Western Holdings (Tas) Pty Limited CDC Nominees (GRC) Pty Limited v State of Tasmania
[1999] TASSC 92
•8 September 1999
[1999] TASSC 92
CITATION:Western Holdings (Tas) Pty Limited CDC Nominees (GRC) Pty Limited v State of Tasmania [1999] TASSC 92
PARTIES: WESTERN HOLDINGS (TAS) PTY LIMITED
CDC NOMINEES (GRC) PTY LIMITED
v
TASMANIA (State of)
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 2198/1997
DELIVERED ON: 8 September 1999
DELIVERED AT: Hobart
HEARING DATE: 12 - 15 April 1999
JUDGMENT OF: Cox CJ
CATCHWORDS:
REPRESENTATION:
Counsel:
Plaintiff: J D Merralls QC
Defendant: D J Bugg QC and S Lighton
Solicitors:
Plaintiff: Page Seager
Defendant: Director of Public Prosecutions
Judgment Number: [1999] TASSC 92
Number of paragraphs: 26
Serial No 92/1999
File No 2198/1997
WESTERN HOLDINGS (TAS) PTY LIMITED
CDC NOMINEES (GRC) PTY LIMITED v STATE OF TASMANIA
REASONS FOR JUDGMENT COX CJ
8 September 1999
This action concerns the proper interpretation of cl 11(b) in an agreement between the plaintiffs and the Minister administering the National Parks and Wildlife Act 1970 ("the Act") and the determination of the question whether or not the Minister breached his obligations under that clause.
The defendant, which is sued pursuant to the Crown Procedures Act 1993, s5(2)(a), admits the following allegations in the statement of claim as amended:
· On or about 30 May 1995 the first named plaintiff (then named Gordon River Cruises Pty Ltd) entered into an agreement with the Minister concerning the continuation by the first named plaintiff of certain operations in the Tasmanian Wilderness World Heritage Area ("the first agreement"). It was a term of the first agreement that it would remain in force for 10 years from 1 June 1995.
· By cl 4 of the first agreement, the Minister agreed to authorise the Director of National Parks and Wildlife ("the Director") to issue the first named plaintiff with a licence, pursuant to the Act, with respect to each of four vessels referred to in the first agreement.
· Licences dated 31 May 1995 were issued to the first named plaintiff in respect of vessels known as "Force 10", "James Kelly II", "Gordon Explorer" and "Wilderness Seeker". All these licences were issued pursuant to the Act, s25B and in accordance with the first agreement.
· Each of those licences was expressed to be effective from 1 June 1995 until 31 May 2005 and, subject to its terms and conditions, it authorised the use of the vessel in respect of which it was issued, or any replacement vessel approved in writing by the Director, as a commercial tourist facility and cruise boat within the parts of the Tasmanian Wilderness World Heritage Area to which the first agreement applied.
· Each of those licences was expressed to be read in conjunction with the first agreement and by virtue of the National Parks and Wildlife Amendment (Business Licences) Act 1995 ("the amending Act"), s8, each of those licences, since 1 February 1996, has been taken to be a business licence under the Act, as amended by the amending Act.
· On about 21 December 1995, the first named plaintiff and the second named plaintiff agreed to enter into a joint venture to conduct the operations in the Tasmanian Wilderness World Heritage Area which, until then, had been conducted by the first named plaintiff.
· On or about 2 February 1996, the plaintiffs entered into a second agreement ("the second agreement") with the Minister in substitution for the first agreement. It was a term of the second agreement that it would remain in force for 10 years from 1 June 1995. The operative terms of the second agreement were mutatis mutandis the same as those of the first agreement.
· Business licences dated 2 February 1996 were issued to the plaintiffs in respect of the vessels, "Force 10", James Kelly II", "Gordon Explorer" and "Wilderness Seeker", pursuant to the Act, as amended, s25E and in accordance with the second agreement.
· Each of those business licences was expressed to be effective from 1 June 1995 until 31 May 2005 and, subject to its terms and conditions, it authorised the use of the vessel in respect of which it was issued, or any replacement vessel approved in writing by the Director, as a commercial tourist facility and cruise boat within the parts of the Tasmanian Wilderness World Heritage Area to which the second agreement applied and each of those business licences was expressed to be read in conjunction with the second agreement.
