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[2010] NSWLEC 172
appellant. The appeal was upheld. The Minister was ordered to transfer the land claimed in claims 3967 and 3969 in fee simple to Muli Muli Local Aboriginal Land Council and to do what was necessary to enable...
The Smiths had won a tender for a proposed grazing licence and had put cattle on the land. But winning the tender was not the same thing as receiving the statutory licence needed to graze Crown land. The Court also found that the documents and events did not establish that the parties had already made a binding contract on 30 May 1991. Because the licence had not been executed by the Minister’s delegate by the date the Aboriginal land claims were lodged, the grazing was not shown to be lawful. The Minister therefore did not prove that the land was outside the claimable Crown land definition, and the Council’s appeal succeeded.
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Muli Muli Local Aboriginal Land Council appealed the Minister’s refusal of two claims under s 36 of the Aboriginal Land Rights Act 1983 (NSW), concerning lots 89 and 90 in DP 751057 near Urbenville. The claim date was 6 September 1991. The central factual point was accepted: the Smiths had cattle on the land on that date. The dispute was whether their grazing was lawful, which mattered because s 36(1)(b) defined claimable Crown land to include land that was “not lawfully used or occupied” when claimed.
No linked legislation citations have been extracted yet.
The Smiths had previously grazed cattle in the area and pursued a formal arrangement for the claimed land. In 1991 the Department called for tenders for a grazing licence. The Smiths’ tender was accepted, and a 30 May letter told them that their tender had been successful. The letter requested their full names, a copy of the conditions, and $315 “to cover processing costs” so a licence document could be prepared ([12], [17], [61]).
The Smiths put cattle on the land after receiving that letter. They also worked on fencing and water arrangements. The cattle were still present when the land claims were lodged on 6 September ([12]–[13], [17]). The Smiths later received an offer of licence and a draft licence form. They signed and returned it in October, after the claim date. The Minister’s delegate had not executed the licence before the claims were lodged. After learning of the claims, the Department withdrew the offer and refunded the amounts paid ([13]–[14], [17]).
The Minister advanced two connected propositions: first, that the tender process had resulted in a concluded contract with the Smiths by 30 May; second, that the contract itself gave rise to a licence authorising the grazing. The Council disputed both. It argued that the contract had not been concluded and, in any event, the statutory licence was a separate exercise of power under the Crown Lands Act 1989 (NSW).
Pain J upheld the appeal. The reasons have two related but distinct parts. The Court did not find a concluded contract at the claim date. It also held that tender acceptance could not itself confer the statutory authority needed to graze Crown land. The Minister was ordered to transfer the land claimed in fee simple to the Council, with the land to be surveyed as necessary. Costs were reserved ([85]–[87]).
The Court began from the statutory claim test. Section 36(1)(b) referred to land that was “not lawfully used or occupied”. Pain J adopted the construction that “lawfully” qualifies both “used” and “occupied”, relying on Minister administering the Crown Lands Act v New South Wales Aboriginal Land Council (No 2) ([52]). The Crown Lands Act provisions also mattered: s 6 restricted occupation, use and other dealings with Crown land unless authorised by that Act or the Crown Lands (Continued Tenures) Act, while s 155 prohibited depasturing stock on public land without lawful authority ([6], [52]).
The Minister bore the burden of establishing that the land was not claimable Crown land under s 36(7). Pain J referred to Bathurst Local Aboriginal Land Council for the proposition that the Minister had to establish the primary facts and the necessary inferences supporting that conclusion ([50]). The Court also noted the remedial nature of the Aboriginal Land Rights Act and the approach that exceptions to the right to claim should be construed narrowly ([48]–[49]). These principles framed the evidentiary question; the outcome rested on the contract and statutory licence issues.
For the contract issue, the Court applied an objective test. It examined the communications and conduct as a whole, rather than treating the Smiths’ subjective understanding as determinative. The principles adopted at [54] included that the party alleging a contract bears the burden of proving it, and that the parties’ intention must be assessed objectively from words, conduct and surrounding circumstances. The Court also considered the later events as evidence of what the parties had intended at the alleged contract date ([54], [66]).
The 30 May letter did not persuade the Court that all terms had been finalised. It requested information and a processing fee to prepare a licence document. The blank licence form supplied during the tender process omitted operative details, including the commencement date. Pain J concluded that there were still matters to be finalised and that the letter’s effect was, at most, to establish the proposed annual rental and initiate preparation of a licence document ([61]–[64]).
The later correspondence supported that reading. The licence material sent to the Smiths described itself as an offer, said the offer would remain open for a limited period, and stated that signing the draft did not itself create a licence. It further indicated that the licence would not be granted until formally executed in the Department’s office. The Smiths signed and returned the document only after the land claims had been lodged, and the Minister’s delegate did not execute it before that date ([40]–[46], [67]–[70]). The Court therefore characterised the arrangement as closest to the third Masters v Cameron category: the parties did not intend to make a concluded bargain until execution of the formal contract ([55], [71]).
The separate statutory-authority issue was independently important. The Court accepted that a tender can produce contractual consequences, but held that the tender process and grant of a statutory licence are different in character. The tender process could identify the market rental or create contractual arrangements; it did not, without more, grant the authority required under s 34 of the Crown Lands Act. The statutory licence was a separate act by the Minister ([72]–[85]).
Pain J considered tender and authorisation authorities, including Upper Hunter Timbers and Byrne v Shire of Broome. The Court adopted the distinction in Byrne between a consensual, bilateral tender process and a unilateral act conferring statutory authority ([80]–[82]). It distinguished Nancor, which involved a different statutory tendering setting and a tender containing details that were absent here, including a commencement date and payment provisions ([77]–[78]). The Court also reasoned that a statutory discretion to grant authority could not be treated as already exercised merely because a tender process had occurred ([83]–[84]).
The combined result was that neither a concluded contract nor a statutory licence authorising grazing had been established by 6 September. Since the cattle’s presence did not itself prove lawful use, the Minister had not shown that the land was outside the definition of claimable Crown land ([85]).
This judgment applies existing principles to a particular combination of an Aboriginal land claim, a government tender process and a proposed Crown land licence. It does not purport to create a new statutory test. Its reasoning turns on the text of s 36(1)(b), the Crown Lands Act provisions, and the evidence about the tender and licence documents.
Before this decision, the relevant principles identified in the judgment included: the objective approach to contractual intention; the Masters v Cameron categories for arrangements contemplating a formal document; the rule that later conduct may illuminate whether an earlier contract was intended; and the distinction between an agreement and the exercise of statutory power. Pain J set out and applied those principles at [54]–[56] and [65]–[70].
The decision’s contribution is its application of those principles to the particular tender record. The Court found that the 30 May letter and the earlier tender materials did not establish that the parties intended to be immediately bound on all material terms. The commencement date and other matters had not been completed, and subsequent communications treated execution as necessary ([63]–[71]).
The second aspect is the explicit separation between contractual arrangements and statutory authorisation. Even where a tender might form a contract, the tender’s acceptance does not automatically exercise the Minister’s power under s 34. The judgment describes the tender as a process for determining the market value of the proposed licence and the actual grant as a separate statutory act ([82]–[85]). That distinction was decisive because the Crown Lands Act required authority for grazing, and no licence had been executed by the claim date.
The judgment also restates the burden under s 36(7). In an appeal from a refusal, the Minister had to satisfy the Court that the land was not claimable Crown land, including by establishing the facts and inferences supporting that position ([50], [59]). The judgment’s reasoning therefore has particular relevance where the asserted lawful use depends on a claimed government permission or licence that has not been completed in the manner contemplated by the governing statutory process.
The decision does not establish that every government tender requires a separate formal instrument, nor does it decide the legal effect of all possible tender terms. It specifically notes the broad power in s 34 and that a licence may be granted in a manner determined by the Minister ([72]–[73]). The holding rests on the particular documents, missing terms, subsequent conduct and statutory setting before the Court.
At [52], Pain J stated: “For the purposes of s 36(1)(b) of the ALR Act lawfully must qualify both ‘used’ and ‘occupied’.” In plain English, it is not enough to show that someone physically used or occupied the land. The use or occupation must also have legal authority.
At [63], the Court found that “there was not a final agreement on all terms of the contract” on 30 May. The letter announcing the successful tender was not treated as proof that every part of the proposed arrangement was complete. The need to prepare a licence document, and the absence of a commencement date and other particulars, weighed against immediate contractual finality.
At [71], the Court said the circumstances were closest to the third category in Masters v Cameron, where the parties do not intend a binding contract until they execute a formal agreement. The proposed licence document was not simply treated as a later copy of an already complete arrangement. On the evidence, it remained a necessary step.
At [82], Pain J explained: “The tender process is a means of determining the market value of the licence, a contractual process. The grant of a statutory authority is separate from that process.” In plain English, selecting a successful bidder and agreeing a proposed price are not necessarily the same as giving that bidder legal permission under the statute.
At [85], the Court concluded that the statutory grant “did not ultimately take place” and that the grazing was consequently not authorised under the Crown Lands Act. That conclusion linked the absence of a licence to the claimability test under the Aboriginal Land Rights Act.
The judgment is relevant to fact patterns where a claim under s 36 turns on whether Crown land was lawfully used or occupied at the claim date, particularly where the asserted authority is a proposed licence or permission arising from a tender process. The important factual questions identified by this decision include what the tender invitation and accepted tender said, whether all material terms were settled, whether a formal licence was contemplated, and whether the relevant statutory authority had actually been granted by the critical date.
The reasoning is especially pertinent where a successful tenderer begins using Crown land before the licence document has been completed, or where the Department’s communications distinguish between a successful tender and a later offer or execution of a licence. In Muli Muli, the tender acceptance letter requested details and a processing fee to prepare the licence, and later documentation expressly referred to an offer and formal execution ([12], [17], [40]–[46]).
The judgment also highlights the significance of timing. The land claims were lodged on 6 September 1991. The Smiths’ signed licence was received in October, and the Minister’s delegate had not executed it before the claims were lodged ([17], [42]–[44]). The Court assessed the land’s status at the claim date, rather than treating later steps as retrospectively supplying authority.
This precedent does not resolve every case in which a tender is accepted. The content of tender documents, the statutory scheme, the language used by the parties, and later conduct remain material. The Court distinguished Nancor by reference to differences in the tender terms and statutory context, including the presence there of a commencement date and payment arrangements ([78]). A lawyer analysing another matter would likely want to compare the actual tender documents, the statutory source of the asserted authority, and the date any formal approval or licence took effect.
The supplied judgment contains no decisions after 17 September 2010 and no account of later judicial treatment of Muli Muli. It is therefore not possible, from the supplied material, to say whether later courts followed, distinguished, limited or questioned this decision.
Within its own reasons, Pain J considered several earlier authorities. Masters v Cameron supplied the framework for deciding whether the parties intended to be bound before execution of a formal document ([55]–[56]). Sagacious Procurement was used for the objective assessment of communications and later conduct ([54], [65]–[66]). Bathurst Local Aboriginal Land Council supported the allocation of the burden to the Minister under s 36 ([50], [59]).
The Court applied Minister administering the Crown Lands Act v New South Wales Aboriginal Land Council (No 2) on the construction that “lawfully” qualifies both use and occupation ([52]). It applied the narrow-construction approach to exceptions to Aboriginal land claims discussed in Deerubbin ([49]). These are treatments of earlier authority by Pain J, not evidence of how later courts treated Muli Muli.
The Court distinguished Nancor because of material differences in the governing tender regime and the tender documents, and it considered Upper Hunter Timbers and Byrne in support of the distinction between tendering and statutory authorisation ([77]–[82]). Those comparisons help explain the judgment’s reasoning but do not establish Muli Muli’s subsequent precedential history.
