Spencer v NSW Minister for Climate Change, Environment and Water [2008] NSWSC 1059 | Case summary

JUDGMENT 1 HIS HONOUR: Mr Peter Spencer is a farmer, whose business has been significantly affected by legislation seeking to implement certain environmental policies. The implementation of those policies by a government has, it is alleged, directly caused Mr Spencer's business to lack viability. Mr Spencer sues the NSW Minister for Climate Change, Environment & Water and the Nature Conservation Trust for orders that: have the effect of declaring invalid an offer made to purchase Mr Spencer's property pursuant to a government program entitled the "Farmer Exit Assistance Program"; seek injunctive relief; and, alternatively, damages under the Fair Trading Act 1997 and the Trade Practices Act 1978 (Cth) for misleading and deceptive conduct and/or unconscionable conduct. 2 It is necessary to explain certain background facts and the operation of the Farmer Exit Assistance Program before dealing with the specific claims of Mr Spencer. Background Facts 3 Mr Spencer owns and manages a grazing property called Saarahnlee near Shannon's Flat, a property of just over 5,000 hectares on the upper-Murrumbidgee. It consists of 16 separate contiguous parcels of land held either in freehold or leasehold. 4 The native vegetation on the land includes rare species of mountain ash and extensive woodlands. The land is well-watered grazing land and is said to be ideal for the establishment and maintenance of a carbon sink. 5 By operation of the Native Vegetation Conservation Act 1997 ("the 1997 Vegetation Act") and the Native Vegetation Act 2003 ("the 2003 Vegetation Act") (the combined operation of each of the 1997 Vegetation Act and the 2003 Vegetation Act will be referred to as "the State Vegetation Acts") has been to impose significant restrictions on Mr Spencer's use of Saarahnlee for his grazing/farming interests. For reasons which will become obvious, it is unnecessary for the Court to detail the restrictions. 6 It is necessary to understand the scheme within which the State Vegetation Acts operate. By agreement between, relevantly, the Commonwealth and New South Wales, there is in place a scheme, implemented, it seems, for the purpose of giving effect to environmental concerns, for the funding by the Commonwealth of a financial assistance package, operated by New South Wales, for the purchase of properties, and/or the provision of financial assistance to owners of properties, affected by certain environmental legislation. The Commonwealth Acts giving effect to this agreement are the Natural Resources Management (Financial Assistance) Act 1992 (Cth) and the Natural Heritage Trust of Australia Act 1997 (Cth). 7 For the purpose of these proceedings, I accept, without the necessity to decide, that the landholding, Saarahnlee, was, prior to the State Vegetation Acts operating, a viable farming and grazing business, as a consequence of which, there was a particular value given to the landholding. That landholding included improvements, profits a prendre from timber and the like. 8 In New South Wales, further statutes were promulgated for the implementation of the agreement between it and the Commonwealth. Those statutes were the Environmental Trust Act 1998 and the Nature Conservation Trust Act 2001. The first defendant, the Minister for Climate Change, is the Minister responsible for the administration of each of those last-mentioned statutes and the second defendant, the Nature Conservation Trust, is an allegedly independent body established by the Nature Conservation Trust Act. 9 The funds provided by the Commonwealth to New South Wales find their way into a program administered by the Nature Conservation Trust. One of the programs administered by the Nature Conservation Trust is the Farmer Exit Assistance Program. It is necessary to set out the relative time-frame in which these matters occurred. 10 After the promulgation of the 1997 Vegetation Act and the Environmental Trust Act in 1997 and 1998 respectively, Australia became a signatory to the Kyoto Protocol to the UN Framework Convention on Climate Change. The last mentioned matter occurred on 29 April 1998. Pursuant to the agreements between the Commonwealth and New South Wales, New South Wales promulgated the Nature Conservation Trust Act in 2001 pursuant to which the Nature Conservation Trust published a Business Plan in 2002 for the period 2002-2007. 11 On 23 February 2003, the provisions of the Nature Conservation Trust Act, not previously operative, were promulgated. 12 On 7 June 2006, the Business Plan for the Native Vegetation Assistance Package was published and the formal announcement of the operation of the package was made in July 2006. 