· It was a term of the second agreement:
"11(b)In the event that the Minister shall issue any further licences with respect to the carriage by vessels of passengers in the Historic Site and/or the River then the Minister shall ensure that such vessels have demonstratively very low wash with a maximum wave wash height of thirty millimetres (30mm) with a power for the Minister to vary wave wash height subject to the receipt of scientific data and advice which justifies a variation and otherwise generally comply with environmental and other standards including but not limited to the standards recommended in the Lower Gordon River Recreation Zone Plan of 1995 (and in this regard the Companies acknowledge that any replacement vessel acquired to replace any of the Vessels shall comply with the same standard."
The companies referred to in cl 11(b) are the first plaintiff and the second plaintiff.
· The plaintiffs conduct a business under the name of Gordon River Cruises of carrying passengers by the four vessels mentioned above within the area described in cl 11(b) of the second agreement as "the Historic Site and the River".
It is common ground that:
· On 31 October 1991, the Director, on the authority of the Minister, issued a licence to World Heritage Cruises, pursuant to the Act, s25B, (as it then stood) to operate a cruise boat business and conduct tours in the Franklin Gordon Wild Rivers National Park and Macquarie Harbour Historic Site ("the Parks") for a term of five years from 1 November 1991 and that the licence authorised the use of the vessel "Heritage Wanderer" or its approved replacement.
· On 19 September 1996 the Director, relying on the provisions of cl 4(c) of the licence, approved the vessel "Wanderer II" as a replacement vessel for "Heritage Wanderer".
· On 31 October 1996, the Minister gave authority for the vessel "Wanderer II" to be used in accordance with the business licence for the period of four months, to expire on 28 February 1997. The plaintiffs claim this amounted to the issue of a licence contrary to cl 11(b) of the agreement. The defendant contends that the Minister's actions amounted to a renewal of the business licence, pursuant to the Act, s25H.
· On 27 February 1997, similar authority was granted to the use of "Wanderer II" for a further month. The parties adopt the same contentions in respect of this action of the Minister.
· On 30 April 1997, a business licence purporting to be issued pursuant to the Act, s24D to Troy Donald Grining and Guy Robert Grining ("the Grinings"), trading as World Heritage Cruises, in respect of "Wanderer II" to conduct operations involving the carriage of passengers within the area, or substantially within the area, for which the plaintiffs' licences had been issued. The business licence was expressed to be issued for the period commencing 1 April 1997 and expiring on 31 March 2006. The defendant acknowledges that such a licence issued as alleged, but claims that it was invalid due to the signatory to that licence not being the holder of a delegation from the Minister and that it was replaced by a business licence in the same terms validly issued on 29 October 1997.
· "Wanderer II" did not, as at 1 November 1996, 1 March 1997 or 1 April 1997, have a demonstratively very low wash within the meaning of cl 11(b) of the second agreement, or a maximum wave wash height of 30 millimetres or less.
· The Minister has not, in relation to "Wanderer II", or indeed any other vessel, varied the wave wash height stipulated by cl 11(b) of the second agreement.
· In none of the authorities or licences granted or renewed in respect of the operation of "Wanderer II" referred to above, was there a condition imposing a limit to the wave wash height of a maximum of 30 millimetres, nor did the Minister ensure that in operating under such licence or authorities, "Wanderer II" would have a demonstratively very low wash with a maximum wave wash height of 30 millimetres.
The plaintiffs contend that in the circumstances, the defendant was in breach of cl 11(b) in giving the Grinings authority to use "Wanderer II" for the periods of four months commencing 1 November 1996, one month commencing 1 March 1997 and nine years commencing 1 April 1997. The defendant disputes any such breach, contending that the Minister's actions in respect of each period did not amount to the issue of any further licence within the meaning of cl 11(b).
In 1984, the Act was amended by the insertion of s25B in these terms:
"25b ¾ (1) A person shall not, in a State reserve ¾
(a)sell or hire out, offer or expose for sale or hiring out, or have in his possession for selling or hiring out, any article, material or other thing; or
(b)provide, offer to provide, or hold himself out as willing to provide, any service or facility for any monetary or other consideration;
unless that person is the holder of a licence issued under this section.
Penalty: $500.
(2) A person who seeks a licence under this section may make application to the Director in a form approved for that purpose by the Director.