The judgment leaves open how a differently worded tender process might affect contractual formation. Pain J acknowledged that the Minister had broad power under s 34 to determine the manner and conditions of a licence, and accepted that a tender can in some circumstances create a binding contract ([72]–[74]). The result therefore depended on the particular documents and evidence, including the missing commencement date, the processing fee, and the later offer and execution requirements.
The decision also does not specify a universal form that every statutory licence must take. Its conclusion was that, in this case, acceptance of the tender did not itself grant the authority, and the Department’s own licence material required formal execution. The Court’s analysis should be read in that statutory and evidentiary context ([79], [82]–[85]).
Another issue is how the principles would apply where the relevant statute or tender documents expressly state that statutory authority begins on tender acceptance, or provide an alternative method of granting the licence. The judgment does not decide that hypothetical. It emphasises that the tender process and statutory grant are distinct in the circumstances before it, not that statutory licences can never be granted through tender-related communications.
Finally, the supplied text does not establish how later courts have addressed these questions or what amendments, if any, may have been made to the relevant legislation after the events considered. The judgment analyses the statutory provisions as they applied to the 1991 claim date. Any assessment of a later event would need to account for the legislation in force at that time.
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CITATION : Muli Muli Local Aboriginal Land Council v Minister Administering the Crown Lands Act [2010] NSWLEC 172
APPLICANT PARTIES : Muli Muli Local Aboriginal Land Council RESPONDENT Minister Administering the Crown Lands Act
KEY ISSUES: ABORIGINAL :- whether land subject of claim is claimable Crown land - whether claimed land lawfully used or occupied at date of claim - whether contractual agreement giving rise to a licence under the Crown Lands Act 1989 in place at date of claim - whether licence of Crown land an exercise of statutory power under the Crown Lands Act separate from a tender process identifying rental amount for licence - land claimed not lawfully used and occupied for grazing cattle at date of claim
Aboriginal Land Rights Act 1983 s 36 Crown Lands Act 1989 s 6, 7, s 34(1), s 35(1), s 45, s 46, s 47, s 48, s 155, s 180(1) Forestry Act 1916 LEGISLATION CITED: Forestry Regulation 1983 Local Government Act 1993 Local Government Act (WA) 1995 Local Government (Tendering) Regulation (1999) (repealed)
Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth (1977) 139 CLR 54 Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR 622 Byrne v Shire of Broome [2006] WASAT 376; (2006) 48 SR(WA) 161 Coshott v Woollahra Municipal Council (1988) 14 NSWLR 675 Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 Hounslow London Borough Council v Twickenham Garden Developments Ltd [1971] 1 Ch 233 CASES CITED: Howard Smith and Co Ltd v Varawa [1907] HCA 38; (1907) 5 CLR 68 Marshall v Berridge (1881) 19 Ch D 233 at 245 Masters v Cameron (1954) 91 CLR 353 Minister Administering the Crown Lands Act v Bathurst Local Aboriginal Land Council [2009] NSWCA 138; (2009) 166 LGERA 379 Minister administering the Crown Lands Act v Deerubbin Local Aboriginal Land Council [No 2] [2001] NSWCA 28; (2001) 50 NSWLR 665 Minister administering the Crown Lands Act v New South Wales Aboriginal Land Council (No 2) (1997) 42 NSWLR 641 Minister for Natural Resources v New South Wales Aboriginal Land Council (1987) 9 NSWLR 154 Randwick City Council v Nancor Trading Co Pty Ltd [2002] NSWCA 108; (2002) 120 LGERA 261 Sagacious Procurement Pty Ltd v Symbion Health Ltd (formerly Mayne Group Ltd) [2008] NSWCA 149 Upper Hunter Timbers Pty Ltd v Forestry Commission of New South Wales [2001] NSWCA 64
Butterworths Australian Legal Dictionary, (1997) Butterworths Sydney TEXTS CITED: Macquarie Dictionary, 5th ed (2009) Macquarie University Michael Furmston and GJ Tolhurst Contract Formation: Law and Practice (2010) Oxford University Press N Seddon, Government Contracts, 4th ed (2009) Federation Press
DATES OF HEARING: 19 August 2010 20 August 2010
APPLICANT Dr S Pritchard SOLICITOR LEGAL REPRESENTATIVES: Chalk & Fitzgerald RESPONDENT Mr J Waters SOLICITOR Crown Solicitors Office
JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES
30098 of 2010 Muli Muli Local Aboriginal Land Council v Minister Administering the Crown Lands Act
JUDGMENT 1 Her Honour: The Muli Muli Local Aboriginal Land Council is appealing against a decision of the Minister administering the Crown Lands Act 1989 to refuse two Aboriginal land claims (No 3967 and No 3969) made under s 36 of the Aboriginal Land Rights Act 1983 (the ALR Act). The claims are in relation to lot 90 in DP 751057 and lot 89 in DP 751057 located near the township of Urbenville on the north coast of New South Wales. An amended application was filed with leave at the hearing as it was necessary to have before the Court an amended refusal by the Minister relating to the whole of the land claimed. The original refusal referred to only part of the lots claimed. I thank Acting Commissioner Edmunds for her assistance. Aboriginal Land Rights Act 1983 2 Section 36 of the ALR Act provides: 36 Claims to Crown lands (1) In this section, except in so far as the context or subject-matter otherwise indicates or requires: claimable Crown lands means lands vested in Her Majesty that, when a claim is made for the lands under this Division: (a) are able to be lawfully sold or leased, or are reserved or dedicated for any purpose, under the Crown Lands Consolidation Act 1913 or the Western Lands Act 1901, (b) are not lawfully used or occupied, (b1) do not comprise lands which, in the opinion of a Crown Lands Minister, are needed or are likely to be needed as residential lands, (c) are not needed, nor likely to be needed, for an essential public purpose, and (d) do not comprise lands that are the subject of an application for a determination of native title (other than a non-claimant application that is an unopposed application) that has been registered in accordance with the Commonwealth Native Title Act, and (e) do not comprise lands that are the subject of an approved determination of native title (within the meaning of the Commonwealth Native Title Act) (other than an approved determination that no native title exists in the lands). Crown Lands Minister means the Minister for the time being administering any provisions of the Crown Lands Consolidation Act 1913 or the Western Lands Act 1901 under which lands are able to be sold or leased. (2) The New South Wales Aboriginal Land Council may make a claim for land on its own behalf or on behalf of one or more Local Aboriginal Land Councils.
(3) One or more Local Aboriginal Land Councils may make a claim for land within its or their area or, with the approval of the Registrar, outside its or their area. (4) A claim under subsection (2) or (3): (a) shall be in writing and, if a form for making such a claim has been prescribed, shall be in or to the effect of that form, (b) shall describe or specify the lands in respect of which it is made, (b1) (Repealed) (c) shall be lodged with the Registrar, who shall refer a copy thereof (together with a copy of any approval necessary under subsection (3)) to the Crown Lands Minister or, if there is more than one Crown Lands Minister, to each of them. (5) A Crown Lands Minister to whom a claim for lands (being lands which are, or, but for any restriction on their sale or lease, would be, able to be sold or leased under a provision of an Act administered by the Crown Lands Minister) has been referred under subsection (4) shall: (a) if the Crown Lands Minister is satisfied that: (i) the whole of the lands claimed is claimable Crown lands, or (ii) part only of the lands claimed is claimable Crown lands, grant the claim by transferring to the claimant Aboriginal Land Council (or, where the claim is made by the New South Wales Aboriginal Land Council, to a Local Aboriginal Land Council (if any) nominated by the New South Wales Aboriginal Land Council) the whole or that part of the lands claimed, as the case may be, or (b) if the Crown Lands Minister is satisfied that: (i) the whole of the lands claimed is not claimable Crown lands, or (ii) part of the lands claimed is not claimable Crown lands, refuse the claim or refuse the claim to the extent that it applies to that part, as the case may require…. …
(6) An Aboriginal Land Council may appeal to the Court against a refusal under subsection (5) (b) of a claim made by it.
(7) The Court shall hear and determine any appeal made to it under subsection (6) in respect of any lands claimed and may, if the relevant Crown Lands Minister fails to satisfy the Court that the lands or a part thereof are not or is not claimable Crown lands, order that the lands or the part, as the case may be, be transferred to the claimant Aboriginal Land Council or, where the claim is made by the New South Wales Aboriginal Land Council, to a Local Aboriginal Land Council (if any) nominated by the New South Wales Aboriginal Land Council. … (9) Except as provided by subsection (9A) [not relevant] , any transfer of lands to an Aboriginal Land Council under this section shall be for an estate in fee simple but shall be subject to any native title rights and interests existing in relation to the lands immediately before the transfer. …
(10) A transfer of lands pursuant to this section operates to revoke any dedication or reservation under the Crown Lands Consolidation Act 1913 to which the lands were subject immediately before the transfer. … 3 The expression "claimable Crown lands" is defined in s 36(1) of the ALR Act. The Applicant brings these proceedings pursuant to the right of appeal conferred by s 36(6) of the ALR Act. Section 36(7) states what the Court must do in any appeal under subsection 6. If the appeal is upheld the land is transferred to the applicant as provided under s 36(9). Crown Lands Act 1989 4 The Minister has power to grant licences under the Crown Lands Act 1989 (the CL Act) as in force at the time of the claim. The relevant sections follow.
5 Section 6 provides: Crown land shall not be occupied, used, sold, leased, licensed, dedicated or reserved or otherwise dealt with unless the occupation, use, sale, lease, licence, reseriration or dedication or other dealing is authorized by this Act or the Crown Lands (Continued Tenures) Act 1989. 6 Section 34(1) provides: 34 Powers of Minister in relation to Crown land (1) The Minister may, in such manner and subject to such terms and conditions as the Minister determines: (a) sell, lease, exchange or otherwise dispose of or deal with Crown land, or (b) grant easements or rights-of-way over, or licences or permits in respect of, Crown land, on behalf of the Crown.
Section 35(1) provides: 35 Assessment of land (1) The powers of the Minister under this Part may not be exercised in respect of Crown land unless the Minister is satisfied that the land has been assessed under Part 3. (2) Subsection (1) does not apply if - … (b) the powers are to be exercised in respect of the grant of - (i) an enclosure permit; or (ii) a licence which does not authorise the erection of a structure other than fencing or the removal of material.
Section 45 provides: A licence may authorise the sue or occupation of Crown land for such purposes as the Minister thinks fit. Section 46 provides: A disposition of Crown land by the Minister on behalf of the Crown, expressed to be a licence, is a licence even if exclusive possession of the land is conferred on a person.
Section 47 provides: A licence is revocable at will by the Minister or on such notice as may be specified in the licence.
Section 48 provides: A licence is not transferable.
Section 155 provides: (1) A person shall not, without lawful authority- (a) reside on public land; (b) erect a structure on public land; (c) depasture stock on public land; (d) drive stock on public land; … Section 180(1) provides: (1) The Minister may delegate to a person the exercise of any of the Minister's functions other than this power of delegation.
7 The land the subject of the two claims comprises two adjoining lots: (a) Lot 89 DP 751057, which comprises three irregularly shaped parcels being 36 acres 3 rods (excluding roads) shown as part of the shaded area in the plan contained in Applicant's bundle (exhibit A) at tab 3 (the public roads which separate the three parcels are excluded from the lot), and (b) Lot 90 DP 751057 is also an irregularly shaped parcel comprising the shaded area which is shown as 104 acres 1 rods (including designed roads) in the plan contained in exhibit A at tab 4.
