Piety Developments Pty Ltd v Cumberland City Council [2023] NSWSC 480 | Case summary

Submissions and conclusion

Submissions for the Council: Counsel for the Council relied principally upon the High Court's decision in Bathurst City Council. Counsel submitted that the present case was sufficiently analogous. Counsel characterised the resumption as having been for a public purpose, namely the purpose set out in s 249(cc) of the 1919 Act. Counsel noted that this purpose was expressly stated in the notice of resumption issued by the Council to the owners of Lots 13 and 14, and in the application for approval of the resumption by the Governor.
Counsel acknowledged the distinction drawn by Bignold J in the Transport Infrastructure Corporation case between an acquisition in a town planning context and an acquisition by private treaty (see above at [76]-[77]). Counsel accepted his Honour's conclusion that property acquired by private treaty under s 532 of the 1919 Act was not, by reason solely of that acquisition, "subject to a trust for a public purpose". Counsel acknowledged that this was so even if use for a specified purpose was the stated reason for the acquisition, as it had been in that case.
Counsel submitted however that Bignold J's reasoning was distinguishable, and the features of the present case were closer to those of the Bathurst City Council case. In this regard counsel relied heavily on the decision of Biscoe J in the Little Manly Beach Foreshore case. Counsel submitted that the decision showed that the power of resumption could only be exercised for a public purpose and that land so resumed was acquired, and had to be held in future, for that purpose.
Question for determination: The issue before the Court is one of statutory construction, namely, whether the relevant land was, as at 1 July 1993, "subject to a trust for a public purpose", so as to fall within cl 6(2)(b) of Sch 7 to the 1993 Act. It is not suggested on behalf of the Council that the land was subject to a trust in the strict or technical sense. The question is whether the land was subject to a "statutory trust" of the type referred by the High Court in the Bathurst City Council case.
Elements of a "statutory trust": The High Court judgment did not spell out the boundaries of what the court meant by a "statutory trust". But clearly the Court considered that there needed to be some analogy with a charitable trust in the technical sense.
In Rookwood General Cemeteries Reserve Land Manager v Attorney-General NSW [2022] NSWSC 1763 at [183]-[211], I analysed some of the authorities concerning the recognition or otherwise, in various different contexts, of "statutory trusts". Neither party asked me to reconsider my analysis. I will not repeat all that I said, but I think that three features of charitable trusts are of special importance in identifying whether a particular statutory regime is sufficiently analogous to a charitable trust to be treated as a "statutory trust".
First, charitable trusts impose affirmative obligations on trustees to use the trust property, or ensure that it is used, for the nominated charitable purposes. Detailed provisions governing how the trustees are to conduct themselves are usually found in the trust instrument, and, if that is lacking, will be supplied by the court by way of administrative scheme. In a statutory trust, this role is usually played by specific statutory provisions governing the way in which the property is to be used, or a conferral of a power of oversight on some other person or body, or both: see Rookwood at [230]-[231].
The second feature is that there is a need for a mechanism to ensure that the trustees use the trust property in accordance with the specified purposes and comply with the terms of the trust. In a charitable trust, this is supplied by the court's jurisdiction over the administration of trusts which can be invoked by or in the name of the Attorney General. In a statutory trust, as the High Court noted in the Bathurst City Council case, the equivalent role was performed by the Attorney General in the exercise of an administrative law jurisdiction: see also Grain Technology Australia Ltd v Rosewood Research Pty Ltd (No 3) [2023] NSWSC 238 at [140]-[147], [172].
The third feature is that there must be some way of dealing with a situation where it is impossible or impracticable to carry out the original purpose. In the case of charitable trusts, this function is performed by the doctrine of cy-près. In the case of statutory trusts, the Parliament can of course intervene; but there may be provision in the statute allowing for the assets to be redeployed for other purposes.
In Randwick Municipal Council v Rutledge (1959) 102 CLR 54, Windeyer J described the dedication of Crown land for public purposes as indicating "something binding on the Crown and creating some right in members of the public or of a section of the public" (at 74) and equated dedication with the creation of a "public trust" (at 75-76) with the creation of a "public trust": the history is discussed at length in Rookwood at [17]-[65] . As I noted at [16], the "lengthy and significant" history to which the High Court referred in the Bathurst City Council case covered the same ground. The Crown Lands Act provisions for the dedication, reservation or setting aside of Crown land may well have been the sort of statutory regime which High Court had in mind in the Bathurst City Council case as giving rise to a "statutory trust": see in particular what the Court later said in Western Australia v Ward (2002) 213 CLR 1 at [241], quoted in Rookwood at [209].
Against this background, I turn to the specifics of the debate in the present case. The relevant points can be organised under three headings.
Section 532 of the 1919 Act: The nominated lots in the Bathurst City Council case came into council ownership because they were "accepted" by the council under s 526 of the 1919 Act. That section is not relevant in the present case. The land in question here was "acquired" by the council under s 532 of the 1919 Act.
