Roads and Maritime Services v Devine Marine Group Pty Ltd

Roads and Maritime Services v Devine Marine Group Pty Ltd - [2013] NSWSC 1467 - NSWSC 2013 case summary — Zoe

[9]

Call for Expressions of Interest 36In September 2001, RMS called for expressions of interest ("the Call") for the development of the "Rozelle Bay Maritime Precincts" in accordance with a Master Plan that RMS had placed on public exhibition in September 1999. The Call stated: "Rozelle and Blackwattle Bays have been selected to support [RMS's] strategy of retaining sufficient waterfront sites for working waterfront activities to cater for a range of maritime industries. A Master Plan for the redevelopment of the [RMS] lands was placed on public exhibition in September 1999... the Minister for Urban Affairs and Planning in December 2000 adopted the Master Plan... At Rozelle Bay the Master Plan proposes the creation of four precincts: ● Commercial & Recreational Boating Precinct ● Major Boat Repair Precinct ● Marine Contracting Precinct ● Maritime Operations Precinct". 37By the Call, RMS invited expressions of interest for the redevelopment and lease of a number of sites at Rozelle Bay, including the Property. 38The Call stated that: (a)the aim of RMS was to execute Agreements to Lease for various sites adjoining Rozelle Bay (including the Property) by March 2002; (b)the deadline for proposals to be submitted pursuant to the Call was 30 November 2001; (c)successful proponents for sites would be expected to provide any additional services required for the proposed development; (d)proposed leases for "land area" and "water area" would be 10 years; (e)any capital expenditure was to be undertaken by the developer/lessee; (f)proposed lessees were expected to submit a Development Program showing "all significant activities from execution of an agreement to lease to lease commencement"; (g)proposals were to be assessed on the extent to which they met RMS's objectives and that "neither the highest nor any financial offer may necessarily be selected"; (h)RMS would not be responsible for any expenses or losses incurred by a proponent as a result of termination of the negotiation period; (i)any expression of interest would be non-binding and no legal or other obligation would arise "unless and until formal documentation has been signed and all necessary Ministerial approvals and consents have been obtained"; and (j)all costs and expenses incurred by a proponent in any way associated with the development, preparation and submission of proposals would be borne entirely by the proponent. 39The Call made clear that RMS was undertaking the proposed redevelopment for the public purpose of "retaining sufficient waterfront sites for working waterfront activities to cater for a range of maritime industries". That broad public objectives were in play was emphasised by the statement in the Call that RMS might seek advice from an "Assessment Panel" comprising representatives from RMS, and other governmental and private sector advisers. 40One of the objectives of RMS was said to be the: "Optimisation of the financial return to Waterways Authority from the overall development, by achieving a commercial market return from each of the development sites in accordance with the permitted use". 41Mr Dupree relied on this statement as an "admission that this is a business". 42I do not accept that submission. The "financial return" was stated to be necessary to recoup an amount of $7 million that RMS had spent on the refurbishment of the wharf frontage along Rozelle Bay. It was stated to be necessary to recoup the public funds incurred thus far on what obviously is, and was, a public project. 43The Call also made clear that any response to the Call, and any work done on RMS property by a successful proponent for development, would be at the cost and risk of that party.

[10]

Devine Shipping's Expression of Interest 44On 14 December 2001, Devine Shipping submitted to RMS an "Expression of Interest" in respect of the Property. 45Devine Shipping's covering letter stated: "We are delighted to provide our Expression of Interest for an area of land and water at the western end of Rozelle Bay... [Devine Shipping] has operated a successful waterfront contracting business from its Rozelle Bay site since 1997 and seeks to establish a long-term future for the ongoing operation of the business... Since establishing our base at Rozelle Bay we have undertaken extensive remedial activities, on both land and water areas, at our location and in adjoining areas. Much of this work has been done at our expense. We value our location and its amenity and look forward to continuing to invest our time and effort in the area. We believe that our proposal is consistent with the relevant New South Wales Government and [RMS's] objectives, policies and plans." 46The Expression of Interest proposed two options, one more extensive than the other. Devine Shipping stated: "For both options Devine Shipping would at the very least conform to the 10-year lease period. However, we would prefer a further 10-year option or 20-year lease to enable us to undertake more comprehensive development works... In September of 1997 [RMS] offered Devine Shipping occupancy, under a monthly contractual agreement, to part of [the Property], our present location at Rozelle Bay. It was acknowledged between the parties that Devine Shipping was responsible for clearing out the entire area containing surplus rubbish, logs, piles, concrete wharf sections and debris left on the site by previous occupants." (emphasis added) 47The Expression of Interest thus revealed that Devine Shipping accepted that its occupation of the Property was by reason of a "monthly contractual agreement" (and not a lease) between it and RMS. Devine Shipping's reference to a "monthly contractual agreement" was evidently a reference to the 1997 Licence (although Devine Shipping was not a party to that agreement; it was named only in the 2000 Licence). 48No mention was made in the Expression of Interest of Consistent Shipping or of any basis upon which Consistent Shipping might assert an entitlement to occupy of the Property.

