unauthorised installation, and recover the cost of removal as a debt from the person (s.13JG(2)-(4)). A person who erected any structure in waters vested in or controlled by MSB required the permission of MSB (s.13T(3), (5)) and MSB was empowered to remove and dispose of unauthorised structures, and recover the cost of removal as a debt (s.13T(4), (9)).

65 The meaning of “exclusive control” is explained by cases on s.33 and analogous provisions of other legislation. In Parramatta City Council v Stauffer Chemical Co (Aust) Pty Ltd [1971] 2 NSWLR 500, it was submitted that the word “exclusive” in s.33 contains an implied negative, and that the exercise by a council, in respect of any area within the Port of Sydney, of any power within the scope of s.33 affects the operation of s.33. Hope J referred to Beaver v The Justices of Williamstown; Ex parte Hammond (1883) 9 VLR 454 and James Paterson & Co Pty Ltd v Melbourne Harbour Trust Commissioners [1961] VR 343 both of which considered analogous provisions of Victorian legislation. Those cases support a construction of the provisions as conferring control of the relevant port “as a public port”.

66 In Beaver, Stawell CJ said at p.456:

“It would in my opinion require very clear and distinct language in an Act of Parliament to justify the Court in holding that it was intended that the general Government should hand over exclusive control over general matters of Government to persons who are qualified to discharge duties relating to nautical matters but who may not be qualified to discharge the duties of the general government.”

67 In James Paterson, Adam J said at pp.351-352:

“By s.47 of the Act there is vested in the Commissioners the exclusive management and control and the preservation and improvement of the port generally. … Apart from specific authority, I should have thought that the exclusive powers of management and control conferred in general terms on the Commissioners by s.47 should be construed as conferring on them power to administer the Port of Melbourne as a public port, but not as warranting interference with a due and proper exercise of public rights in a manner consistent with the management, maintenance and conduct of the port as a public port …”

68 Although in Stauffer Hope J did not think it material to consider the precise extent of the control, he adopted the “as a public port” construction in determining how the Sydney Harbour Trust Act was affected by s.289(f) of the Local Government Act 1919 and Ordinance No. 37. I quote from p.508:

Sydney Harbour Trust Act

69 The decision of Hope J was affirmed on appeal: Parramatta City Council v Stauffer Chemical Co (Aust) Pty Ltd [1973] 1 NSWLR 229. Hutley JA said(at pp.231-2):

“I agree with the judgment [of Hope J] except on one small question. The point at which my views diverge from his is probably without any significance in the litigation between the parties, but it may be significant in other contexts. My caveat is solely directed to certain remarks of Hope J as to the effect of s.33 of the Sydney Harbour Trust Act , 1900, which gives the exclusive control of the Port of Sydney to the Maritime Services Board.

In considering whether the council of the City of Parramatta could impinge upon the Maritime Services Board’s control of the port, it was assumed that there was no power in the Maritime Services Board to pollute such port in the course of controlling it. If there is, and I consider there is, and the Board so acted, either by polluting itself or authorising acts which necessarily polluted the port, within the area of the City of Parramatta, a collision of a different kind from that envisaged by Hope J could occur.

It is legally possible that the City might attempt to restrain the Board or its servants from doing, within such part of the port as is within the area of the City of Parramatta, something in pursuance of its powers that the City regarded as pollutive. I cannot, therefore, agree that the power to prevent pollution given by s. 289 (f) of the Local Government Act , 1919, does not impinge upon the control of the Port of Sydney as a public port vested in the Board.

Local Government Act

Sydney Harbour Trust Act

Local Government Act

Sydney Harbour Trust Act

Local Government Act

Sydney Harbour Trust Act

70 The cases of Woollahra Municipal Council v MacLennon, both at first instance ([1969] 1 NSWR 609) and on appeal ([1970] 1 NSWR 273) and Royal Sydney Yacht Squadron v North Sydney Municipal Council (NSWLEC, McClelland J, 18 September 1981) concerning the coexistence of the Local Government Act 1919, the Sydney Harbour Trust Act and the Maritime Services Act support the analysis in the judgment of Hutley JA.

