Mr Grace, of Counsel, instructed by Best Hooper Solicitors

Mr Bingham, of Counsel, instructed by Kliger Partners Lawyers

1 This matter comes before me by way of an application against Cavendish Properties Pty Ltd ("Cavendish") by Wesley Alan Gainard and Amanda Jane Gainard. The application was issued out of this Tribunal on 13th August 2003. Subsequently, similar applications against Cavendish were issued out of this Tribunal by Neale Alan Vines, Kevin George Weeks and Idun Chipp. It was indicated to me that each has the same legal representation and Mr Grace of counsel completed an appearance sheet on behalf of all relevant named applicants. Accordingly, I shall simply refer to the applicants as "the Gainards". However, answers given or rulings made as part of this decision are equally applicable and relevant to the applications of Messrs Vines, Weeks and Chipp. Apart from referring to "the Gainards", at times I shall be referring collectively to the licensees, being the owners of private properties within the complex, as "the owners".

2 The dispute concerns the entitlement of Cavendish to charge certain fees relating to a Marina at Patterson Lakes ("the Marina") pursuant to a mooring licence ("the mooring licence"). Some preliminary issues or questions to be determined are listed in the consent orders made by Deputy President Levine on 8th April 2005. These include the boundaries of the Marina, a lengthy list of categories of expenditure which may or may not be properly described as costs for the maintenance of the Marina, and whether a surcharge of 10 percent can be added in relation to the cost of dredging. Clearly it was felt that the answering of these questions would assist in the ultimate disposition of the application, which, in essence, is centred upon the quantum of the maintenance fee payable pursuant to the mooring licence for the financial year ending 30 June 2004. On 7th July 2005, I added to that list of questions five further questions for preliminary determination, these being questions formulated by the Gainards ("the further questions"). They could be summarised as follows:-

(A) Which company may charge maintenance fees under Clause 3(l) of the mooring licence?

(B) Does a liability so arise only if an amount is payable by Cavendish to Melbourne Water for dredging charges?

(C) Does a liability so arise if an amount is payable by Marina Operations to Melbourne Water for dredging charges?

(D) Does a liability so arise only if costs are expended by Cavendish Properties Pty Ltd on maintenance of the Marina?

(E) Does a liability so arise in respect of any costs expended by Marina Operations on maintenance of the Marina?

3 The above is a summary of the many preliminary questions to be determined, and there shall be some expansion upon them in this judgment. Essentially, the basic issues underlying them are whether Cavendish, pursuant to the mooring licence, is entitled to charge a fee and, if so, what categories of expenditure can be described as relating to maintenance of the Marina and can thus constitute the maintenance fee. As the matter unfolded, the issues to be determined in the preliminary questions overlapped with the relief sought in the original application. However, it is hoped that the determinations delivered in this ruling will assist in resolving the basic dispute between the parties.

4 As stated, Mr Grace of counsel appeared on behalf of the Gainards. Mr Bingham of counsel appeared on behalf of Cavendish. Oral evidence and the adoption of affidavit material was received from Amanda Jane Gainard, Sam Zuchowski, a Director of Cavendish, and Allan Murray Cayzer, a marina manager called by the respondent as to practices adopted. Each was subject to extensive cross-examination. In addition, various documents and materials such as photographs were tendered. Helpful written and oral submissions were received from counsel.

5 Whilst, in some cases, I make it clear that findings of fact are solely for the purposes of preliminary or interlocutory rulings and do not bear upon the merits of the matter, in the present case the preliminary questions to be determined go to the heart of the dispute. In addition, the presentation of the proceeding was such that certain key issues require determination. Accordingly, whilst some of the following findings of fact are general in nature, they are intended to be relevant to any ultimate determination. Indeed, it is for the purposes of the ultimate determination of the matter that I am asked to provide these answers and rulings.

6 At the outset, I shall set out the clauses in the mooring licence which seem to me to be the key clauses providing the foundations for the arguments advanced before me. I appreciate that other clauses also received some attention, but the key clauses were the following:-

(a) The rights interests and obligations under this Licence extend to Cavendish, its successors in title and permitted assigns;

(b) Cavendish may affect a transfer or assignment of the rights interest (sic) and obligations existing under this Licence by entering such form of transfer as Cavendish in its absolute discretion shall approve and shall complete that assignment by giving notice in writing to the owner at the owner's address set out in this Licence;

(l) The maintenance fee shall be determined by Cavendish annually and advised to the owner in writing. The maintenance fee shall comprise:

(i) an amount equal to the charge payable by Cavendish to Melbourne Water for dredging charges in respect of each mooring. The charges are currently apportioned by Melbourne Water on the basis of the number of Berths controlled by Cavendish; and

(ii) a proportion of the costs expended by Cavendish for maintenance of the Marina.

The costs of maintenance shall be the cost to Cavendish of maintenance plus ten percent. The proportion payable by each Mooring shall be decided by Cavendish in its absolute and unfettered discretion. The maintenance fee shall be payable within 14 days of the owner being notified of the fee."

7 The Gainards purchased a property at Patterson Lakes in July, 1999. (I am setting out the factual background solely in relation to Mr and Mrs Gainard. The other applicants referred to earlier essentially join in and will abide by the results delivered in this ruling). Upon purchasing the property, the Gainards also took an assignment of the mooring licence. They were allocated a specific "wet berth mooring", that is, a mooring by a jetty in the water as opposed to a mooring in a shed where a boat can be stored. The identification number and location of this mooring changed twice, until they were ultimately entitled to their present position. No significance is attached to the changes of mooring.

8 The Certificate of Title relating to the land which they now occupy is subject to an encumbrance, being an agreement pursuant to s.173 of the Planning and Environment Act 1987. There existed an agreement between Cavendish, the Melbourne Water Corporation, the City of Chelsea, and the City of Springvale. I accept that a copy of such agreement was provided to the Gainards as part of the relevant material supplied to them upon purchase of their property. The manner in which it is to be interpreted was the subject of some dispute.

