Watson's Bay and South Shore Ferry Company Limited v Whitfeld [1919] HCA 69

Watson's Bay and South Shore Ferry Company Limited v Whitfeld [1919] HCA 69 - HCA 1919 case summary — Zoe

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of the parcel of land which the Company wished to get back. The agreement then concluded : - '" And whereas subsequently to such revocation it is the intention of the Minister to have the said land (being the said urea of 1 rood 9 perches) offered for sale by public auction subject to the provisions of the Crown Lands Con- solidation Act 1913 and the regulations thereunder Now these presents witness that it is hereby covenanted and agreed between the parties hereto respectively as follows : - {i.) The Minister will as soon as conveniently may be after the completion of such revoca- tion of the dedication of the areas of land referred to in the above recited proposals (a) direct that the said land (being the said area of 1 rood 9 perches) be submitted at public auction subject to the provisions of the Crown Lands Consolidation Act 1913 and the regulations thereunder (b) direct the dedication of the land described in the second schedule as a public road (ii.) The amount at which the said Jand shall be sold at such auction shall subject to the dedication of such public road as aforesaid and subject to such lease as aforesaid being completed be accepted by the Company in full satisfaction of all claims in respect. of the resumption of the said land as aforesaid and on payment thereof by the Minister to the Company the Company andthe old Company and the liquidator thereof will execute a release in the form to be prepared by the Crown Solicitor (iii.) It is specially agreed and declared that this agree- ment is entered into by the parties on the express condition that if Parliament should not assent to the proposals of the Ministe: as above mentioned or should the Minister from any cause whatsoever be unable to carry out this agreement then these presents shall be void and of no effect and shall not prejudice the rights of the parties hereto in relation to the said resumption. from the old Company or any matter connected therewith Provided also that the Com- pany shall not in any case be entitled to any compensation for any expenses incurred or loss if any occasioned or sustained through this agreement having been entered into."

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The Minister - it is recited, and we must accept that recital as a fact - formed and held on 21st November 1916 the intention to have the land, 1 rood 9 perches, put up for auction under the Act of 1913. At this point we must ask why was that intention so recited? Reading the agreement as a whole, the answer must be this : - In order to rid the Government of the compensation claim on the terms proposed by the Company, it was necessary to use the forms of the Crown Lands Act 1913. No other way pres.nted itself than to put the land up to public auction. But to do that, revoca- tion of the park dedication was essential so as tu make the land "Crown lands"; and then the only practicable method of pro- cedure was to hold an auction sale at which the Company might bid. But, as at an auction sale other people also might bid, and the price might, in the changed circumstances that four and a half years had brought about, be much higher than the value in 1912 some provision had to be made to guard against the Company being compelled to pay that higher price: it was arranged that if the Company bought, at whatever sum, it was to be a mere book-keeping entry, because that sum was to be taken as their compensation. In other words, what they nominally paid under the Land Act of 1913, was to be what they nominally received under the Works Act of 1900. But the arrangement, if carried out, left the Company the choice of stopping at a point in the bidding ; and, as Mr. Maughan rightly argued, a point might come when it would have paid the Company to bid no more and to leave another person at his higher bid, so that the Company would not have the land but the price it fetched at auction. This argument was necessary to his case, in order to show that the auction sale was to be a real one to the highest bidder. But it also demonstrated that the agreement if carried out might, at the option of the Company, yield them, under the name of com- pensation for the true value of the land in 1912, a sum admittedly, in their opinion, higher than that value, ond higher than, in their opinion, the value of the land in 1916 or whenever it was sold.

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following reasons : - First, taken as a whole it was an attempt to fetter in advance the discretion and the public duty of the Minister of Lands for the time being. The very ground of the claim is that the Minister was bound by the contract to exercise his statutory power, not as the expediency of doing so presented itself to him at the moment of exercise, but as predetermined by the contract. Tt was put that his discretion was exercised at the time of making and by the act of making the contract. But the answer to that is that on the true construction of the Act and, particularly in this connection, of sec. 63, that is not a mode of exercising his discretion that comes within his authority. The contract was not the com- pleted exercise of discretion, as in the cases cited of private trustees, but it was an anticipatory fetter on the future exercise of discretion and public action. That discretion might, if unfettered, lead the Minister to retain the land as Crown land, and so change his inten- tion, however and whenever previously formed, of selling the land by auction. That agreement is impossible to support. The principle stated by Lord (then Lord Justice) Moulton in Osborne v. Amalgamated Society of Railway Servants (1) as applicable to the case then in hand is equally applicable to the present. It is there said: "Every such agreement is tainted with the vice of the trustee binding himself contractually for valuable considera- tion that he will exercise a trust in a specified manner to be decided by considerations other than his own conscientious judgment at the time as to what is best in the interests of those for whom he is trustee." The agreement was an attempt to vest at the Company's option, and possibly after special terms had been required under sec. 63 of the Act to further the object of the agreement, a piece of land, possibly then park land and so not vested in the Minister, or else " Crown lands," in a particular private individual preferentially, there being no legal warrant for such preference. The special terms might have been so framed as to deter competition, and in any event the nature of the bargain, if known - and there was nothing to pre- vent the Company making it known - would in itself greatly deter possible competitors.

At a glance

Court

Decision date

Before

Source

Judgment (62 paragraphs)