8 Both lot 89 and lot 90 are within reserve 68765, "For Future Public Requirements". Lot 90 is within the suburban boundaries of the village of Urbenville and is to the north of the existing urban area of Urbenville. Issue 9 The Minister argues that, on the evidence, the Court should be satisfied that the subject land was not, on the date of the claim 6 September 1991, claimable Crown land as it was lawfully used or occupied for the purpose of grazing by J H and J Smith. It is accepted by the Applicant that the land was used and occupied for grazing at the date of the claim. The Applicant does not accept the land was used and occupied lawfully for that purpose and is therefore claimable Crown land under s 36(1)(b). Evidence 10 The evidence relied upon by the Minister included an affidavit of Stephen Houlahan, Land Administration Officer, affirmed 25 May 2010, which attaches a number of documents. The annexed documents to Mr Houlahan's affidavit form the basis of the Minister's table of documents at par 17 below.
11 An affidavit of James Smith sworn 25 May 2010 states that he is a pastoralist and has, in partnership with his wife Janette Smith, raised beef cattle in the Urbenville area since about 1965. Mr Smith is familiar with the subject land and states that he had an informal arrangement prior to 1991 with a former lessee of the land (Barnes and Clark Realty Pty Ltd) and was permitted to run some of his cattle on the subject land. Mr Smith states that the land was also used by Urbenville townspeople to variously agist horses and cattle. By letter dated 15 March 1990 Mr Smith approached the Department of Lands to take over the lease held by Barnes and Clark Realty Pty Ltd or to get a new lease over the subject land. This proposal was unsuccessful.
12 In a letter dated 8 April 1991 from the Department of Lands, Mr Smith was invited to submit a tender for a licence over the land and was provided with a document setting out the conditions that would apply to the licence if the tender was successful. Mr Smith submitted a tender for the land and understood that if his tender was accepted he would be obliged to pay annual rental and would hold the land subject to the conditions earlier provided. In a letter dated 30 May 1991 from the Department of Lands, Mr and Mrs Smith were notified that the tender was successful and immediately stocked the land with his cattle. Over a period of weeks immediately following notification of the successful tender Mr Smith also repaired and replaced fencing and improved a dam on the land. He also made enquiries with the local council regarding access to town water supplies for the land.
13 Mr and Mrs Smith sent a cheque for $315 and their name details to the Department of Lands in a note dated 3 July 1991. Their cattle remained on the land continuously for many months after the tender was accepted and were on the land on 6 September 1991. Around this time Mrs Smith contacted the Department of Lands to enquire about the payment of rent. Some time before 16 October 1991 Mr and Mrs Smith received a copy of a licence agreement which they both signed and returned to the Department of Lands with their accompanying cheque for rental payment. Mr Smith has kept no records or other documentation pertaining to the licence agreement or tender process. Copies of all the correspondence referred to in Mr Smith's affidavit are annexed to his statement.
14 Mrs Smith also swore an affidavit on 25 May 2010. Her affidavit provides similar details to those of Mr Smith with an additional statement which identifies that the Department of Lands notified the Smiths, by letter dated 6 December 1991, that the Minister was not proceeding with their licence as a claim had been made under the ALR Act for the land. She states that they did not attempt to argue with the Department of Lands, but were surprised at the position taken by the Department after being told their tender was successful. The Smiths eventually received a refund of all the monies they had paid to the Department in relation to the land. Copies of all the correspondence referred to in Mrs Smith's affidavit are annexed to her statement. Applicant's bundle of documents 15 The Applicant tendered a bundle of documents as exhibit A. Many of the documents in the bundle also appear conveniently in the table prepared by the Minister at par 17 below and it is unnecessary to repeat them here. Documents that do not appear elsewhere include computer folio search details for lot 89 and lot 90, and an aerial photograph of the claimed land with DP references. Copies of Department of Lands letters, all dated 24 February 1992, to various local government and state departments and utility authorities calling for any submissions or evidence relevant for refusing the Aboriginal land claims on the land, are included. It is noted that these letters also identify that following tender, a licence had been offered to the successful tenderer but that the executed licence was not returned to the Minister until after lodgement of the land claim.
16 Further documents included in exhibit A relate to the period 30 November 1995 to 13 December 1995 detailing Departmental inspection of continuing cattle grazing on the land. A copy of a Departmental inspection memorandum dated 1 August 1996 confirms that all cattle grazing has discontinued. A copy of a facsimile from the Department of Lands to Tenterfield Shire Council dated 9 January 2007 identifies that land claim 3969 was processed in 1996 and was recommended to be granted is in the bundle. A Land Property Management Authority (LPMA) ministerial memorandum regarding land claims 3967 and 3969, and Ministerial refusal dated 11 November 2009, complete the bundle. The memorandum identifies LPMA opinion that the land is used for public (community) purpose and that: During times of drought numerous horses, house cows and orphaned calves are hand fed in the backyards of village residents. On these occasions the land is used by locals in the manner of a traditional common for emergency agistment to aid in the feeding of the stock. Minister's table of documents 17 A useful table of documents and events relevant to the parties' arguments was provided by the Minister. Item Date Event Document Evidence 1. 03/11/89 Regional Manager Grafton Lands Office writes to Barnes and Clark (Realty) Pty Limited expressing, without prejudice, preparedness to recommend extension of existing special lease of subject land for 30 years from 1 January 1990. Letter Lands Office to Barnes and Clark (Realty) 3 Nov 1989. Affidavit of S. Houlahan, Exhibit SH-2 2. 10/11/89 Barnes and Clark (Realty) Pty Limited inform Department of Lands that the company has decided not to proceed with acquisition of new and further term lease of subject land. Informs Department that Mr J Smith of Urbenville might be permitted to "accept our lease". Letter SC Sheean & Co to Dept Lands 10/11/89 Affidavit of S. Houlahan, Exhibit SH-3 Affidavit of J.H. Smith, para. 5. 3. 15/03/90 J.H. Smith writes to Department of Lands "As indicated to you previously by Barnes and Clark (Realty) Pty Limited I am interested in obtaining some form of Grazing Lease of the above land……Please advise what further steps I should take to have my request approved" Letter J.H. Smith to the Regional Manager 15/3/90 Affidavit of S. Houlahan, Exhibit SH-4. Affidavit of J.H. Smith, para. 6, annexure B. 4. 23/04/90 Manager, Dept Lands informs J.H. Smith that subject land is not available for Special Lease for grazing but advises that it is proposed to call for tenders for permissive occupancy for grazing. Letter, Dept of Lands to J.H. Smith 23/04/90. Affidavit of S. Houlahan, Exhibit SH-5. Affidavit of J.H. Smith, para. 7, annexure C. 5. 25/03/91 Acting Regional Director, North Coast Lands Office approves offer of land for licence for grazing by Tender, advertising and notification of J.H. Smith and another of availability of subject land for licence by tender File Note 25/3/91 Affidavit of S. Houlahan, Exhibit SH-6. 6. 26/03/91 Form of proposed advertisement sent to Govt. Advertising Agency Draft Advertisement and note subscribed. Affidavit of S. Houlahan, Exhibit SH-7 7. 06/04/91 Advertisement calling for tenders appears in Lismore Northern Star Saturday 6 April 1991. Tenders required to be lodged by 10 May 1991 Letters Dept Lands to L. A. Clements and J.H. Smith 8/4/91 Affidavit of S. Houlahan, Exhibit SH-8 and SH-9 Affidavit of S. Houlahan, Exhibit SH-8 and SH-9. 8. 08/04/91 L. A. Clements and J.H. Smith informed by letter of availability of subject land for licence by tender for grazing purposes subject to the conditions listed on schedule which is attached. Letters Dept Lands to L. A. Clements and J.H. Smith 8/4/91 Affidavit of J.H. Smith, para. 8, annexure D. Affidavit of Janette Smith, para. 3, annexure A. 9. Undated V. M. Hobbs submits tender at $1,224.00 per annum Undated tender subsequently initialled by tender committee. Affidavit of S. Houlahan, Exhibit SH-10 10. 01/05/91 L. A. Clements submits tender at $1,210.00 per annum, with form of licence conditions. Tender 1/5/91 and conditions subsequently initialled by tender committee. Affidavit of S. Houlahan, Exhibit SH-11 11. Undated Letter from J. H. & J Smith submit tender of $1,800.00 per annum, with form of licence conditions. Tender and conditions subsequently initialled by tender committee. Affidavit of S. Houlahan, Exhibit SH-12. "We agree to all conditions listed on the Schedule and licence. We are prepared to erect any necessary boundary fencing." Affidavit of J.H. Smith, para. 10, annexure E. Tender box opened at 4.05pm following clearing of post office box at 4.00pm. Tenders as described above are only tenders received: 12. 17/05/91 1. J H & J Smith - tender $1,800.00 p.a File note signed by tender committee 17/5/91. Affidavit of S. Houlahan, Exhibit SH-13 2. L A Clements - tender $1,210.00 p.a 3. V M Hobbs - tender $1,224.00 p.a 13. 27/05/91 S R MacDonald, Regional Director, North Coast receives recommendation of tender committee and signs minute thereunder (under delegation 6.3.1.1) that: File Note, S. R. MacDonald 27/5/91 Affidavit of S. Houlahan, Exhibit SH-14 "Tender of $1800 rental per year by J H & J Smith be accepted and an offer of licence (subject to conditions set out in licence document herewith) be sent." Letter from Department of Lands to Mr and Mrs Smith for Regional Director, North Coast,: Affidavit of S. Houlahan, Exhibit SH-15. 14. 30/05/91 Dear Mr and Mrs Smith, Letter, C Pavitt for Regional Director to J.H. and J Smith 30 May 1991 Affidavit of J.H. Smith, para. 11, annexure F. Your tender of $1800.00 (annual rental) for a licence for grazing purposes over lots 89 and 90, D.P. 751057 at Urbenville has been successful. Affidavit of Janette Smith, para. 4, annexure B To assist in the preparation of the licence document, please forward your full names, the copy of conditions previously forwarded to you and $315.00 to cover processing costs. 15. 30/5/91 LA Clements and V.M Hobbs informed by letter that their tenders have been unsuccessful Letters, Dept to L.A. Clements and V.M. Hobbs 30 May 1991. Affidavit of S. Houlahan, Exhibit SH-16 and SH-17. 16. Immed-iately after receipt of letter of J.H. Smith places between 30 and 40 cattle on subject land, considering that to be fill capacity of the land. Affidavit of J.H. Smith, para. 12. 30/5/91 Affidavit of Janette Smith, para. 5. 17. Within a couple of weeks after letter of J.H. Smith takes steps to secure fencing and to improve availability of water. Makes enquiries of council concerning connection to town water. Affidavit of J.H. Smith, para. 13, 14. 30/5/91 Affidavit of Janette Smith, para. 5. Mr and Mrs Smith lodge $315.00 processing fee - receipt no. J121259. Covering note says: Affidavit of S. Houlahan, Exhibit SH-18. 18. 03/07/91 "In reply to your letter accepting our rental Ref GF 89 4810 CP JAC, Note 3/7/91 Affidavit of J.H. Smith, para. 15, annexure G. Full names James Hugh and Janette Smith, enclosed $315.00" Affidavit of Janette Smith, para. 6. Document prepared for forwarding to J.H. and J Smith for Regional Director, North Coast, Department of Lands, purporting to formally offers Licence No. 191483 to Mr and Mrs Smith. Document states: "The offer will remain open for 40 days from the date of this letter." Undated "Offer of Licence over Crown land" form. Affidavit of S. Houlahan, Exhibit SH-19 and SH-26 19. 8/08/91 ……. Further licence document. Affidavit of S. Houlahan, Exhibit SH-20 "Please note that your acceptance by signature of the draft licence document does not constitute the creation of a licence. The licence is not granted until formally executed in this office, after receipt of the signed draft licence document, indicating your agreement to be bound by the terms conditions and provisions of the licence." Affidavit of S. Houlahan, Exhibit SH-21 Licence document conforms with form previously disclosed, completed to describe licensee and land. At Schedule 1, licence specifies Item 13 Initial Rent of $1,800.00 and Item 14 Market Rent Review Period 5 years. Commencement date is 1 August 1991 and no expiry date is stated. Departmental "action sheet" noting offer expires on 20/9/1991. Departmental Action Sheet and minute sheet at front of file GF 91 H 476 note that "Licence offer expires on 20/9/91 Departmental Action Sheet notes: " Affidavit of S. Houlahan, Exhibit SH-21. 20. 04/09/91 Mrs Smith contacted Dept Lands Office - licence documents not received. New copies sent 5.9.91. Offer now expires 25.10.91 Departmental "action sheet". Affidavit of J.H. Smith, para. 18. Affidavit of Janette Smith, para. 8. 21. 05/09/91 Department dispatches copy documents to J.H. and J Smith (presumably of "offer" and draft licence) Departmental "action sheet". Affidavit of S. Houlahan, Exhibit SH-21 22. 06/09/91 Aboriginal Land Claims 3967 and 3969 lodged with Aboriginal Land Rights Registrar in respect of Lots 89 and 90, DP 751057. 23. 06/09/91 Cattle of J.H. and J Smith on subject land. Affidavit of J.H. Smith, para. 17. Affidavit of Janette Smith, para. 7. 24. 12/09/91 Aboriginal Land Claims 3967 and 3969 forwarded to Minister by Aboriginal Land Rights Registrar. Letter Department to Registrar 19/9/91 Affidavit of S. Houlahan, Exhibit SH-22 and SH-23. 25. Licence documents submitted by Department signed by Mr and Mrs Smith and returned to Minister with first year's rent ($1,800.00). Licence Document. Affidavit of J.H. Smith, para. 18. Affidavit of Janette Smith, para. 9. 26. 18/10/91 Signed licence and fee of $1800.00 received by Minister. Licence Document. Receipt. Affidavit of S. Houlahan, Exhibit SH-23 and SH-24 27. 4/12/91 Manager Lands Office Grafton, notes that Licence documents not having been executed by Minister's delegate and concludes that land was not lawfully used or occupied, In view of ALR Act claim and conclusion that land was not lawfully used or occupied, approves purported withdrawal of offer of Licence and refund of amounts of $315.00 and $1,800.00 paid by Mr and Mrs Smith Note 4/12/91 Affidavit of S. Houlahan, Exhibit SH-25 C. Pavitt writes to Mr and Mrs Smith: Dear Mr and Mrs Smith I refer to my offer of 8 August, 1991 for Licence No 191483 for the purpose of "Grazing" in respect of Lots 89 and 90, DP 751057 of 57.06 hectares at Urbenville. Your acceptance of that offer together with the first years rent of $1800.00 was received in this office on 18 October, 1991. Affidavit of S. Houlahan, Exhibit SH-26. 28. 06/12/91 I have now been informed that on the 6 September, 1991 the Mulli Mulli Local Aboriginal Land Council lodged a claim with the Aboriginal Land Rights Registrar in respect of that land. As the licence had not been executed as at that date, the land was not lawfully used or occupied in terms of Section 36, Aboriginal Land Rights Act, 1983 and is therefore "claimable Crown land". Licence No 191483 may not now be executed until such time as the Aboriginal Land Claim has been determined. Letter C Pavitt for Regional Director to J.H and J Smith 6 Dec 1991 Affidavit of Janette Smith, para. 10, annexure D. As it may be some time before the existing Aboriginal Land Claim can be resolved it has now been approved by the Minister's delegate that the offer of Licence No 191483 be withdrawn with refund in full of the amounts of $315.00 and $1800.00 already lodged with this Department. A cheque in the amount of $2115.00 will be forwarded to your above address as soon as possible. Please accept my apologies for any inconvenience you may have been caused. 29. 06/12/91 C. Pavitt certifies receipt for refund of Licence Application costs of $315.00 and rental of $1,800.00. Affidavit of S. Houlahan, Exhibit SH-27