71 Section 10 of the Local Government Act 1919 was activated (so as to make that Act subject to the Sydney Harbour Trust Act) only when the Local Government Act actually affected the Sydney Harbour Trust Act. There is no equivalent of s.10 of the Local Government Act 1919 in the Local Government Act 1993 as in force on 31 December 1993. Nor are there any cases concerning the coexistence of the Act of 1993 and the Sydney Harbour Trust Act or the Maritime Services Act, so far as I am aware. It therefore becomes necessary to resolve the tension between the two enactments.

Statutory inconsistency

72 Section 68 of the Local Government Act 1993 is inconsistent with the Sydney Harbour Trust Act (s.33) and the Maritime Services Act (s.6) in promoting a council as the sole authority or an additional authority to approve the demolition of the wharf. In the absence of a provision such as s.10 of the Local Government Act 1919 that had resolved previous statutory “collisions”, it is accordingly necessary to decide whether the powers of MSB were or were not subject to the control regime under the Local Government Act.

73 The answer depends on the application of principles of statutory construction. The principles for determining whether there has been an implied repeal arising from inconsistency between statutes were considered by me in ISPT Nominees Pty Ltd v Chief Commissioner of State Revenue (2003) 53 ATR 527 at [101]-[118]. The contrariety test there discussed would apply to this case of inconsistency between two New South Wales statutes. In applying the test, the court will be guided by three main principles: the presumption of consistency (that the legislature did not intend to contradict itself); the “rule of commonsense”, and the maxim generalia specialibus non derogant. I quote from paragraphs [114]-[116] of ISPT Nominees:

“The effect of the presumption [of consistency] is that the party that argues that a statute has been implied repealed bears a heavy burden. Moreover, courts should, if reasonably possible, construe a statute in such a way as to avoid the conclusion that a pre-existing statute was impliedly repealed upon the subsequent statute’s enactment. ….

The next relevant principle is the ‘rule of commonsense’, which provides that it is rare for one statute in affirmative terms to be found impliedly repealed by another which is also in affirmative words. ….

generalia specialibus non derogant

74 The Sydney Harbour Trust Act was assented to on 11 February 1901 and commenced on 1 November 1900. The Maritime Services Act was assented to on 10 December 1935 and commenced on 1 February 1936. The Local Government Act 1993 was assented to on 8 June 1993 and commenced on 1 July 1993. The Sydney Harbour Trust Act and the Maritime Services Act are clearly earlier than the Local Government Act both in terms of the date of assent and commencement (see Black v Director-General of Education [1982] 1 NSWLR 576).

75 A later Act will not necessarily repeal pro tanto earlier Acts. In Howship Holdings Pty Ltd v Leslie & Anor (1996) 41 NSWLR 542 at pp.547-548, Young J said:

“There is a general rule that a later Act pro tanto repeals an earlier Act ... . That is only a prima facie rule. One has to actually work out what the intention of the legislature was.

Black v Director General of Education

76 The Sydney Harbour Trust Act and the Maritime Services Act vested “exclusive control” of the port of Sydney, including wharfs, in MSB. The Local Government Act 1993 provides for the regulatory functions of councils generally. Both the presumption of consistency between statutes and the rule of commonsense would militate against the implied repeal of s.33 of Sydney Harbour Trust Act and s.6 of the Maritime Services Act. In light of the rule that subsequent general legislation which is inconsistent with particular legislation does not repeal the particular legislation (generalia specialibus non derogant), the specific provisions of the Sydney Harbour Trust Act and the Maritime Services Act were not impliedly repealed by s.68 of the Local Government Act 1993, an apparently inconsistent provision cast in general terms. On that basis C&A did not require the prior approval of North Sydney Council under the Local Government Act 1993 for the demolition of the wharf on 31 December 1993.

77 The Sydney Harbour Trust Act and Maritime Services Act, as in force on 31 December 1993, referred to certain things that could not be done in relation to “installations” without the permission of MSB: see paragraph [64] above. Demolition is not one of the things expressly mentioned. It may well be, however, that it would have been inconsistent with MSB’s “exclusive control” of the wharf for C&A to demolish it, at least in the absence of MSB’s concurrence in that course of action. Even if that were so, the Act would not have stood in the way of demolition by C&A, given the terms of the lease between MSB as lessor and C&A as lessee and the course of dealings in which MSB had actively sought to have MSB effect demolition. I refer in that connection to relevant correspondence. MSB had requested C&A to demolish the wharf during the term: see the letter from the “A/Property Controller” of MSB Mr Michael J. Lonie to the Assistant Superintendent of C&A Mr Ian MacLeod dated 10 November 1992. MSB also indicated that it consented to the development application being lodged with the North Sydney Council by C&A in a letter from Mr Lonie to the Council dated 7 September 1993: see paragraph [39] above.