(3) On receipt of an application referred to in subsection (2), the Director shall forward the application to the Minister together with such recommendations as the Director thinks fit.
(4) The Minister shall, as soon as practicable after receiving an application under subsection (3), grant or refuse to grant the application and shall advise the Director accordingly.
(5) Where the Minister grants the application under subsection (4), he shall authorize the Director to issue the applicant with a licence and to collect from the applicant such licence fee as is specified in that licence.
(6) A licence granted under this section ¾
(a)is subject to such fees, conditions, and restrictions as are specified in the licence;
(b)is in force for such period as is specified in the licence; and
(c)may be renewed on application to the Director in the same manner as an application for an original licence for such period and subject to such fees, conditions, and restrictions as the Minister may determine.
(7) Where the holder of a licence contravenes or fails to comply with any condition or restriction to which the licence is subject, the Minister may cancel the licence."
By Act No 112/1995, proclaimed to commence on 1 February 1996, s25B was repealed and the following relevant sections substituted:
"Business Licence
25B ¾ (1) A person, who is not the holder of a business licence must not, in a specified area of which the Director is the managing, authority ¾
(a) sell or hire out, offer or expose for sale or hiring out, or have in his or her possession for selling or hiring out, any article, material or other thing; or
(b) provide, offer to provide or hold himself or herself out as willing to provide, any service or facility for any monetary or other consideration; or
(c) take or cause to be taken any photograph or cine, video, movie or television film for or with a view to any monetary or other consideration.
Penalty: Fine not exceeding 10 penalty units.
(2) This section does not apply to a person who holds or licence in force under section 26.
(3) In this section, 'specified area' means a part or all of ¾
(a) a State reserve; or
(b) a game reserve; or
(c) a conservation area.
Application for business licence
25C ¾ (1) A person may apply to the Minister for a business licence.
(2) An application is to be ¾
(a) in writing; and
(b) accompanied by the prescribed fee; and
(c) accompanied by any information and documents the Minister requires; and
(d) lodged with the Minister.
(3) The Minister may remit any or all of the fee for an application.
Granting of business licence
25D ¾ (1) The Minister may ¾
(a) grant an application for a business licence, with or without conditions; or
(b) refuse to grant the application.
(2) The Minister, by notice in writing, must notify the applicant of ¾
(a) the grant of the application; or
(b) the refusal to grant the application and the reasons for the refusal.
Issue of business licence
25E ¾ (1) On granting an application for a business licence, the Minister is to issue a business licence to the applicant.
(2) A business licence may be in a contractual form or in any other form the Minister determines.
Variation of conditions
25F ¾ The Minister, by notice in writing to the holder of a business licence, may vary the conditions of the licence.
Term of business licence
25G ¾ A business licence is in force for the period specified in the licence.
Renewal of business licence
25H ¾ (1) The holder of a business licence, before the licence ceases to be in force, may apply to the Minister for a renewal of the licence.
(2) An application for renewal is to be ¾
(a) in writing; and
(b) accompanied by the prescribed fee; and
(c) accompanied by any information and documents the Minister requires, and
(d) lodged with the Minister.
(3) The Minister may ¾
(a) grant an application, with or without conditions; or
(b) refuse to grant the application.
(4) A licence is renewed ¾
(a) for a period determined by the Minister; and
(b) subject to any conditions specified in the licence as renewed."
Section 8 of the amending Act provided:
"8 ¾ (1) A licence or an agreement for a licence purportedly entered into under section 25b of the Principal Act between 18 April 1984 and the day on which the National Parks and Wildlife Amendment (Business Licences) Act 1995 commences, is taken to be a business licence under the Principal Act.
(2) A lease of, or licence to occupy, reserved land that is Crown land, or an agreement for such a lease or licence, purportedly entered into under section 26 of the Principal Act between 1 November 1971 and the day on which the National Parks and Wildlife Amendment (Business Licences) Act 1995 commences, is taken to be a lease or licence to occupy under the Principal Act."