Counsel for PD drew attention to the different terminology in ss 526 and 532, s 526 referring to "acceptance" and s 532 referring to "acquisition". Counsel submitted that, in accordance with the ordinary principles of statutory construction, it should be assumed that by using different language the Parliament intended to refer to different concepts.
This assumption is certainly available, although in general it is only a weak guide to construction: see Taheri v Vitek [2014] NSWCA 209 at [124]. But I think there is another textual point.
Section 526 expressly referred to acceptance of property "on trust" and s 518(2) also referred to property "held on trust". It was a short step to conclude that these references to "trust" property were intended to be picked up by the reference to a "trust" in cl 6(2)(b) of Sch 7. The High Court expressly made this point in the Bathurst City Council case at [52].
Section 532, however, only referred to "acquisition" of property. It did not use the word "trust" at all. The term "acquire" may include receipt of property on terms which subject the recipient to trust obligations, but the acceptance or imposition of trust obligations is not inherent in the term.
In making the point (see [77] above) that the council in the Transport Infrastructure Corporation case had not complied with the requirements for a valid declaration of trust over the land, Bignold J may have gone too far. It is clear that the trust of which the High Court spoke in the Bathurst City Council case need not have been a trust in the strict sense. But this does not affect his Honour's conclusion that an acquisition by private treaty, even for a stated purpose, did not give rise to a trust in the relevant sense. Nor does it call into question the concession made on behalf of the Council that that conclusion is correct.
Once it is conceded that acquisition of property by private treaty under s 532 did not give rise to a "trust", even if undertaken for a specified purpose, there is no reason to think that resumption under the same section should have been any different. Resumption involved compulsion, but it was still a compulsory purchase, and it still involved payment of the market value of the land (albeit determined by a statutory process rather than actual voluntary sale).
The facts of the present case illustrate the artificiality of drawing a distinction between purchase and resumption under s 532. If the trustee of Lot 13 had had a power of sale, then the Council would not have had to exercise its power of resumption at all. The power was only used as a shortcut. Similar comments apply to the acquisition of the part of Lot 14.
Section 518 of the 1919 Act: Counsel for the Council emphasised that in the Bathurst City Council case the High Court appears to have contemplated that, if not held on trust, the nominated lots would have been "public land". Counsel submitted that the land in question in this case would likewise have been unsaleable because of s 518.
This conclusion may be accepted for the purposes of the argument. But I do not think that the restriction on alienation of certain types of land in s 518 of itself gave rise to a "statutory trust". It is one thing for a statute to restrict or even prevent the sale of land. It is quite another for that statute to impose affirmative obligations on the land holder to use the land for a particular purpose.
In the Parramatta City Council case, Roper CJ expressly decided that the land used for the council's electricity undertaking was not land which was "subject to a trust" for the purposes of s 518(2). There is no sign in the Bathurst City Council judgment that the High Court thought that Roper CJ had been incorrect in taking that view. The report of the Parramatta City Council judgment does not indicate how the land in question was acquired by the council. It seems more than likely that the land would have been acquired under s 532 rather than accepted under s 526. It is, however, unnecessary to pursue this question further. There is certainly nothing in the judgment to support the Council's argument in this case.
Resumption under the 1919 Act: In the Bathurst City Council case, the council's stated objective was the establishment of a carpark. But it is clear from the High Court's decision that this was not sufficient to give rise to a "statutory trust". Nor was the subsequent use of the property as a carpark. There had to be something more. The High Court found that additional element in the acceptance of property pursuant to development conditions imposed by the council in fulfillment of a "town planning purpose".
In my view, resumption (at least under the provisions of the 1919 Act which applied in 1965) was quite a different process. It is true that there were requirements for the purpose of the application to be given when the resumption application was notified to the owners and to the public. No doubt the purpose of those provisions was, as Dixon CJ suggested in Jones, to provide information to the owner, and other affected parties, in aid of a potential challenge. But if no challenge was made, it is difficult to see that the provisions had any ongoing significance.
In my view, it is notable, as counsel for PD pointed out, that the actual notice of resumption, following the language of s 536A of the 1919 Act, did not oblige the notice of resumption to specify the purpose, and only stated that, upon resumption, the council became the owner in fee simple of the land, to the extinguishment of any previous interests. Of course, as counsel for the Council pointed out, that is not inconsistent with the resumption imposing some fresh obligation. But there is no sign of that in the statutory language and I cannot see a basis for any such implication (which would also be an implied limitation on the council's express power of sale under s 518(1)).
Counsel for the Council submitted that the authority of the decision of Bergin CJ in Eq in Broadcast Australia was reduced because her Honour was not considering the question of a statutory trust under the principles in the Bathurst City Council case, or the application of the local government legislation. I cannot agree. Of course, as her Honour said, whether land acquired by compulsory acquisition for a particular purpose must continue to be retained and used for that purpose ultimately depends on the relevant statute. But her Honour's decision makes clear that the mere fact that the statutory power allows acquisition for a particular purpose does not necessarily compel the conclusion that the property must thereafter be used for that purpose. In my view, the decision is entirely consistent with the Mogo Local Aboriginal Land Council case in that regard.
