Lithgow State Mine Railway Ltd v City of Greater Lithgow Mining Museum Inc

Supreme Court of NSW|2019-10-28|Before: Darke J

Introduction

These proceedings involve a claim by the plaintiffs, Lithgow State Mine Railway Ltd ("LSMR") and COC Ltd ("COC"), for specific performance of an agreement for the transfer of certain land by the defendant, City of Greater Lithgow Mining Museum Inc ("GLMM"). LSMR and COC are closely related entities who share directors in common. Each is a company limited by guarantee, classified as a non-profit unlisted public company.
The land the subject of the alleged agreement is Lot 10 in Deposited Plan 1240259 ("Lot 10"). Lot 10 was created in March 2018 as a result of a subdivision of Lot 1 in Deposited Plan 242977. In addition to Lot 10, the subdivision also created Lot 11 in Deposited Plan 1240259. GLMM is the registered proprietor of each lot.
The lots were created on the site of the former Lithgow State Coal Mine. Lot 10 is the smaller of the two lots, having an area of about 3.9 hectares. It contains a railway track on which trains operated to transport workers and coal when the mine was working. LSMR and COC now operate trains on the railway track as a tourism attraction. This railway track is referred to by the plaintiffs as the State Mine Branch line. The track runs within what is described as the "rail corridor". Lot 10 also contains a maintenance workshop, part of which is used to store a locomotive belonging to the plaintiffs.
Lot 11 has an area of about 12.9 hectares. In addition to containing some of the area of the former mine, it also contains a mining museum which is operated by GLMM.
The plaintiffs allege that in mid-2010 an agreement was reached between GLMM and LSMR whereby Lot 1 in Deposited Plan 242977 would be subdivided so as to create a lot in respect of the rail corridor, following which GLMM would transfer the lot to LSMR for nominal consideration.

Background to the transaction

GLMM was incorporated in 1990. It was apparently set up as a tourism initiative by the Lithgow Enterprise Development Agency with the support of the Lithgow City Council. According to Mr Wilson, the land which contained the former Lithgow State Coal Mine site was donated to GLMM by Austen & Butta, a locally based coal mining company. As mentioned earlier, the land contains a mining museum which is operated by GLMM. It appears the running of that museum is one of the primary functions of GLMM.
In 1994, GLMM established an internal sub-committee styled State Mine Rail. The sub-committee (which was chaired by Mr Wilson) was responsible for managing all railway related activities in respect of the land. That same year, State Mine Rail obtained a licence (presumably granted by the relevant government authority) to operate trains along the rail corridor on the land.
Between 1995 and 2005, the activities of State Mine Rail expanded considerably. State Mine Rail, through GLMM, secured external funding to build, inter alia, a workshop on the land. GLMM, on behalf of State Mine Rail, acquired further licences from the State Rail Authority (now RailCorp) to use parts of nearby lands over which the rail corridor extends. In July 2004, GLMM became an accredited rail operator in New South Wales.
In around August 2005, the board of GLMM began discussing the possibility of formally separating State Mine Rail from GLMM. The benefits of separation were said to be to allow GLMM to concentrate on mining related heritage works and the running of the museum, and State Mine Rail (through a new entity) to focus on the operation and maintenance of the State Mine Branch line (including the rail corridor). In August 2005, a resolution was passed by the board of GLMM in support of the proposal to effect the separation.
LSMR was incorporated on 3 April 2006, evidently as the entity intended to operate the "Lithgow State Mine Railway".
In June 2006, LSMR acquired a licence from RailCorp to operate trains along another part of the rail corridor. In May 2008 there were discussions between RailCorp, LSMR and GLMM concerning the regularisation of arrangements with respect to the operation of trains along the rail corridor. Following these discussions, in late August 2008 RailCorp sent a letter to LSMR and GLMM which noted that the fixed terms under the existing licences between GLMM and RailCorp to operate along the rail corridor had expired and that GLMM was holding over on a month to month basis under the terms of the licences. The letter went on to state that if GLMM and LSMR agreed for those licences to be terminated, a new consolidated licence would be entered into between RailCorp and LSMR in respect of the rail corridor. Although there is no direct evidence of such, I infer that the licences between GLMM and RailCorp were subsequently terminated, and new licence arrangements were made between RailCorp and LSMR.
In January 2009, COC was established by those standing behind LSMR. According to Mr Wilson, the board of LSMR saw it as advantageous to establish a separate entity which would manage the wider heritage projects managed by LSMR and oversee operations on the rail corridor. Mr Wilson deposed that COC is "now mainly responsible for the day to day operations" of the activities of the plaintiffs.