Environmental planning instruments

78 C&A submits that the North Sydney Local Environmental Plan 1989 (“NSLEP 1989”) and the Sydney Regional Environmental Plan 23 – Sydney and Middle Harbours (“SREP 23”) as in force on 31 December 1993 presented obstacles to the lawful demolition of the wharf on that date. The NSLEP 1989 and SREP 23 were made pursuant to the Environmental Planning and Assessment Act 1979.

79 The “Ball’s Head Bay Coal Loader, Quarantine Station” is listed as a “heritage item” under Schedule 2 of the NSLEP 1989. Clause 37(1) of NSLEP 1989 provides that:

80 However, the NSLEP 1989 does not refer to or affect the wharf as distinct from the Coal Loader.

81 SREP 23 regulates the wharf because of its location within the Sydney Region (clause 3 and the map entitled SREP 23 (“the Map”)) and prevails over the NSLEP to the extent of any inconsistency (clause 4(1)). Under Part 2 of SREP 23, the area of the wharf and the Map was zoned “W1 - General Waterways” (clause 9) and the development control table for the zone provided:

“ Zone No. W1 – General Waterways

The objective of this zone is to permit a wide range of waterway activities and facilities that are generally compatible with the existing or planned future character of the adjoining foreshore lands.

Aids to navigation; maintenance dredging; single moorings.

Any purpose other than a purpose included in item 2.

Nil.”

82 Clause 5 of SREP 23 defined “development” as follows:

“’development’ has the same meaning as in section 4 of the Act, and includes the clearing of land, earthworks, the placement of mooring piles and dredging.”

83 Section 4(1) of the Environmental Planning and Assessment Act as then in force provided:

(b) the carrying out of a work in, on, over or under that land;

84 Section 34(1) of the Environmental Planning and Assessment Act stated:

“Expressions used in an environmental planning instrument shall, unless the contrary intention appears, have the same meanings respectively as they have in this Act.”

85 The definitions of “development” in both SREP 23 and the Environmental Planning and Assessment Act as in force on 31 December 1993 did not refer to “demolition”. Does it follow that demolition of the wharf was not restricted by SREP 23? In Belle Design Group Pty Ltd v Woollahra Municipal Council (2004) 136 LGERA 1, Bignold J held that demolition was not prohibited by the Woollahra Local Environment Plan 1995 in which the relevant development control table prohibited “[a]ny development other than development included” under the preceding headings, namely, “Development which may be carried out without development consent” and “Development which may be carried out only with development consent”. This was because “development” in the Plan had the same meaning in s.4(1) of the Environmental Planning and Assessment Act which did not refer to “demolition” at the relevant time.

86 That reasoning is equally applicable here. It leads to the conclusion that demolition of the wharf on 31 December 1993 would not have constituted “development” for the purposes of SREP 23. Nor would it have constituted “water based development”, the definition of which is based on the term “development” (clause 5(1); Schedule 3(q)).

87 Clause 10 of SREP 23 applied to the development control table for “Zone No. W1 – General Waterways”. It provided as follows:

“10.(1) The objectives of a zone are set out in the Table to this clause under the heading “Objectives of zone” appearing in the matter relating to the zone.
(2) Except as otherwise provided by the plan, in relation to land within a zone specified in the Table to this clause, the purposes (if any) for which –

(a) development may be carried out without development consent; and
(b) development may be carried out only with development consent; and
(c) development is prohibited,
are specified under the headings ‘Without development consent’, ‘Only with development consent’ and ‘Prohibited’, respectively, appearing in the matter relating to the zone.

(3) Except as otherwise provided by this plan, the consent authority shall not grant consent to an application to carry out development on land to which this plan applies unless it is of the opinion that the carrying out of the development is generally consistent with the aims and objectives of this plan and of the zone within which the development is proposed to be carried out.”

88 In the table for Zone No. W1 – General Waterways, development for purposes other than those specified in item 2 are dealt with by item 3 as “any purpose other than a purpose included in item 2” which “may be carried out only with development consent”. When the table is read in conjunction with clause 10, it is clear that the table regulates development for various purposes, although the word “purpose” is used instead of “development” in item 3. By analogy with the Belle Design Group case, the demolition of the wharf was therefore not restricted by Part 2 of SREP 23 on 31 December 1993.