The evidence table also includes five documents covering the period 24 April 1995 to 13 November 1995 and includes departmental file notes and correspondence to Mr and Mrs Smith. These documents relate to complaints regarding the Smiths' continuing use of the land for grazing cattle and instructions the Smiths received to remove their cattle. Minister's submissions 18 The Smiths were lawfully using and occupying the land at the date of the claim on 6 September 1991. The provisions of the CL Act impose no formal requirements in relation to the grant of licences. The process of assessment required where land is to be dealt with in certain ways, as provided for in CL Act s 35, is not applicable where the grant of a licence which does not authorise the erection of a structure other than fencing or the removal of material (CL Act s 35(2)(b)). Clearly however a counterbalance to this is the fact that licences are typically an insecure form of tenure (by reason of s 47). There is nothing in the CL Act to require a formal instrument to be executed or which prevents a licence from being created by acceptance of a tender made on terms which conform with the CL Act. In short, there were no formal requirements in relation to the creation of the licence of the subject land to Mr and Mrs Smith for grazing, apart from the ordinary principles that apply to the formation of agreements.
19 The Minister's primary submission is that a concluded and legally binding licence agreement had been reached with Mr and Mrs Smith on behalf of the Minister, by virtue of the acceptance of Mr and Mrs Smith's tender by the Minister's delegate on 27 May 1991 and Mr and Mrs Smith were notified that their tender had been successful on 30 May 1991. The call for tenders, the lodgement of the tender that was ultimately successful and the notification that Mr and Mrs Smith's tender had been successful took place in circumstances where the creation of the licence proposed was not, in any case, expressed to be conditional, tentative, subject to negotiation of further terms, postponed or otherwise subject to the taking of further substantive steps. Mr and Mrs Smith proceeded accordingly, and neither of them was aware, nor were there any objective matters that should have made them aware, that anything else was required. 20 The contract is represented by the documents: (i) Acting Regional Director, North Coast Lands Office approves offer of land for licence for grazing by tender, advertising and notification of J H Smith and another of availability of subject land for licence by tender (par 17 table item 5), (ii) invitation to tender sent to Smith (par 17 table item 8), (iii) Smith proposal for tender (par 17 table item 11), and (iv) letter from Respondent saying that tender successful (par 17 table item 14). The Minister's offer included the conditions attached to the licence. Internal memoranda on the file are not part of the contract and are subjective and known to only one party. 21 The Minister's case is firstly that the Minister had granted a licence to Mr and Mrs Smith over lots 89 and 90 at the date of the claim. The lodgement of the tender and its acceptance created a contract which gave rise to a licence. 22 Secondly, even if, following the advice to Mr and Mrs Smith that their tender had been successful, some further step towards that creation of a formal instrument was or should have been contemplated, the only step that could have been required was completion of documentation. The Minister relies on Masters v Cameron (1954) 91 CLR 353 to advance three possible characterisations of the Smiths' contract: (i) Those circumstances are most readily identifiable as an instance of what has become known, by reference to the three categories of cases identified in Masters v Cameron , as the "fourth category". (ii) Alternatively, if the circumstances can be characterised as within the first category in Masters v Cameron as the dealings were: (a) a case in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time proposed to have the terms restated in a form which will be fuller or more precise but not different in effect; (iii) Or, less probably, the second category in Masters v Cameron : (b) a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document.
In either (ii) or (iii) there is a binding contract, according to the High Court (par 31 Respondent's written submissions). 23 The circumstances do not fall into the third category in Masters v Cameron where the intention of the parties was not to make a concluded bargain at all, unless and until they execute a formal contract (Masters v Cameron at 360). 24 The circumstances that lead to this outcome include the following: (a) The Department chose the process of calling for "tenders" (par 17 table item 5). It did not invite "proposals" or "expressions of interests" or any other form of inchoate approach. Dictionary meanings of the term "tender" emphasise notions of an offer capable of acceptance. This, without more, distinguishes the setting of the communications in question from ordinary correspondence and suggests a preparedness on the part of the party calling tenders to commit in the event that it selects a successful tender and a preparedness on the part of the tendering party to be bound by an acceptance of the offer comprised in the tender submitted. (b) The published notice inviting tenders (par 17 table item 7) noted that " further particulars (including conditions and additional costs to attach to the licence) may be inspected at the Lands Office Grafton. " By this prospective tenderers would be left with no doubt that the terms of the licence had been settled and would have the opportunity to fully understand the terms that would apply. (c) The published notice inviting tenders (par 17 table item 7) and the letters sent to Mr Smith and Mr Clements (par 17 table item 8) did not include any notation to the effect that the making of an agreement with a successful tenderer would be postponed or conditional in any way. (d) The invitations to tender (par 17 table item 8) sent to Mr Smith and to Mr Clements each included comprehensive conditions and a plan of the subject land. Those invitations did not include any proviso to the effect that the conditions might be varied by the Minister prior to a binding formal agreement coming into being. (e) The published notice inviting tenders (par 17 table item 7) and the letters sent to Mr Smith and Mr Clements (par 17 table item 8) did not suggest that terms would be, or could be, subject to amendment or negotiation by tenderers or on behalf of the Minister after a successful tenderer had been selected. (f) The absence of specified terms in the schedule to the draft licence agreement sent to the parties was immaterial, being item 1 (holders address for service), item 8 (commencement date), item 9 (expiry date) and item 13 (initial rent). A commencement date could not have been shown at that time. That was an irrelevant matter as a licence can be revoked at any time. (g) The process of calling for tenders was, in itself, one that had as its basis disclosure of comprehensive terms that were openly disclosed and available to all prospective tenderers. The process was consistent with a transparent process and a "level playing field" in which no aspiring licensee had, or was capable of gaining, advantages not available or known to other tenderers by in essence submitting offers that were not completely comparable. The integrity of this process would be destroyed if, after selection of a successful tenderer, either the Minister or the successful tenderer were free to raise new matters or renegotiate at large or in any material way. The tender process itself suggests that the whole and final form of the agreement that would arise upon acceptance of a tender had been settled and revealed. This much was noted by the tender committee: "Apart from rental, there does not appear to be any other matters to be considered, therefore it is the recommendation of the tender committee (see minute hereunder) that the highest tender by J.H. and J. Smith be accepted." (h) Consistent with an understanding and acceptance of the point made above on the part of the tenderers, none of the three tenderers attempted to negotiate the terms of the proposed licence. Two of the three tenderers, Mr and Mrs Smith and Mr Clements, affirmed their understanding that the terms of the licence had been finalised by re-submitting the Minister's form of conditions with their tender letters (par 17 table items 10 and 11). (i) The language used in the minute of the Minister's delegate (par 17 table item 13) which accepts the recommendation of the tender committee: "Tender of $1800 rental per year by J.H. and J Smith be accepted and offer of licence (subject to conditions set out in licence document herewith) be sent ", whilst somewhat ambiguous in the context of the notions of offer and acceptance that pertain to the formation of contracts, does not seek to depart from the terms that had clearly been understood and agreed. (j) The advice to Mr and Mrs Smith did not seek to introduce new terms or to suggest that the rights of the "successful" tenderers were to be deferred for any period or pending the happening of any event. (k) The sending of unqualified advice to Mr Clement and Ms Hobbs (par 17 table item 15) to the effect that their tenders had been "unsuccessful" concurrently with the sending of advice to Mr and Mrs Smith (par 17 table item 14) that their tender had been successful is indicative of an expectation that Mr and Mrs Smith were bound to and would proceed. The rebuffing of the interest shown by other tenderers is inconsistent with the existence of a situation in which binding arrangements had not been established. (l) Mr and Mrs Smith complied with the only further requirement made known to them before 6 September 1991, by providing their full names and payment of $315 (par 17 table item 18). (m) The undated "Offer of Licence Over Crown Land" which appears to have been created on 8 August 1991 (par 17 table item 19) but did not reach Mr and Mrs Smith until after the dispatch of a copy on 5 September 1991 cannot have had the effect of altering or undoing the contractual relationship which had already come into being. It is also noted that the document appears to be a standard form that might accompany a form of licence that had not previously been shown to or accepted by the prospective licensee insofar as it is characterised as an "offer" and invites attention to particular provisions, which in the present case had been propounded and accepted months earlier. (n) Moreover the form of licence document which, when re-sent to Mr and Mrs Smith in September 1991 (par 17 table item 21) with the copy of the "Offer of Licence Over Crown Land", placed before them for the first time, a proposed commencement date of 1 August 1991; a date which had already passed, before the date of the claim and before the document could have reached Mr and Mrs Smith, even if their earlier dispatch on 8 August 1991 had arrived. Whilst the provenance of the date "1 August 1991" and the reason for selection of that date in lieu of 30 May 1991 for inclusion in the draft licence submitted to Mr and Mrs Smith is not apparent, the incorporation of a prior date must amount to acknowledging that the relationship of licensor and licensee had been established, and that notwithstanding the unilateral statements in the "Offer of Licence Over Crown Land" concerning execution on behalf of the Minister, there was no disagreement prior to 6 September 1991, the term of the licence of the subject land had commenced. 1 August 1991 was before any formal document could have been prepared. (o) The inclusion in the draft licence submitted to Mr and Mrs Smith of a commencement date of 1 August 1991, can only be construed as expressing acquiescence to the use by Mr and Mrs Smith of the subject land from that date. To construe the document otherwise would be to impose the obligations of the licence agreement on Mr and Mrs Smith (including the financial obligations) for an indeterminate period (from 1 August 1991) during which they would be denied the benefits of that agreement. 25 The views expressed by officers of the Department after the date of the claim are irrelevant in considering whether at that date a binding agreement had been reached. Applicant's submissions 26 The grazing by Mr and Mrs Smith was unlawful. No contract or licence was created at the time the land claim was made. There are two distinct legal actions which the Minister must prove occurred in order for lots 89 and 90 to be legally used or occupied for grazing by Mr and Mrs Smith. Firstly, that a legally binding contract was formed, a bilateral private agreement between the Minister through his department and the Smiths. Secondly, and separately, a grant of a licence under the CL Act conferring lawful authority to graze cattle on the claimed land. This is a unilateral exercise of executive power entirely separate from any contract which may have been reached. The Minister's approach impermissibly conflates the two. No legally binding contract 27 The Court would not be satisfied that the letter of 30 May 1991 (par 17 table item 14) was capable of constituting a legally binding contract. An objective assessment of the state of affairs between the parties is inconsistent with there being any intention of the parties to be contractually bound at any time prior to the execution of a licence by the Minister. As the authorities make clear, the objective intention of the parties is fact-based, found in all the circumstances. 28 On 23 April 1990, the Regional Manager of the Department of Lands wrote to Mr Smith advising that it had been decided to call tenders (by advertisement in the local press) for a permissive occupancy of the area for the purpose of "Grazing" (par 17 table item 4). The purpose was to determine the commercial value for the purpose of a licence to be offered by the Minister.
