Minister for Public Works & Local Government v Duggan

The engineer's report referred to in the resolutions of the Council was a report dated 18th March 1946 and related to the resumption of the foreshores and reclamation of the mangrove swamps in the North West and North-East arms of Oatley Bay. Most of the reclaimed land is to be made into a park. It also referred to proposals for a new road joining Connel's Point and Oatley to form part of a proposed marine drive from Tom Ugly's Point to Oatley. It stated that "the proposed new road runs from Connel's Point Road opposite Kyle Parade, across the N.E. Arm, through the partly built on area at the foot of Waitara Parade and West Crescent, across the N.W. arm and then up the valley between Frederick and Kitchener Streets to join Frederick Street opposite Louisa Street." After claiming certain advantages for this road, the report proceeded to discuss what was called the "Use of dead ground". It stated that "The properties facing Connel's Point Road and Homedale Crescent have very big depths and practically without exception the rear portion of the lots is unused. If a road were put through as shown on the plans, this dead ground could be subdivided for residential sites. The improved value should cover the cost of resumption and road construction. A considerable improvement in the area and the new park would result. The area between Halstead Street, Rickard Road and Greenacre Road requires replanning. A sketch showing a suitable layout is submitted. This can be treated as a separate matter except as it affects the outlet of the proposed new road along the eastern side of the park. The land fronting Whitfield Parade and East Crescent also has a big depth and could be similarly treated, although conditions are not as favourable at the northern end. The contours of the land fronting the N.W. Arm do not lend themselves to any similar treatment."

On 8th April 1948 the Council applied to the defendant Minister under s. 536 of the Local Government Act 1919 as amended for the acquisition by resumption for the purpose of the improvement and embellishment of the area under s. 321 of the Act of the lands of those owners required for the scheme who were unwilling to sell voluntarily.

The statement of claim in the suit was issued on 21st September 1950. On 25th September 1950 the defendant Council passed a resolution which stated, inter alia, that the purpose "the improvement and embellishment of the area (s. 321)" as expressed in the resolution of 17th February 1947 and in the application submitted to the Minister was intended by the Council to mean and include the following purposes and powers which the Council is authorized under the Local Government Act 1919 to undertake and exercise, namely: (a) the planning of new roads and subdivisions, vide s. 321 (a) of the Local Government Act 1919; (b) the re-arrangement of parcels of land vide s. 321 (b) of the Local Government Act 1919; (c) the improvement and embellishment of the area vide s. 321 (d) of the Local Government Act 1919; (d) the provision, control and management by the said Council of grounds for public health, recreation, convenience and enjoyment vide 348 (1) of the Local Government Act 1919; (e) the resumption of land under and for the purpose of s. 477 of the Local Government Act 1919; and (f) the resumption of land under and for the purposes of s. 535 of the Local Government Act 1919.