89 The application of s.33 of the Sydney Harbour Trust Act is not suspended by clause 6(1) for enabling a “development” to be carried out in accordance with the plan or a consent granted under the Environmental Planning and Assessment Act. This is because of clause 6(2). Clause 6 as a whole reads:

“ Suspension of laws
6. (1) For the purpose of enabling development to be carried out in accordance with this plan … or in accordance with a consent granted under the [ Environmental Planning and Assessment Act ] section 33 of the Sydney Harbour Trust Act 1900, to the extent necessary to serve that purpose, shall not apply to the development.

90 Mr Einfeld QC for MSB submitted that the definition of “development” under SREP 23 was the same as the definition in s.4 of the Environmental Planning and Assessment Act, which was extended to include demolition of buildings by s.75 and the NSLEP 1989. The relevant provisions of the Environmental Planning and Assessment Act are:

(d) controlling the demolition of buildings or works;

Part

91 It is sufficient to note that the extended definition of “development” provided by section 75 applies only to Part 4 of the Environmental Planning and Assessment Act. It was therefore not imported into SREP 23 which, in the relevant respect, continued to take its meaning from the definition of “development” in s.4(1) of the Act.

Heritage Act 1977

92 C&A also relies on the Heritage Act to support its submission that the demolition of the wharf on 31 December 1993 would have been unlawful. Specifically, C&A says that the Heritage Act was binding on MSB and applicable to the wharf. This submission is based on the proposition that the wharf was a “relic” for the purpose of the Heritage Act and could not be lawfully demolished without a permit under s.139.

93 The Heritage Act as in force on 31 December 1993 contained the following definition of “relic” (s.4):

94 This definition of “relic” in the Heritage Act has never been the subject of judicial comment, as far as I am aware. Mr Dicker of counsel for the defendant submitted that the wharf should be regarded as a relic because of its age, its clear heritage significance and the fact that it exists in Sydney Harbour.

95 That the wharf is at least 50 years old is not disputed. I note that a report regarding the coal loader prepared for the North Sydney Council by “Conservation Planner, C Kemp” and dated 16 August 1993, states:

“The wharf was built progressively from 1918 to 1920.”

96 The Waverton Peninsula Industrial Sites – Conservation Management Plan dated May 2000 also states:

“With the land prepared, a wharf was built into Balls Head Bay between 1918 and 1920.”

97 Mr Dicker submitted that “the settlement of … New South Wales” may include the provision of commercial and marine facilities. That may be so, but the essential aspect of “settlement”, it seems to me, is that it causes to be settled, used and inhabited territory which, from a non-Aboriginal perspective, was not previously settled, used and inhabited. The “settlement” referred to is that of “the area that comprises New South Wales”, not of some locality within or forming part of New South Wales. On that footing, an item could, in my opinion, be a “relic” as defined only if it related to the process that saw New South Wales converted from what was once called “waste lands” into a community of the European (specifically, British) kind.

98 Verse is not evidence. I nevertheless set out in full a poem written by Henry Lawson in 1916:

“ The Sacrifice of Ball’s Head

Where picnic parties used to go
To spend a glorious day,
With all the scenery of a coast
And not a cent to pay.
The deep cool tangle shall be cleared
To make the glaring roads
And motor lorries jolt and grind
And drag their sordid loads.

And strings of grimy trucks shall run
In everlasting trains
And on the cliffs where wild trees are
Shall stand the soulless cranes,
To dump their grimy loads below,
Where great brown rocks are grand;
And the deep grass and wild flowers grow –
And boating couples land.

No more shall poorer families
Give ‘Grandma’ and ‘Grandad’
A glimpse of nature’s mysteries
To make their old hearts glad.
No more our eyes shall be relieved
In the city’s garish day –
A sordid crime has been achieved!
And none has aught to say.”

99 Taken at face value, this suggests that Balls Head was “settled” at that time. It was then, as now, a popular recreation area visited by “boating couples” and “picnic parties”. Common knowledge would testify that the whole of Sydney Harbour was, by the second decade of the twentieth century, part of “settled” New South Wales and had been for a considerable period.