9 The geographical setup of what can be described as the Marina area or precinct is relatively clear. What actually constitutes the Marina for the purposes of the mooring licence is hotly disputed. The Marina area generally is bounded on the north side by the Patterson River. The southern boundary is defined by a substantial road, which, judging from a street directory which I have consulted, would appear to be McLeod Road, which becomes Thompson Road. The eastern boundary of the Marina area is difficult to describe without a map, but would appear to be to the eastern end of an area described as "inner harbour". The western boundary is at the western end of an area known as Whaler's Cove and just beyond the westernmost floodgates separating the Marina water basins from the Patterson River. Within those boundaries are four water basins. In three of these are jetties which run approximately at right angles to the walls of the basins. In turn running at right angles to those jetties are individual "fingers" which define mooring berths or pens and assist in relation to access. Other moorings are described as "back-of-house" moorings and these are not attached to jetties. They are constituted by poles approximate to individual apartments. I might repeat that it is difficult to describe in words a setup which has been explained to the Tribunal by means of photographs and plans.

10 Within the Marina precinct and at the western end is an hotel and the Marina office from which its affairs are administered. There are three large security gates controlling access to the Marina precinct generally, in addition to security gates controlling access to individual jetties.

11 The northern boundary of the Marina precinct, along the Patterson River, is largely constituted by a type of levy bank. Three floodgates operate between the Patterson River and the Marina basins. Numerous services operate within the Marina precinct. These include such things as a travel lift, a dry stack, boat repair and cleaning services, security services, garbage collection and disposal (in addition to municipal collections) and other similar services which need not be listed in full. As shall be discussed, some of these are the subject of dispute as to whether expenditure related to their upkeep and operation represents maintenance charges pursuant to the mooring licence.

12 In relation to the relevant company structure, both Cavendish and Marina Operations are within the Cavendish group of companies. I accept that Cavendish has carried out property development operations on behalf of the group, but other operations are carried out by other entities. At some stage Cavendish assigned, inter alia, the benefits and obligations pursuant to the various mooring licence agreements to Marina Operations. The year which forms the basis of the application in the present case is the financial year 2003-2004 and it is the invoice for that financial year which is under attack. During that year, Marina Operations occupied the precinct and incurred all the expenses which form the basis of the fee charged. It is with Marina Operations that the Gainards dealt in relation to the operation of the Marina, however, that may be defined. As stated, that definition is a very substantial bone of contention, but I accept that, in relation to matters generally concerning the marina and its workings, the Gainards dealt with Marina Operations.

13 I accept that, in calculating the quantum of the mooring licence fee, Cavendish, via Marina Operations, has taken into account expenses incurred by it over and above those directly related to maintenance of the water basins, jetties, fingers and moorings. The preliminary questions posed by Deputy President Levine bring into consideration a long list of expenses, including such things as land tax, rates, security costs, and the like, many of which are incurred in relation to the general administration of the Marina precinct. Whether the mooring licence fee can be calculated on the basis of these expenses is a question at the heart of the dispute.

14 I shall now briefly summarise the cases as advanced by the parties. The summaries are compilations of both written and oral submissions. Every argument advanced will not necessarily be included.

15 The case advanced by Mr Bingham on behalf of Cavendish could be summarised as follows.

16 The geographical limits of the Marina are not limited to the moorings and the jetties. It is clear from Clause 2(b), (f) and (p) of the mooring agreement that the individual owner is responsible for the maintenance, repair and cleaning of the mooring and jetty. Therefore costs incurred in this regard cannot be costs incurred by Cavendish and Marina Operations. Therefore the reference to the Marina in Clause 3(l) must mean the Marina with the exception of the mooring and jetty.

17 Reference is also made to the definition of the Marina contained in Clause 3(k). The Marina contains the mooring, is both separate to and larger than it, and Cavendish freehold land is part of the Marina. Land that is the subject of the agreement with Melbourne Water is also part of the Marina, which includes freehold land and the licensed, or foreshore land. Reference is made to the affidavit of Mr Zuchowski. Thus, there are three divisions of land within the Marina - freehold, licensed and private. When land was sold to individual owners, they became subject to the covenant with Melbourne Water. The end owner became subject to the same covenants affecting all Marina land as Cavendish and Marina Operations. Reference is made to s.182 of the Planning and Environment Act 1987 and to Clause 3(k) of the mooring licence.

18 The definition of "the Marina" contended for by the Gainards is unconvincing. Taken to its extreme, it would mean that, for the back of house moorings, the Marina would consist solely of a pole sticking out of the water. Attempts to distinguish between a marina and a harbour lead nowhere. If the definition contended for by the Gainards were adopted, there are immediate practical difficulties in drawing boundaries. For example, it was conceded by Mrs Gainard that the security gate at the end of the jetty is part of the Marina, but it is difficult to stop there, because the gate is operated by a computer. The computer is elsewhere. Similarly, the cost of cleaning cannot be confined to the actual cleaning of a finger or jetty, because there must also be considered the cost associated with employment of the cleaner, including supervision and payment, and the cost associated with the office from which the cleaner is so employed, paid and the like. In addition, there is the difficulty of attempting to draw a boundary associated with, for example, public liability insurance. Thus, the definition contended for by the Gainards faces difficulties in relation to the drawing of both physical and non-physical boundaries. A marina is in fact a collection of facilities. It has an integrity. The impracticality of the Gainard's contention is again demonstrated by reference to the cost of power. The Gainards admit that power for the purposes of a light on their finger is a maintenance cost, but this is unmetered and there is no way of dissecting it from the overall power bill for the Marina. The same difficulty applies to insurance.

19 Reference is also made to the expert report of Mr Cayzer and the evidence of Mr Zuchowski. Reference is also made to various decisions, basically planning cases, in which the meaning of the word "marina" was considered.