13 The Nature Conservation Trust published a document, seemingly consistent with its Business Plan, which offered to purchase properties at market value. That market value was said to be derived on the assumption that the 2003 Vegetation Act did not apply. In other words, the proposal made on 1 July 2006 by the Nature Conservation Trust was that the diminution in value, caused by the operation of the 2003 Vegetation Act and its limitation on the operation of farming and/or grazing activities, would be compensated in the purchase price offered for such properties under the Farmer Exit Assistance Program. 14 On 6 December 2006, the Nature Conservation Trust Board decided to request the Native Vegetation Assistance Package Sub-Committee of the Environmental Trust to seek to change the Native Vegetation Assistance Package Minutes of Trust to delete the requirement that the offer to purchase would be made at market value on the assumption that the 2003 Vegetation Act did not apply. If the decision of the Nature Conservation Trust was adopted and implemented, the offer to purchase would be made at current market value, which, by definition, would not compensate for such grazing and/or farming activities that were no longer allowed pursuant to the statutes promulgated by parliament. 15 On 12 December 2006, the manager of the Farmer Exit Assistance Program for the Nature Conservation Trust, Mr Nigel Strutt, spoke to Mr Spencer and discussed the operation of the Farmer Exit Assistance Program. There is some issue as to the date upon which this conversation occurred, but, it seems, on the evidence before the Court, that it occurred on either 12 or 13 December 2006. At or about the same time, the changes to the Native Vegetation Assistance Package were being discussed by the Sub-Committee of the Environmental Trust responsible for those matters. 16 Memoranda relating to the proposed changes to the operation of the Farmer Exit Assistance Program passed between various government departments and/or Ministers. In particular, following certain advice from departmental personnel and persons attached to the Environmental Trust and/or the Nature Conservation Trust, the then Director-General signed a recommendation to the Minister to change the Business Plan, operating under the 2003 Vegetation Act, so that offers to purchase properties would be made at "current market value" and not the market value assuming the 2003 Vegetation Act had not been promulgated. 17 Having received that advice, the Minister corresponded with the then Minister for Environment seeking an alteration to the operation of the purchase scheme. That letter, seemingly received by the Minister for the Environment on 15 February 2007, gave rise to an alteration to the Business Plan to give effect to the recommendation. That amended Business Plan was published as the Native Vegetation Assistance Package Business Plan 2007-2008. In evidence is version 2.1 published on 7 November 2007. The Business Plan makes clear that offers to purchase property affected by the 2003 Vegetation Act would be "based on independent valuation of the current market value". The new Business Plan operated from 30 June 2007. 18 On 19 January 2007, Mr Strutt, on behalf of the relevant authorities, communicated with Mr Spencer and sent him a Farmer Exit Assistance Program Fact Sheet. The Fact Sheet stated that the Nature Conservation Trust would offer to purchase a property from eligible farmers, which class included Mr Spencer, based on an independent valuation of the current market value, assuming that the 2003 Vegetation Act did not apply. 19 In January and February, Mr Spencer continued to have discussions regarding the Nature Conservation Trust's purchase of his landholding, or the possibility of same. 20 Pursuant to the process necessary for the Farmer Exit Assistance Program to be utilised, Mr Spencer applied to the Murrumbidgee Catchment Management Authority as to whether Saarahnlee was a property that ceased to be viable by virtue of the operation of the State Vegetation Acts. 21 The application to the Murrumbidgee Catchment Management Authority applied for exemption from the operation of some or all of the strictures in the 2003 Vegetation Act. The Catchment Management Authority rejected Mr Spencer's proposal to clear parts of his property, for which clearance an exemption was required, but indicated to him that he satisfied the hardship test. This was done on 6 March 2007. 22 On 13 April 2007, Mr Spencer sent to the Rural Assistance Authority, material relating to the Murrumbidgee Catchment Management Authority decisions, which material, Mr Spencer submitted to them, disclosed that Saarahnlee was no longer viable. 23 On 25 May 2007, Mr Spencer and Mr Strutt discussed the Farmer Exit Assistance Program and, according to Mr Spencer, who on this issue I accept, Mr Strutt said that the valuation of the farm would be "on current value". 24 On 5 July 2007, Mr Spencer received advice from the Rural Assistance Authority that Saarahnlee was "no longer commercially viable", as a consequence of which Mr Spencer was eligible for the Farmer Exit Assistance Program. Further discussions occurred between Mr Spencer and Mr Strutt relating to the Program. 