Events surrounding the transaction

On 7 January 2009, representatives of the boards of LSMR and GLMM met to discuss a number of matters in relation to the future of both companies. The matters discussed included the transfer of railway assets owned by GLMM to LSMR so that the latter could run the railway operations along the rail corridor. A related matter, which is central to these proceedings, was a discussion about a proposal to subdivide the land owned by GLMM and to convey to LSMR that part of the subdivided land which includes the rail corridor. The minutes of that meeting included the following: [Michael Wilson] proposed that the rail corridor from Atkinson Street to the start of the shunting neck be surveyed and a plan of sub-division be drawn up. This essentially would remove any rail implications from the GLMM Inc. LSMR Ltd would foot the costs for the sub-division to be drawn up. [Geoff Ivers, a member of the LSMR board] indicated that a lease of more than three years would need a sub-division. [Ray Christison, the chairperson of GLMM] said as there would be no monetary transaction taking place it didn't contravene the terms that the land was given by [Austen & Butta] to the GLMM. There would be a permanent easement over the rail line to access the State Mine site. …
At the end of the minutes of meeting, the following recommendations were adopted by the representatives of both LSMR and GLMM: The Railway Assets are to be formally handed over to the LSMR Ltd, by way of a Deed of Transfer which would be drafted by Geoff Ivers for consideration and adoption by GLMM Inc. That LSMR Ltd investigate what is required from Craven's to prepare a plan of sub-division over the area concerned and report back. If there were any impediments to a subdivision a licence to occupy the shed and access to the rail corridor could be drawn up from modified Access Agreements already in place with other organisations and the LSMR Ltd.
The reference to "Craven's" is apparently a reference to the surveying firm Craven, Elliston & Hayes Surveyors ("CEH").
According to Mr Wilson, shortly after this meeting, he and Mr Christison (of GLMM) approached the law firm Le Fevre & Co on behalf of both LSMR and GLMM to investigate and advise on the proposed sub-division and transfer of the rail corridor land to LSMR.
Le Fevre & Co became aware of a caveat over the title to the land that had been lodged by the former registered proprietor Austen & Butta. On 25 June 2009, Le Fevre & Co sent a letter to Shell Australia, which had apparently taken over Austen & Butta sometime in the 1990s. The letter relevantly stated: We advise that we have received instructions to act on behalf of [GLMM] ("the Mining Museum") and also [LSMR] ("the Railway") in relation to the proposed subdivision of land owned by the Museum and the related transfer of some of that land to the Railway. Briefly, it is proposed that the Mining Museum will transfer some land to the Railway for use as a railway museum and tourist railway, thereby separating the two distinct activities (i.e. a mining museum and a railway museum/tourist railway). The Mining Museum is the registered proprietor of the land comprised in the two abovementioned title deeds namely: Folio Identifier 1/242977, and Folio Identifier 2/787403 … We note that on each title deed there is a registered Caveat lodged by the former registered proprietor, namely Austen & Butta Limited… We understand Shell Australia Limited acquired Austen and Butta Limited during the 1990's. The Caveator claims an interest in the land as Chargee of the land with such charge securing a right to a share in the proceeds of the sale of the land. … In relation to the subdivision and related transfer of land, it is proposed that these relate to the old railway "corridor" as existed when the Lithgow State Mine was then in operation as a coal mine. The consideration for such subdivision and transfer of the old railway corridor land from the Mining Museum to the Railway is proposed to be for a nominal consideration. In order for such subdivision and transfer of title to the subject pieces of land to proceed, it will of course be necessary for the existing Caveat to be withdrawn/lifted as relates to the subject subdivision and transfer of land, or the priority of the Caveat to be varied to facilitate such subdivision/transfer. In particular, there would appear to be two obvious options available in relation to the lands comprised in Folio Identifier 1/242977 and 2/787403, these being: - The railway corridor be subdivided out and transferred to the Railway, with