20 Turning to the meaning of the word "maintenance", again reference is made to various authorities, including cases such as Greetings Oxford Koala Hotel Pty Ltd v Oxford Square Investments Pty Ltd (1989) 18 NSW LR 33. In the context of the present case, maintenance does not mean simply filling in holes in the jetties. It means the keeping of the Marina in a condition which allows it to serve the purpose for which it exists. It means keeping it in good working order, and this can involve replacement - see In the Estate of William Just, Deceased (No. 2) (1974) 17 SASR 515. Examination of the 29 questions or categories of expenditure shows that without these various items there would be no marina. It would simply be a pole sticking out of the water. A marina would not exist without such things as electricity, an office, vehicles, patrol boats and the like. There has to be an allowance for depreciation because the correct meaning of the word "maintenance" requires the replacement of capital items, and there have to be amounts available in order to attend to such replacements when required. In relation to the 29 categories, Cavendish has a very large margin with which to play in order to justify the fees for a year in question. The Gainards have already admitted that some of the items represent proper costs of maintenance. Whilst the Tribunal is asked to answer each of these 29 questions, a simple "yes" or "no" is all that is required in relation to each category of expenditure and any apportionment can be dealt with at the next stage of the case should this become necessary.

21 In relation to the word "costs", this is the equivalent of "expense". Each is a word or wide import. "Expense" means the spending of money or the using up of resources. This is an ongoing concept, concluding the day-by-day destruction of the value of an asset such as a jetty. Thus, the destruction of a jetty is a cost. Equally, the payment of an employee is a cost. The term also includes money to be paid out and money that is in the course of being paid out.

22 In relation to arguments concerning whether or not an additional 10 percent can be added to the dredging charges, it is submitted that the three lines below Clause 3(l)(ii) should not be indented. They are clearly intended to apply to Clause 3(l)(i) and (ii). They give to Cavendish the power to apportion, and, if they applied only to (ii), it would mean that there was no power to apportion in relation to the dredging charges. The purpose of the additional 10 percent is to give to Cavendish some recompense for its trouble. This is similar to a provision in a building contract for "cost plus 10 percent".

23 In relation to the manner in which the agreement is to be interpreted generally, reference is made to the decision of the Court of Appeal in MLW Technology Pty Ltd v May [2005] VSCA 29. Issues as to meaning are to be considered in the setting in which the contract was executed. Business common sense must not be overlooked. Particularly in the case of commercial arrangements, a narrow approach is not warranted. Accordingly, as stated in that case, the first question is to determine what the commercial purpose of the contract was and the background against which it was made. The contract in the present case was between business people or entities. In such a situation, a court should not be the destroyer of bargains.

24 In relation to the 5 further questions (set out in paragraph 2 of these reasons), these should not be answered. They can only be asked and answered in the context of the contract, and take one straight back to it. They are worded in the present tense take, for example, question 1 - "Which company may charge maintenance fees under the relevant clause of the mooring licence?". That can only be answered by using the terms of the contract and by saying "Cavendish Properties, its successors in title and permitted assigns". Thus, the identity of the legal person entitled to charge the maintenance fees can change from time to time and it is irrelevant and of no assistance that the person presently entitled to charge such fees is Marina Operations.

25 Questions (B) and (C) are equally futile. They revolve around the word "payable" which is a term not used in the agreement. In fact, the dredging charges referred to can be "payable" by a number of entities, and, regardless of the assignment, remain payable by both Cavendish and Marina Operations. Thus, there could be a number of answers to these questions.

26 If the additional questions are to be answered, it is submitted that Marina Operations is a permitted assign of Cavendish. It is clear that the business operations were transferred to it in 1996. An assignment of that type is not required to be in writing. However, there was a written assignment, part of which is the licence, but the licence is not the entirety of the assignment.

27 The agreement in evidence between Cavendish and Marina Operations recites the assignment of the business and makes manifest the intention of the parties that the business with all its rights and liabilities be transferred. Thus, there is no doubt but that the business was transferred. This is also clear from the transfer of the agreement with Melbourne Water, from the Marina rules, and from the evidence. Marina Operations did the work, sent out the invoice, and this was paid by the Gainards.

28 This point is further illustrated by reference to the mooring licence. Both Clauses 3(a) and (b) must be examined, and not just 3(b). The effect of 3(a) is that, for example, in 3(l), "Cavendish" should be read as "Cavendish, its successors in title and permitted assigns". Clause 3(a) envisages the transfer of the business. Clause 3(b) deals with the quite separate topic of the transfer of the licence. Were this not so, the licence would already have determined by reason of the operation of Clause 3(k), as it has been Marina Operations, and not Cavendish, that has been exercising the option referred to therein. The logical extension of the argument advanced by the Gainards would be that, as Cavendish did not exercise the option, the licence is at an end. Therefore the owners would have no obligation to pay for any work done and would escape "scot-free". Reference is again made to the decision in MLW Technology, wherein the well-known principle is cited that clear words are needed to rebut the presumption that a contracting party does not intend to abandon any remedies available. Clause 3(a) provides no basis for the argument that the intention of the agreement was that, if the business was assigned, unless notice was given in writing to the owners, there was no obligation on their part to pay for work which had been done for them. Clause 3(b) is not the only mechanism for the assignment of the licence, which can also be assigned as part of the business.

29 If this is wrong, and Clause 3(b) provides the only mechanism by which the licence can be assigned, what then is the purpose of the notice to be given? It is to enable the owners to know to which party to make payment, and thus to receive a full and complete receipt. If no notice is given, it does not mean that the debt cannot be collected, because the assignment would still be effective in equity. The remedy of the debtor is to stay the action so that both the assignor and assignee can be made party to it. Clause 3(b) is not there to impose "sudden death" in the absence of notice. It is there to ensure that the licence holder knows which entity to pay.

30 In any event, if notice of the transfer is required, it was in fact given. Mrs Gainard gave evidence that, in July 2001, the mooring was allocated to the Gainards by Marina Operations and it was with Marina Operations that she dealt. She was invoiced by and paid Marina Operations. The business was in fact being conducted by Marina Operations, and she must have known this. In any event, there is nothing to prevent notice of the transfer being given at a later date, and certainly it has now been given and the Gainards have knowledge of it. In summary, amounts payable by Marina Operations can constitute the licence fee.