25 While there are issues as to the value of the property, these are issues to which I will return, to the extent necessary. It is sufficient for present purposes to note that after a series of discussions and meetings, and the qualification of different experts, Mr Bernard Sullivan, an independent valuer, was retained by the Nature Conservation Trust to provide a valuation report on the current market value of Mr Spencer's property. 26 In October 2007, Mr Sullivan provided the Nature Conservation Trust with two copies of his valuation report, which report contained two valuations, both of which were based upon the current market value of the property. The difference between the two valuations was that one (the lower valuation at $2,170,000) took into account the improvements in the property in the state they were at the time of the inspection. The other value took into account the improvements if those improvements were to have been completed and valued the property, on that basis, at $2,400,000. 27 On 6 November 2007, Mr Strutt wrote to Mr Spencer and formally offered, on behalf of the Nature Conservation Trust, to purchase his property. The offer to purchase was an offer to purchase at $2,170,000. The offer remained open until the close of business on 4 January 2008. The offer remains open until after the conclusion of these proceedings. 28 Mr Spencer objected to the valuation and instituted these proceedings. Issues 29 It is appropriate to comment on matters that are not in issue in these proceedings. While there are some issues of fact, those issues of fact are not significant in the determination of the issues before the Court. Further, it is not suggested that any of the legislation under which this scheme was implemented (or indeed any other legislation) was invalid or outside the power of the New South Wales Parliament (or, for the purposes of these proceedings, outside, relevantly in relation to Commonwealth legislation, the Commonwealth Parliament). It is not suggested that any of the New South Wales statutes, to which reference is made above, is invalid or is not a law "for the peace, welfare and good government of New South Wales": see Building & Construction Employees & Builders Labourers' Federation (NSW) v Minister for Industrial Relations [1986] 7 NSWLR 372. 30 Mr Spencer submits that the offer to purchase at the price of $2,170,000 was invalid because the Nature Conservation Trust was bound to apply the Farmer Exit Assistance Program in a manner consistent with the Native Vegetation Assistance Program Business Plan as it existed prior to 30 June 2007. 31 It was required to apply that Business Plan because: no valid amendment was made to the Business Plan, and in particular, that the Minister was not authorised to amend the Business Plan; that if the Minister did have such power, the Minister's decision was void because he failed to have regard to relevant considerations (the objects of the Native Vegetation Assistance Program; the principle that persons whose property is affected by the actions of government should be paid just compensation; that persons, including the plaintiff, had changed their position on the basis of the existing Farmer Exit Assistance Program); that the Business Plan was ultra vires the terms of s 12(2)(a) of the Nature Conservation Trust Act because that section should be construed in a way which implied that compensation would be "on just terms"; further, that the Minister took into account irrelevant considerations, being the interest of the Nature Conservation Trust (and not that of the farmers); and that the alterations were to provisions of an endorsed conservation priority which formed part of the Business Plan of the Nature Conservation Trust which the Minister was required to approve under s 23(1) and s 25 of the Nature Conservation Trust Act. 32 Lastly, the submissions of Mr Spencer were that the decision of the Minister was manifestly unreasonable or irrational, because it did not provide adequate compensation for loss of property. 33 The plaintiff submits that the reasons given by the Minister in the memorandum of 23 January 2007 are based upon factually incorrect assertions, namely, that there are not various interpretations of the phrase "assuming the Native Vegetation Act 2003 does not apply"; there is no basis upon which it could be suggested that legal challenges were likely; that the effect of the alteration is not substantial, because the 1997 Vegetation Act had similar restrictions to the 2003 Vegetation Act; and the reliance on the view that "current market value" was "fair compensation". 