the residue remaining with the Mining Museum. The whole of the land be transferred to the Railway with a "perpetual" lease back to the Mining Museum of the mining museum buildings. We are instructed that the area of land to be excised from the two title deeds is minute compared to the total area of each lot… Again, it is proposed that a nominal consideration only be nominated for any of the above. We would be pleased to receive your response to the above at your early convenience. We are instructed that if your company is agreeable in principle to the above proposals or any other proposal suitable to the company, preparatory detailed survey work can be commenced in order to detail with precise clarity the piece(s) of land to be subdivided/transferred.
Meanwhile, on 26 June 2009 LSMR and GLMM entered into a Deed of Transfer of Assets. The terms of the Deed largely reflect the discussion referred to in the minutes of the 7 January 2009 meeting between LSMR and GLMM. The Deed provided that GLMM transfer most, if not all, of its railway stock and assets to LSMR for a nominal consideration.
It seems that in July 2009 Shell Australia sent a letter to Le Fevre & Co indicating that they preferred the second option referred to in the 25 June 2009 letter, that being a perpetual lease over the land, and not a subdivision and transfer. The letter sent by Shell Australia is referred to in the letter sent by Le Fevre & Co on 22 July 2009 to GLMM, which stated the following: We have received notification from Shell that it has received our correspondence and annexures and that, principle, its preferred option at this stage is to consent to the granting of a perpetual lease of the rail corridor land between the parties. The rail corridor land will, of course, need to be agreed upon and details identified by a requisite Identification Survey so as to avoid confusion arising as to the land that is to be the subject of the perpetual lease… A perpetual lease of the subject rail corridor will not, however, divest legal title to the subject leased land. As such, all legal obligations and insurance issued relating to Public Risk, etc., will remain the responsibility of the Mining Museum. For the purposes of expediting the matter so as to vest at least a leasehold interest in the subject rail corridor land to [LSMR] at this juncture, such a perpetual lease would appear to be the best option. The matter of transfer of legal title to the subject rail corridor by way of sale/purchase can be explored at a later date when suitable to all parties.
Mr Wilson deposed that on or about that date, GLMM and LSMR agreed in principle, subject to board approval, that the land would be subdivided and that the land the subject of the rail corridor would be transferred to LSMR for $1.00. There is no documentary evidence directly recording this consensus between the two companies.
However, on 14 September 2009, Le Fevre & Co sent another letter to Shell Australia. This letter is not in evidence, but it can be inferred from the response of Shell Australia that Le Fevre & Co conveyed that GLMM and LSMR did not want a perpetual lease but rather wanted to proceed with a subdivision and transfer. The letter sent by Shell Australia to Le Fevre & Co on 18 September 2009 stated: I refer to your letter of 14th September 2009. Given that the granting of a perpetual lease is not suitable to either [LSMR] or [GLMM], we are prepared to co-operate to allow the parties to pursue the first of the 2 options set out in your original letter of 25th June 2009 - namely, subdivision of railway corridor and transfer to [LSMR]. We look forward to your sending us the relevant documentation for execution to achieve this option. Whilst we do not envisage that we will need to incur any costs (particularly legal costs) to facilitate this option being implemented, our willingness to co-operate is conditional upon any such costs which are incurred being reimbursed by your clients.
On or around 18 December 2009, Mr Wilson formally engaged CEH to undertake a preliminary survey of the proposed sub-division. Throughout the next several years in which CEH undertook work in respect of the subdivision, CEH sent invoices to LSMR.