31 As a matter of practicality, the assignment point is a futile one. If the term "Cavendish" does not include a reference to Marina Operations, the whole licence fee procedure concerning which there is a dispute does not involve Cavendish, and the proceeding ought to be dismissed. Furthermore, the position of the Gainards has no merit, in that they are seeking to take the benefit of the works and services supplied to them and then take the position that they are not obliged to pay for them. Taking such a position is inequitable and likely to be productive of further legal disputes between the parties, which may be, for example, on a quantum meruit basis.

32 The case advanced by Mr Grace on behalf of the Gainards could be summarised as follows. The mooring licence is a contract between Cavendish and the Gainards. Clause 3(l) of the mooring licence specifically provides that the maintenance fee shall be determined by Cavendish annually and shall comprise a proportion of the costs expended by Cavendish for maintenance of the Marina. Whilst there is provision in Clause 3(a) and (b) relating to a transfer of Cavendish's rights, interests and obligations under the licence, there are requirements in relation to the giving of notice to the owners. There is no adequate evidence of the assignment of Cavendish's rights, interests and obligations to any other entity, nor of its giving notice in writing of any transfer. There is no evidence of Cavendish having ever incurred any expenditure for maintenance of the Marina. As there is no evidence of any such expenditure by Cavendish, no fees have ever been payable by the Gainards to Cavendish. Whilst all that the Gainards are seeking is a "fair go", the problems of enforcing the agreement are problems of Cavendish's own making. This point could probably be described as "a knockout blow". It may well that, in the future, there will be discussions between Cavendish, Marina Operations and the Gainards concerning work which has been done and for which no payment has been made. This is particularly so given that the Gainards want to be fair about the matter. However, the fact remains that Cavendish has created for itself legal problems in relation to the enforcement of the agreement. There is no, or no adequate, proof of assignment, transfer of the business, transfer of rights, consideration, or of the required notification to property owners.

33 Under the licence, no liability arises in the Gainards in relation to costs expended by Marina Operations. This is so whether that expenditure is in relation to maintenance or to dredging charges.

34 In relation to what constitutes the Marina for the purposes of the licence and maintenance, it is made up of the jetties, the fingers and the water basins. It does not include assets used by Cavendish or any company within its group for income-producing purposes and does not include assets such as the dry stack, the fuel dock, the travel lift and the like. The words "the Marina" should be interpreted or defined according to the context in which they appear in Clause 3(l) of the mooring agreement. Authorities dealing with such words in a different legislative or contractual context are not of assistance. Nor is the meaning of the term a matter for expert evidence. The term "the Marina" should be given their ordinary meaning in the context in which they appear.

35 In relation to the meaning of the word "maintenance" as used in the licence, reference to dictionary definitions and to the Commercial Marina Agreement to which Cavendish is a party establishes that there is a limited number of services which fall within Clause 3. It is conceded that some services, such as maintaining light to the wet berths, the maintaining of the jetties, the servicing of the floodgates, and the like fall within the Clause. However, these are maintenance services directly related to the Marina as previously defined - see paragraph 34 above. Other matters, of which payment of land tax is an example, are clearly not "maintenance". Costs incurred in maintaining projects which generate income for Cavendish or Marina Operations are similarly not items of maintenance for the purposes of the Clause. Examples of this are the travel lift and the dry stack. It is not the situation that the cost of maintaining every building within the geographical boundaries of the Marina should be viewed as maintenance of the Marina for the purposes of Clause 3(l).

36 Whilst in each instance the question of reasonableness of fees may be a matter for debate, as may be the sufficiency of evidence concerning some payments, the various items for expenditure which are subject to scrutiny pursuant to the orders of Deputy President Levine of 8th April 2005 should be dealt with as follows. Any concessions made are so made subject to the argument concerning the assignment previously advanced.

(1) Floodgate charges are conceded to form part of the maintenance of the Marina as defined above.

(2) Only cleaning costs relating to the Marina as defined above are maintenance costs.

(3) Given that owners use the council service, garbage disposal is not a maintenance cost.

(4) Insurance costs relating to the Marina as defined are maintenance costs.

(8) Only that proportion of water rates relating to the Marina as defined could be considered to be a maintenance cost.

(9) Only legal fees referrable to the Marina as defined could be considered to be a maintenance cost, and there is no evidence that any legal fees have been incurred in this respect. Legal fees for defending this action are not maintenance costs.

(10) Only those marina operating costs referrable to the Marina as defined could be maintenance costs.

(11) The same applies to the maintenance and repairs of Marina equipment.

(12) The same applies to the maintenance and repair of Marina buildings.

(13) Charges for maintenance and repairs of the Marina swimming pool and other amenities are not maintenance costs as these amenities do not form part of the Marina as defined and the residents were not permitted to use them.

(14) Costs incurred for the maintenance and repairs of the dry stack building and associated equipment are not maintenance costs as the dry stack building is not part of the Marina and is a separate profit-making business conducted by Marina Operations on behalf of Cavendish.

(15) Charges for maintenance and repairs of Marina docks and pens are only maintenance costs if related to the Marina as defined and not to other separate profit-making enterprises.

(16) Charges for maintenance and repairs of the Marina travel lift are not maintenance costs because the travel lift is not part of the Marina as defined and, in any event, the travel lift is a separate profit-making enterprise.

(17) Costs incurred in the maintenance and repairs of the Marina gates is considered to be a cost of maintenance.

(18) Costs incurred in the leasing of equipment for maintenance of the Marina is only a maintenance cost if related to the Marina as defined.

(19) Wages and salaries are to be treated in a similar fashion. No part of wages and salaries related to the floodgates are a maintenance cost as these expenses are borne by Melbourne Water.

(20) The provision of a security patrol is not a maintenance cost.

(21) The costs of Marina telephone and other communications equipment is likewise not a maintenance cost.