34 Mr Spencer's case against the second defendant, the Nature Conservation Trust, is fundamentally different. The case against the Nature Conservation Trust is that, the Nature Conservation Trust, being involved in trade or commerce, has engaged in conduct which is misleading or deceptive (as defined in the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1997). Further it is submitted that the conduct of the Nature Conservation Trust was unconscionable. On the basis of those causes of action, Mr Spencer seeks compensation and/or damages for the loss or damage that he has suffered and an order requiring the Nature Conservation Trust to amend the offer document to increase it to an offer which compensates for the value of the land, as it existed prior to the limitations imposed by the State Vegetation Acts. 35 At this stage, reference should be made to s 8 of the Nature Conservation Trust Act which established the Nature Conservation Trust as a body corporate. The body corporate may sue and be sued in its own name and style and its major activities relate to the buying and selling of land. The Validity of the Amendments to the Business Plan 36 Mr Spencer seeks judicial review to quash the alteration to the Farmer Exit Assistance Program Business Plan, which changes were purportedly effective from 30 June 2007. It is necessary to deal with the relationship between the different Trusts and the relationship between those Trusts and the Ministers. 37 The New South Wales Government allocated $37,000,000 to the Environmental Trust over a three-year period. Pursuant to the terms of s 8 of the Environmental Trust Act, the Environmental Trust was entitled to grant moneys (from the allocation it has received from Government) to the Nature Conservation Trust for the purposes of administering the Farmer Exit Assistance Program. While it may be possible for the Environmental Trust to place conditions on such grants, there is no evidence of any such condition having been placed. Perhaps implicitly, it may be suggested that the grant by the Environmental Trust to the Nature Conservation Trust, for the purpose of administering the Farmer Exit Assistance Program, presupposes an understanding of the operation of the Farmer Exit Assistance Program and therefore the Business Plan. But adherence to the Business Plan was not part of the conditions of the grant of money by the Environmental Trust. 38 Even if there were a condition, or the approval of the Environmental Trust were required, such approval was given because, on 23 January 2007, the Environmental Trust accepted the recommendation of its Native Vegetation Assistance Program Sub-Committee to adopt the change to the wording of the Business Plan of the Farmer Exit Assistance Program. 39 Further, that recommendation was made in accordance with the terms of reference of the Native Vegetation Assistance Program Sub-Committee, which required the Sub-Committee to review the Business Plan and to propose to the Environmental Trust any revisions to the Plan. The Minister responsible for the administration of the various Acts, being the then Minister for Natural Resources wrote to the Minister for the Environment recommending the alterations. The Minister for the Environment was involved because he was the chairperson of the Environmental Trust, pursuant to s 6 of the Environmental Trust Act 1998. Further, s 6 of the Environmental Trust Act provides for the other members of the Trust and applies Schedule 1 to the Act to the operations of the Trust. Schedule 1 deals with the nomination of appointed members, vacancies and procedures. 40 The objects of the Trust are to encourage and support restoration and rehabilitation projects, reduce or prevent pollution, promote research into environmental issues, promote environmental education and to fund the acquisition of land for national parks and other categories of dedicated and reserved land for the national parks estate. 41 The functions of the Trust, described in s 8 of the Environmental Trust Act, are to make grants, either conditionally or otherwise, to supervise the expenditure of money granted, to expend money as authorised and engage in other activities relating to its objects and of which the Minister may approve. 42 The Nature Conservation Trust is also a body corporate. It is not, and does not represent, the Crown and its objects are to encourage landowners to enter into cooperative arrangements for the management and protection of urban and rural land, to provide mechanisms for achieving conservation and to promote public knowledge of natural heritage and the importance of conserving that heritage. 43 The functions of the Trust are particularised as: operating the Revolving Fund Scheme and other such funds; relevantly, to provide financial and other assistance to landholders when the Trust considers it appropriate; to be the repository of gifts; to exercise its functions of negotiating and monitoring compliance with conservation agreements and property agreements; and to act in accordance with, inter alia, the Native Vegetation Conservation Act 1997, which Act was replaced by the 2003 Vegetation Act. 44 No provision of either the Environmental Trust Act or the Nature Conservation Trust Act limits the power of the Environmental Trust (or the Nature Conservation Trust) to alter the Business Plan. There is no basis upon which it is arguable that the procedures of the Trust were not followed. 