The total area proposed to be reclaimed or acquired voluntarily or by resumption comprises 119 acres, of which 85 acres are to be used for park lands, 17 acres for new roads and 17 acres for resale. The plaintiffs do not object to the proposed resumption of so much of their land as is required for the new road and park lands, but they do object to the resumption of so much of their land as is not required for these purposes. This land is conveniently referred to in the statement of claim and in the judgment of Roper C.J. in Eq. as the residual lands. In the course of his judgment his Honour said "The plans put before the Council show, I think, quite clearly that, although if the Council effect these resumptions it would no doubt effect some re-subdivision of the residual lands before submitting them for sale, at the same time if they were left in the hands of the plaintiffs, the plaintiffs could, without having to co-operate with other persons effect subdivision of their lands so as to give them frontages to the proposed new road, and could sell them in that form of sub-division. The resolutions I think of the Council, and in particular the reports upon which they are based, the report of the engineer and the report of the Town Clerk, indicate, I think, that the question of re-sale of residual lands was a matter of importance to the Council, and that the proposed profit on the re-sale which the engineer has suggested would cover the cost of the resumption and of the road-making was a material and vital consideration in the Council in approving of the resumption of the residual lands of the plaintiffs. It was put that that conclusion did not necessarily follow at this stage because one could not find that the plan of the Council had reached a stage of maturity under which it was a matter of any certainty that the roads in question would be built, and if they were not built, then it was suggested that the whole of the resumed land would be used for park lands, and that would be a proper purpose either under the provisions of the Act dealing with improvement and embellishment of the municipality or under some other provisions of the Act. I think there are two answers to that argument, one being that if the proposal of the Council is so ill-defined at the present time that the resumption might be effected for purposes which are proper or for purposes which are improper, then the proposal to resume is improper at the present time. The other one is that it is, in my opinion, clear from the resolution of the Council that the Council did propose and does propose to re-subdivide and re-sell the residual lands referred to in this case. In making offers to each of the plaintiffs, and in the resolution of the Council authorizing the offers, it is put to the plaintiffs that they would have a right to acquire one of the blocks on the re-subdivision of the area. In that set of circumstances it appears to me that this case is only distinguishable from Thompson v. Randwick Municipal Council [1] in that it is somewhat considerably stronger".

We agree with respect with these remarks of his Honour. Before us no serious attempt was made to distinguish the present case on the facts from the recent decision of this Court in Thompson v. Randwick Municipal Council [1] . It was not disputed that it was a substantial purpose of the resumption of the residual lands to make a profit out of their re-sale, and that no attempt would have been made to resume these lands if it had not been the desire of the defendant Council to reduce the cost of the construction of the new road in this way. The resolution of the defendant Council of 25th September 1950 passed after the issue of the statement of claim and soon after the delivery of judgment in Thompson v. Randwick Municipal Council [1] was not passed after any further reconsideration of the scheme by the Council and adds nothing to its validity. It was evidently passed after legal advice had been obtained and was intended to support the arguments which have been addressed to us. The object of the appeal really is to persuade the Court that in Thompson v. Randwick Municipal Council [1] there were important sections of the Local Government Act and other considerations to which insufficient weight had been given and that the case was wrongly decided and should not be followed.

1. (1950) 81 C.L.R. 87; 17 L.G.R. 256. 2. (1950) 81 C.L.R. 87; 17 L.G.R. 256. 3. (1950) 81 C.L.R. 87; 17 L.G.R. 256.

Section 532, which appears in Part XXV. of the Local Government Act headed "Acquisition of Land", provides that "the Council may acquire land within or outside the area for any purpose of this Act by lease, purchase, appropriation, or resumption in accordance with this Part". It was admitted that this section is the basis of all acquisitions of land voluntarily or compulsorily by local governing bodies. But it was submitted that ss. 477 and 322 confer powers of acquisition on Councils which are in themselves "purposes of this Act" within the meaning of s. 532 and that if a Council bona fide resolves to exercise these powers the acquisition of the intended lands is a purpose within the meaning of s. 532 and that the only restriction on carrying out this purpose is that the Governor-in-Council must approve and the Council must provide the necessary funds. It was contended that the jurisdiction of the Courts to interfere is restricted to cases where the exercise of the power of acquisition conferred by these sections is not bona fide or where, in the case of s. 477, it is clear that the acquisition could not be in the interests of the area or, in the case of s. 322, it is clear that the acquisition could not be for one of the purposes defined in pars. (a) to (h) of that section. It is true that s. 477 is not referred to in the judgment of this Court in Thompson v. Randwick Municipal Council [1] . But it was certainly not overlooked when the Court was considering its opinion. In the more recent case of Howarth v. McMahon [2] the meaning of the section was carefully considered by this Court and the opinion was there expressed that "the vagueness of the expressions employed in this provision affords no warrant for giving it a more generous scope than s. 532. On the contrary it suggests that it is an incidental power depending upon specific powers the exercise of which calls for the acquisition of land. No machinery is supplied outside Part XXV. for acquiring land when s. 477 is invoked".