(22) Postage and courier costs are to be treated similarly.

(23) Marina office overheads are in the same position.

(25) Rental of land for Marina purposes is not a maintenance cost.

(26) Marina site presentation costs are in the same category.

(27) Licence charges, subscriptions and membership charges for professional associations are in the same category and are not maintenance costs.

(28) Marina office equipment and repair costs are in the same category.

(29) Depreciation is not a cost at all and therefore cannot be considered to be a maintenance cost.

37 In relation to the additional 10 percent to be added to dredging charges, Clause 3(l) is clearly referring to an additional 10 percent in relation to the cost of maintenance, and does not simply mean that 10 percent is added to the dredging charges. Even if it is established that Cavendish is entitled to repayment of dredging charges although it is not the entity that has paid these, it is not entitled simply to add 10 percent to such charges. Also, in the relevant Clause there is a distinction between the "maintenance fee" and the "cost of maintenance". The wording of Clause 3(l)(ii) is clear. The maintenance fee is the costs of the maintenance plus 10 percent. This is distinct from the dredging charges. If it was intended that there also be a 10 percent surcharge added to the dredging charges, it would have been a simple matter to have expressed this in the agreement.

38 It is conceded that the cost of maintenance can include some indirect costs which can then be recoverable pursuant to clause 3(l). However, such indirect costs are only those with a provable connection to maintenance work, being work of the type conceded by the Gainards to be work relating to maintenance of the Marina - that is, such items as the reasonable cost of servicing the floodgates, maintaining water quality and the like.

39 It is suggested that, if the Tribunal rules that certain of the 29 listed items of expenditure are in fact recoverable pursuant to Clause 3(l), the answer to the question posed should not be a simple "yes". In some instances, apportionment would be appropriate. Whilst the Tribunal might determine that the cost of insurance represents a maintenance cost, it should be spelt out that the affirmative finding applies only to those parts of the Marina as defined by the Gainards and not to other assets. Thus, there may be instances where it would be helpful if the answer provided by the Tribunal went beyond a simple "yes".

40 It may well be that some of the services provided by Cavendish could be described as "management fees", a term used by two of the witnesses, namely Messrs Zuchowski and Cayzer. However, that is not the term used in the mooring agreement. It is a maintenance fee, rather than management fees, that is to be paid.

41 In this ruling I shall deal at the outset with what could be described as the assignment argument. Apart from having the potential to deliver a "knock-out blow", a consideration of this issue has a direct bearing upon the further questions to be answered.

42 Firstly, I am satisfied that, in approximately 1996, an agreement in the form of an assignment of licence was executed between Cavendish and Marina Operations ("the Cavendish licence"). Whilst the executed agreement which has been placed in evidence is undated, I accept the evidence of Mr Zuchowski that it was executed in approximately that year. Pursuant to that agreement, Cavendish granted to Marina Operations use of land, which is described by reference to Certificates of Title and also as being the land situate at Patterson Lakes Marina, from the date of what is described as "this Licence ... subject to the provisions of this Agreement". The introduction to the document recites that Cavendish and Marina Operations had previously agreed that Marina or any of its successors in title was granted a non-exclusive licence to use the land, and that the document recorded the terms and conditions of that licence. Amongst the terms is reference to Marina Operations paying a licence fee of $180,000 per annum and paying one half the operating expenses for the land, including all rates, charges, taxes, levies, assessments and outgoings and insurances.

43 Arguments were advanced by Mr Grace on behalf of the Gainards that the Tribunal should not be satisfied that this assignment in fact took place or that there was consideration for it. However, I am satisfied on the evidence that the assignment of the licence from Cavendish to Marina Operations in fact took place. I also reject the argument concerning the absence of consideration. As Mr Bingham quite rightly pointed out, the essence of consideration is the exchange of a promise for a promise, and this took place in the present case. In summary, I am satisfied that in 1996, and for valuable consideration, Cavendish assigned to Marina Operations the licence to use the land in question, and the agreement then executed specified that the land could not be used or occupied for any purpose other than as a marina and ancillary uses. In other words, Cavendish assigned to Marina Operations a licence to conduct the Marina.

44 I turn now to the argument as to whether, pursuant to the mooring licence, notice of assignment of the Cavendish licence was required to be given to the owners in order for the assignment to be valid and as to whether such notice was in fact given. In relation to this, I am persuaded by some of the arguments advanced by Mr Bingham. One such argument is that notice can be given at any time. Clause 3(b) refers to the giving of notice as completing the assignment. It does not prescribe that the assignment is invalid or ineffective until such time as the notice is given. To my mind, the giving of the notice identifies, for example, the party that can sue, and identifies the entity to which a person making a payment can turn for a complete receipt. The failure to give notice does not invalidate or render ineffective the assignment.

45 Furthermore, whilst, pursuant to Clause 3(b) it is Cavendish that is required to give the notice, there seems to me to be something to be said for the argument that the merits of the situation should lead the Tribunal to the conclusion that a type of constructive notice has been given. I accept that the Gainards are, and have been, quite clear in the knowledge that it is with Marina Operations that they are dealing in relation to the affairs of the Marina. I agree with the submission of Mr Bingham in this regard.

46 In those circumstances, and even if notice, in the technical sense of a document or letter formally setting out details of the Cavendish assignment, has not been provided to the owners as at the present time, it seems to me that the law should strive to uphold the contract. Whilst both parties may not be "businessmen" in the sense referred to in MLW Technology, I am in no way persuaded that there has been, for example, some crucial misunderstanding or injustice which can be traced back to the Cavendish assignment and the lack of formal notice thereof. This is a commercial dispute based upon a commercial transaction. Indeed, the Tribunal was not asked to place before it the additional questions based on the assignment point until approximately July, 2005. The application was originally issued out of this Tribunal in August, 2003. When Deputy President Levine, on 8th April 2005, listed the 31 questions to be determined, they all related to the issues of the geographical boundaries of the Marina and the costs of maintenance - basically the "fair go" issues. I am not saying that the Gainards could not add the further questions which they did, and indeed I ruled in their favour in that regard. However, when it comes to a question of what could be described as constructive notice, the history and conduct of the matter would indicate that the Gainards were well aware of the issues which they wished to ventilate, whether their dispute be with Cavendish or with Marina Operations. This seems to me to lend some strength to the basic proposition that, to quote Lord Wright in Hillas and Co Limited v Arcos Limited [1932] UKHL 2; (1937) 147 LT 503, "it is accordingly the duty of the court to construe such documents fairly and broadly, without being too astute or subtle in finding defects ...".