A large amount of documentary material was placed in evidence by the plaintiffs with the consent of the defendant. Some additional documentary material and some parol evidence was tendered by the defendant and received de bene esse, objection being taken to its relevance. From the evidence adduced by the plaintiffs and not the subject of objection, the following conclusions can be drawn. For many years, difficulties had been encountered in the conduct of cruises on the Gordon River. There was rivalry between operators, the predecessors of the plaintiffs having been accorded special privileges in the form of an A category licence and priority of use of certain facilities on the River. There were, furthermore, environmental concerns caused by the threat of erosion of river banks due to the wash from the cruise ships. The issue was complicated by the necessity to provide vessels suitable for traversing the waters of Macquarie Harbour in conditions quite different from those encountered within the River itself. An inquiry was commissioned in 1994 and conducted by Sir Max Bingham QC, who recommended that a new licensing system should be introduced, putting existing cruise operators on equal terms and encouraging the use of vessels complying with standards which would minimise the risk of environmental damage. As the result of his recommendations, the amending Act of 1995 was passed and a system of business licences introduced. Existing licence holders had varying residues of their licence terms still to run their course. The plaintiffs' initial 10 year licence ran out in about May 1995 and the first agreement operated from 1 June 1995. By virtue of the amending Act of 1995, s8, it became a business licence when that Act was proclaimed to commence on 1 February 1996 and the following day, the second agreement was signed and operated as a business licence under the Act for the rest of the term granted under the first agreement. The Grinings' licence which, since November 1991, had authorised the operation of "Heritage Wanderer", was due to expire in October 1996. The licences of the other two operators were also due to expire within a year or so of the commencement of the amending Act.
It was contemplated that the first agreement entered into with the first named plaintiff should be one of a set of agreements in common form with the other operators, specifically incorporating the substance of cl 11(b). The restriction of a maximum wave wash height of 30 millimetres was designed to minimise the risk of erosion to the river banks, but at no material time did any of the vessels, the subject of any of the licences, comply with that standard. It was contemplated that environmentally unfriendly though the existing vessels were, their operators would be granted fresh licences, but that, as can be seen from the bracketed words of the clause, any replacement of them would have to comply with that standard.
On 28 July 1995, the Grinings wrote to the acting Director indicating that they intended to build a replacement vessel for the "Heritage Wanderer". They said:
"In regard to the new vessel, we are working towards the new Licence conditions even though those Licence conditions are not yet in force. We query however the necessity for model testing as that is not regarded as conclusive. Our research shows that the constraints imposed by the new Licence conditions as to a maximum wave wash height of 30 mm will be impossible to achieve. No current design can achieve this and we are particularly hampered by the varying conditions that are encountered as between Macquarie Harbour and the Gordon River."
On 3 October 1995, the acting Director wrote a memorandum to the Minister which included the following statements:
"When the new licence was being discussed with Gordon River Cruise's (GRC) [ie, the first named plaintiffs] representatives, John Harry and Ian Malcolm, Ian sought to include a clause in the agreement which would give GRC some reassurance that the Minister would, in considering an application for a new vessel to operate on the river, take wave wake height into account and not permit a new vessel to use the river unless it demonstrably had a low wave wake height.
As a result Clause 11 (b) was added, the 30 mm being at the bottom of the range of measurements achieved by the vessel with the lowest wake from the November tests, the 'Heritage Wanderer', the rationale being that any new vessel should as a minimum, produce a lower wake than any of the existing vessels.
Recognising that the November tests were not definitive, provision was included in the agreement for the Minister to vary this figure on the basis of new scientific information and advice.
GRC also received a letter from the Director assuring them that the environmental protection clauses, including those covering new and replacement vessels, would be common to all agreements.
At the present time, GRC are the only operator to have signed a new licence. Priority was given to them because they are the major operator and because they wanted the new licence to show to a possible purchaser. All other operators have draft licences and negotiations which will lead to signature are proceeding. The current situation with each operator is set out below.
Grinings are generally happy with the new draft, apart from the 30 mm requirement for new vessels which they don't believe are realistic, they will be making the 'Heritage Wanderer' available for further testing in October, to check the correctness of this figure and the difference which a load of passengers and fuel will make. They have some minor concerns with the licence on which further legal advice is being sought."
In a letter to the Grinings of 5 December 1995, concerning their application to replace the "Heritage Wanderer" with a new vessel, the acting Director warned them that its average maximum wave wake height would need to be assessed by the Australian Maritime College and that:
"… it would be inadvisable for you to sell your existing vessel until such time as you have the written approval of either the Director or the Minister, as required by whichever licence is in place at the time, to operate your new vessel on the Gordon River or other parts of the Tasmanian Wilderness World Heritage Area."