1. (1950) 81 C.L.R. 87; 17 L.G.R. 256. 2. (1951) 82 C.L.R. 442; 18 L.G.R. 43.

On the argument of the present appeal the previous history of these sections and of the origin of the powers of local governing bodies to resume land were fully explored. But we do not think that this history throws any real light on the meaning of these sections in the structure of the present Act. Section 477 appears to have been imported from South Africa and had no previous history in Australia. Section 322 appears to be derived from s. 22 of the Sydney Corporation Amendment Act 1905, which gave power to the Municipal Council of Sydney in respect of any land purchased or resumed by the Council under the authority of the Act to do most of the things included in s. 322. Some importance, it was submitted, must be conceded to the alteration of language in s. 322, which provides that the Council may purchase or resume, as elsewhere in this Act provided, any land, and may thereupon do all or any of the things therein described. But the words "as elsewhere in this Act provided" and the word "thereupon" in s. 322 appear to us to confine the operation of the section, like s. 22 of the Sydney Corporation Amendment Act, to the doing of things upon land purchased or resumed for some purpose elsewhere provided in the Local Government Act. We see no reason whatever for reconsidering the meaning placed upon this section in Thompson v. Randwick Municipal Council [1] , where it is said: "In our opinion this section does not confer a power to purchase or resume independently of purpose, nor does it enumerate purposes for which purchases or resumptions may be made. Its operation is to confer powers which may be exercised with respect to land when purchased or resumed for a purpose authorized elsewhere in the Act".

1. (1950) 81 C.L.R., at p. 103; 17 L.G.R., at p. 266.

We were also referred to ss. 496, 496A and 518A of the Act and it was submitted that these sections authorize the acquisition of land for housing purposes. It may well be that s. 496 does so, but there is no evidence that the defendant Council proposes to acquire the residual lands of the plaintiffs for such a purpose. The evidence is all to the contrary, for it is part of the present scheme that any owner who agrees to sell his land to the Council shall have the option of purchasing a lot in the new sub-division. These sections are not mentioned in any resolution of the Council, not even in the resolution of 25th September 1950, or in the report of the engineer, and cannot assist the defendants.

The crucial question on the appeal is whether the Local Government Act authorizes a Council to acquire land with a view to re-sale at a profit so as to recoup itself for the expenditure or part of the expenditure on some authorized work. Section 321 (d) of the Act was construed by this Court in Thompson v. Randwick Municipal Council [1] to mean that the undertaking of the improvement and embellishment of the area involves at least some physical improvement or embellishment of the area. "This power authorizes the Council itself to undertake work which can be said to be an improvement or embellishment of the area and provides a purpose for which the council may acquire the land on which the work is to be done" [2] . From that construction we see no reason to depart. The physical work which the Council proposes to undertake in the present case is the reclamation of the swamp area, the making of the park lands and the construction of the new road. The resumption of the land necessary for these purposes is authorized by ss. 235 and 321 (d) of the Act. The Council does not propose to do any work on the residual lands. It merely proposes to re-subdivide and sell them. The acquisition of land for this purpose is not authorized by s. 321 (d) of the Act. But it was contended that ss. 477 and 535 are clearly intended to give a right to recoupment. As we have already said, it was contended that the powers of acquisition referred to in these sections are in themselves independent purposes within the meaning of s. 532 of the Act. We have already rejected that contention in Thompson v. Randwick Municipal Council [1] and Howarth v. McMahon [3] .

1. (1950) 81 C.L.R. 87; 17 L.G.R. 256. 2. (1950) 81 C.L.R., at p. 104; 17 L.G.R., at p. 267. 3. (1950) 81 C.L.R. 87; 17 L.G.R. 256. 4. (1951) 82 C.L.R. 442; 18 L.G.R. 43.