45 Given their interrelated activities, it is understandable that both the Environmental Trust and the Nature Conservation Trust approved the amendments to the Business Plan. The aspect of the Business Plan, which was said to have caused confusion and therefore required amendment, was the instruction to offer to purchase land from farmers, who were eligible for the plan, at a value that assumed the 2003 Vegetation Act did not apply. Officers of the Trust stated that the intention of the original Business Plan was little or no different to the current market value. I accept that this belief was honestly held. 46 The reasoning process that gave rise to the aforementioned belief was that prior to the 2003 Vegetation Act applying, the 1997 Vegetation Act applied. Because, as is alleged by persons who gave evidence on behalf of the defendants, the 1997 Vegetation Act had similar restrictions, on the use of farmland, as the 2003 Vegetation Act, a valuation that assumed the 2003 Act did not apply would still be based upon restrictions imposed by the 1997 Act. 47 The difficulty with the above reasoning process is that the original Business Plan used the words "current market value assuming the Native Vegetation Act did not apply". The 2003 Vegetation Act replaced the 1997 Vegetation Act. The proposition that the "Native Vegetation Act" did not apply would, on its face, suggest that neither the 1997 nor the 2003 Acts applied. In those circumstances, the expression "assuming the Native Vegetation Act did not apply" would make a significant difference to the meaning of the term "current market value". 48 Thus, on a proper construction of the Business Plan pre-2007 and post-2007, assuming the Business Plan was validly amended, there was a significant difference in the basis upon which, pursuant to that plan, an offer for purchase would be made. However, neither the Nature Conservation Trust nor the Environmental Trust are an emanation of the Crown. The Ministers, to the extent that they had a formal role to play, were acting as nominated chairpersons of the relevant committees. Otherwise, there approval was informal and unnecessary. There is no basis upon which the first defendant, the NSW Minister for Climate Change, in his capacity as such, acted in a manner which would render his conduct subject to judicial review. 49 First, it is evident that the chairperson, with the approval of the relevant Trust, had the power to effect the changes to the Business Plan. There is, as previously noted, no basis upon which the valuation method in the original Business Plan could be said to have been a condition of the grant by the Environmental Trust. 50 The amendment to the Business Plan, which on the evidence before the Court, had the agreement of both the Environmental Trust and the Nature Conservation Trust, and the agreement of both relevant Ministers in their capacity as such, or in their capacity as chairperson of the relevant Trust, was capable of being altered in the manner that it was. 51 Further, Mr Spencer's submissions assume that the Native Vegetation Assistance Program Business Plan is the effective document. The Business Plan, it would seem, is a proposal for the functioning of the program for the forthcoming year. The conditions upon which an offer of purchase is made, are conditions that either conform to the Business Plan, and are therefore the subject of a general authority to the relevant officers, or are established specially by the Trust. The Trust, in making an offer of purchase, is not bound by the conditions of the Business Plan. Failure to have Regard to Relevant Considerations 52 It is an error of law (and possibly jurisdiction) for a decision-maker to fail to take into account a relevant consideration. A failure of a decision-maker to consider relevant criteria in the making of an administrative decision is one example of an abuse of discretion entitling a party with sufficient standing to obtain judicial review. However, the ground is not made out simply by an allegation that there are considerations, which the decision-maker could have taken into account but did not. The ground is made out only when a decision-maker fails to take account of a consideration or criterion that he is bound to take into account in making the decision: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at p 39, per Mason J with whom, relevantly, Gibbs CJ and Dawson J agreed. The factors that a decision-maker is bound to take into account are determined by the proper construction of the statute conferring the discretion. Those "mandatory" considerations will be either expressly stated or necessarily implied from the purpose and scope of the legislation in question: see Peko-Wallsend, supra. 