[11]

The Agreement to Lease 49Thereafter, Devine Shipping was placed on a "short list" for negotiations with RMS. Negotiations ensued. 50On 10 February 2003, RMS and Devine Shipping entered an "Agreement to Lease". 51The Agreement to Lease is a substantial document. Including schedules, it is over 200 pages in length. 52The Agreement to Lease recited: "A. In September 2001 [RMS] invited prospective proponents to lodge proposals in response to its Call. B. On 14 December 2001, [Devine Shipping] lodged its proposal to the Call. C. On 31 May 2002, [Devine Shipping] was short listed for... and entered negotiations with RMS. D. Arising out of the negotiations... [RMS] grants [Devine Shipping] the rights contained in this Agreement for consideration stated in, and otherwise in accordance with the terms and conditions set out in, this Agreement. E. On satisfaction of the Construction Licence Conditions Precedent the Construction Licence will commence pursuant to this Agreement to enable the construction of the Development by or on behalf of [Devine Shipping]. F. It is the intention of the parties that subject to the terms of this Agreement and satisfaction of relevant conditions precedent [RMS] will grant to [Devine Shipping] the Lease and the Water Area Licence." 53Consistently with those recitals, the structure of the Agreement to Lease was that: (a)it was necessary for Devine Shipping to satisfy the Construction Licence Conditions Precedent; (b)if (and I would add, only if) Devine Shipping satisfied the Construction Licence Conditions Precedent, then the "Construction Licence" would commence; and (c)thereafter, RMS would grant Devine Shipping the "Lease" and the "Water Area Licence" defined in the Agreement. 54As Mr Potts, who appeared for RMS, emphasised, the Agreement to Lease did not itself confer on Devine Shipping any right to possession or occupancy of the Property. It simply contained mechanisms by which such a right might be sought, and prescribed procedures to achieve such a right. 55The definition of the Construction Licence Conditions Precedent included: (a)the obtaining of development consent for the proposed development from the relevant body (ultimately the Sydney Harbour Foreshore Authority); (b)production by Devine Shipping to RMS evidence of "Finance Commitment" and a "Bank Guarantee" for the Development; and (c)demonstration by Devine Shipping to RMS's satisfaction that at the date of satisfaction of all other Construction Licence Conditions Precedent, practical completion of the Development by the "Lease Final Commencement Day" was realistically achievable. 56This definition was replete with references to other terms defined in the Agreement to Lease. It is not necessary to refer to them all. 57Condition Precedent (a), as summarised above, was achieved. As I set out below, Devine Shipping did, eventually, obtain development consent from the relevant authority. 58However, there were at least two other Conditions Precedent which were never achieved; namely, the provision by Devine Shipping to RMS of the "Finance Commitment" (defined to be an "effective, binding, written commitment" from a financier with particular ratings) and a "Bank Guarantee" (defined to be an "unconditional and irrevocable bank guarantee" in the sum of $26,500). 59Clause 13.3(a) of the Agreement to Lease provided that if (as happened) the Construction Licence Conditions Precedent were not satisfied by the "Construction Licence Final Commencement Date" (10 February 2004) then: (a)RMS was not be obliged to grant the Construction Licence, Leases or Licences but might, if the Agreement to Lease was still "active", elect to do so at any time in the future in its absolute discretion; and (b)either party would be entitled to terminate the Agreement to Lease and RMS would be free to deal with the Land and Water Areas as it deemed fit in its absolute discretion. 60Thus, in the events that happened, from 10 February 2004, RMS had no obligation to grant Devine Shipping the "Construction Licence" or any lease and was able to terminate the Agreement to Lease at its discretion. 61The particular clause of the Agreement to Lease upon which Mr Dupree relied was cl 13.5, that made provision for an "Occupation Licence". Indeed Mr Dupree said that "[w]e live or die on 13.5". 62Clause 13.5 provided: "[RMS] agrees to act reasonably in considering a request by [Devine Shipping] to occupy the whole or part of the Development Site prior to the Lease Commencing Date [defined to mean the 'date of actual commencement' of any lease] for the purposes of [Devine Shipping] carrying on its business, and if [RMS] agrees to grant a licence to occupy the Development Site it shall be on terms and conditions proposed by [RMS], acting reasonably." 63This clause did not operate to grant Devine Shipping an "Occupation Licence", or any other entitlement to occupy the Property. 64The effect of cl 13.5(a) was to oblige RMS to consider a request by Devine Shipping for permission to occupy the whole or part of the Property prior to a Lease, and to act reasonably in considering such a request. 65The clause imposed no obligation on RMS to agree to any such request and made clear that, if RMS did agree to grant a licence to occupy the Development Site, it would be on the terms and conditions imposed by RMS, again acting reasonably. 66Despite Mr Dupree's submissions, I do not see cl 13.5 as playing any decisive role in this matter. Devine Shipping and Consistent Shipping were in occupation of the Property at the time of the Agreement to Lease. In my opinion, they were entitled to occupy the Property pursuant to the 1997 Licence and the 2000 Licence. I do not see what difference it would have made had RMS agreed to grant any licence pursuant to cl 13.5 of the Agreement, unless such a licence conferred a superior right to occupation than that already enjoyed by the defendants. 67In any event, the only evidence pointing to the conclusion that cl 13.5 may have been enlivened is in correspondence between the parties in April 2009; to which I will return later in these reasons. 68Clause 12.1(a) of the Agreement to Lease obliged Devine Shipping to use its best endeavours to achieve certain target dates set out in the "Works Program". Those target dates were: (a)lodgement of a development application, 28 April 2003; (b)obtaining a development consent, 15 October 2003; (c)practical completion of the works, 30 October 2004. 69There was significant delay in the lodgement of the development application. Neither development consent nor practical completion was ever achieved.