It is not clear when the preliminary survey by CEH was completed. However, it seems that at least two alternative preliminary plans were drafted by CEH and received by GLMM in either December 2009 or January 2010. On 1 February 2010, Mr Christison of GLMM sent a letter to LSMR which stated the following: I refer to plans prepared by [CEH] for a subdivision of a section of the former Lithgow State Coal Mine site to create a parcel of land for transfer to [LSMR]. The Board of [GLMM] has considered these plans. The Board generally supports the boundary proposed in the [CEH] document titled DWG No. SMGULLY CEH REF 4/4434 dated 18 December 2009, with the following amendments: We require that permanent easements be clearly defined on the subdivision plan for the following: Underground electrical and telephone services into the section of Lot 1 DP 242977 to be retained by [GLMM]. An access roadway including the current level crossing linking the front gate of the Mining Museum site to State Mine Gully Road. Fresh water services provided to the carriage shed from the Council water main located on Lot 1 DP242977. Sewage services connected to the sewer lines located on Lot 1 DP 242977. It was our understanding from earlier discussions regarding the subdivision that the proposed boundary would, as far as possible, follow the top of the retaining walls located north and south of the western side of the carriage shed. We request that [LSMR] provide written evidence that it has investigated the cost of fire-rating the western side of the carriage shed to allow the line of the subdivision to follow the top of the retaining wall along the entire length of this wall. In the event that it is not practical to pursue this option we confirm as a minimum requirement that the proposed boundary on the western side of the Carriage Shed should follow the eastern footing of the former Hayshed building. In the event that the boundary must follow the proposed line west of the Carriage Shed we require that a permanent easement be defined on the subdivision plan including the structure known as the "Block House" and the access pathway to the public toilets and viewing platform located at the southern end of the carriage shed. In accordance with the position stated by [GLMM] in its letter of 25 June 2009 the Board requires that the boundary be adjusted to create a corridor of land linking its main gate to Atkinson Street on the western side of the rail corridor. The alternative or amended boundary plan identified as DWG No. SMGULLY CEH REF 4/4434 dated 22 December 2009 is not acceptable to the Board of [GLMM]. The Board also wishes to re-affirm its position stated in the letter of 25 June 2009 as follows: The purpose of the proposed subdivision is to allow a complete transfer of the rail corridor within the property to [LSMR]. We will agree to a subdivision of the property only if this is undertaken with the express purpose of transferring title to the rail corridor and all associated legal and statutory responsibilities to [LSMR]. I look forward to further discussion on this matter.
I interpose here to note that the letter of 25 June 2009 referred to above is not in evidence.
On 19 June 2010, the board of GLMM met to discuss several matters, one of which was the proposed subdivision. The minutes of meeting relevantly provide: State Mine Site Subdivision [LSMR] has responded to our letter sent in late January 2010. This letter indicates that they wish to proceed with their Option 2. Subsequent personal communication with Michael Wilson indicates that [LSMR] is willing to comply with our wishes regarding boundaries if this will procure an agreement. … We should seek Council advice on the subdivision and access. It is recommended that we agree to a subdivision in accordance with Plan 1 considered in January 2010. Subject to: Definition of easements as identified, Retention of the level land along the western side of the former departure road (the departure road is defined as the alignment of the railway during the operational life of the State Coal Mine), Retention of the hay shed site within the State Mine site.
The minutes indicate that the above matter was put to a motion which was carried by the board. The "late January 2010" letter is likely to be a reference to the letter sent to LSMR on 1 February 2010. "Plan 1" is likely to be a reference to the CEH drawing dated 18 December 2009.
On 30 September 2010, LSMR lodged with Lithgow City Council a Development Application with respect to the subdivision of Lot 1 in Deposited Plan 242977. Consent to the application was given by GLMM. On about 19 October 2010 Shell Australia confirmed to Le Fevre & Co that it consented to the proposed subdivision.
The Development Application was approved on 28 February 2011, subject to several conditions. The surveyor's plans of subdivision were to be submitted to Lithgow City Council for "subdivision release" following satisfaction of all the conditions.