53 The considerations, urged by Mr Spencer, are criteria, which the Minister was entitled to regard as important. However, none of them were mandated by the provisions of the Act, or any other Act. 54 The State Government is entitled to acquire property compulsorily (either real estate or any other property) without just compensation. However, Mr Spencer does not suggest that this is a compulsory acquisition case. Nor could he suggest that it is. 55 Likewise, the fact that Mr Spencer and other farmers had changed their positions, if that be the case, on the basis of information originally provided, is a factor that the decision-makers could take into account in determining not to amend the Business Plan. But it is not a factor that is required to be taken into account. Further, there is no evidence that the factor was not considered. Taking Account of Irrelevant Considerations 56 Like the failure to take into account relevant considerations, a decision-maker that takes account of any irrelevant consideration will be subject to judicial review. It is unclear, in this case, what considerations are said to have been taken into account that were irrelevant. 57 If, as may be one suggestion, the irrelevant consideration was the interests of the Nature Conservation Trust, then the Minister, as Chairperson of the Nature Conservation Trust, was entitled to take the Trust's interests into account and such a consideration is manifestly not irrelevant. 58 That he gave such interests priority over farmers is a matter of balance, but does not render the consideration of the interests of the Nature Conservation Trust irrelevant. 59 No other matter seems to be raised as an irrelevant consideration, other than, possibly, the issue of the alteration being to a provision of an endorsed conservation priority. It is not clear whether this submission is that the consideration is relevant but not considered, or considered and irrelevant. It matters not. The consideration is not mandatory, in that it was not a required consideration and, if it were considered, about which there is little or no evidence, it was not irrelevant. Manifest Unreasonableness 60 Fundamentally, the submission of Mr Spencer on the question of manifest unreasonableness is the proposition that, either through the Business Plan or otherwise, it was manifestly unreasonable to acquire a property otherwise than by adequate compensation. There are two answers to this submission. The amended Business Plan, and the proposition that an offer to purchase would be based upon market value, cannot be said to be a purchase that does not provide "adequate compensation" for the loss of property. The compensation or purchase price that is offered is, by definition, the value of the property and therefore adequate. 61 The complaint, in reality, is not that adequate compensation has not been offered for the loss of the property; it is that the compensation offered for the loss of the property does not adequately compensate for the effect of the restrictions imposed by various statutes on the business activities of Mr Spencer. 62 It is a fact of life, regrettable though it may be in some cases or in the view of some people, that governments legislate in a way that prohibits certain activities. An extreme case is that they prohibit the making of profits from the sale of illicit drugs. In less extreme cases, governments, at various levels, prohibit the carrying on of business in certain residential premises. It may be as simple as a tree preservation order. 63 The "unfairness" in this case is that government has legislated in a way that renders the otherwise legitimate activities of Mr Spencer to be such that they are no longer viable as a business. Having done so, government then offers to purchase the property at a value that is necessarily less than the value that could be obtained if the prohibitions were not in force. I will later comment, when dealing with the conclusions in this matter, with the effect of that course of conduct. 64 Nevertheless, the proposition that persons would be offered, for their property, the current market value is a proposition which is consistent with, and not inconsistent with, the persons being offered adequate compensation for the loss of their property. There is no manifest unreasonableness or irrationality in arriving at the policy that offers for purchase will be made at current market value. 65 As a consequence of the foregoing, there is no ground of judicial review which would vitiate the alteration to the Business Plan. The offer to purchase was predicated upon the Business Plan and the requirement to offer current market value. As a consequence, there is no basis for a declaration that the offer to purchase was void or invalid. Misleading and Deceptive Conduct and Unconscionability 66 I accept, without deciding, that the Nature Conservation Trust, the second defendant, is engaged in trade or commerce or capable of engaging in trade or commerce. Further, the Trust is a corporation and, on the basis of the above acceptance, would be amenable to remedies under the Trade Practices Act. 67 On the facts as alleged, and as found by me to exist, a representation was made on 19 January 2007 that the Nature Conservation Trust would make an offer to purchase Mr Spencer's property on the basis of an independent valuation of the current market value, assuming that the Native Vegetation Act did not apply. At the time of that representation, the effective Business Plan so provided. 