100 I find that the wharf was not, at 31 December 1993, a “relic” as defined by the Heritage Act as then in force.

Conclusion on the illegality question as at 31 December 1993

101 As the law stood on 31 December 1993, no provision of a statute or statutory instrument would have prohibited demolition of the wharf by C&A, either absolutely or in the absence of some form of official consent or permission. Unilateral action by C&A to demolish may well have been inconsistent with MSB’s “exclusive control” under the Sydney Harbour Trust Act and the Maritime Services Act. But demolition by C&A in conformity with the lease terms – that is, in satisfaction of a contractual obligation owed to MSB – would not have been inconsistent with that “exclusive control”, particularly in the factual circumstances where MSB was actively seeking compliance with the obligation by C&A. Indeed, MSB, by requiring demolition, was exercising an aspect of its “exclusive control”.

The need to consider the illegality question at a later time

102 In Mills v Ruthol (2004) 61 NSWLR 1, Palmer J undertook a comprehensive review of decided cases and textbook commentary on the question of the point of time at which a party seeking equitable damages under s.68 of the Supreme Court Act must be seen to have a right to specific performance or injunction. His Honour demonstrates convincingly that damages in lieu cannot be awarded unless it is shown that the equitable relief could have been granted at the commencement of proceedings. Palmer J stated his conclusion as follows (at p.13):

Supreme Court Act

could

would

103 Where, as in the present case, questions of statutory illegality arise for consideration, the impact of relevant statutory provisions thus needs to be examined as at the time of commencement of the proceedings in which the equity founding a right to specific performance is asserted. The court will not decree specific performance where the act compelled would have been unlawful at the time proceedings were commenced. Such a case is one in which, in Palmer J’s terminology, the court neither “could” nor “would” have granted specific performance. The consequences, in terms of damages in lieu of specific performance, were stated by Isaacs J in Norton v Angus (1926) 38 CLR 523 at p.534, a case concerning the impact of Queensland Crown lands legislation:

“For the reasons given, the nature of the case itself, as matters stood at the institution of the action and as they still stand, renders it absolutely impossible, in my opinion, to order specific performance. Such an order would violate the statute. It would compel the parties to do what, if done, would be a breach of a statute regulating a matter of high public policy. It would direct an act in breach of a condition imposed by the Crown and Parliament in relation to the tenancy of Crown lands. Whatever the penalty for such a breach, the breach itself is unlawful, and no Court, in my opinion, is empowered to direct any breach of a statute. Therefore, equitable damages in substitution for specific performance seem to me to be altogether out of consideration.”

104 Because these proceedings were commenced by statement of claim filed on 17 December 1999, it is necessary to consider whether any order for specific performance of the promise to remove the wharf made on that date would have compelled C&A to act unlawfully.

Changes to relevant legislation and other measures between 31 December 1993 and 17 December 1999

105 The first matter to be mentioned under this heading is that, with effect from 1 July 1995, s.6 of the Maritime Services Act was repealed by the Ports Corporatisation and Waterways Management Act 1995 (Schedule 4.15 [6]). The Ports Corporatisation and Waterways Management Act dissolved MSB (and its subsidiaries) (s.5), established the Marine Ministerial Holdings Corporations (s.29) and the Waterways Authority (s.35), and transferred the powers, authorities, duties and functions of MSB under the Maritime Services Act to the Minister for Ports and Waterways (“the Minister”) (Schedule 4.15 [5]; Maritime Services Act, s.2B). The Ports Corporatisation and Waterways Management Act also repealed the Sydney Harbour Trust Act as of 1 July 1995 (s.111 and Schedule 3).

106 The Environmental Planning and Assessment Act was amended, as from 1 July 1998, so as to include “demolition of a building” within the definition of “development”.

107 With effect from 22 March 1994, SREP 23 (Amendment No. 1) caused the category of wharfs to be included under Schedule 3(o) of SREP, amended clause 8 and inserted Schedule 5.

108 On 21 August 1998, the Sydney Environmental Planning Policy No. 56 – Sydney Harbour Foreshores and Tributaries (“SEPP 56”) was introduced. It was amended on 1 April 1999.

109 The Waverton Peninsula Strategic Masterplan (the “Waverton Masterplan”) was made pursuant to SEPP 56 in March 1999.

110 On 3 March 1999, clause 73 of NSLEP and clause 4(3) and Schedules 3 and 5 of SREP 23 were amended by NSLEP 1989 (Amendment No 60).

