New South Wales v Commonwealth [1926] HCA 23

New South Wales v Commonwealth [1926] HCA 23 - HCA 1926 case summary — Zoe

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on mainland, which was to be in communication with Garden Island naval depot. The 4th paragraph of the agreement creates a condition precedent to vesting the Imperial lands. That condition is twofold, since the works must be done to the Commodore's satisfaction - that refers to the manner of executing them; and, next, that the sites of the receiving depot and of the residence were to be "conveyed, granted or dedicated in perpetuity" to the Imperial Government " in the same way as Garden Island had been." That refers to the vesting of the property in the Imperial Government - "conveyed," obtained from a private owner, and " granted" or "dedicated in perpetuity" if Crown lands. Recital 5 is of the - highest importance, because it says that the agreement had been - consensually modified by erecting the receiving depot on Garden Tsland. ts importance consists in this: that, by so erecting the receiving depot on Garden Island, it became part of the Island, and therefore ipso facto was " dedicated in perpetuity in the same way as Garden Island." No other or further grant or dedication of the receiving depot was necessary or possible, for, as already pointed out, the legal title to Garden Island had always been and remained in the Crown. In other words, the mere erection there of the receiving depot was in law a complete fulfilment of the condition precedent as to the site of the receiving depot. It is always to be remembered that the necessary depot was the really essential part of the stipulated consideration for the Imperial lands (see the letter of Admiral Fairfax, 22nd February 1889). Recital 5 is, therefore, in effect, a statement of the fulfilment of the condition precedent as to the depot. The same may be said as to the accessorial reclamation. The fulfilment of the rest of the condition precedent needed express statement, and that is found in recital 6. Plaintiffs' admission, No. 13, shows that the recital is true as to Admiralty House ; so both parties regarded it. Recitals 7, 8 and 9 are as to the formalities of the Order in Council.

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grant and has ever since retained and still enjoys the full benefit of it. New South Wales by the Order in Council received and holds lands which in the opinion of Sir Alexander Stuart, recorded in his proposals of 1883, were " of great value," and which are asserted, without contradiction, to have been worth in 1898 about £2,000,000, that is, appraising them at their selling value, just as Garden Island is appraised, whereas Garden Island and Admiralty House were together in 1910 valued by the State at something less than £450,000. The Imperial Government, it is true, had leased some of these lands to the State at a nominal rental. But that generosity does not detract from the intrinsic value of the lands, had the Home Govern- ment taken up a commercial attitude. Now, according to well established law, settled for centuries, a grantee from the Crown in circumstances such as those of the present case is bound by the statements, affirmations and conditions in favour of the grantor which are contained in the grant. Therefore, whatever statements, affirmations and conditions are found in the vesting order in favour of the Imperial Government must be taken as true and as binding on New South Wales as if executed on behalf of the State. If, as already shown, the recitals, expressly or by implication, imply its action or inaction, then at the moment of acceptance - I leave aside for the instant any possible alteration of the law, or any possible executive cancellation ex post facto of obligations under existing law

the State claiming the benefit of the Order in Council was bound accordingly to act, if competent constitutionally so to act, or to observe forbearance. There is no difference in this respect between a State and an individual. If a term or condition is imposed and accepted, then, if within the legal capacity of the grantee, the grantee is bound to act or forbear accordingly, and if incompetent by law, the grant conditioned on the performance or forbearance fails. But acceptance is an election to be bound by the terms and conditions, and no one is allowed at once to approbate and reprobate. Platt, in is work on Covenants, at p. 18, speaks of "the acceptance of a deed being considered equivalent to an actual execution by the lessee." In the case of a Crown grant the position has always been unquestionable that the grantee consents to all things therein, all words of promise, condition or other consideration being as