47 Other submissions of Mr Bingham, and other matters put to me, also support the proposition that Marina Operations can and should stand in the shoes of Cavendish when charging owners the maintenance fee. Whilst they may not be matters that directly involve the law of contract, I am also conscious of the proposition that to uphold Mr Grace's submissions would render the proceeding an exercise in futility - a proposition with which I agree - and also of the fact that Mr Grace said that what his clients were really after was "a fair go" and to be fair about the matter. They have also sought an answer to their questions.

48 In summary, for a variety of reasons I am of the opinion that there has been an effective assignment of the rights of Cavendish to Marina Operations, which can then recover from the owners a maintenance fee embracing the cost of the relevant maintenance work which it has performed.

49 In the light of that finding, I am now able to answer the further questions. They are based upon what I believe to be the proper interpretation of the relevant contracts and of the agreement into which the parties entered. Hopefully they will also provide to the parties a practical result. That such was desired was emphasised by Mr Grace with his references to the Gainards wanting no more than "a fair go" and by Mr Bingham who emphasised his client's expectation that commonsense would be applied.

50 The answers to the further questions are as follows:-

(A) Marina Operations, as an assignee of Cavendish, may charge a maintenance fee under the relevant clause of the mooring licence.

(B) The liability under the mooring licence extends to dredging charges, whether or not these amounts are paid by Cavendish or by Marina Operations. It does not arise only if amounts are payable by Cavendish to Melbourne Water for dredging charges.

(C) Liability arises if an amount is payable by Marina Operations to Melbourne Water for dredging charges.

(D) Liability does not arise only if costs are expended by Cavendish on maintenance of the Marina. It also may arise if costs are expended by Marina Operations.

(E) Costs expended by Maria Operations in relation to the maintenance of the Marina may attract liability on the part of the owners to pay such costs via the maintenance fee.

51 As can be seen, further questions (B) and (C) involve dredging charges. Question 1(c) of the questions originally posed by Deputy President Levine also involves dredging charges, and in particular whether Cavendish (or, as I have found, Marina Operations) is entitled, pursuant to the sentences at the end of Clause 3(l)(ii), to add 10 percent to such dredging charges for the purposes of calculating the maintenance fee. As this is a discreet issue relating to the fees and charges, and particularly dredging charges, it may be appropriate if I deal with it now.

52 I disagree with the proposition put forward by Mr Bingham in relation to the last three lines of Clause 3(l). Apart from the fact that those lines are indented immediately below (ii), it seems to me that, logically, those sentences refer to the word "maintenance" as used directly above them in (ii). The relevant clause of the mooring agreement is set out as if that were intended to be the case. In addition, that interpretation seems to me to make sense. It is far from clear why 10 percent should be added to the dredging fees charged by Melbourne Water. I reject the submission advanced by Mr Bingham based upon the analogy of "cost plus 10 percent".

53 I shall now deal with the question of the geographical boundaries of the Marina, this being question 1(a) posed in the orders of Deputy President Levine. Whilst considerable attention has been devoted by both parties to this issue, again it seems to me that a commonsense approach should be adopted. To some extent, I agree with submissions made on behalf of both parties. The owners should not be responsible for costs which, viewed in a commonsense fashion, are related more to the commercial enterprises associated with the Marina than to its maintenance for their purposes. On the other hand, a strictly geographical determination of the limits of the Marina can be difficult and can result in anomalies, as has been demonstrated by Mr Bingham. The artificial drawing of boundaries does not seem to me to produce a just result. Nor does the equally artificial lumping together of all sorts of expenses associated with the operation of the Marina and its associated enterprises. Without engaging in the exercise of entering into a detailed examination of the maps, plans, dictionary definitions and determinations of courts defining the words "the Marina" in a different context, all of which have been put before me, it seems to me that, in the present case, the meaning of the words "the Marina" should be interpreted as follows.

54 The cost of maintenance of those aspects of the complex or precinct, to adopt neutral terminology, which would normally be anticipated to be part of, or associated with, a marina, and which are of benefit to the owners, is a cost which should be passed on to them. Aspects of the complex which would normally be anticipated to be part of a marina are features related to the mooring, cleaning, repair, maintenance, servicing, refuelling, and the coming and going of boats, and the attendant services directly related to these activities - such things as power and insurance. There may be very large marinas that also provide such services as a gymnasium or a hairdressing salon. However, these are not services which one would normally anticipate to find in or to be associated with a marina. They may well be found in shopping centres, and there may well be shopping centres which are attached to or within the fence lines of marinas. Basically, however, what one would normally expect to find in, and to be associated with, a marina are things to do with boats. The dictionary definitions confirm this. Those costs which are associated with profit-making enterprises conducted by the Cavendish group of companies, including Marina Operations, are not part of the "cost of maintenance". It seems to me that the phrase "cost of maintenance" should relate to expenditure directly concerned with the upkeep of the Marina. Mr Bingham's argument that it is difficult to draw a line as to where these things end is something of a double-edged sword. For example, should the cost of insurance include costs associated with an insurance broker travelling interstate in order to make inquiries as to cheaper insurance? If an insurance package subsequently obtained relates to the entire Cavendish operations, are the costs associated with the insurance broker nevertheless payable by the owners? The proposition advanced by Mr Bingham that it is difficult to draw a line works both for and against his client.