The only purposes within the meaning of s. 532 that emerge in the present case are the purpose of constructing the new road and the purpose of undertaking the improvement and embellishment of the area within the meaning of s. 321 (d). And we are not prepared to hold that either s. 477 or s. 535 confers a right to acquire land for the purpose of recoupment as incidental to these or any other express purposes. Section 477 in terms authorizes the Council to purchase or resume land within or outside the area. It may do so in any case where the Council deems it expedient to acquire, hold, sell or let such land in the interests of the area. It must always be in the interests of the area considered as a whole to acquire land if by so doing it can be re-sold at a profit and the profit applied as part of the revenue of the Council. If s. 477 authorizes recoupment a Council could embark on a plan of acquiring land anywhere in New South Wales which it thought it could re-sell at a profit. The consent of the Minister would only be required where the acquisition was by compulsion. Section 535 provides that "Where the council proposes to acquire land for any purpose it may also acquire other land adjoining or in the vicinity". If this section authorizes recoupment, the power of acquisition for this purpose would be almost as wide as under s. 477 because s. 531 (1) (c) provides that in respect of any area Part XXV. shall apply to land within or outside the area. The case of Criterion Theatres Ltd. v. Sydney Municipal Council [1] was strongly relied upon by the appellants. The legislation there in question and in particular s. 16 of the Sydney Corporation Amendment Act 1905 as amended provided that "the Council may from time to time with the approval of the Governor purchase or resume all lands required for the opening of new public ways or the widening, enlarging, or extending of public ways in the city, and all lands of which those required for such purposes form part, and any land required for carrying out improvements in or remodelling any portion of the said city". The only work which the Municipal Council of Sydney proposed to do was to widen Park Street. It had not considered the question of carrying out improvements in or remodelling any portion of the city. Part only of the lands fronting Park Street were required to widen the street. But the Council resolved to resume that part of these lands required to widen Park Street for that purpose and the remainder of these lands for carrying out improvements and remodelling that portion of the city in the vicinity of that public way. And the whole of the lands were resumed. It was held that even if the second portion of the resolution was ineffectual the resumption was nevertheless effective because part of the lands was required to widen Park Street and this authorized the resumption of all the lands of which the lands required for this purpose formed part. There is, in our opinion, no real resemblance between s. 16 of the Sydney Corporation (Amendment) Act and ss. 477 and 535 of the Local Government Act, because the latter sections are not, like the former section, limited to any specific land.

The question when the whole of a person's lands may be acquired although part only is required for some undertaking so that the residue may be resold at a profit has frequently arisen in England. English legislation often specifies the lands that may be resumed for the statutory purpose. Even so, if the land is resumed for the benefit of a body trading for private gain, such as a railway company, the body may usually be restrained from resuming more of the land so specified than is actually required for the particular work. Public bodies usually may resume the whole of such lands although parts only are required for the particular purpose with a view to re-selling the residue at a profit. But these are all cases where the public body is on the face of the statute authorized to acquire the whole of the land and then empowered to re-sell the surplus land. In Galloway's Case [1] , where the English decisions are reviewed, Lord Cranworth L.C. said: "In the Model Act all the lands and buildings authorized to be taken compulsorily are enumerated or referred to in a schedule to the Act. In later Acts the practice has been to have them all described in a book called the book of reference, deposited with the clerk of the peace accompanied by a map or ground plant" [2] . The difference between sections authorizing the acquisition of specific land and wide sections like s. 477 and s. 535 of the Local Government Act is discussed in the judgment of Kay J. (as he then was) in Gard v. Commissioners of Sewers of the City of London [3] and on appeal by Baggally L.J., Kay J. said: - "Now there is a very wide distinction between this and the case of Galloway v. Mayor and Commonalty of London [4] . In that case the lands which were to be taken were all put in a schedule to the Act; they were actually defined by boundaries and quantities, and the words of the Act were that they might take all those lands, which not only showed the extent to which they were to go, but placed a limit within the four corners of the Act upon the quantity of land which they were to take. There is nothing of that kind in this statute. It contains no schedule. There is no limit whatever upon the lands which are to be taken, save such as is comprised in the words which I have read, and that makes an enormous difference between the two cases". An example of a section in England which impliedly authorizes the acquisition of land for the purposes of recoupment is to be found (according to the text writers, Lord Macmillan's Local Government Law and Administration in England and Wales, 1934, vol. 2, p. 42; Halsbury's Laws of England, 2nd ed., vol. 6, p. 31) in s. 83 of the Public Health Act 1925, which provides that for removing doubts it is declared that the purposes mentioned in s. 154 of the Public Health Act 1875 (which relates to the purchase of premises for the widening, opening, enlarging or otherwise improving any street or for the making of any street) include the improvement and development of frontages or of lands abutting on or adjacent to any street. This section includes an express reference to the improvement and development of frontages or of lands abutting on or adjacent to any street which indicates that such frontages or lands can be purchased for this purpose and is limited to lands which would be likely to benefit from the work done.