Did any of these changes cause demolition of the wharf to be unlawful in 17 December 1999?

111 From 1 July 1998, the definition of “development” in s.4 of the Environmental Planning and Assessment Act was amended by the Environmental Planning and Assessment Amendment Act 1997, to include a reference to the “demolition of a building or work”:

“‘development’ means:
(a) the use of land, and
(b) the subdivision of land, and
(c) the erection of a building, and
(d) the carrying out of a work, and
(e) the demolition of a building or work, and
(f) any other act, matter or thing referred to in section 26 that is controlled by an environmental planning instrument,
but does not include any development of a class or description prescribed by the regulations for the purposes of this definition.”

112 The term “development” in clause 5 of SREP 23 continued to have the meaning given by s.4 of the Environmental Planning and Assessment Act. By clauses 4(1) and 4(3) SREP 23 was applicable to the wharf and prevailed over the NSLEP 1989 to the extent of any inconsistency, except for clause 73 of the NSLEP. Specifically, clause 73 of the NSLEP provided:

“ Former BP Site, Coal Loader Site and Caltex Site, Balls Head
(1) This clause applies to the land known immediately before the commencement of this clause as the Former BP Site, Coal Loader Site and Caltex Site, Balls Head.

(a) the proposed use is compatible with the item and its site and would not adversely effect its heritage significance; and

(b) the proposed use is compatible with the predominant uses in the locality and would not adversely affect the amenity of the neighbourhood or the quality of the environment; and

(c) the conservation of the heritage item depends upon the granting of the consent.

113 “Coal loader – Balls Head Drive, Waverton” is listed as a “heritage item” (Schedule 5 of SREP 23).

114 An effect of the amended definition of “development” that had applied from 1 July 1998 was that, on 17 December 1999, demolition of the wharf constituted “water based development” as defined by clause 5 and Schedule 3(o) of SREP 23 (as amended). By clause 8(4) of SREP 23, the Minister for Ports and Waterways was the relevant and sole consent authority for “water based development”. Clause 8(4) of SREP 23 provides:

“The consent authority for water based development proposed to be carried out on any land to which this plan applies is the Board.”

115 As the wharf was zoned “W1 – General Waterways” (clause 9 and the Map) and demolition was not a purpose permitted without development consent under the development control table for Zone No. W1 – General Waterways (see paragraph [81] above), C&A would have required development consent to demolish the wharf on 17 December 1999.

116 The Sydney Environmental Planning Policy 56 (SEPP 56) was also applicable to the wharf (clause 4). It prevailed over other environmental planning instruments (e.g. SREP 23, NSLEP) to the extent of any inconsistency (clause 5(1); Environmental Planning and Assessment Act 1979, s.36).

117 SEPP 56 listed the “Coal Loader Site, Balls Head” as a “site of strategic significance” (Schedule 2, Map 10). Clause 14(1) of SEPP 56 provided that development consent for the Coal Loader Site must not be granted unless there was a master plan for the land, the consent authority had considered the master plan and the development was consistent with the master plan. The Minister for Urban Affairs and Planning was empowered to waive compliance with the requirements of clause 14(1) (clause 14(2)). In addition, the consent authority was required to seek the views of the Director General before granting consent to a development application (clause 15). These requirements effectively guided the ministerial consideration of a development application for consent to the demolition of the wharf.

118 The Waverton Masterplan concerns strategies for the future development of the Coal Loader Site. In relation to the wharf, the Masterplan noted:

“COAL LOADER WHARF -
Investigate potential uses subject to full structural evaluation and commercial viability that might include:
- intermittent ferry access
- mooring and basic ancillary support for medium to large vessels
- public access”

“COAL LOADER WHARF
- Seek to maintain framework structure for adaptive use for vessels
- Re-use salvaged timbers in development of sites”

“COAL LOADER WHARF AND GANTRY WAYS
- Commission a detailed survey-focussed on possible retention and reuse.
- Seek to re-use and adapt the wharf structure for large vessel moorings and ferries.
- Salvage all useable timber and metal from any demolition of the wharf and re-use in land-based landscape or architectural works.
- Carry out remedial works as required to conserve existing gantry structures and to make safe areas progressively opened up for public access.
- Investigate reuse of water level gantries for a range of public recreation and working waterfront activities including recreational fishing, mooring.”