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was applied to a Crown grant in a well-known case nearly a hundred years ago (Mayor of Lyme Regis y. Henley (1) ). There a royal grant of a pierquay or cob was made to the corporation, the grant stating that the King was " willing" that the corporation should repair. An injury occurring to an individual by reason of non-repair, he sued the corporation. The Court of Common Pleas and the Court of King's Bench held the corporation liable, and an appeal was taken to the House of Lords. A question was proposed to the Judges as to the corporation's liability, and Park J. delivered their opinion, which, on the main question, was unanimous. At p. 350 is found a passage in that opinion which is much in point here, namely, "Now these words are undoubtedly an expression of the King's will that the corporation should repair ; but they are not the less a condition on that account ; on the contrary, they show the considera- tion for the grant, the motive inducing the King to make the grant, and consequently the terms and conditions on which the grant was to be accepted." It is perfectly plain that the Judges of England thought - and the House of Lords confirmed their opinion - that "terms and conditions" in that connection are equivalent to the " consideration " in the full legal sense, that is, as including not only all that the grantor receives, but also all that the grantee is required to perform or observe. This judicial interpretation of the expression "terms and conditions," if one were needed, it may be parenthetically observed, necessarily applies to the Colonial Fortifications Act 1877. The point of difficulty in the minds of the learned Judges apparently was whether the King's mere " willingness" was sufficient to constitute a consideration in law, there being no antecedent agreement and no express promise by the corporation in the grant. Park J. continued as follows: '" What effect such words might have in a grant from one subject to another it is not necessary to determine ; such a grant between subjects is a matter of contract and bargain, strictly so speaking ; but a grant from the King to a subject is a matter (1) (1834) 2 Cl. & Fin, 331.

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Then the case of Brett v. Cumberland (1) is cited, and is the fundamental case on the subject, and is referred to by Plait. The opinion then proceeds: "So in the charter in question, the words are in show the words of the King only, but the corporation having accepted the charter and enjoyed the benefits of it, as is averred in the declaration, they are as strongly bound as if they had coven- _anted expressly by an indenture." So far as concerns the recital as to the original dedication of Garden Island, the case is directly in point. It also goes without saying that where there is a strict bargain, as in the present case with respect to the new works and the new transfers or dedications, the same result ensues, a multo fortiori. Had there been a bargain in that case, evidently there would have been no argument on the point. The law as declared _ covers the whole of Garden Island. The opinion delivered by Park J. was in exact accordance with a passage in the judgment of Lord Tenterden C.J. in the King's Bench (Mayor &c. of Lyme Regis v. Henley (2) ), stating that acceptance of the benefits is assent to being bound by the King's will "as a condition or obligation." Observe, it was a condition or obligation in the sense that it carried personal Viability for breach causing injury to individuals, that is, something other than a mere "condition" in the abstract legal 'sense (see the third ground of the writ of error (3) and Mr. Erle's argument (4) ). The latest and, for us, the most authoritative illustration is found in Ontario and Minnesota Power Co. v. The King (5). No new law was there enunciated: it was merely the enforcement in modern circumstances of the ancient and deeply-rooted doctrine of the common law already mentioned. If that case be at all distinguishable from the present, it is because the present is the clearer case. In the Canadian case the recital binding the grantee was admittedly inaccurate in fact; here it is true. The judgment of Riddell J. in the Ontario Court, there approved by the Privy Council, shows (Smith v. Ontario and Minnesota Power Co. (6) ) how far a Court is (1) (1617) Cro. Jac. 521. (5) (1925) A.C. 196, at pp. 205, 206. (2) (1832) 3 B, & Ad. 7, at p. 92. (6) (1918) 44 Ont. L.R. 43, at p. 49,