On 12 December 1995, the Minister wrote to the plaintiffs' solicitors advising that:
"The Grinings have been informed in writing and verbally on several occasions of the risk which they are taking and have been given no undertakings that the vessel under construction will be allowed to operate on the Gordon River other than in accordance with the conditions set out in the licensing agreement."
On 3 January 1996, the Premier wrote to the first plaintiff's directors advising that the Minister had advised him that his office had recently had discussions with the plaintiffs' accountant, Mr Ian Malcolm, in relation to the testing of the new vessel under construction for World Heritage Cruises (the Grinings). The Premier continued:
"I understand that Mr Malcolm has indicated his satisfaction with the assurances given by the Government, in regard to the performance requirements the new vessel will have to meet if it is to be licensed."
On 2 February 1996, the second agreement was signed. The Director wrote to the second named plaintiff on 8 May 1996 in response to a letter concerning licence conditions for tour operators on the Gordon River and seeking his comment in relation to the vessel "Wanderer II" then being built for the Grinings. He repeated that the Minister had been advised that all the obligations under the agreement with the first named plaintiff would be fulfilled and that the Grinings had been warned of the risks they were taking. In a briefing note to the new Minister dated 17 May 1996, the Director referred to the fact that the Grinings were then licensed under the old licensing regime until November that year and only in respect of part of the area, namely Zone 1. He said the new boat had been completed recently and that they would be required to meet "the tough new wave wash height conditions". He went on:
"Unfortunately the Grinings have still conducted no wave wash tests and, in fact, have indicated they don't believe the 30 millimetre limit is achievable. They, nonetheless, still seem intent on using the new vessel on the Gordon River. This could prove very difficult as, if they don't meet the wave wash limit, they will very likely place pressure on the Department and the Government to licence them in any case, given the size of the investment they have made. On the other hand, their commercial competitors [the plaintiffs] will insist on the condition being met before any new licence is issued."
Notwithstanding these statements, the Minister was advised on 15 August 1996, in a minute cleared by the Director, that he should approve, first, the issue of a new licence under the Act, s25B to the Grinings for 10 years from the expiry of their existing licence on 30 October 1996, second, the replacement of the "Heritage Wanderer" with the new vessel, "Wanderer II", and, third, a speed limit in Zone 1 of the Gordon River for the new vessel to be set initially at 5.5 knots. The minute pointed out that since the setting of the limit at 30 millimetres, "preliminary results from ongoing scientific investigations indicate that the appropriate target maximum wave height is likely to be around 80 millimetres" and reminded the Minister that cl 11(b) allowed him to vary the 30 millimetre limit "subject to receipt of scientific data and advice". As has already been observed, the Minister has not, at any material time, sought to vary the wave height in accordance with that clause. The minute further noted that the new vessel had not, when tested, been able to comply with the 30 millimetre limit and said:
"It could be argued that because the Grinings are replacing their existing licensed vessel, not introducing an additional vessel on the River, that providing the replacement vessel can perform at least as well as the vessel it replaces, then the conditions of the licence and the Lower Gordon River Recreation Zone Plan have been met."
In September 1996, the Director sought the Minister's approval to amend the Grinings' licence, due to expire on 30 October 1996 by substituting "Wanderer II" for "Heritage Wanderer", by changing the speed limit from 6 knots to 5.5 knots and by removing the restriction on passenger numbers, the original licence being restricted to 50 passengers. The Minister gave his approval and on 19 September 1996, the Director advised the Grinings' solicitors that as from the day following the variations would apply. The letter concluded:
"The approval is provided without prejudice to the current considerations in relation to your clients' application for a new licence. Your clients should draw no assumption from this interim authorisation in terms of the outcome of the new licence application."
On 30 October 1996, the Minister wrote to the Grinings, referring to their application to extend their current licence for the operation of "Wanderer II" and advising "I hereby renew your licence on the present terms and conditions for a period of four months, to expire at close of business on 28 February 1997". On 27 February 1997, the Minister again wrote to the Grinings saying:
"I hereby renew this licence on the present terms and conditions for a period of one month, to expire at close of business on 31 March 1997. At the end of this time, I will be in a better position after reviewing all the information received from the ANC Wave Wake Height Measurement Report on the Gordon River to issue a more substantive licence, including any variations to your operation."