Subsequent events

Mr Wilson deposed that LSMR took further steps over the next couple of years to advance projects in relation to the railway. Mr Wilson deposed that LSMR purchased further locomotives and rolling stock and negotiated agreements for the development of a maintenance facility.
Mr Wilson deposed that between June 2010 and March 2012 there were further discussions between LSMR and GLMM concerning "alterations to the already established boundaries of the railway corridor lot". Alterations were made to accommodate a proposed extension to the workshop (which I note was the subject of a separate Development Application lodged in around March 2012) and an additional area of land to the south-west of the mining museum was added to the part of the land to be transferred to LSMR. On about 22 February 2012, CEH pegged out the final boundary positions for the subdivision of the land.
On 21 March 2012, CEH delivered the final altered plan of subdivision ready for lodgement with the Land Titles Office.
However, several events contributed to a lengthy delay in the lodgement of the plans. It is not necessary to describe in any detail these events. In broad terms, these events concerned the taking of various steps necessary to meet the conditions imposed by Lithgow City Council for the subdivision.
On 29 June 2017, Lithgow City Council issued a subdivision certificate and executed the Deposited Plan Administration Sheet. The Deposited Plan Administration Sheet was also signed by Mr Christison (and by Mr Noble) on behalf of GLMM.
On 26 March 2018, the subdivision was registered, creating Lots 10 and 11 in Deposited Plan 1240259.
On 27 March 2018, Le Fevre & Co sent a letter to Mr Wilson (in his capacity as secretary of COC). The letter stated: We refer to previous correspondence and attendances herein and confirm that the abovementioned two lot plan of subdivision has now been registered at NSW Land Registry Services (formerly known as NSW Land Titles Office) with the two resultant lots created in Deposited Plan 1240259 being: - Lot 10 in Deposited Plan 1240259 being the land comprised in Certificate of Title Folio Identifier 10/1240259 being the property to be transferred to [COC] by [GLMM]. Lot 11 in Deposited Plan 1240259 being the land comprised in Certificate of Title Folio Identifier 11/1240259 is to be retained by [GLMM]. The following steps will need to be taken in order to complete the transfer of title to the land comprised in Certificate of Title Folio Identifier 10/1240259 to [COC] by way of registration of the Transfer with NSW Land Registry Services: - The preparation of a Contract for Sale of Land with the contract to include all relevant details such as: - Sale price and GST implications (if any) relating to the sale/purchase. Any special conditions relating to the sale including but not limited to: - Items included in the sale; Items excluded from the sale; Fencing requirements including nature and style of fencing and the costs associated therewith; Costs burden of the respective parties; Taxation implications of the sale/purchase; As there is no real estate agent engaged and we are the only firm of solicitors involved in this transaction at this stage, it will in all likelihood be necessary to obtain an independent valuation from a Registered Valuer for stamp duty purposes. Stamp Duty will be assessed on the sale/purchase contract price (consideration) or the valuation amount, whichever is higher. Whilst it does not appear to be necessary to obtain the formal consent of Shell to the transfer to Lot 10 in Deposited Plan 1240259, as a matter of courtesy we will be formally notifying Shell of the transaction, for its record purposes. In order to satisfy the requirements of NSW Land Registry Services it will be necessary to obtain certified copies of documents as to the identity of two (2) Directors of [COC]…
It seems that it was envisaged, at least as between the plaintiffs, that Lot 10 would be transferred to COC rather than LSMR.
There is no evidence of what took place between March 2018 and August 2018. However, on 8 August 2018, Mr Christison on behalf of GLMM sent a letter to Mr Wilson on behalf of COC stating as follows: I am writing to advise that, at its meeting held on 4 August 2018, The Board of [GLMM] (the Museum) resolved that the Museum would retain ownership of Lots 10 & 11 DP 1240259, and not proceed with the transfer of Lot 10 DP 1240259. We are looking forward to a positive ongoing relationship with [LSMR]. With this in mind, we plan to work with all stakeholders in properties owned by the Museum to develop access and use arrangements that benefit the conservation of Lithgow's industrial heritage and tourism within the region. As these arrangements are negotiated the Museum will continue current arrangements for [LSMR] to access its assets located on the State Mine site.
The plaintiffs commenced the present proceedings by Statement of Claim filed on 1 May 2019. As noted earlier, and notwithstanding the tenor of the letter of 8 August 2018, GLMM did not file a Defence, but instead filed a submitting appearance.