29 On 25 March 1991 (par 17 table item 5) it was approved for and on behalf of the Minister that lots 89 and 90 be advertised as available for licence by tender for grazing "subject to the conditions listed on Schedule B". Schedule B was a standard form of licence pursuant to s 34 of the CL Act. The standard form: (i) provided for the grant by the Minister to the licensee of " a Licence pursuant to the provisions of section 34 of the Crown Lands Act 1989 in respect of the land described hereunder and subject to the terms and conditions contained in the following pages and Schedule 1 "; The Applicant submitted that the Minister was grantor/offeror of a licence subject to terms and conditions, and any grant was subject to the execution of the licence by the Minister (by his delegate). (ii) The licence provided for signature by the licensee, in the presence of a witness stating that the licensee " in consideration of the grant of the Licence agree [ing] to be bound by the terms, conditions and provisions of the Licence ". The licensee was not bound by the terms, conditions and provisions of the licence until the licence was granted. The licence was not granted until executed by the Minister. Schedule 1 in the licence identified no particular terms or conditions, including significantly no commencement date.
30 The Minister argued that "the first the Smiths knew about a licence document was when Mrs Smith contacted the Department on 4 September". That cannot be correct. The licence was at all times part of the tender material, and an initialled copy was returned by Mr Smith to the Department attached to his tender dated 8 April 1991 (Mr Smith's affidavit annexure D p 11; also par 17 table item 11). The Minister also submitted that it was of no significance that as at 30 May 1991 there was no commencement date in the Schedule because the commencement date was not part of the licence, and the agreement was capable of operating without the inclusion of a start date. This is incorrect. Clause 24(a) of the licence (exhibit 1 tab 6 p 6) in relation to commencement of the licence states as a term of the licence that it is required to be "specified or referred to in Column 2 of Item 5 of Schedule 1". 31 On 8 April 1991 the Regional Director advised Mr Smith (par 17 table item 8) that a "Notice calling for tenders" appeared in the Lismore Northern Star on 6 April 1991. This process is entirely consistent with two steps. It told Mr Smith that an area was available for licence and conditions of licence were attached (that is, in relation to execution etc, but as yet not in relation to commencement inter alia). Secondly, tenderers were to state in writing the annual rental they would offer. 32 On 27 May 1991, following the closing of tenders, the delegate recommended that "Tender of $1800 rental per year by J H and J Smith be accepted and offer of licence (subject to conditions set out in licence document herewith) be sent" (par 17 table item 13). This is also consistent with two steps: (i) The tender of $1800 rental per year was accepted, that is, would be a term of an offer of licence to be made by the Minister; (ii) an offer of licence (in form of licence document) would be sent by the Minister to the Smiths.
30 May 1991 letter 33 By letter dated 30 May 1991, the Regional Director advised Mr and Mrs Smith (par 17 table item 14) that their "tender of $1,800 (annual rental) for a licence for grazing purposes over lots 89 and 90, DP 751057 at Urbenville ha[d] been successful" and that to "assist in the preparation of the licence document", they should forward their full names, the copy of conditions previously forwarded "and $315.00 to cover processing costs". This is inconsistent with the suggestion that "the first the Smiths knew about a licence document was when Mrs Smith contacted the Department on 4 September". This could only be understood objectively as a reference to the form of licence previously provided to the Smiths and initialled by Mr Smith.
34 In considering whether the letter of 30 May 1991 (par 17 table item 14) in relation to the success of the Smiths' tender was capable of giving rise to a binding contract, it is relevant to note that it is the Minister as the party alleging the existence of a legally binding contract who bears the onus of proving its existence. 35 The Minister has failed to discharge his onus of proving that the letter of 30 May 1991 evinces any intention of the parties, determined objectively, to be immediately contractually bound. In particular, it is noteworthy that the Minister has failed to call, or provide any explanation for his failure to call, the author of the letter of 30 May 1991 (or any other departmental officer), but instead seeks to rely on the evidence of Mr and Mrs Smith some 20 years after the events in question in relation to their uncommunicated, subjective understanding at the time. The Smiths' evidence goes to use and occupation as at the date of claim. It cannot bear upon the question of intention to enter binding contractual relations. 36 At its highest, the letter is evidence that: (a) as a result of the tender process, the annual market rental for a licence for grazing purposes would be $1,800 per annum; (b) a "licence document" needed to be prepared; (c) there would be processing costs in an amount of $315 in connection with the preparation of the licence document; (d) the licence document would be in the form of the standard form of licence pursuant to s 34 of the CL Act which required: (i) execution of the licence by the Minister (by his delegate); (ii) signature by the licensee, in the presence of a witness, the licensee " in consideration of the grant of the Licence agree [ing] to be bound by the terms, conditions and provisions of the Licence "; and (iii) agreement to " to the terms and conditions contained in the following pages and Schedule 1 ", which as at 30 May 1991 were not stipulated, in particular in relation to commencement date. 37 Significantly, the letter of 30 May 1991 did not advise Mr and Mrs Smith to commence paying rental or of any commencement date for any licence. Rather, the plain inference is that the commencement of any licence would depend upon: (a) the timing of the provision by the Smiths of a processing fee; (b) the timing of the preparation of a licence document; (c) agreement being reached in relation to the terms and conditions of the licence; (d) the signature (and witnessing of the signature) of the licence by the licensee; and (e) execution of the licence by the Minister. 38 The reference to a processing fee would be understood objectively as a "charge to defray the costs of the Minister and his department - as grantor of the Licence - in carrying into effect his statutory powers in respect of the grant of a licence." The Smiths paid the processing fee and objectively this would be understood as being for the preparation of a licence document. The payment of a processing fee for the preparation of a licence document would not give rise to a contract. In Coshott v Woollahra Municipal Council (1988) 14 NSWLR 675 Wood J held that the mere payment of a fee when making a development application did not give rise to any contract. Wood J said at 684: "Rather it would be treated as a permitted charge to defray the costs of the Council, as a consent authority, in carrying into effect the planning and development powers and duties assigned to it." 39 All of these matters speak against the Minister's contention that the letter of May 1991 was capable of constituting a binding contract, let alone the grant of a licence by the Minister to the Smiths immediately to graze cattle upon lots 89 and 90. Rather, these matters strongly suggest that at its highest the case falls within the third class of cases identified by the High Court in Masters v Cameron at 361; that is, cases in which the terms of agreement (namely, annual rent in an amount of $1,800) are not intended to have, and therefore do not have, any binding effect of their own. Events after 30 May 1991 40 Much reference has been made to the undated Department of Lands letter (par 17 table item 19) headed "Offer of a Licence over Crown Land", referred to the Smiths as "Proposed Licensee", to "Draft Licence No. 191483" and to "previous correspondence concerning the grant of a licence", enclosed a "draft licence document", and advised that: (i) " An offer is made of a licence to authorise the use or occupation of Crown land "; (ii) the offer would " remain open for a period of 40 days from the date of this letter ", after which it would " lapse "; (iii) " acceptance by signature on the draft licence document does not constitute the creation of a licence "; (iv) the licence " is not granted until formally executed in this Office, after receipt of the signed draft licence document, indicating your agreement to be bound by the terms, conditions and provisions of the licence "; (v) " in considering the terms and conditions set out in the draft licence " the Smiths should "have particular regard to the clauses making provision for the purpose, rent, term and revocation" . This is entirely consistent with previous communications to the effect that a formal licence document would be prepared in the standard form previously provided and initialled. The Smiths would need carefully to consider terms and conditions including in relation to the term and commencement date which had not previously been specified in second column Item 5 of Schedule 1 of the draft licence. It would need to be signed by the licensee. It would need to be executed by the Minister in order formally to be granted. 41 The evidence suggests that licence documents were sent to Mr and Mrs Smith on or about 8 August 1991 (par 17 table item 19), however on 4 September 1991 Mrs Smith contacted the Department to advise that the "licence documents" had not been received (par 17 table item 20). A pro-forma Action Sheet headed "Consideration of an Application for the Grant of a Licence under the Crown Lands Act 1989" records that "new copies" were sent on 5 September 1991, and that the "offer now expires 25.10.91" (par 17 table item 21). The inference would be readily drawn that the copies of the licence documents which were sent again on 5 September 1991 were: (i) the undated Department of Lands letter (par 17 table item 19) addressed to the Smiths, headed " Offer of a Licence over Crown Land "; and (ii) a standard form of licence pursuant to s 34 of the CL Act which had been part of the tender material, but which now identified a licence number "191483" and contained entries in Schedule 1, including holder's address for service of notices and, significantly a commencement date of 1 August 1991. 