On 17 April 1997, the Director wrote a minute to the Minister recommending the renewal of the Grinings' licence:
"… under S25H of the National Parks and Wildlife Act 1970 to operate a tourist vessel on the Gordon River for a period of nine years in all, subject to the vessel 'Wanderer II' operating while upstream of the speed limit in the Gordon River, on one engine at engine revolutions no greater than 600 rpm. This being equivalent to approximately 5 knots and producing an approximate average maximum wake wave height of 100 mm."
The minute referred to the question of whether the 30 millimetre limit in cl 11(b) of the plaintiffs' agreement should remain and said that recent tests were not conclusive, further detailed work still being required to assess the vulnerability of banks to wake waves. The minute concluded:
"In summary, I can advise you that:
a) the 'Wanderer II' will almost certainly continue to cause erosion of the river banks;
b) on the available information and at the specified operating conditions, the 'Wanderer II' will probably produce the lowest average wave wake height of all the large tourist vessels operating on the river;
c) it is most likely that the 'Wanderer II' travelling at 5 knots will produce a lower wave wake height than the vessel it replaces, the 'Heritage Wanderer'."
On 30 April 1997, the Minister entered into an agreement with the Grinings for the operation of "Wanderer II" and the grant of a licence therefor. The agreement contained a clause in identical terms to cl 11(b) of the second agreement. On the same day, a licence was granted, purportedly under the Act, s25D, to use the "Wanderer II" and any approved replacement vessel, as a commercial tourist facility and cruise boat in the Gordon River Reserve for a period of nine years from 1 April 1997. As mentioned earlier, this licence was signed by a person who was not authorised to do so and a business licence in the same terms, signed by an authorised officer, was substituted for it on 29 October 1997.
Under s25B, inserted by the 1984 amending Act, and s85B of the 1995 Act, a licence may be issued to a person to carry out certain activity. In respect of the licences issued prior to 1995, certain persons were licensed to carry out operations in a State Reserve, thereby gaining authority to provide a service or facility of carrying passengers by boat for monetary consideration. The first named plaintiff and the Grinings, by virtue of their pre-1995 licences, were authorised to use certain named vessels, "or their nominated and approved replacement". By cl 4(c) of their respective licences, it was provided:
"If the Licensee wishes to make extensive modification or purchase or hire a replacement Vessel in the Licensee's Business in the event of a Vessel being lost, destroyed, damaged, sold or otherwise disposed of the Licensee shall require the Director's approval which shall not be unreasonably withheld."
When each of the first and second agreements with one or both of the plaintiffs was signed, the number of licences already issued and the vessels authorised thereby to operate on the river were known to all parties. It is clear (and indeed common ground) that the expression "further licence" used in cl 11(b) did not mean any licence issued by the Director subsequently to that issued to the plaintiffs. Both parties contemplated that the existing licence holders would be licensed under the new regime to carry on their existing operations without the imposition of a term restricting the wake wave height of the vessels then licensed, but rather that any vessel not then licensed, and any replacement of a vessel the subject of a post-1995 licence, should comply with the 30 millimetre limit. The correspondence from the Minister and his officers referred to above clearly indicates their acceptance of such a proposition. They repeatedly warned the Grinings that a new vessel would have to comply with the standard alluded to in cl 11(b). Compliance with the requirement was to be enforced by the adoption of an agreement in common form, notwithstanding that the already licensed vessels did not themselves comply and might be less environmentally friendly than a replacement vessel which fell short of the standard. What was not adverted to at the time of the first and second agreement, was the possibility that one of the other licensees might, in accordance with cl 4(c) of his licence, seek the Director's approval, which could not be unreasonably withheld, for a replacement vessel which would become the subject of the existing licence. The approval of such a replacement vessel during the currency of the existing licence, could not be said to involve the issue of a licence or further licence. It merely involved the variation of an existing licence. The Director's letter of approval of 19 September 1996 did not breach cl 11(b), nor do the plaintiffs contend that it did.
