Collex Pty Ltd v RTA [2005] NSWLEC 601 | Case summary

Land and Environment Court (NSW)|2005-10-21|Before: Talbot ACJ, Mr J

The Applicant and Respondent provide an amended question by way of a preliminary issue framed in terms of what the theoretical purchaser and vendor would have taken into account by 4pm Tuesday 18 October 2005. 18 Although the RTA does not resile from submissions already made that some of the questions may be appropriate for further evidence about the inquiries that a prudent purchaser might have made before purchasing the land and the outcome of those enquiries the parties have reformulated the proposed questions for preliminary determination in the following agreed form:- 1. In a hypothetical sale of the subject land (Lot 9), would the prudent purchaser and vendor have taken into account all of the provisions of the Deed of Licence and Operation between Collex Pty Ltd and Austral Brick Company Pty Ltd dated 2 July 2001 (the Deed)?

Would a prudent hypothetical purchaser have obtained a legal opinion on the operation of the Deed so far as it affects Lot 9?

Would the prudent hypothetical purchaser and vendor have been advised that the proper interpretation of the Deed that had been entered into between Collex and Austral requires the following conclusions:

(a) that any sale of Lot 9 was to be in accordance with the terms of the Deed;

(b) that the purchaser would be required to agree to be bound by the terms of the Deed with Austral;

(c) that clause 8 of the Deed was applicable to the continued operation of the extraction and filling of Lot 9 and of land retained in the ownership of Collex;

(d) that Austral was not required by Clause 8 to replace any land, or airspace, acquired by a public authority at its (Austral's) expense (or otherwise compensate the owner of Lot 9) either by Clause 8 of the Deed or otherwise; and

(e) that the owner of Lot 9 was bound by the obligations in relation to any future disposal of Lot 9 in accordance with Clause 14.1, 14.2 and other applicable provisions of Clause 14 of the Deed?

19 The reformulation calls to attention the following additional provisions in the Deed:- 14. Disposal of The Land 14.1. Collex may not dispose of the Land except pursuant to clause 14.3: 14.1.1. for a period of five years from the Commencement Date;

14.1.2. at any time to a person whom Austral acting reasonably considers to be a competitor in the clay products market;

14.1.3. to any person who cannot demonstrate to Austral's reasonable satisfaction that it: 14.1.3.1. has the financial resources to fully discharge Collex's obligations under this Deed; or

14.1.3.2. is willing and able to procure a reasonably acceptable third party or bank guarantee in respect of those obligations; and 14.1.4. unless Collex first procures a binding agreement from the relevant disponee to be bound by the terms of this Deed, provided that this clause 14.1.4 shall not apply once Collex has paid the Total Minimum Payments. 14.2. Subject to clause 14.5 and 14.6, if Collex Disposes of the Land then Collex must within 7 days of settlement of the Disposal, pay to Austral 66% of the Net Sale Proceeds (which amount shall be increased in accordance with clause 32 to allow for any GST payable by Austral) and provide Austral a written statement setting out the manner in which the same is calculated and any other information which Austral reasonably requires to evidence the terms of the Disposal.

14.3. Collex undertakes to act with reasonable diligence to Dispose of the whole of the Land following filling of the voids on the Land and rehabilitation in accordance with the Approvals of the LEMP.

14.4. Austral must prepare and deliver a tax invoice to Collex in relation to its share of the Net Sale Proceeds, which tax invoice must be issued to Collex no later than 7 days after Austral receives its share of the Net Sale Proceeds in accordance with this clause.

14.5. Subject to the conditions set out in clause 14.1.3 and 14.1.4, Collex shall have the right to dispose of its interest in the Land, without obligation to make payment under clause 14.2, to a reasonably financial third party who takes over the Landfill Operations and the obligations of Collex under this Deed.

14.6. Notwithstanding clause 14.1, Collex may take on a business partner in respect of the Land, without obligation to make payment under this clause, provided that: 14.6.1. before taking on such a partner, Collex provides Austral details about the identity of the proposed partner, the nature of the relationship between Collex and that party and reasonable evidence that Collex will at all times remain the dominant equity (where applicable) and financial partner in the relationship;

14.6.2. the proposed partner is not a person whom Austral acting reasonably considers to be a competitor in the clay products market;

14.6.3. Collex in fact remains the dominant equity (where applicable) and financial partner at all times; and

14.6.4. Collex first procures a binding agreement from the relevant proposed partner to be bound by the terms of this Deed as if it or he was Collex. 14.7. Collex must make available to Austral on request, all documentation reasonably requested by Austral to enable it to establish to its reasonable satisfaction the amount of Net Sale Proceeds and other consideration received by Collex and associated with a Disposal or assignment referred to in this clause 14.

Answers to Preliminary Questions 20 Based upon the evidence as it stands and the submissions made to date I answer the questions posed as follows:-

Question 3: The prudent hypothetical purchaser and vendor would have been advised that under the terms of the Deed strictly applied (without any consideration to the physical constraints or consequences about which separate advice would be required by persons having appropriate expertise in that regard) Lot 9 had the potential for use for filling of waste.

Question 4 (a) and (b): Yes, subject in particular to the effect of clause 14 according to the circumstances at the date of sale. Pursuant to the definition of "disposed of" in the Deed a sale includes the whole or any part of the land.

Question 4 (d): Austral was not required by clause 8 to replace any land or airspace acquired by a public authority but was subject to the effect of clauses 8.2, 8.3, 8.4 and 8.5.

Question 4 (e): Yes. Directions 21 I confirm the further directions made this morning as follows:-

Time for compliance with Order 1 dated 14 October 2005 is extended to 24 October 2005.
Time for compliance with Order 6 made 20 September 2005 is extended to 4pm 25 October 2005 and time for filing joint report extended to 4pm 27 October 2005.
The matter is listed 9am 26 October 2005 for mention. Valuers to be in attendance.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

CITATION : Collex Pty Ltd v RTA [2005] NSWLEC 601

CASES CITED: Minister Administering the Environmental Planning and Assessment Act 1979 v Bautovich [2005] NSWCA 350

Collex Pty Ltd v RTA

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