42 On 18 October 1991, over a month after Aboriginal land claims 3967 and 3969 were lodged on 6 September 1991 (par 17 table item 22), the Department received a signed and witnessed licence from Mr and Mrs Smith, bearing the date 16 October 1991 (par 17 table items 25 and 26). The objective circumstances were that the Smiths must have read the undated letter, their evidence at its highest is that they do not recall. They must have understood that they did not have a licence to graze cattle until the licence was executed. They signed and had witnessed the licence. The effect of their signature could not be that the licence commenced on 1 August 1991 as it still needed to be executed for it to take effect. 43 Upon learning of the existence of the Aboriginal land claims, on 4 December 1991 the delegate approved the "withdrawal" of the licence offer (par 17 table item 27), noting that: "At the time of lodgement of the claims, lots 89 and 90 were not lawfully used or occupied (Licence No 191483 had not yet been executed by the Minister's delegate) and consequently were "claimable Crown land" in terms of the Aboriginal Land Rights Act". 44 The Minister was particularly critical of this document. However, it is entirely correct that on 27 May 1991 the tender of the Smiths of $1800 per annum was accepted by the Regional Director (par 17 table item 13). It is entirely correct that the formal offer of licence was forwarded to the successful tenderers on 8 August 1991 (par 17 table item 19). Also entirely correct is that a signed licence document was returned to the Department on 18 October 1991. "The claim must therefore be resolved before Licence No 191483 can be executed by the Minister's delegate" is entirely logical. It would be altogether inappropriate, and presumably ultra vires to execute a licence in circumstances in which the land claims had been lodge in the meantime, and needed first to be determined. On 6 December 1991 the delegate advised the Smiths that the offer of licence was withdrawn (par 17 table item 28). 45 As Giles JA observed in Sagacious Procurement Pty Ltd v Symbion Health Ltd (formerly Mayne Group Ltd) [2008] NSWCA 149 at [69], regard can be had to the conduct of the parties after the occasion of the putative contract, to cast light on the meaning of the communications in question and otherwise on whether they intended immediately to be contractually bound. To paraphrase Griffiths CJ in Howard Smith and Co Ltd v Varawa [1907] HCA 38; (1907) 5 CLR 68 at 78, in considering the question of whether the parties had in fact concluded an agreement on 30 May 1991, any statements or conduct on their part after that date inconsistent with the existence of a concluded contract are relevant. 46 In the instant case, the following communications and conduct of the parties after the date of the putative contract are entirely inconsistent with there having been a concluded contract as at 30 May 1991. (a) The undated Department of Lands letter to the Smiths, which was first sent on or about 8 August 1991 (par 17 table item 19) but not received by the Smiths, but was again sent on 5 September 1991 and this time, the Court would infer, received by the Smiths, advised them inter alia that: " An offer is made of a licence to authorise the use or occupation of Crown land" ; " acceptance by signature on the draft licence document does not constitute the creation of a licence" ; and the licence " is not granted until formally executed in this Office, after receipt of the signed draft licence document, indicating your agreement to be bound by the terms, conditions and provisions of the licence" (b) The draft licence document which was sent to the Smiths on 5 September 1991 (par 17 table item 21) and which now identified a licence number "191483" and contained entries in Schedule 1, significantly a commencement date of 1 August 1991; (c) The signature by the Smiths of the draft licence document and the witnessing thereof on 16 October 1991, and the receipt by the Department of the draft licence document on 18 October 1991 (par 17 table item 26); (d) Each of the matters referred to in (a) to (c) - the provision to the Smiths of the undated Department of Lands letter (par 17 table item 19) headed "Offer of a Licence over Crown Land", the stipulation of a commencement date of 1 August 1991, and the Smiths' subsequent signature of the draft licence document - is inconsistent with there having been any intention of the parties to create contractual relations as at 30 May 1991, let alone for the letter to constitute the grant of a licence immediately to graze cattle on the subject land; (e) The delegate's letter of 6 December 1991 (par 17 table item 28) which advised the Smiths that the offer of licence was "withdrawn" as the licence had not been executed as at the date the Applicant lodged a claim with the Aboriginal Land Rights Registrar in respect of the land. It is of significance that the delegate did not purport to revoke a licence which had been granted, but rather to withdraw an offer made in circumstances in which a licence had not been executed; again entirely consistent what previous communications. (f) The absence of any evidence that the Smiths disputed the delegate's assertion in the undated letter to them that the licence " is not granted until formally executed in this Office ", or that after receipt of the delegate's letter of 6 December 1991 (par 17 table item 28) they alleged the existence of any authorisation to use the land for the purpose of grazing; (g) The absence of any evidence that prior to 1995 the Department was aware that the Smiths had commenced to graze cattle on lots 89 and 90, and positive evidence of steps taken by the Department once it was made aware to advise the Smiths that there was no authorisation for the grazing of stock on those lots.
If contract concluded at 30 May 1991, no grant of licence 47 On no available construction would the letter of 30 May 1991 (par 17 table item 14) be capable of evincing agreement that the Smiths were authorised under the CL Act immediately to place their cattle on lots 89 and 90 for the purpose of grazing. The Applicant notes in particular the following matters:
(a) A relevant analogy is with a contract for the sale of land. The execution of a contract to convey does not give rise to a right of possession. Execution of the conveyance does. Likewise, in this case, the grazing of cattle required lawful authority in the form of the grant of a licence executed by the Minister (or his delegate). In other words, the Smiths would not have been entitled to the benefit of any licence until it was granted. That never occurred. (b) The Minister's submission that advice to the Smiths concerning the success of their tender was capable of constituting a grant of licence is tantamount to a submission that there was an agreement in relation to how a statutory discretion in respect of a grant of licence would be exercised, and that the advice to the Smiths was capable of constituting an anticipatory fetter on the Minister's statutory discretion: see Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth (1977) 139 CLR 54 where Mason J at 74-75 gave as an example town planning cases where it has been decided that a local or planning authority cannot by contract fetter in an anticipatory way its future discretion to approve or reject applications after proper consideration in accordance with the prescribed procedure; and (c) The Minister's submission (submissions in chief at par 26) that "a concluded and legally binding licence agreement had been reached with Mr and Mrs Smith on behalf of the Minister by virtue of the acceptance of Mr and Mrs Smith's tender by the Minister's delegate on 27 May 1991" in reliance on the decision of the High Court in Masters v Cameron overlooks the particular context of the "tender" process in the present case, involving the exercise by the Minister of the powers in s 34 of the CL Act in relation to Crown land. The analysis (at par 26 to par 34 of the Minister's submissions in chief) apparently disregards the context in which the grant of a licence is an exercise of power subject to the standards of decision-making dictated by administrative law. Finding 48 As identified in the Applicant's submissions, the preamble to the ALR Act refers to the Act as a means of remedying past dispossession of Aboriginal people in NSW. Numerous cases have held that the ALR Act is beneficial and remedial in nature and should be interpreted accordingly, per Kirby P in Minister for Natural Resources v New South Wales Aboriginal Land Council (1987) 9 NSWLR 154 at 157. 49 In this context the Court of Appeal held in Minister administering the Crown Lands Act v Deerubbin Local Aboriginal Land Council [No 2] [2001] NSWCA 28; (2001) 50 NSWLR 665 (the Maroota case) per Spigelman CJ at [53]-[54] that exceptions to the right to claim land should be narrowly construed. 50 The Minister has the onus of satisfying the Court that the lands claimed are not claimable Crown land under s 36(7). In Minister Administering the Crown Lands Act v Bathurst Local Aboriginal Land Council [2009] NSWCA 138; (2009) 166 LGERA 379 Basten JA held at [202]: In this context, inferences are also matters as to which a burden of proof may arise. Accordingly, in the present case, the Minister, bearing the burden of satisfying the trial judge of the ultimate fact, namely that the lands were not claimable Crown lands, also bore the burden of establishing such primary facts and inferences as must be drawn therefrom in order for his decision to be upheld. Although it may be possible in an appropriate case for an aggrieved party to challenge a finding on the ground that there was no material which logically tended to support it, the Minister must demonstrate that the findings which were made supported no other conclusion other than that for which he contended. Absent such a demonstration the Minister will only succeed if he is able to demonstrate that the trial judge incorrectly identified the legal principle to be applied. 51 The Minister's onus must be exercised in the context that the events in question occurred 18 years ago. 52 For the purposes of s 36(1)(b) of the ALR Act lawfully must qualify both "used" and "occupied"; Minister administering the Crown Lands Act v New South Wales Aboriginal Land Council (No 2) (1997) 42 NSWLR 641 per Sheller JA (Priestley, Handley JJA concurring) at 653G. Whether the use and occupation of the claimed land was lawful depends on whether s 6 of the CL Act has been complied with. Section 6 states that Crown land must not be occupied unless the use is authorised by the CL Act. Section 155 of the CL Act provides that a person may not drive stock on public land without lawful authority. The Minister agreed the issue was whether the Smiths' use was lawful in terms of their contractual rights as licensees. The grazing occurred pursuant to the grant of a licence according to the Minister.