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The discretionary phase 70I accept Mr Potts' submission that on 10 February 2004, the Agreement to Lease entered a "discretionary phase" and that thereafter: (a)RMS was no longer obliged to grant Devine Shipping a Construction Licence, Lease or any other right to occupy the Property, but might, if the Agreement to Lease was still on foot, in its absolute discretion elect to do so; and (b)either party was entitled to terminate the Agreement to Lease at any time. 71As I have said, according to the terms of the Agreement to Lease, Devine Shipping was obliged to lodge a development application with the appropriate authority by 28 April 2003. 72There were numerous communications between Devine Shipping and RMS concerning the progress being made by Devine Shipping (or lack of it) so far as concerned the development application. 73From time to time, RMS granted Devine Shipping an extension of the time to lodge the development application and extension of other time limits specified in the Agreement to Lease. 74In the meantime, Devine Shipping and Consistent Shipping were using the Property as a site upon which to store materials unrelated to the development contemplated by the Agreement to Lease. On numerous occasions, RMS wrote to those parties asking them to remove cranes, barges and other material from the site. 75Ultimately, Devine Shipping lodged its development application (with the Sydney Harbour Foreshore Authority) on 24 July 2007. 76On 16 July 2007, RMS gave "Land Owner's Consent" (or "LOC" as the parties referred to it) to the making of the development application. 77Mr Dupree submitted that the provision by RMS of the LOC somehow had the effect of providing to Devine Shipping a "grant" of an interest in the Property. I will deal with that submission further below. In my opinion, there is no substance to it. 78On 11 January 2008, the Sydney Harbour Foreshore Authority granted Devine Shipping development approval. The development approval was for: "Demolition of existing temporary structures and construction of a new building, timber jetty and reconstruction of existing seawall."