119 The position at 17 December 1999 was, in summary, that C&A was prohibited by SREP 23 from demolishing the wharf in the absence of development consent by the Minister for Ports and Waterways whose duty it would have been to consider any application for such consent in accordance with SEPP 56 and the Waverton Masterplan.

120 Submissions were made as to what the Minister might have done in considering an application by C&A for consent to demolition of the wharf, with particular reference to indications said to arise from the Waverton Masterplan. Mr Dicker pointed out on behalf of C&A that the route of a footpath shown in the Masterplan included the wharf and that the Masterplan also contemplated that the wharf structure would be retained, adapted and reused. This, it was said, implied that the Minister would have refused consent to demolition of the wharf. Mr Einfeld QC, on behalf of MSB, drew attention to a feature of the Masterplan acknowledging a potential to “re-use salvageable materials in redevelopment of sites eg. wharf timbers” and referring to a need for extensive timber removal and replacement. That, it was said, pointed towards a preference for demolition and is consistent with a probability that consent to demolish the wharf would have been granted, if sought by C&A.

121 It is, in my view, beside the point to speculate, by reference to the content of the Waverton Masterplan, what might have been the outcome of an application for the Minister’s consent to demolition of the wharf in December 1999. A range of considerations would have affected the relevant decision-making. Consistency with the Masterplan would have been a requirement under clause 14(1) of SEPP 56. But, as has been noted already, the Minister would have been under a duty to seek (and no doubt take into account) the views of the Director General, added to which there was always the possibility that the Minister for Urban Affairs and Planning, acting under clause 14(2) of SEPP 56, could have waived compliance with the clause 14(1) requirements. No reliable conclusion can be reached on what is a wholly hypothetical and speculative question.

122 It is, in any event, unnecessary to speculate on whether the Minister would have consented to the demolition of the wharf had C&A applied for development consent. The significant point is that, in the absence of any relevant consent by the Minister (and there can be no suggestion, on the evidence, that any such consent was in force on 17 December 1999), removal of the wharf by C&A would, on that date, have been unlawful because contrary to statute.

Conclusion on the illegality question as at commencement of proceedings

123 For the reason just stated, C&A would have acted unlawfully had it removed the wharf on 17 December 1999. As at the commencement of these proceedings, therefore, any order of the court directed to C&A and requiring it to perform the unfulfilled promise in clause 7 of the lease to remove the wharf would have been an order requiring the performance of an unlawful act.

124 The court would therefore not have made, on 17 December 1999, the order for specific performance on which the viability of the claim by MSB for damages under s.68 of the Supreme Court Act is dependent.

Relief

125 In view of the way in which MSB’s case was pleaded, opened and argued, it is, I think, desirable that I do no more at this point that re-state my central findings and then hear submissions as to the orders that should be made as a consequence of those findings, assuming that the parties do not come to some consensus as to the appropriate orders.

126 The findings are as follows:

1. The failure of C&A to remove the wharf at or before the expiration of the term created by the memorandum of lease dated 12 January 1972 (as subsequently varied) constituted breach by C&A of the contractual promise contained in clause 7 of the memorandum of lease.

2. It would not have been unlawful for C&A to remove the wharf at any time during the period commencing on 10 November 1992 (when MSB, in exercising the “exclusive control” over Sydney Harbour vested in it by s.33 of the Sydney Harbour Trust Act 1900, required C&A to remove all structures and equipment) and ending at the expiration of the term created by the memorandum of lease (as varied).

3. Because no relevant consent of the Minister for Ports and Waterways was for the time being in force, it would have been unlawful for C&A to remove the wharf on the day on which these proceedings were commenced, being 17 December 1999.

4. If MSB’s application for an order for specific performance requiring C&A to remove the wharf were pressed, the court would decline to make that order.

127 The parties may approach my Associate in the new term to arrange for the matter to be re-listed for directions as to the making of submissions.