53 At issue is whether a binding contract between the Minister's department and Mr and Mrs Smith came into existence on 30 May 1991 and whether that contract, if finalised at that date, also gave rise to a licence under the CL Act. Although stated as two separate questions they are difficult to consider separately as the Minister's case is that the same process of agreeing a contract through a tender process gave rise to a licence issued for the purposes of s 34 of the CL Act. Whether legally binding agreement 54 The Applicant's counsel provided an excellent summary of the relevant principles in relation to the formation of a legally binding contract which the Minister agreed with. As I cannot improve on this I adopt it and now set the principles out: (a) a party alleging the existence of a legally binding contract bears the onus of proving its existence: for example Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 per Gaudron, McHugh, Hayne and Callinan JJ at [26]; (b) whether or not a binding contract comes into existence depends on the intention of the parties; (c) whether the parties intend immediately to be contractually bound is to be determined objectively, according to the intention disclosed by their words and conduct: Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 548-549 per Gleeson CJ, with whom Hope and Mahony JA agreed; (d) the search for the "intention to create contractual relations" requires an objective assessment of the state of affairs between the parties ( Masters v Cameron (1954) 91 CLR 353 at 362 per Dixon CJ, McTiernan and Kitto JJ; ABC v XIVth Commonwealth Games Ltd at 548-549 per Gleeson CJ), "as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour" : Ermogenous per Gaudron, McHugh, Hayne and Callinan JJ at [25]; (e) parties may enter into a binding contract upon terms and conditions necessary for their contractual relationship, in the expectation that at a later time the formal contract will be executed consistently with those terms and conditions or perhaps with additional terms and conditions. Conversely, parties may agree upon quite detailed terms and conditions for a contractual relationship but not intend immediately to be contractually bound on those terms and conditions; this may be pending negotiations on other matters or until execution of a formal contract: Sagacious per Giles JA at [66]; (f) where the question is whether a single document constitutes a legally binding contract; "the decisive issue is the intention of the parties which must be objectively ascertained from the terms of the document when read in the light of the surrounding circumstances" : Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR 622 per McHugh JA at 634; (I note the Minister submits the contract is found in four documents, par 20 above); (g) however, there is the prior question whether the document is the sole repository of the parties' contractual intention: Sagacious per Giles JA at [66]; (h) as McHugh JA observed in Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 at 336-337, "the intention to be bound is a jural act separate and distinct from the terms of their bargain" (cited by Giles JA in Sagacious at [68]); (i) accordingly, the answer to what can be describes as a Masters v Cameron question is not necessarily found in a single document. As Giles JA observed in Sagacious at [69]: The intention of the parties may be found in a series of communications, or it may be shown that the signed document is only part of their putative contractual relationship. Further, in ascertaining the intention of the parties, whether from a series of communications or from a single document, regard can be had to the commercial circumstances in which the parties exchanged their communications or arrived at the document and to the subject-matter of the putative contract. The objective intention of the parties is fact-based, found in all the circumstances including "by drawing inferences from their words and their conduct in the making of [their] agreement": Allen v Carbone [1975] HCA 14; (1975) 132 CLR 528 at 532 per Stephen, Mason and Murphy JJ; see also Australian Broadcasting Corporation v XIV Commonwealth Games Ltd at 548 per Gleeson CJ. (j) it is long settled principle that regard can be had to the conduct of the parties after the occasion of the putative contract, to cast light on the meaning of the communications in question and otherwise on whether they intended immediately to be contractually bound: Sagacious per Giles JA at [69], and [99] to [106] and cases there cited; see generally Michael Furmston and GJ Tolhurst Contract Formation: Law and Practice (2010) Oxford University Press, Ch 10. In Howard Smith and Co Ltd v Varawa at [78] Griffiths CJ said that: the question being whether the parties had in fact concluded an agreement on 1st December, any statements or conduct on their part after that date inconsistent with the existence of a concluded contract are relevant for this purpose. (k) as Mason P observed in Randwick City Council v Nancor Trading Co Pty Ltd [2002] NSWCA 108; (2002) 120 LGERA 261 at [36], the context to be considered may include events occurring after the alleged date of the contract "because this may assist in pin-pointing when a contract was made" . 55 Three categories of contractual arrangements where the parties have been negotiating on contractual terms and also agree that that there will be a formal contract (here a licence under the CL Act according to the Minister) were identified in Masters v Cameron by the High Court (Dixon CJ, McTiernan and Kitto JJ in unanimous judgment) at 360. Firstly, where the parties reach finality in all the terms of the bargain and intend to be immediately bound by those terms, and at the same time propose to have the terms in a form which will be fuller but of the same effect. Secondly, where the parties agree all the terms of their bargain and intend no departure from these but also make performance of one or more terms of the bargain conditional on the execution of a formal document. Thirdly, the parties do not intend to make a concluded bargain until they execute a formal contract. In the first two categories there is a binding contract when the terms are agreed. There is no contract in the third category until a formal agreement is entered into. 56 The category referred to as the fourth category in Masters v Cameron by the parties is in fact identified in other cases such as Baulkham Hills Private Hospital. It refers to circumstances where a document recording the terms of the parties' agreement refers to the execution of a formal contract but the parties are immediately bound on a proper construction of the document. The Minister (in his secondary case, par 22 above) submits this is the applicable category to the arrangements between the Minister and the Smiths. In the alternative he submits the circumstances are those in the second or third category in Masters v Cameron. The Minister's primary case is that on 30 May 1991 a concluded contract which gave rise to a licence was reached. The authorities emphasise that the question must be answered objectively considering all relevant circumstances. 57 The Applicant also relied on Marshall v Berridge (1881) 19 Ch D 233 at 245 in which a lease which had no commencement date was held to be invalid for lack of certainty. The Minister argued that case was not relevant as it concerned a lease which creates an interest in land unlike a licence. 58 Hounslow London Borough Council v Twickenham Garden Developments Ltd [1971] 1 Ch 233 at 254D was cited by the Minister as authority that a contractual licence is not an entity distinct from the contract which brings it into being, but merely one of the provisions of that contract. Hounslow related to a standard form building contract and the licence for building contractors to enter the building site for the purpose of constructing dwelling units. In reply, the Applicant distinguished Hounslow from the factual circumstances of this matter as the Smiths were not licensees on land by any contractual right. I agree with the Applicant that the grant of a licence by the Minister under s 34 of the CL Act is different to a contractual licence. 59 Whether a binding contract was reached must be determined objectively, as held by the authorities identified above in par 54. The Minister bears the onus of establishing the existence of the contract as he seeks to rely on it (per Ermogenous). Under the ALR Act the Minister also bears the burden of establishing primary facts and inferences to be drawn from these in order to discharge the onus he bears under the ALR Act (per Basten JA at [202] in Bathurst). 60 The parties provided detailed submissions which I have set out above largely unaltered. These were difficult to summarise as it was necessary to consider the transactions between the Minister and the Smiths in detail in order to make the submissions the parties deemed necessary. Up to 30 May 1991 61 The documents and evidence identify steps leading up to the conclusion of a contract on 30 May 1991 according to the Minister (table ref 1-14). The Minister submits that the contract and licence were made by the agreement of the parties as identified in four documents. The Smiths were invited to tender (par 17 table items 7 and 8). A copy of the blank licence form including conditions was sent to the Smiths by the Department as part of the tender process (par 17 table item 8). The front page provides for the Minister's signature to be affixed. Schedule 1 to the licence form did not have a commencement date and other relevant information. The Smiths sent an undated letter which stated that they accepted all conditions listed in the schedule and licence (par 17 table item 11). The letter of 30 May 1991 from the Department accepting the tender is set out in its entirety in the table (par 17 table item 14). It refers to the preparation of a licence document and asks for names, a copy of the conditions previously sent to the Smiths and a processing fee of $315. 62 The Minister's submissions on why this document and those preceding it gave rise to a binding contract with all agreed terms are identified above at par 19 to 24. The Applicant's comprehensive submissions as to why that cannot be the case are set out above at par 27 to 39. 63 The Minister submitted that there was nothing in the 30 May 1991 letter suggesting that further steps were required before a binding agreement was concluded. At the time the letter of acceptance of the tender dated 30 May 1991 did not give rise to a concluded contract whereby all terms were agreed and all that remained was the execution of a formal licence agreement which included agreed terms (par 20, 21 above). In my view, at that point there was not a final agreement on all terms of the contract as at that date as there were still matters to be finalised. The tender documents included a blank licence form with some of the operative provisions, in particular the commencement date for the payment of rental, rental amount and personal details relating to any licensee(s) omitted as these would not be completed until the tender process was competed. I have to agree with the Applicant's submissions set out in par 36 and 37 as to the effect of the letter, which was that the market rental for the ability to graze was accepted and that a licence document had to be prepared which would include additional terms. 64 The letter also referred to the requirement to pay a processing fee for a licence document. That alone suggests that a licence document was to be provided by the Department as a subsequent step given that such a document was provided in blank form as part of the tender. As submitted by the Applicant in par 38 the payment of a licence fee does not suggest that a contract which is also a licence had then been concluded. The Applicant relied on Coshott as an analogous situation concerning the payment of a fee for a development application which did not give rise to a contract. The same analysis applies in this situation also. After 30 May 1991 65 The parties made conflicting submissions on the relevance of the events after 30 May 1991. As set out above in par 40 to 46 the Applicant relied on these as demonstrating that there was no binding agreement to enter into a licence on the part of the Minister. The Minister submitted these events were irrelevant as they occurred after the date the contract was finalised on 30 May 1991. Alternatively, the "Offer of licence over Crown land" received by the Smiths after 5 September 1991 cannot have had the effect of undoing or altering the existing contractual relationship which had already come into being. 66 As referred to by the Applicant relying on Sagacious at [69] and Nancor at [36] inter alia, events after 30 May 1991 can be considered in order to determine whether it was intended by the parties that a binding contract be finalised on that date. In the table at par 17 events from item 15 took place after the date the contract was concluded (if it was). These events include the placement of stock on the land by the Smiths immediately after receiving the departmental letter, lodgement by the Smiths of the processing fee of $315, the Smiths securing fencing around the land, the Department preparing a licence document which states that it is open for 40 days from the date of the letter, Mrs Smith ringing the Department to find out about rent payment, the Department noting the licence documents had not been received, the Department sending the document, land claims lodged, licence document signed by Smiths and returned with first year's rent payment to the Department, a departmental officer considering that as land claims had been lodged and the licence not executed the land was not lawfully used or occupied and approved withdrawal of licence offer and refund of rent paid, the Smiths were advised accordingly by letter dated 6 December 1991 and a refund of the rent being paid. 67 The effect of the document called an offer of licence over Crown land received by the Smiths in early September 1991 from the Department is also discussed extensively in the parties' submissions. The Minister submitted (par 24(m)-(o)) that while received by the Smiths in early September, that is after the contract was finalised, it could not alter that agreement. It contained a commencement date of 1 August 1991, which had already passed. This was argued to be an acknowledgment that the relationship of licensor and licensee had already commenced. This is contrary to the description of the document as an offer which required the execution of the Minister in order to be effective, according to its terms. While the Minister submitted that to construe the document as other than acquiescence that the Smiths could use the land from 1 August 1991 that is contrary to the express terms of the document which required execution in order for it to be effective. As set out in the Applicant's submissions par 40, there were numerous references in the offer of a licence which suggested that it was just that, an offer. Apart from the title the offer was open for period of 40 days and stated that signature on the draft licence did not constitute the creation of a licence. The inference to be drawn from the document itself is that it was an offer, an inference inconsistent with there being a final binding agreement reached by the parties on 31 May 1991 which included a licence of Crown land. 68 The subsequent events confirm that there was no intention by the Department to enter a binding contract the formal outcome of which was a licence under the CL Act as a result of the letter from the Department to the Smiths of 30 May 1991. Objective v subjective evidence 69 The Minister has relied on the affidavit evidence of the Smiths to the effect that they considered they were entitled once their tender offer was accepted to place cattle on the two lots immediately as they understood an agreement had then been reached. The subjective understanding of one party is not conclusive that a final agreement has been reached. In this case events took place some 18 years ago. No view is provided by the Department as to the understanding of its officers (perhaps not surprisingly given the time that has elapsed). The Smiths' evidence as to their belief on 30 May 1991 when the letter from the Department accepting the tender was received and their actions on and after 30 May 1991 in placing cattle on the land is not conclusive of whether there was a final contract which gave rise to a licence over Crown land. 70 In relation to the state of mind of relevant officers in the Department, documents from the departmental file in evidence leading up to the formation of the contract can be considered. The view of the Department as expressed in the internal minute dated 27 May 1991 (par 17 table item 13) when the Smiths' tender was accepted was that the offer be accepted subject to conditions set out in the licence document. The inference arising from that minute is that the licence document had still to be finalised following acceptance of the tender (which is referred to in the Minister's submissions par 26(i) as ambiguous). That was in fact the case in that the commencement date had not been finalised. It is also confirmed by the later actions of the Department in not issuing a licence executed by the Minister's delegate (as argued by the Applicant in par 46(e) above). 