Determination

The Court has considered the written submissions made on behalf of the plaintiffs. The plaintiffs primarily submitted that it should be found on the evidence that an agreement was concluded with the defendant to the effect that the defendant would subdivide the land it owned at the site of the former mine into two lots, and thereafter transfer the lot that included the rail corridor to the plaintiffs. It was submitted that the agreement was sufficiently evidenced in writing so as to satisfy the requirements of s 54A(1) of the Conveyancing Act 1919 (NSW) and thus be enforceable against the defendant. The plaintiffs submitted, in the alternative, that there were sufficient acts of part performance of the agreement to enable its enforcement even if the requirements of s 54A(1) were not satisfied.
However, in circumstances where the defendant has not sought to plead a s 54A defence, it is open to the plaintiffs to prove the agreement even if it is one that would not satisfy the requirements of the section (see Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 440). Questions of compliance with the section, and issues concerning the law relating to part performance, do not arise. The focus of the enquiry is rather upon whether it should be found on the evidence before the Court that an agreement in the nature of that alleged by the plaintiffs was concluded with the defendant. Of course, the various acts said to be acts of part performance might themselves be relevant to the question whether the alleged agreement was formed.
LSMR was established in 2006 for the purpose of taking over and conducting what might be described as the "railway activities" that were part of the operations of GLMM. The process of separation and transfer of those activities occurred over a number of years.
By early 2009, the parties were taking steps towards the effecting of a transfer of "railway assets" from GLMM to LSMR, and began investigating the possibility of effecting a subdivision of the land at the site of the former mine so as to create a lot that included the rail corridor, which lot would then be transferred by GLMM to LSMR. Assistance was obtained from surveyors, CEH, who appear to have been retained by LSMR. Le Fevre & Co, solicitors, were also retained, by both parties, in relation to the proposed subdivision and transfer.
A transfer of assets was effected by means of the Deed of Transfer of Assets entered into on 26 June 2009. The proposed subdivision was at that stage still in its infancy. However, I accept Mr Wilson's evidence to the effect that in about July 2009 the parties reached an agreement in principle to proceed with a subdivision so as to create a lot that included the rail corridor, and for that lot to be transferred to LSMR for $1.00. The existence of that agreement in principle is supported by the terms of the Shell Australia letter to Le Fevre & Co of 18 September 2019 which indicates that Le Fevre & Co had conveyed that GLMM and LSMR did not want to enter into a perpetual lease (as suggested by Shell Australia) but rather wanted to proceed with a subdivision and transfer.
By the end of 2009, draft plans in respect of the proposed subdivision had been prepared by CEH. By its letter of 1 February 2010, GLMM expressed a preference for the boundary depicted in one of the plans, and further stated that the subdivision would need to satisfy various requirements including easements for services and access. By that letter, GLMM also reaffirmed its previously stated position that "the purpose of the proposed subdivision is to allow a complete transfer of the rail corridor within the property to [LSMR]". The letter made it clear that GLMM would only agree to a subdivision if it was undertaken "with the express purpose of transferring title to the rail corridor and all associated legal and statutory responsibilities to [LSMR]".
On 19 June 2010 the board of GLMM formally resolved to agree to a subdivision in accordance with a particular plan, but subject to the defining of easements and the retention (that is the excision from the lot to be transferred) of certain parts of the land. The parties thereafter joined in the lodgement, on 30 September 2010, of a Development Application in respect of the subdivision of the relevant land (Lot 1 in Deposited Plan 242977).
Following the approval of the application on 28 February 2011, steps were undertaken towards the fulfilment of the conditions of the approval, and the parties had further discussions about the boundaries of the lot to be transferred. It appears that as a result of those discussions adjustments were made to the boundaries of the proposed lot, and the new boundaries were embodied in the plan prepared by CEH in March 2012. Despite lengthy delays, the proposed subdivision proceeded, a subdivision certificate was eventually obtained and, with the agreement of GLMM, the plan of subdivision was lodged for registration in about late 2017 or early 2018. When registration was achieved on 2 March 2018 the lot containing the rail corridor, namely Lot 10, was brought into existence.