1. (1866) L.R. 1 H.L. 34. 2. (1866) L.R. 1 H.L., at pp. 45, 46. 3. (1885) 28 Ch. D. 486, at pp. 496, 497, 509. 4. (1866) L.R. 1 H.L. 34.

The fact that in s. 477 there is no limit by reference to their situation upon the lands which may be acquired is in itself a very strong reason for rejecting the contention that the section enables a council to acquire lands compulsorily for purposes of recoupment only. In s. 535 there is a limitation to land adjoining or in the vicinity, but that is so wide and vague a description that the same reason against such an interpretation remains applicable. Lands could be acquired which did not benefit in any way from the particular expenditure simply because the local governing body saw the opportunity of re-selling them at a profit. In Perpetual Executors and Trustees' Association of Australia Ltd. v. Federal Commissioner of Taxation (Thomas's Case) [1] this Court had recently to consider, not for the first time, the circumstances in which it will reverse one of its own decisions. It was pointed out that this Court is not bound by its own previous decisions so as absolutely to preclude reconsideration of a principle approved and applied in a previous case. But the exceptions to the rule are exceptions which should be allowed only with great caution and in a clear case. In the present case we can see no reason whatever for departing from the construction placed upon the various sections of the Local Government Act considered in Thompson v. Randwick Municipal Council [2] and Howarth v. McMahon [3] . There is nothing in ss. 477 or 535 to indicate that Parliament intended that local governing bodies should be authorized to acquire land for purely financial reasons. Section 121 of the Act provides a well-recognized means by which such a body can recoup itself for special expenditure which benefits a particular portion of its area. The submission that the facts that such a body must obtain the approval of the Governor-in-Council and provide the necessary funds before it can resume land indicates that these are the safeguards intended by the Act against the resumption of land for an unlawful purpose cannot be accepted. The submission is quite inconsistent with the decision of the Privy Council in Municipal Council of Sydney v. Campbell [1] as this Court pointed out in Criterion Theatres Ltd. v. Sydney Municipal Council [2] . It is clearly a judicial function to determine what is a purpose within the meaning of s. 532 of the Act.

1. (1949) 77 C.L.R. 493. 2. (1950) 81 C.L.R. 87; 17 L.G.R. 256. 3. (1951) 82 C.L.R. 442; 18 L.G.R. 43. 4. (1925) A.C. 338; 7 L.G.R. 69. 5. (1925) 35 C.L.R. 555; 7 L.G.R. 72.

[Editor's Note. - By Act No. 46 of 1951 assented to on 10th December 1951, the Local Government Act was amended by omitting ss. 321, 322 and 535 and inserting a new s. 321. By the same Act an amendment was made to s. 532. The effect of these amendments is to confer on councils power which the High Court in this case has held they did not possess prior to the date of the amendment. By s. 2 (2) Act No. 46 of 1951 has a limited retrospective operation.]