68 Further representations were made in or to the same effect. Accepting, without deciding, that Mr Spencer's recollection of the conversation with Mr Strutt on or about 25 May 2007 is accurate, it adds little to the representation that was made in January of the same year. The new Business Plan came into effect on or after 30 June 2007. 69 For reasons that follow, it is unnecessary for me to determine whether Mr Strutt and/or the Nature Conservation Trust engaged in misleading or deceptive conduct. It would seem, if, at the time that the representation was made, the representation were accurate, there would be little capacity to succeed on an allegation that the representation, when made, was misleading or deceptive. It may be that a failure to correct the impression may be conduct that is misleading or deceptive. Again it is unnecessary, for reasons that follow, for me to determine that issue. 70 It is now trite, and accurate, to remark that conduct will be misleading or deceptive if it induces or is capable of inducing error. In this case, the conduct in question would be the making of the representation as to the basis upon which an offer would be made and, possibly, the failure to correct that representation. 71 Central to the issues raised by the cause of action based upon s 52 of the Trade Practices Act is that the person who is misled or deceived may obtain a remedy in circumstances where the person can prove that loss or damage has been (or will be) suffered by conduct in breach of the provisions. In Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514, Mason CJ said: "The statutory cause of action arises when the plaintiff suffers loss or damage 'by' contravening conduct of another person. 'By' is a curious word to use. One might have expected 'by means of', 'by reason of', 'in consequence of' or 'as a result of'. But the word clearly expresses the notion of causation without defining or elucidating it. In this situation, s.82(1) should be understood as taking up the common law practical or common-sense concept of causation recently discussed by this Court in March v. Stramare (E and M. H.) Pty. Ltd. ((15) [1991] HCA 12; (1991) 171 CLR 506), except in so far as that concept is modified or supplemented expressly or impliedly by the provisions of the Act. Had Parliament intended to say something else, it would have been natural and easy to have said so." 72 Misleading and deceptive conduct is not remediable in abstract. It requires reliance by the party who has been misled or deceived (or is likely to be). This is a fundamental aspect of the provisions of the Trade Practices Act. In this case, Mr Spencer has, in one sense, relied upon the representation by building up his expectations of the offer that would be made by the Nature Conservation Trust. That expectation was not realised. But it did not cause loss or damage. Mr Spencer has not suffered recognisable loss or damage as a consequence of any misrepresentation or any misleading or deceptive conduct. 73 On 13 July 2007, Mr Strutt, on behalf of the Nature Conservation Trust, emailed Mr Spencer the new Farmer Exit Assistance Program Fact Sheet with the different wording in relation to the valuation basis. A valuation was made by an independent valuer and an offer to purchase was made, which offer to purchase has not, as yet, been accepted. Nor has it been rejected. 74 The offer to purchase was an offer to purchase the entirety of the relevant landholding of Mr Spencer. As already stated, it was an offer to purchase at current market value, being $2,170,000. Mr Spencer still has the land. Mr Spencer is still free to hold the land and to reject the offer to purchase. On the other hand, Mr Spencer is free to accept the offer. There is no evidence before the Court that would allow the Court to come to the view that Mr Spencer, at this point in time, has suffered, or is likely to suffer, any loss or damage which would give rise to any remedy under either s 82 or s 87 of the Trade Practices Act. The same is true under the equivalent provisions under the Fair Trading Act. Unconscionability 75 If one takes an overall approach, there is no doubt that Mr Spencer is under a special disadvantage. The special disadvantage arises from the combined effect of valid legislation promulgated by the legislature that, by other legislation, provides for a compensation or assistance package to farmers, affected by the first legislative scheme, on a basis, which does not provide compensation for the effect of the first legislative scheme. 76 I hasten to add, that there is no allegation in these proceedings of mala fides (if such an allegation may be made against Parliament). Nevertheless, the overall effect of the different pieces of legislation seems grossly unfair and unconscionable. 