To conclude that land which had originally been resumed for specified purposes was impressed with a "statutory trust" for those purposes and therefore could not be classified as "operational land" for the purposes of the 1993 Act would create practical difficulties. The council might, as in the present case, have acquired the land decades before. The land held by the council might be the result of the acquisition of various different parcels, some of which had been resumed and some of which had been acquired by private treaty or in some other way. It is difficult to imagine that the Parliament would have thought that the valid classification of the land would require a potentially complex historical enquiry of the type which would be necessary to determine the purpose or purposes for which the land (or some parts of it) had been originally resumed.
It must also be emphasised that a "statutory trust" arising from the resumption of land for specified purposes would not merely have prevented the relevant council from disposing of the land in question. It would have imposed positive obligations on the council to use, or ensure the use of, the land for those purposes. Furthermore, on the Council's case, any "statutory trust" came into existence when the land was resumed in 1965. In the present case, the Council would have been obliged from 1965 onwards to continue to make the land available as a public carpark indefinitely, even if its policies towards the provision of public carparking changed, and irrespective of the expense and difficulty (or perhaps even impossibility) of doing so. The 1919 Act contained no mechanism for the terms of any such obligation to be adjusted in the light of such factors.
As Roper CJ in Eq pointed out in the Parramatta City Council case (49 SR at 292), conferral of a power on a council did not mean that, once exercised, the power had to continue to be exercised by the council for all time. Yet that in practice was what would have been required if the Council's argument in the present case were upheld. Again, I find it impossible to attribute to Parliament an intention to create such a result.
I do not think the decision in the Little Manly Beach Foreshore case stands in the way of the views I have expressed. If there is any inconsistency between the reasoning of Biscoe J and that of Bergin CJ in Eq in Broadcast Australia, I think I would have to defer to that of Bergin CJ in Eq which I see as being consistent with the Court of Appeal's reasoning in the Mogo Local Aboriginal Land Council case. But it is not necessary to go that far. That is for two reasons.
First, Biscoe J's presently relevant comments were obiter, despite the submission to the contrary by counsel for the Council. His Honour expressly stated as much at [82].
Second, the Little Manly Beach Foreshore reasoning is distinguishable. The resumption provisions in the 1993 Act (and in particular s 188(1), referred to by Biscoe J at [79]) are not the same as those in the 1919 Act which applied to the acquisition of the land in question in this case. Nor was there any equivalent to the owner-initiated acquisition provisions in the Just Terms Act (which depend on designation for acquisition "for a public purpose": s 23(1)). Most importantly, there was no equivalent under the 1919 Act, as it stood in 1965, to s 36 of the Just Terms Act.
There may be room for further argument about whether s 36 supports the conclusion that a resumption of land governed by the terms of the Just Terms Act gives rise to a "statutory trust", as Biscoe J thought (see [94] above). On any view, s 36 only confers standing on the acquiring authority to prevent the land being used for a purpose other than that for which it was resumed. The section does not confer open standing in favour of the general public, or, at least expressly, on the Attorney General. It is, however, unnecessary to consider this any further.
Conclusion: For these reasons, I consider that the acquisition of the land in question by resumption pursuant to s 532 of the 1919 Act did not give rise to a "statutory trust" in the sense used by the High Court Bathurst City Council. Accordingly, the land so acquired was not the subject of a "trust for public purposes" within the meaning of that phrase in cl 6(2)(b) of sch 7 to the 1993 Act. The Council's cross-claim fails.
Finally, I note in passing that the Court of Appeal in the Bathurst City Council case concluded that the land acquired for carparking by the council, other than the nominated lots, was not the subject of any trust for the purposes of cl 6(2)(b). Some of that land was acquired by way of resumption (see 93 LGERA at 399). There is nothing in the High Court decision to suggest that the Court of Appeal's decision concerning the other carpark land (which appears to have been acquired, one way or another, under s 532 was incorrect. Moreover, the effect of the Court of Appeal's decision must be considered as a matter of precedent.
The Court of Appeal was, of course, proceeding on the basis that the "trust" meant trust in a technical sense, and not on the wider basis which commended itself the High Court. But the fact remains that the Court decided that the parcels of land resumed for carparking purposes did not fall within cl 6(2)(b). That decision was not challenged and still stands. It may be arguable that the decision is still binding as a matter of precedent irrespective of whether it is consistent with the subsequent decision of the High Court: see New Cap Reinsurance Corporation Ltd v A E Grant (2008) 221 FLR 164 at [71]. But as I have independently reached the conclusion that the land in question in this case was not caught by cl 6(2)(b), I do not need to consider the question further.

Piety Developments Pty Ltd v Cumberland City Council

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