The plaintiffs contend, however, that the renewal of the Grinings' licence for four months from 1 November 1996 and for one month from 1 March 1997, and the grant of a licence for nine years from 1 April 1997, amount to the issue of a further licence. So far as the two "renewals" are concerned, they appear to be have been renewed in reliance upon the Act, s25H. Application was made to the Minister for "an extension" of the current licence before it ceased to be in force, in accordance with s25H(1) and the Minister renewed it on the last day it was in force for a further four months. Likewise, on 27 February 1997, the Minister purported to renew the current licence before it, too, ceased to be in force. Counsel for the plaintiffs submits that the word "issue" in cl 11(b) is generic, rather than specific and that the operative concept is that of a further licence coming into existence and not the means by which it comes into existence, whether it is described as granted, issued, obtained or renewed. He observed that s25H was not in the Act when cl 11(b) was drafted. Furthermore, he submits, that just as a lease, even when renewed by the exercise of an option to renew under an existing lease operates in law as a second lease, so too, is a renewed licence different from the original licence (see ICI Alkali (Australia) Pty Ltd v Federal Commissioner of Taxation (1978) 22 ALR 465 at 476 per Barwick CJ and at 477 per Gibbs J for the proposition that the renewal of a lease is a new lease or a new demise). In Ex parte James; re Furlong (1940) 40 SR NSW 345, Jordan CJ said, in respect of a liquor licence (at 349):
"The authorities show that the renewal of a licence is not a continuance of the old licence, but the re-granting of a new licence: Ex parte Castles 3 NSWLR 201 at 204; Sharp v Wakefield [1891] AC 173 at 183." (See also R v Central Australian District Licensing Court; ex parte Glen Pines Pty Ltd (1978) 20 ALR 112 at 117).
I agree. In my view, the fact that the licence was "renewed" under s25H, rather than "issued" under s25E, does not result in its ceasing to have been issued within the meaning of cl 11(b).
I take the same view in respect of the "grant" of the licence for nine years from 1 April 1997. Section 25D authorises the grant by the Minister of an application for a business licence. Section 25E requires that "on granting an application for a business licence, the Minister is to issue a business licence to the applicant". The Minister granted the application as is evidenced by his signing the agreement with the Grinings dated 30 April 1997. By cl 4 of the agreement, the Minister agreed, "pursuant to the provisions of the Act to authorise the Director to issue the operator [the Grinings] with a Licence with respect to the Vessel ['Wanderer II'] …". Such a licence purported to issue under the hand of the acting Director on the same day, although doubts were subsequently expressed about its validity due to the lack of the signatory's authority and a replacement licence was later issued. The actions of the Minister, in my view, caused the licence to be issued within the meaning of cl 11(b) to the Grinings with effect from 30 April 1997.
The ultimate question is whether any of these licences which I have found the Minister issued was a "further" licence. All the negotiations and the discussions which culminated in the execution in February 1997 of the agreement upon which this action has been brought, took place in a factual context where the current licensees were conducting operations with identified craft. At the conclusion of Sir Max Bingham's investigation and report, they had expressed their willingness to bind themselves to comply with a common standard in respect of any replacement vessel, but shared a common expectation that their existing craft, whatever their shortcomings from an environmental point of view, would be licensed under the new regime and that the grant of a licence in respect of the operation of those vessels would not amount to the issue of a further licence. In my opinion, that expression was intended to cover the licensing of any operation in which a vessel, other than a currently licensed one, was to be used. It covered craft which might be sought to be used by not yet licensed operators, as well as craft not at that stage built, or, if built, not in use in any of the existing operations. For one of the operators to replace its vessel with another non-compliant vessel, thereby possibly postponing the date at which a vessel which did comply with the standard would have to be procured, may well be thought to give that operator an unfair advantage. I construe cl 11(b) accordingly and find the defendant was in breach of it by the actions of the Minister in issuing the licences to the Grinings of four months, one month and nine years, referred to above.
In interpreting the contract, it was conceded by Mr Merralls QC for the plaintiffs, that the factual context in which the words used came to be placed in it is a proper matter for the Court's consideration. I hold that the evidence tendered by the defence is admissible but, in my view, it does not support the contention that the licensing of a vessel which was not even in existence at the time of either the first or second agreements, for the three periods I have mentioned, did not amount to the issue of a further licence or further licenses. I have been asked to determine the issue of liability only at this stage. I accordingly find for the plaintiffs. There will be judgment in their favour against the defendant for damages to be assessed.
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