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Citations

Waterways Authority of New South Wales v Coal and Allied Operations Pty Limited [2005] NSWSC 1285

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CITATION:	Waterways Authority of New South Wales v Coal and Allied Operations Pty Limited [2005] NSWSC 1285
HEARING DATE(S):	15/08/05, 16/08/05, 17/08/05 Written submissions: 02/09/05; 16/09/05
JUDGMENT DATE :	15 December 2005
JURISDICTION:	Equity Division
JUDGMENT OF:	Barrett J
DECISION:	See paragraphs 125 and 126

CATCHWORDS:	LANDLORD AND TENANT - covenants - covenant by tenant to remove all structures before expiration of term - in default landlord may "retain the same" or remove at tenant's cost - whether landlord's contractual right to retain or remove was sole remedy where tenant failed to remove - whether failure to remove was breach of contract - EQUITY - equitable remedies - specific performance - damages in lieu of specific performance - whether such damages will be awarded where act to be compelled by order for specific performance is unlawful - time at which lawfulness of act to be considered - LOCAL GOVERNMENT - ENVIRONMENTAL LAW - conspectus of provisions regulating development - specific provisions governing Sydney Harbour, Waverton Peninsula and Balls Head Coal Loader at 31 December 1993 and 17 December 1999 - LOCAL GOVERNMENT - definition of boundaries of local government areas - STATUTES - interpretation - whether inconsistency effects implied repeal - WORDS AND PHRASES - "exclusive control", "relic", "settlement"
LEGISLATION CITED:	Conveyancing Act 1919, s.133A Environmental Planning and Assessment Act 1979, ss.4(1), 6, 26, 34(1), 36, 75 Environmental Planning and Assessment Amendment Act 1997 Heritage Act 1977, ss.4, 139 Local Government Act 1919, ss.10, 289(f), Ordinance No 37 Local Government Act 1993, ss.4, 10, 68, 69. 72, 205, Maritime Services Act 2B, ss.2, 6, 13JE, 13JG, 13T Ports Corporatisation and Waterways Management Act 1995, ss.5, 29, 35, 111, Schedules 3, 4-15 Supreme Court Act 1970, s.68 Sydney Harbour Trust Act 1900, s.33
CASES CITED:	Beaver v The Justices of Williamstown; Ex parte Hammond (1883) 9 VLR 454 Belle Design Group Pty Ltd v Woollahra Municipal Council (2004) 136 LGERA 1 Black v Director-General of Education [1982] 1 NSWLR 576 Citizens Airport Association v MSB and FAC (1993) 79 LGERA 254 Commonwealth v Yarmirr (1999) 101 FCR 171 Ex parte O’Neill (1892) 13 LR (NSW) 280 Gimtak Pty Ltd v Cathie [2001] V ConvR 54-645 Graham v Market Hotels Ltd (1943) 67 CLR 567 Hornsby Shire Council v Danglade (1928) 29 SR(NSW) 118 Howship Holdings Pty Ltd v Leslie & Anor (1996) 41 NSWLR 542 ISPT Nominees Pty Ltd v Chief Commissioner of State Revenue (2003) 53 ATR 527 James v Hutton and J Cook and Sons Ltd [1950] 1 KB 9 James Paterson & Co Pty Ltd v Melbourne Harbour Trust Commissioners [1961] VR 343 Joyner v Weeks [1891] 2 QB 31 Mills v Ruthol (2004) 61 NSWLR 1 Norton v Angus (1926) 38 CLR 523 Parramatta City Council v Stauffer Chemical Co (Aust) Pty Ltd [1971] 2 NSWLR 500 Re Zis; O’Donnell v Keogh [1961] WAR 120 R v Portus; Ex parte Federated Clerks Union of Australia (1949) 79 CLR 428 Royal Sydney Yacht Squadron v North Sydney Municipal Council (NSWLEC, McClelland J, 18 September 1981) Starline Drive-In Theatre Ltd v Federal Commissioner of Taxation (1964) 112 CLR 458 Telecom & CPS Community Credit Cooperative Ltd v Heberg Pty Ltd [1993] ANZ ConvR 312 Vopak Terminals Australia Pty Ltd v Commissioner of State Revenue (2004) 55 ATR 1 Woollahra Municipal Council v MacLennon [1969] 1 NSWR 609 Woollahra Municipal Council v MacLennon [1970] NSWR 273
PARTIES:	Waterways Authority of New South Wales - Plaintiff Coal and Allied Operations Pty Limited - Defendant
FILE NUMBER(S):	SC 5099/99
COUNSEL:	Mr M.L.D. Einfeld QC/Mr J.M. Atkin - Plaintiff Mr M.C.L. Dicker - Defendant
SOLICITORS:	Dibbs Abbott Stillman - Plaintiff Allens Arthur Robinson - Defendant