71 The primary case for the Minister (par 21 above) that the contract was created and gave rise to a licence is not established in the above circumstances. Further reason for this is also found in the next section which deals with this issue in the context of whether a statutory licence can be issued in that way in any event. In relation to the alternative case of the Minister (par 22), the circumstances in this case are closest to those referred to as the third category in Masters v Cameron, namely the parties do not intend to make a binding contract until they executed a formal contract. This did not occur. Consequently, the Minister is unsuccessful in relation to this part of his case. Can a statutory licence to graze cattle be granted by tender? 72 A further consideration raised by the parties' arguments is whether entering into a binding contract on 30 May 1991 (assuming this occurred) also gave rise to the grant of a licence under the CL Act. As identified above in par 56, whether the contract also gave rise to a licence under s 34 of the CL Act is in dispute. Section 34 of the CL Act provides broad unfettered power to the Minister to grant licences in such manner as he or she thinks fit. There is no requirement for a land assessment under s 35 before a licence is granted unlike the creation of other interests in Crown land provided for in the CL Act. 73 The Minister has argued the contract awarded by a tender process gave rise to a licence effective from 30 May 1991 and that is in accordance with the Act. It is open to the Minister to grant a licence in terms which incorporates by reference to other documents the terms that are agreed. The Minister submits that is appropriate as a licence does not create any interest in land and is determinable at will. The Minister has broad discretion under the CL Act to determine the form and content of a licence under the CL Act. The Applicant argues to the contrary that the entering into a binding contract mutually agreed by two parties is separate from the unilateral grant of a licence of Crown land, a grant of statutory authority, by the Minister under the CL Act. The tender process and the issuing of a licence over Crown land was a two step process with the first step of reaching a contractual agreement being separate from, and not automatically arising from, the tender process. 74 It is helpful to first consider the nature of the tender process generally and in the specific circumstances of this case as the Minister relied on the conduct of the tender process as supportive of his case, see submissions at par 24(e)-(h) above where the nature of the tender process undertaken and the information disclosed is set out. The Minister referred to N Seddon, Government Contracts, 4th ed (2009) Federation Press, and relied on par [7.6] as follows: [7.6] Formal documentation - when is the contract made? It is usually the case that the successful tenderer will be required to enter into a formal written agreement. If so, the question arises: does a binding contract come into being on acceptance of the tender or on execution of the formal document? The answer depends entirely on the intention of the parties as disclosed by the tender documents. If it is made clear that formation of contract is contingent on the execution of a formal document - the agreement is, for example, "subject to contract" - then acceptance of the tender does not constitute formation. However, this would be unusual in a tender at least for smaller and uncomplicated contracts. Sometimes, particularly with routine purchases, the intention is that selection of, and notification to, a particular tenderer is acceptance of that tenderer's offer and the execution of a formal document becomes one of the obligations of the contract. The written agreement is generally only intended to recapitulate what was specified in the request for tender. The High Court in Masters v Cameron acknowledged the possibility of a "holding" contract that contemplates the execution of a formal contract in its first two categories under which the parties intend to be immediately bound but they intend to restate their bargain "in a form which will be fuller or more precise but not different in effect", or they have made performance of one or more of the terms to be conditional upon the execution of a formal document…. It is there unlikely that it will be possible to argue that formal documentation is a crucial step in the tendering process (unless the terms of the tender make this absolutely clear). 75 The Minister argued this analysis supported his argument. 76 The Minister also referred to the dictionary definitions of "tender" as found in the Macquarie Dictionary and Butterworths Australian Legal Dictionary. The Macquarie Dictionary, 5th ed (2009) Macquarie University, defines tender as "… the act of tendering; an offer of something for acceptance …". Butterworths Australian Legal Dictionary, (1997) Butterworths Sydney, defines tender as "[a]n offer which is capable of acceptance". 77 Cases which have considered tender contracts were referred to by both parties. Nancor was relied on by the Minister. The Court of Appeal (Stein JA, Mason P and Santow JA concurring) was considering an appeal against Rolfe DCJ's decision to award a large amount of damages to Nancor resulting from his finding that the parties had entered into a binding agreement which gave rise to damages if the contract was frustrated or brought to an end. That case had unusual facts involving a tender by the council for a contract to operate a kiosk in a council owned building. The tender stated that the tender was in accordance with the specification issued by the council and an acceptance by the tenderer of the terms and conditions in the specification. The successful tenderer was sent a draft licence agreement which had significant differences from the tender specification documents, such as a reduction in the term of an option and specified market review of rent rather than CPI, inter alia. The kiosk building the subject of the tender was demolished by the council while negotiations about the licence agreement were ongoing. Rolfe DCJ held that the contract was that identified as the second category in Masters v Cameron, the parties having completely agreed on all the terms of their bargain and with no intention to depart from or add to these. The Court of Appeal agreed that a binding agreement was concluded on the acceptance of the tender by the council. 78 The Applicant correctly submitted that the tender in Nancor was under the Local Government Act 1993 which provides for strict rules as specified in the Local Government (Tendering) Regulation (1999) (repealed). The issuing of tenders under the CL Act is not subject to any similar provisions. The tender included a commencement date, unlike this case. The tender specified that the licence fee was payable from the date of occupation notwithstanding that the licence agreement may not have been executed, unlike this case where the 30 May 1991 letter made no reference to when payment of rent would commence. The acceptance by the council specified a commencement date, the timing and method of payment unlike the letter of 30 May 1991 in this case. There was no processing fee to be paid for the preparation of a licence document. In contrast to Nancor, there was no suggestion in this case of any agreement that use or occupation be authorised prior to agreement in relation to the terms and conditions, and the execution of a formal licence document. Nor does Nancor deal with the grant of a statutory authority for the use of land as this case does, another important point of difference. 79 Further, in this case the licence document, a copy of which was sent to the Smiths as part of the tender process, required formal execution by the Minister's delegate in order for it to take effect. Events after 30 May 1991 confirm that was the view of the Department. 80 Other authorities referred to by the Applicant which consider a tender process include Upper Hunter Timbers Pty Ltd v Forestry Commission of New South Wales [2001] NSWCA 64 (Handley, Stein and Giles JJA). In that case an agreement was reached by tender in relation to a licence to take timber. The respondent invited tenders and published details describing the tendering procedure in a brochure which had a tender form and general conditions attached. The general conditions of tender included a statement that the supply of timber to the successful tenderer(s) would be made under the Forestry Act 1916, the Forestry Regulation 1983 and subject to the conditions of licences issued under those statutes. Following the tender process, the respondent informed the appellant that the appellant's tender had been accepted in principle and confirmed subject to satisfactory negotiation. This was held to be an agreement to take the necessary steps to grant a licence, not the granting of the actual licence. I agree with the Applicant that the approach taken in that case is also relevant to the circumstances in this case. It confirms that the Applicant's submissions on the two step process in relation to the tendering process in 1991 to determine the market value of the licence to be followed by a separate grant of the licence are correct. 81 The Applicant also adopted the analysis in Byrne v Shire of Broome [2006] WASAT 376; (2006) 48 SR(WA) 161 of the State Administrative Tribunal of Western Australia concerning the granting of an authorisation under the Local Government Act (WA) 1995. The decision of the tribunal at [11]-[13] states: 11 First, a decision not to award a tender for goods or services to a person does not involve a decision not to grant the person an "authorisation". The term "authorisation" is defined in s 9.2 of the LG Act to mean, unless the contrary intention appears, "a licence, permit, approval, or other means of authorising a person to do anything, other than one that has been excluded by regulations from being an authorisation for the purposes of this definition". The word "authorising" means giving authority or legal power to or empowering a person to do something or giving authority for or formally sanctioning an act or proceeding: The Macquarie Dictionary (Macquarie, 4th ed (Sydney) 2005), page 91. Similarly, in Ex parte Johnson; Re MacMillan (1946) 47 SR (NSW) 16, Jordan CJ observed at 18 that "the word 'authorise', according to its natural meaning, signifies the conferring upon a person of a right to do something which, apart from the authorisation, he does not possess"; see also Metal Manufacturers Pty Ltd v Lewis (1998) 13 NSWLR 315 at 318 and Transport Accident Commission v Moore [2004] VSCA 60 at [13]. 12 As the Shire correctly submits: "The process of authorisation is therefore a unilateral process, whereby a person or entity possessing a lawful, statutory authority authorises, approves or otherwise confers a right to do something on a person who did not otherwise possess such authority ... The process of tendering is a contractual process that is essentially consensual and bi-lateral in nature, in contrast to a process of authorisation whereby a licence, permit or approval is granted in a unilateral exercise of statutory or other lawful authority." 13 It is apparent from s 3.57 of the LG Act, which requires a local government to invite tenders before it enters into a contract of a prescribed kind under which another person is to supply goods or services, and the terms of Pt 4 of the LG (F&G) Regulations, that a tender, which effectively forms an offer for acceptance for the purpose of creating a contract for the supply of goods or services to a local government, is not an application for a licence, permit, approval or other means of giving authority or legal power to or empowering a person to do something or giving authority for or formally sanctioning an act or proceeding. The process of inviting and accepting a tender for the purpose of creating a contract for the supply of goods or services is fundamentally different in character to the process of authorisation. 82 I agree with the Applicant that the distinction drawn in that case between the acceptance of a tender and the grant of an authorisation (there under the WA Local Government Act) is apposite to this matter which involves the grant of a licence of Crown land under the CL Act. The tender process is a means of determining the market value of the licence, a contractual process. The grant of a statutory authority is separate from that process. I agree with and adopt the submissions of the Applicant set out above at par 47 to the effect that the Smiths were not entitled to graze cattle without the granting of a licence and that did not occur. Authority to graze cattle on Crown land under the CL Act could not arise solely from the tender process. 83 The Applicant relied by analogy on a contract for the sale of land (par 47(a) above) and, more relevantly, the development consent process as referred to in Ansett Transport as analogous circumstances where the discretion to grant statutory authority was held not have been fettered by an application for a fee for that authority. Mason J at [75]-[76] referred to authority that in town planning cases a planning authority cannot by contract fetter its future discretion whether or not to grant development consent. The force of that finding and approach as appropriate for this case is not undermined by the fact that a licence over Crown land does not create an interest in land and is determinable at will. A licence is nevertheless a conferral of statutory authority under the CL Act. 84 The distinction between the granting of a licence of Crown land and an agreement in relation to the use of that land on terms can be demonstrated by referring to the Minister's submissions that the Smiths were the offerors and the Minister in effect was the offeree in relation to the tender process. As submitted by the Applicant, that may be an available characterisation of their relationship in relation to ascertaining market value for a licence in a tender process, but not in relation to the grant of a licence. The Minister is offeror/grantor of a licence under s 34 of the CL Act. While a tender process can give rise to a binding contract it cannot confer a binding grant of a statutory authority. Nothing in the extract from Seddon set out in par 73 concerning the nature of the tender process applies to the grant of a statutory authority. 85 This conclusion means that the Minister's case must fail even if there was a binding agreement between the parties reached on 30 May 1991 that was intended to give rise to a licence under the CL Act (although I have held to the contrary above in par 71). The granting of the licence under the CL Act is a separate unilateral action by the Minister, and one which did not ultimately take place. The preparation and execution of the licence was more than a formal recording of the agreement of the parties reached on 30 May 1991. Consequently the grazing of the Smiths' cattle on lots 89 and 90 at the date of the claim was not authorised under the CL Act. As a result the claimed land was and is claimable Crown land under the ALR Act. 86 The Applicant is successful in this appeal and I therefore make the orders sought in the application. Orders 87 The Court makes the following orders: 1. The appeal is upheld. 2. The Minister is to transfer the land claimed in Aboriginal Land Claims 3967 and 3969 in fee simple to Muli Muli Local Aboriginal Land Council. 3. The Minister is to do all things necessary to enable the transfer of the land in accordance with order 2, including surveying the land, as soon as reasonably practicable. 4. Costs are reserved.
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.
Muli Muli Local Aboriginal Land Council
Minister Administering the Crown Lands Act
[2006] WASAT 376
[2004] VSCA 60
(1985) 2 NSWLR 309
(1977) 139 CLR 54
(1988) 18 NSWLR 540
(1986) 40 NSWLR 622
(1988) 14 NSWLR 675
(2002) 209 CLR 95
(1907) 5 CLR 68
(1954) 91 CLR 353
(2009) 166 LGERA 379
(2001) 50 NSWLR 665
(1997) 42 NSWLR 641
(1987) 9 NSWLR 154
(2002) 120 LGERA 261
(1975) 132 CLR 528
(1998) 13 NSWLR 315
The appeal was upheld. The Minister was ordered to transfer the land claimed in claims 3967 and 3969 in fee simple to Muli Muli Local Aboriginal Land Council and to do what was necessary to enable the transfer, including surveying the land, as soon as reasonably practicable. Costs were reserved.