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of maintaining the Imperial Navy should rest on the Imperial Government, which ought, at its own cost, to defend Australia by sea, and pressed for an increase of the squadron kept on the coast. Those resolutions would be sheer nonsense unless it were conceded that a local base would be available for purposes beyond the particular colony in which it was situated. Further, it is unimaginable that those who took part in the Conference did not intend that the naval depot in Sydney Harbour might be used for the purpose of defending Australia generally. The best proof of the matter is that the out- come of the Conference was the Colonial Conference agreement of 1887, followed hy local legislation of the colonies, of which the New South Wales Act No. 22 of that year was the type. The British Parliament, on its side, passed an Act (51 & 52 Vict. c. 32) called the Imperial Defence Act 1888, the recital of which shows the recognition by all the Australian colonies and New Zealand with the Imperial Government that the floating trade in Australasian waters should and could be protected at their joint charge. The agreement was ratified by the respective Parliaments of all the contracting parties. It was in accordance with that agreement that the Fleet entered Port Jackson on 5th September 1891. The agreement lasted up to Federation, and continued, indeed, until the renewal in 1903. In 1892 an agreement was made between New South Wales, Victoria, Queensland, South Australia and Western Australia to defend Albany. In 1893 a similar agreement was arrived at with reference to Thursday Island. Since Federation the same view of local constitutional power has prevailed, as witness the renewal in 1903 of the Naval Agreement, New Zealand assenting, and also the Imperial Conferences of 1907, -1909, 1911 and 1923. All these events are of public notoriety. It cannot, therefore, be maintained that a New South Wales port was incapable under the Constitution of the Colony of utilization for the defence of Australia generally, even when territorial defence was a local constitutional power, and therefore not now capable by force of New South Wales law. I would add that for mere misuse, by allowing unauthorized persons to use land dedicated, the remedy would not be cancellation, but restraint of the misuser complained of.

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For some years before 10th January 1865, the first dedication, the Island had, with the consent of the New South Wales Government, been continuously and exclusively used by the Imperial Government as a naval depot, and the whole Island was so used from 1866 until Ist July 1913. On this last date the duty of naval defence of the Commonwealth was undertaken by the Commonwealth Government, and the Island has since been used by that Government for the _ purposes of the Australian Navy - no doubt with the consent of the _ Imperial Government if such consent is material. The Common- wealth has not paid any compensation for the Island or the buildings thereon under sec. 85 of the Constitution of Australia, inasmuch as the section did not apply to this land that had been occupied by the British Navy. So far, one cannot discern any shadow of a title, on these facts, in either the British Government or in the Common- wealth Government. It seems impossible to conceive of New South Wales ever objecting to the use of the Island by the British Navy ; but, so far as the legal title is concerned, the Navy had no roperty in the Island. The Island was still the property of the wn; but under the Constitution of New South Wales (1855 - 8 & 19 Vict. c. 54) "the entire management and control of the waste lands belonging to the Crown in the said Colony" was

vested in the Legislature of the said Colony." By virtue of the Act of 1861 the Legislature reserved the land of the Island from sale, reserved it for a naval depot ; but, subject to this reservation, the State Legislature retained the entire management and control of the Island ; and (under sec. 1 of the Constitution) the Legislature could pass any Act that it saw fit to pass for New South Wales - _ could make laws for New South Wales "in all cases whatsoever." In pursuance of this legislative power, the New South Wales

Legislature passed the Crown Lands Act of 1884; and, by sec. 105, this Act enabled the Governor in Council to revoke any dedication under certain conditions, even if the dedication were " permanent,"

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as this dedication was. No one denies that the Legislature could give power to revoke; but the Commonwealth urges that this dedication could not be revoked. The power to revoke reappeared in the Crown Lands Consolidation Act 1913 (sec. 25), but the power was conferred on the Minister instead of the Governor. The precise words of this see. 25 are very important in several aspects, and I think it necessary to repeat them here in full : - "' In any case in which the Minister shall be of opinion that the purposes for which any reservation or dedication of Crown lands made before or after the passing of this Act have failed wholly or in part - or that there is any doubt or uncertainty as to such purposes - or that it is expedient in the public interest to resume the land which is the subject of such reservation or dedication - or to make an exchange of any portion of any such land for other land of equivalent value or nearly so to be dedicated on similar trusts or for like purposes - or that the trusts annexed to any land reserved or dedicated under the Crown Lands Acts have failed or cannot reasonably be carried out - then and in every such case a notice under the hand of the Minister shall be published in the Gazette, which notice shall set forth the mode in which it is proposed to deal with the reservation dedication or land in question (hereinafter termed ' proposals'), a copy of which notice shall be laid before both Houses of Parliament within one month after the publication thereof in the Gazette if Parliament be then in session, or otherwise within one month after the commencement of the next ensuing session. If Parliament shall within one month declare by resolution that it does not assent to the proposals set forth in such notice, no further action shall be taken in the matter. If no such resolution be passed, then after the expiration of. thirty clear days after the date when the notice was laid before Parliament, it shall be lawful for the Minister to direct the proposals so notified to be carried out, and the same shall be carried out accordingly, and for that purpose the Minister may revoke by notification in the Gazelle any such reservation or dedication, and make any new dedication sanctioned by such proposals; and such grants may be issued and instruments executed, as the circumstances of each case may require. The provisions of this section shall be held to extend to land which after dedication has been or shall be granted by the