[13]

The April 2009 letters 79On 2 April 2009, Ms Tonette Kelly, then general counsel for RMS, wrote to Devine Shipping and Consistent Shipping as follows: "Re: Occupation of NSW Maritime's Land by Consistent Shipping Pty Ltd & Devine Marine Group Pty Ltd Licensed Property: Area adjoining The Crescent, Rozelle Bay as shown hatched in the attached plan I refer to the previous occupation of the above Licensed Property by Consistent Shipping Pty Ltd's in accordance with the terms of a Deed of Licence with the [RMS] (Initial Licence). The Initial Licence allowed Consistent Shipping to occupy the Licensed Property as a Licensee on a monthly basis from 1 March 1998 (after an initial 6 month period from 1 September 1997 to 28 February 1998). [RMS] is aware that: a) Consistent Shipping has not been occupying the Licensed Property for a substantial period of time, and Devine Shipping is the current occupant of part of the Licensed Property (Devine Area); b) Consistent Shipping and Devine Shipping have been using [RMS's] land in the vicinity of the Devine Area to store timber, building materials, rubbish, scrap metal and other items, without [RMS's] consent and without development consent; and c) Devine Shipping has, without authorisation, accumulated timber, building materials, rubbish, scrap metal and other items in the navigable waters adjacent to the Licensed Property. New Occupation Licence To Devine Shipping Should Devine Shipping wish to continue its occupation of the Devine Area, [RMS] requires Devine Shipping to enter into a new Occupation Licence with it such as that contemplated in Clause 13.5 of the current Agreement for Lease between [RMS] and Devine Shipping (under its former name, Devine Shipping Pty Ltd) dated 10 February 2003 (Agreement for Lease). [RMS] is prepared to grant such an Occupation Licence, subject to the following conditions: a) the Occupation Licence must be subject to Devine Shipping's obligations under the Agreement for Lease (see below); b) the Occupation Licence will be on a monthly basis (being the arrangement under the Initial Licence with Consistent Shipping); c) the Occupation Licence fee (plus GST) will be the same as that payable under the Initial Licence with Consistent Shipping, being, currently, $1,182.16 per month including GST; and d) Devine Shipping's use of the Devine Area as a storage site for timber and building materials must be in accordance with a valid development consent and all applicable laws (including environmental laws). For the sake of clarity it is noted that the proposed new Occupation Licence will not negate or reduce in any way Devine Marine's obligation to carry out the works required under the Agreement for Lease. ... It is requested that within the next five (5) business days you advise [RMS], in writing, whether Devine Marine requires a new Occupation Licence and if it does [RMS] will prepare a draft Occupation Licence for your review. ... Possible Additional Occupation Licence It is noted that Devine Shipping may wish to enter into an additional Occupation Licence for the area adjacent to the Devine Area (which forms part of the land the subject of the Agreement for Lease) that is currently being used by Palm Beach Barges Pty Limited for the storage of various items. [RMs] is prepared to consider granting an Occupation Licence of that area to Devine Shipping, once vacant possession of the site is secured. It is requested that within the next five (5) business days you advise [RMS], in writing, whether Devine Shipping is interested in entering into this additional Occupation Licence. Termination of Deed of Licence with Consistent Shipping In view of the fact that; a) Consistent Shipping has not been occupying the Licensed Property for a substantial period of time under the Initial Licence; and b) Clause 2(f) of the initial Licence precluded any assignment, transfer, subletting or sub-licensing of the initial Licence or the Licensed Property; [RMS] hereby gives Consistent Shipping the notice required by Clause 5(a) of the Initial Licence to terminate the Initial Licence within one (1) month of the date of this letter (Terminating Date)." 80In this letter RMS informed Devine Shipping that it: (a)was prepared to enter into an "Occupation Licence" of the kind referred to in cl 13.5 of the Agreement to Lease "on a monthly basis" in respect of that part of the Property currently occupied by Devine Shipping; (b)would consider granting an "Occupation Licence" to additional parts of the Property to Devine Shipping; and (c)terminated the 1997 Licence with Consistent Shipping. 81The letter made no reference to the 2000 Licence. 82By letter of 9 April 2009, Devine Shipping replied by: (a)stating it wished "to continue its occupation licence" on the Property and requested that RMS "prepare a draft Agreement for Lease to be entered into within one month"; (b)expressing interest "to enter into an additional Occupation Licence" for the adjacent area. 83There the matter rested. 84Apart from a statement made on Captain Devine's behalf by James Rose Consulting (consulting engineers then acting on behalf of the defendants) on 14 July 2009 that he "would like to place a temporary fence around the new proposed lease boundary in the next couple of days", the evidence does not reveal any communication between the parties concerning the outcome of the April 2009 exchange of correspondence. 85The most favourable inference that could be drawn for the defendants is that, implicitly, RMS was content to proceed upon the basis that Devine Shipping had entered into an "Occupation Licence" with it, pursuant to cl 13.5 of the Agreement to Lease, in respect of both the "Devine Area" and the area adjacent to the "Devine Area". 86If that is so, it must also follow that Devine Shipping (and Consistent Shipping) accepted the terms proposed by Ms Kelly in her letter of 2 April 2009 including that: (a)only Devine Shipping (and not Consistent Shipping) would have the benefit of any such licence; and (b)such licences would be "on a monthly basis" (and thus terminable on one month's notice). 87If that is not the correct conclusion, then Devine Shipping and Consistent Shipping remained in occupation pursuant to the 1997 Licence and/or the 2000 Licence; again on a monthly basis. 88Whatever be the correct position, the defendants' right to occupy the Property was terminable on one month's notice.