77 However, that is not the question with which the Court is faced. The question of unconscionability arises only in relation to the conduct of the Nature Conservation Trust and does not, and as a matter of law can not, take account of the effect of the 2003 Vegetation Act. The State Vegetation Acts operates regardless of any offer to purchase. The State Vegetation Acts had a crippling effect, as the finding of the Catchment Management Authority makes clear, on the business of Mr Spencer. 78 In Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447, Mason J said: "Relief on the ground of unconscionable conduct will be granted when unconscientious advantage is taken of an innocent party whose will is overborne so that it is not independent and voluntary, just as it will be granted when such advantage is taken of an innocent party who, though not deprived of an independent and voluntary will, is unable to make a worthwhile judgment as to what is in his best interest." 79 In this case, the Court is concerned with the transaction, which is the offer to purchase the property in question. The 2003 Vegetation Act is already effective. There may not be a real commercial choice available to Mr Spencer. However, he is not deprived of an independent and voluntary will or unable to make a worthwhile judgment as to what is, given the effect of the 2003 Vegetation Act, in his best interest. 80 While Deane J, in Amadio, supra, suggested that unconscionability was remediable in more broadly defined circumstances, it is necessary for the special disability to, in some manner, impact upon the capacity of the weaker party to exercise a judgment as to what is in his own best interests. There can be little doubt that Mr Spencer was commercially affected by the 2003 Vegetation Act. There can be little doubt that, as a matter of commercial prudence, it may be necessary for Mr Spencer to accept an offer from the Nature Conservation Trust. Other offers at market value may not be forthcoming. Nevertheless those choices are choices made by Mr Spencer exercising judgment as to what is in his best interests. 81 Further, like the analysis of the difficulties with succeeding on the cause of action based on misleading or deceptive conduct, no remedy would seem to arise. Mr Spencer has not failed to make a judgment. On the contrary, Mr Spencer has been particularly vigilant in asserting his rights. He is entitled so to do. Nevertheless, Mr Spencer has not suffered loss or damage and does not have available the remedies under s 82 or s 87 of the Trade Practices Act. 82 In those circumstances, the remedy for unconscionable conduct cannot succeed. Conclusion 83 For the foregoing reasons, the remedies for judicial review of administrative action and for misleading and deceptive conduct or unconscionable conduct have not been made out. However, it is an extremely disheartening and sad occasion that a person, whose life and resources have been placed into rural property for the purposes of conducting a grazing and farming business, has been required to resort to this action. 84 Governments, not courts, make judgments about political policy relating to what, within reason, is for the benefit of the community. Mr Spencer does not dispute that the objects of the conservation policies adopted in the agreement between the Commonwealth and New South Wales are, at one level, for the benefit of the community. The Federal and State Governments have entered into a scheme to improve the environment and, in so doing, improve the lot of other rural and other proprietors. Nevertheless, they have done so at the expense of Mr Spencer. 85 While all members of society must accept that there will be restrictions on their activities for the "greater good of society", when those restrictions prevent or prohibit a business activity that was hitherto legitimate, because of the area in which it is operating, and assistance is offered which does not fully compensate for the restrictions imposed, society is asking Mr Spencer, and people in his position, to pay for its benefit. 86 Nothing in the foregoing is intended as a criticism of either the current State or current Federal Government. These schemes were implemented by previous Governments both Federal and State, with bipartisan support. Nevertheless, it is a most unfortunate aspect of the operation of the scheme that a person in Mr Spencer's position is effectively denied proper compensation for the restrictions imposed upon him by a scheme implemented for the public good. As earlier stated, ultimately that is a matter for government. 87 The Court makes the following orders:

Spencer v NSW Minister for Climate Change, Environment and Water

At a glance

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Judgment (14 paragraphs)

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Legislation Cited (4)

Cases Cited (8)

Cited By (4)