55 Examples such as this demonstrate the artificiality and unsatisfactory nature of answering the questions by lumping together items of expenditure under a broad heading, and then giving a simple "yes" or "no" answer. I have been reminded that it is hoped that the answers which I provide to the questions can be used as a guide to the parties in sorting out their differences. Bearing this in mind, the following hypothetical example demonstrates the artificiality of determining the cost of maintenance on a geographical basis. Suppose either Cavendish or Marina Operations, on freehold land controlled by Cavendish and within the geographical boundaries of the Marina urged upon me by Mr Bingham, sets up a restaurant which is not leased out but is operated by one of those entities. Let us assume that this is intended to be a profit-making venture for that entity. Let us also assume that the restaurant is open to the general public, but that, for reasons which need not concern us, owners are not permitted to visit the restaurant. It is to be remembered that, in one of the planning cases to which I was referred, namely Pathold No. 176 Pty Limited v Minister for Transport Services [2005] NSW LEC 184, a large marina was defined as including restaurants. In Minister for Planning v Rose Bay Marina Pty Limited [2003] NSW CA 119 a similar view was expressed. Returning to the present hypothetical situation, could it be said that costs associated with the maintenance of such a restaurant run as a profit-making venture by Cavendish is a cost of maintenance as referred to in the mooring licence? It could not. Such an expense does not seem to me to have been intended to fall within the term, "maintenance fee" as used in the mooring licence.

56 Continuing the example, let us assume that, on exactly the same land in exactly the same geographical location, Cavendish or Marina Operations constructs a large shed in which are stored various items of safety equipment which can be used on the jetties, on the fingers, or in the water basins, together with tools used for the keeping of such items of equipment in good working order. Could it be said that the cost of maintaining this shed and the equipment within it is a "cost of maintenance" of the Marina and is an expenditure which is recoverable as part of the maintenance fee for the purposes of the mooring licence? In my opinion, the answer to that is "yes". Indeed, it is to be remembered that it has been conceded by the Gainards that the cost of maintaining safety equipment, at least on the jetties off North Shore Drive, is maintenance as contemplated by Clause 3(l).

57 Thus, on exactly the same location, the cost of maintaining the restaurant would not be a cost of maintenance, whilst the cost of maintaining the shed would be. To me, this demonstrates the point that no real assistance is gained by attempting to define the geographical boundaries of the Marina. As it is of no assistance, I shall not provide an answer to question 1(a).

58 Submissions were also made concerning the meaning of the words "costs" and "maintenance". The precise meaning of these words is perhaps of less significance given the interpretation or test which I have proposed in paragraph 54 above. However, I am again of the view that a commonsense approach should be adopted. I agree that the words should be given a broad interpretation. I also agree that the meaning of the word "costs" is of sufficient breadth to cover not just money that has been paid out, but money that is in the course of being paid out or is to be paid out. However, in Clause 3(l)(ii) the word "costs" is followed by the verb "expended", which is in the past tense. This is to be contrasted with the wording of Clause 3(l)(i) where the terminology employed is "the charge payable" which would seem to indicate an intention to include amounts for which Melbourne Water has rendered an account whether or not that account has been paid by or on behalf of Cavendish. Thus, if Clause 3(l)(ii) were interpreted strictly, it seems to me that costs must first be expended by Cavendish for maintenance before they can comprise part of the maintenance fee. Whether, as a matter of prudence, the owners agree to pay a maintenance fee based in part upon proposed expenditure, so that there are reserves available to deal with possible future problems or emergencies is a matter for them, and again commonsense might suggest that this is not a bad idea, but it seems to me that, on the basis of the wording of the clause, there must first be expenditure - that is, money paid out - for maintenance before it can comprise part of the maintenance fee.

59 Commonsense should also be applied in relation to what is meant by "maintenance". Essentially I agree with the submissions made by Mr Bingham in this regard. The definition of "to maintain" provided by Shaw LJ in Haydon v Kent County Council [1978] QB 343 is useful. That definition is "to keep something in existence in a state which enables it to serve the purpose for which it exists". I also agree with Mr Bingham's submission that maintenance includes the replacement of worn out items or items which no longer serve the purpose for which they exist.

60 In relation to question 1(b) which deals with 29 separate categories of expenditure and whether these are costs of the maintenance of the Marina for the purposes of Clause 3(l), I have been urged by Mr Bingham to answer in respect of each on a simple "yes" or "no" basis. Whilst a "no" answer requires no further step to be taken, Mr Grace has suggested that, in relation to any "yes" answer, I should then apportion the amount of expenditure between Cavendish and the Gainards so as to determine what proportion of the expenditure forms part of the cost of maintenance and hence of the licence fee.

61 If the answers which I provide are to be useful as a guide to the parties in future negotiations, or at the ultimate hearing of the dispute, it seems to me that a simple "yes" answer will not be of much assistance. It also seems to me that there are difficulties in setting out any precise apportionment. Rather, I am of the opinion that, for categories of expenditure to which the answer is "yes", I should indicate whether such category of expenditure constitutes in its entirety a cost of maintenance for the purposes of Clause 3(l), or whether it is only partially so. As stated, there are very real difficulties in attempting to be more precise than this.

62 However, the basic test which I have formulated above should be applied. The cost of maintenance forming part of the maintenance fee should be that part of the expenditure relating to the maintenance of those aspects of the complex which would normally be anticipated to be part of, or associated with, the workings or operation of a marina and which are of benefit to the owners. They should be items of expenditure which are directly related to the upkeep of the Marina. They should not include costs associated with separate profit-making enterprises conducted by Cavendish or its associated companies.

63 Bearing the above in mind, I shall now turn to the 29 categories of expenditure. As I shall be adopting the broad approach which I have set out above, I shall give only the briefest of reasons in relation to each of the 29 categories. Of course, in instances where the answer is "yes", I am referring only to reasonable costs, which I shall not quantify, and am proceeding on that basis. It is not something which I shall repeat in relation to each item. My determination in relation to the categories is as follows:-

(1) Floodgate Charges. Yes. These have been conceded by the Gainards.