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Admiralty authorities thought, or wished it to be recognized, that they were entitled to the use of Garden Island for ever; but it is" sufficient for my purpose to say that the Order in Council did not purport to give to the British Government anything more as to Garden Island than had already been given. This Order in Council - is not a grant or conveyance of the Island; nor is a recital in an Order in Council a conveyance. As for the " arrangement " recited _ as stated in the Colonial Secretary's minute of 11th April 1883, it could not be operative without the sanction of the New South Wales Legislature. Indeed, if the Government of New South Wales desired to give to the Admiralty a right to the Island other than that which the Government was authorized to give by sec. 5 of the Act of 1861 and the subsequent Acts, it had no power to do so, The Crown Lands Acts, from 1861 onwards, contained a section to this effect (sec. 3 of the Act of 1861): '"' Any Crown lands may lawfully be granted in fee simple or dedicated to any public purpose under and subject to the provisions of this Act but not otherwise." - The Admiralty had the two dedications to rely on, and nothing - else in law. The Legislature that could authorize a dedication in perpetuity could terminate the dedication. Even if the New South Wales Government intended, and if the Admiralty understood, that the dedication was not to be revoked, the Government could not fetter the power of the New South Wales Legislature to make any law that it chose as to New South Wales land ; nor could the Government repeal the then existing Act, the Crown Lands Act of 1884, which gave the power to revoke. The Legislature has power even to break faith ; much more has it power to refuse to carry out a promise made by the Government without authority. At this stage I feel bound, out of respect for the view expressed by my brother Zsaacs with so much erudition, to say that I cannot regard this Order in Council as effecting any change in the title to the Island. For the present purpose it is sufficient to say (1) that the Order in Council did not even purport to affect the title; (2) that even if any new or better title was agreed to be given by the New South Wales Government than the Imperial Government had already, the New South Wales Government had no power to give

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that the Minister (the New South Wales Minister for Lands) duly or at all revoked any of the dedications ; and that issue has to be faced. If sec. 25 of the Act merely gives power to the Minister to revoke a dedication to one public purpose and to devote the land to some other purpose (of which the Legislature approves or from which it does not dissent), then this revocation is invalid. If a landlord permit his tenant to pull down a shed and put up another in its place, the tenant is not thereby enabled to pull down the one without putting up the other. If A authorize B to take away any horse in A's stable on the condition that B put another horse in its place, B cannot take away the horse leaving the condition unfulfilled. If the Legislature enables the Minister to revoke any dedication provided that the land be devoted to some other purpose sanctioned by the two Houses, the Minister cannot, without such a sanction, revoke the dedication and throw the land into the ordinary mass of lands available for sale or settlement. The donee of a compound power cannot take the agreeable part of that power and - leave the rest. It is, of course, clear law that there is no valid execution of a power if the conditions prescribed by the donee of the power are not satisfied by a literal and precise performance, even if they seem to be unessential and unimportant except as being required by the donor of the power (here, the Legislature of New South Wales): per Lord Ellenborough, Hawkins v. Kemp (1) ; per Parke B., Rutland v. Wythe (2); Earl of Shrewsbury v. Scott (3); Cooper v. Martin (4); and see Cohen v. Wilkinson (5). There seems to be no doubt that if sec. 25 did not contain more than the first paragraph (the only paragraph in the original sec. 105 of the Crown Lands Act of 1884), this would be a case of such a compound power. If the Minister be of opinion that any dedication of the Crown lands has failed, then a notice shall be published in the Gazette setting forth the mode in which it is proposed to deal with the reservation, dedication or land in question (hereinafter termed "proposals ") ; a copy of the notice is to be laid before both Houses of Parliament ; if in one month Parliament by resolution declare

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