[14]

Subsequent events 89Thereafter, there was correspondence between the parties as to the delay in achievement by Devine Shipping of "trigger dates" referred to in the Agreement to Lease, in particular the obtaining of development consent. 90On 18 January 2010 the Minister for Planning extended the time for development approval to 18 January 2011. 91Mr Dupree contended that the evidence revealed that, thereafter, there had been "substantial commencement" of work on the site with the result that the development approval was indefinitely extended. Whether or not that is so, the fact is that development consent (due on 15 October 2003 according to the proposed "Works Program" specified in the Agreement to Lease) was never obtained. 92Nor did Devine Shipping ever provide RMS with a "Finance Commitment" or a "Bank Guarantee" as required by the Construction Licence Conditions Precedent under the Agreement to Lease (despite numerous requests by RMS for these documents). 93Matters drifted on to the point where, on 28 March 2012, RMS's solicitor, Mr Michael Ellis, sent James Rose Consulting a proposed "Agreement for Lease Amending Deed" ("the Amending Deed"). 94That document was stated to be sent: "... subject to the further instructions of my client [RMS] and any revisions or amendments required by RMS. RMS reserves its right to make further amendments to the document." 95The Amending Deed included a provision as follows: "[Devine Shipping] is an existing tenant of RMS under an existing lease arrangement and has been for a significant period of time. [Devine Shipping] may (but is not obliged to) continue to occupy the Development Site for the purposes of carrying on its permitted use during the course of construction of the Works..." 96Mr Dupree relied on this passage as an admission by RMS that Devine Shipping was in occupation of the Property "under an existing lease". 97I do not accept that submission. Mr Ellis's characterisation of Devine Shipping as the holder of "an existing lease" was a mischaracterisation of events. However, his letter made clear that the draft was sent subject to instructions and all revisions or amendments required by RMS. That makes clear he had no authority from RMS to make admissions on its behalf. In any event, even if his words do constitute an admission by RMS, I am not bound to act on it, especially if there is "reason to doubt the correctness" of it: see Damberg v Damberg [2001] NSWCA 87; (2001) 52 NSWLR 492 at [154] and [157] per Heydon JA. There is "reason to doubt" here as, for the reasons I set out, it is clear that, contrary to the words used by Mr Ellis at [95], Devine Shipping was not "an existing tenant" of RMS. 98On 29 March 2012, the plan of subdivision in respect of the Property was registered. The plan of subdivision created Lots 21 and 22. 99In the meantime, RMS became increasingly concerned at the use that Devine Shipping was making of the Property. Aerial photographs showed that filling was occurring at the site. A beached barge was being used as a retaining wall. There appeared to be no sediment controls. 100And still there was no development consent. 101RMS sought to bring matters to a head in a letter of 20 June 2012. 102In that letter RMS stated that: (a)it appeared that both Devine Shipping and Consistent Shipping were the subject of strike-off action by the Australian Securities and Investment Commission; (b)there appeared to be no development consent authorising "the current business activities" of Devine Shipping and Consistent Shipping on the site; (c)as far as RMS was aware, the development consent obtained by Devine Shipping on 11 January 2008 had lapsed "on the basis that works have not commenced"; (d)it had come to RMS's attention that Devine Shipping had "recently trucked onto lot 22 a significant amount ... of soil and then used it to reclaim part of Rozelle Bay" and that such "reclamation works are a breach by Devine Shipping of its obligations under the [Agreement to Lease]"; and (e)efforts to reach agreement as to the amendments necessary to the Agreement to Lease had not borne fruit. 103The letter concluded: "In the light of the issues arising out of the unauthorised reclamation works, the lapsing of the development consent, the unauthorised activities on the Development Site and other issues which may arise out of your response to this letter, RMS is suspending any further negotiation with [Devine Shipping] relating to the amendment to the [Agreement to Lease] pending a review by RMS of all the relevant circumstances." 