(2) Cleaning. Yes, partially, insofar as any charge falls within the above test.

(3) Garbage Disposal. Yes, partially, as above. The fact that the owners also use a service provided by the local council does not mean that the cost of relevant garbage collection incurred by Cavendish is to be totally excluded.

(4) Insurance. Yes, partially, as above. These charges are at least partially conceded by the Gainards.

(5) Light and Power Charges. Yes, partially, as above. These charges are at least partially conceded by the Gainards.

(6) Land Tax. No. This does not seem to me to be a maintenance cost in the sense of expenditure relating to the upkeep of the Marina for the benefit of the owners.

(7) Council Rates. No, for the reason set out in (6) above.

(8) Water Rates. Yes, partially. As with light and power charges, only that expenditure which satisfies the above test is to be included. This is also at least partially conceded by the Gainards.

(9) Charges for Legal Advice and Representation. Yes, partially, and as conceded by the Gainards. Whilst it may be a comparative rarity, legal costs associated with, for example, an action directly involving the maintenance of the Marina could be a cost of maintenance. An action involving a tradesman who had allegedly failed to carry out proper maintenance work could be an example of such a cost.

(10) Marina Operating Costs. Yes, partially, applying the test set out above and as partially conceded by the Gainards.

(11) Maintenance and Repairs of Marina Equipment. Yes, partially, as in (10) above.

(12) Maintenance and Repair of Marina Buildings. Yes, partially, as in (10) above.

(13) Charges for Maintenance and Repairs of Marina Swimming Pool and Amenities. No. Based on the evidence that was placed before me and the doubt which has been created as to whether the owners are entitled to use any swimming pool (if same still exists) I do not regard this as a cost of maintenance of the Marina. In addition, such charges do not seem to me to satisfy the test to be applied.

(14) Charges for Maintenance and Repairs of Dry Stack Building and Associated Equipment. No. I accept that the dry stack is a separate profit-making venture.

(15) Charges for Maintenance and Repairs of Marina Docks and Pens. Yes, partially, applying the test set out above and as partially conceded by the Gainards.

(16) Charges for Maintenance and Repairs of Marina Travel Lift. No. I accept that this is a separate profit-making venture.

(17) Charges for Maintenance and Repairs of the Maintenance Gates. Yes. The Gainards have conceded this item insofar as the gates concerned are those providing access to the houses and jetties. I note and agree with that concession. If there are internal gates serving only separate profit-making ventures, I would exclude the cost of maintaining them.

(18) Charges for Leasing of Equipment for Maintenance of the Marina. Yes, partially, applying the test set out above and as partially conceded by the Gainards.

(19) Wages and Salaries. Yes, partially, applying the test set out above and as partially conceded by the Gainards. If, as alleged by the Gainards, wages and salaries relating to the floodgates are in fact borne by Melbourne Water, I would agree that those salaries should not be included as a maintenance cost.

(20) Marina Security Costs. Yes, partially, applying the test set out above. I disagree with the proposition advanced on behalf of the Gainards that the provision of a security patrol is not a maintenance cost. It seems to me that, insofar as such patrol satisfies the above test, it is a maintenance cost. Insofar as it relates to the security of, for example, separate profit-making ventures, it is not a maintenance cost. I appreciate that the apportionment of an item such as this may prove difficult, but hopefully the parties can come to a "commonsense" result.

(21) Marina Telephone and Other Communications Equipment Costs, including Mobile Telephones. No. Apart from the fact that apportionment of this item would be extremely difficult, it does not seem to me to be an item involving the upkeep of the Marina for the benefit of the owners.

(22) Postage and Courier Costs. No. I do not regard this item as being an item involving the upkeep of the Marina for the benefit of the owners.

(23) Marina Office Overheads. Yes, partially. Again there may be difficulty in apportioning, but I accept that some office work, for example the hiring of cleaning staff and the engaging of tradesmen for repair work, is necessary as part of maintenance. Therefore that part of the expenditure clearly relating to maintenance of the Marina in accordance with the above test is itself a cost of maintenance.

(24) Marina Motor Vehicle Expenses. No. In my opinion this is beyond the concept of, for example, category (23). It is a cost not directly related to the upkeep of the Marina for the benefit of the owners.

(25) Rental for Lease of Land for Marina Purposes. No. Apart from the fact that this is a somewhat vague item, I repeat the reason set out in (24) above.

(26) Marina Site and Presentation Costs. No. This is also a somewhat ill-defined item. Otherwise, I again repeat the reason set out in (24) above.

(27) Licence Charges for Marina Equipment, Subscriptions and Membership Charges for Professional Associations. Yes, partially. Licence charges for Marina equipment which fall within the above test could be a maintenance cost. I do not regard subscriptions and membership charges for professional associations as being a cost of maintenance. These are too remote.

(28) Marina Office Equipment and Repair Costs. Yes, partially. I would put these in the same category as (23). They should be apportioned in the same way.

(29) Depreciation. No. I do not regard this as being a cost of maintenance. Of course, if the replacement cost of items directly relating to maintenance is incurred, this could be passed on as part of the maintenance fee. However, I do not accept that depreciation as such is a cost of maintenance which should form part of that fee.

64 Apart from the separate issue of the reasonableness of costs incurred or fees charged, in relation to some of the above categories where the answer has been in the affirmative there may be arguments about the sufficiency of evidence establishing that such expenditure was in fact incurred in the year under consideration. However, in the hope that the answers provided will be of assistance to the parties in attempting to resolve their differences, I have nevertheless provided an answer in respect of each category of expenditure.

65 I believe that I have now provided answers to each of the further questions, and all parts of question 1(b) as formulated by Deputy President Levine. I have not provided an answer for question 1(a) for the reasons set out above. Question 1(c) has been dealt with in paragraphs 51 and 52 above following my consideration of further questions (B) and (C) which deal with dredging charges. I answered question 1(c) in the negative.

66 I shall hear the parties as to whether any, and if so what, ancillary or supplementary orders are required.