In my opinion, GLMM was obliged to proceed to transfer Lot 10 to LSMR. The obligation arose from a concluded agreement made with LSMR in the nature of that alleged by the plaintiffs.
This is a case where it is not easy to point to a precise moment when the contract was concluded (see Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 at 11,117-8). However, it seems to me that the conduct of the parties, viewed against the background to the transaction including the evident desire to effect a complete separation and transfer to LSMR of GLMM's "railway activities", leads to the conclusion that at least by the time the plan of subdivision was lodged for registration, GLMM and LSMR had agreed upon all the matters essential for a binding contract.
They had agreed by that time that a particular parcel of land should be created which would contain the railway corridor and would be subject to various easements. The parties had earlier agreed, in about July 2009, that upon the creation of such a parcel, it would be transferred to LSMR for $1.00. The conduct of the parties throughout the following years reveals that mutual assent was ultimately manifested in respect of all essential matters (see Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 at [81]). The details of the subdivision, which remained unsettled in July 2009, were progressively sorted out by the parties, culminating in the lodgement of the plan of subdivision for registration. In all the circumstances, it can be inferred that an agreement in the nature of that alleged by the plaintiffs had been concluded by that time.
The existence of that agreement meant that GLMM was not justified in stating on 8 August 2018 that it had decided not to proceed with the transfer of Lot 10. Of course, GLMM has not in these proceedings sought to maintain that position.
In my opinion it is appropriate to make a declaration as to the existence of the agreement found, and to make orders in the nature of specific performance to compel GLMM to discharge its obligations under the agreement.
The contract is of a character that is routinely the subject of orders for specific performance. Moreover, notwithstanding the nominal monetary consideration involved, the consideration should be taken to include the promise by LMSR to accept a transfer of the railway corridor land. It is clear that it was a matter of some importance to GLMM that the transfer occur so that LSMR would assume "all associated legal and statutory responsibilities". Those responsibilities would include public liability insurance, a matter specifically referred to by Le Fevre & Co in their letter sent to GLMM on 22 July 2009. When regard is had to the substance of the transaction, it would be wrong in my view to characterise it as one of gift as opposed to purchase, or to conclude that LSMR promised merely nominal, not valuable, consideration (cf Costin v Costin [1994] NSW Conv R 55-715; reversed on other grounds in Costin v Costin (1997) 7 BPR 97,362; and see the discussion in the article by N Seddon, 'Is a Provider of Nominal Consideration a "Volunteer"?' (2016) 90 Australian Law Journal 81). Of course, mere inadequacy of consideration, on its own, is not a reason to decline specific performance (see, for example, Coles v Trecothick (1804) 9 Ves 234 at 246; 32 ER 592 at 597 per Lord Eldon; Axelsen v O'Brien (1949) 80 CLR 219 at 226 per Dixon J - referred to in I C F Spry, The Principles of Equitable Remedies (Ninth Edition, 2014, Lawbook Co.) at 61). Finally, I do not see any reason to decline to make orders for specific performance on discretionary grounds.
The Court will give the plaintiffs the opportunity to consider the form of orders. In that regard, two observations should be made. First, it may be beneficial for the plaintiffs to consult with GLMM, and perhaps also with Lithgow Railway Workshop Pty Ltd, which claims to have an equitable interest in Lot 10. The matters referred to in the Court's earlier judgment in Lithgow State Mine Railway Ltd v City of Greater Lithgow Mining Museum Inc (supra) at [6] and [12]-[13] need to be considered. Secondly, whilst the plaintiffs expressed a preference that in the event they were successful in obtaining orders for specific performance the orders should be made in favour of COC rather than LMSR, it seems to me that the evidence shows that the agreement was made between GLMM and LSMR only.
The Court will direct that the plaintiffs bring in a proposed form of orders within 28 days. Finally, I note that if any costs are to be sought against GLMM, it will be necessary to give GLMM an opportunity to be heard on the question (see Seller v Jones [2014] NSWCA 19 at [92]).

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. Decision last updated: 28 October 2019

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