104Under cover of the same letter, RMS served on Devine Shipping and Consistent Shipping a "Notice of Termination of Licence" under the 1997 Licence and under the 2000 Licence giving one month's notice of the termination of such licences. 105Further correspondence ensued without resolution, to RMS's satisfaction, of the issues it had raised in its letter of 20 June 2012. 106On 24 July 2012 RMS sent Devine Shipping and Consistent Shipping further "Notice[s] of Termination of Licence" (expiring on 31 August 2012) and a "Notice to Vacate and Termination of Occupancy" terminating any "periodic monthly tenancy or tenancy at will as may be construed as arising out of" Devine Shipping's occupation of the Property and requiring Devine Shipping to vacate the Property by 8 September 2012. 107On 15 May 2013, RMS sent a demand to Devine Shipping for payment of arrears of licence fees in the sum of $20,847.35. The letter of demand included a reference to "Lease ID: 924". The author of that letter, Mr Michael Manders was cross-examined and made clear that that "ID" reference was an internal RMS identification reference. The same reference also appears on a number of plans prepared by RMS and dated 8 May 2012. 108Mr Dupree relied upon this "ID" number as pointing to the conclusion that there was a lease between RMS and Devine Shipping in respect of the Property. I do not accept that submission. It is clear from the evidence that the "Lease ID: 924" is no more than an identification number adopted by RMS internally for administrative convenience. It cannot provide the slightest foundation for the submission that there existed, at any time, a lease between RMS and Devine Shipping.

[16]

The "Grant" under the Environmental Planning and Assessment Act 1979 116Mr Dupree submitted that, arising out of the "Land Owner's Consent" given by RMS on 16 July 2007, Devine Shipping's development application somehow granted Devine Shipping an interest in the Property. 117In my opinion, there is no substance to that submission. 118The "Land Owner's Consent" of 16 July 2007 was given by RMS pursuant to its contractual obligation under cl 9.4 of the Agreement to Lease. That clause provided: "Subject to [Devine Shipping] having complied with its obligations under clauses 9.2 and 9.3 [as to the provision to [RMS] of certain 'Development Information'], [RMS] must act reasonably and promptly in considering any Development Application lodged by [Devine Shipping] with [RMS] for approval... and [RMS] may only withhold its approval to a Development Application [on particular bases defined in the Agreement to Lease]." 119Mr Dupree submitted that one or more of s 78A, s 81A, s 83 or s 95 of the Environmental Planning and Assessment Act 1979 had the effect of conferring an interest in land on the proponent of a development application. I do not accept that submission. A development approval may "run with the land". It does not follow that a development approval, even if obtained with the consent of the land owner, confers a right of possession on the applicant for development approval. 120Mr Dupree submitted that the effect of the granting of the development consent in January 2008 was to confer "a public right as referred to in paragraph 27-032 (page 1258) of [Megarry & Wade, The Law of Real Property, 8th ed (2012)]" and the "creation of such a right is detailed in paragraph 27-034 of [Megarry & Wade]". 121Paragraph [27-032] of Megarry & Wade speaks of public rights such as rights to fish, or rights of way. The paragraph does not speak of private proprietary rights entitling an individual to a possession of land. Paragraph [27-034] speaks of the creation of those types of rights by statute. It does not speak of the creation of a right of the kind that would be required in this case to permit Devine Shipping to occupy the Property in preference to its registered owner. 122Mr Dupree agreed that acceptance of this submission would have the consequence that every time a landowner consented to a development application in respect of his, her or its property, it would confer on the applicant for development consent an interest in the land. Mr Dupree was not able to point to any authority for such an alarming proposition. I do not accept it.

[18]

Application of the Fair Trading Act 1987 ("FTA") and the Australian Consumer Law ("ACL") 127RMS has the status, privileges and amenities, of the Crown (see s 46 of the Transport Administration Act 1988 and s 13A of the Interpretation Act 1987). 128The Fair Trading Amendment (Australian Consumer Law) Act 2010, which commenced on 1 January 2011, applies the ACL (contained in Sch 2 of the Competition and Consumer Act 2010 (Cth)) as a law of the State by inserting Pt 3 into the FTA. Section 37 of the FTA now provides that the ACL: "... binds the Crown in right of this jurisdiction, so far as the Crown carries on a business, either directly or by an authority of this jurisdiction." 129Thus the ACL only applies to conduct after 1 January 2011. Further, the ACL only applies to RMS "so far as" it was carrying on a business when undertaking the conduct complained of by the defendants. 130In so far as the FTA is relied on in the form it took prior to 1 January 2011, the operation of that Act is to the same effect. Section 3(1), in effect until 31 December 2010, provided: "This Act binds the Crown in right of the State in so far as the Crown in right of the State carries on a business, whether directly or by an authority of the State." 131The defendants alleged that, in calling for expressions of interest to develop, lease or licence on land and water under its control in and around Sydney Harbour, RMS carried on a business within the meaning of the FTA, and the ACL as now applied by the FTA. 132I do not accept that proposition. 133The expression "carrying on of a business" is "intended to refer to activities undertaken in a commercial enterprise or as a 'going concern'": Corrections Corporation of Australia Pty Ltd v Commonwealth of Australia [2000] FCA 1280; (2000) 104 FCR 448 at [12]. The FTA and ACL apply to RMS and its predecessors only "so far as" RMS or those predecessors were carrying on a business. In JS McMillan Pty Ltd v Commonwealth of Australia (1997) 77 FCR 337, Emmett J (as his Honour then was) rejected the view that once it was established that a government department was carrying on a business, the Trade Practices Act 1974 (Cth) (which contains corresponding provisions) applied to all conduct connected in some way with that business. His Honour held (at 356) that the expression "in so far as the Commonwealth carries on a business", indicated "that the Commonwealth is to be bound only when the conduct complained of is engaged in, in the course of carrying on the business". 134I therefore accept the submission of Mr Potts that it is not sufficient to determine that some business is carried on by an authority. What must be established is that, in undertaking the conduct said to constitute the contravention, the conduct itself was done in the course of carrying on of a business. 135In my opinion, the conduct by RMS complained of was not done in the course of carrying on a business. All of the activities of which complaint is made were carried out in the course of the development by RMS of the Rozelle Bay Maritime Precinct. As I have said, (see [39] above), the Call made clear that the proposed redevelopment was being carried out for a public purpose, namely the retention of inner city waterfront sites to cater for a range of maritime industries. I have already rejected Mr Dupree's submission that the stated objective of a "financial return" bespoke the carrying on of a business (see [40] to [42] above). 136For those reasons alone, the defendants' claims based on the FTA and the ACL fail. 137It would also have been necessary for the defendants to establish that RMS, and its predecessors in title, were acting in trade or commerce. I do not find it necessary to deal with that question.

At a glance

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Judgment (25 paragraphs)

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Legislation Cited (2)

Cases Cited (6)