Westfield Management Ltd v Brisbane Airport Corporation Ltd

Federal Court of Australia|2005-02-03|Before: Cooper J

THE COURT ORDERS THAT: The application be dismissed and judgment be entered for the first, fourth, fifth and sixth respondents. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

BETWEEN: WESTFIELD MANAGEMENT LTD

AND: BRISBANE AIRPORT CORPORATION LTD

6 The conduct set forth in pars 5(a) to (h) above, being in summary the conduct pleaded in pars 6 to 7F inclusive of the SOC, as a whole, or in respect of each of the separate components of it, is alleged by Westfield and Centro to involve the carrying on of substantial trading or financial activities in contravention of s 32(1): par 10 of the SOC.

7 Westfield and Centro allege that the approval by the Minister of the 2003 Draft Master Plan pursuant to s 81 was of no force and effect because it included provisions for development of the Site which were not related to, or incidental to, the operation and development of Brisbane Airport as an airport, and which development was contrary to the provisions of the A Act: pars 10A and 10B of the SOC. As a consequence they allege the 2003 Draft Master Plan and its approval were of no effect for the purposes of the A Act: par 10C of the SOC.

8 Westfield and Centro allege that the cost of construction of each of the precincts pleaded in pars 6 and 7(a)(i)(ii)(iv) and (vi) of the SOC will, or will be likely to, exceed $10 million, or will exceed such sum with the cost of infrastructure, earthworks and other preparatory works necessary to construct the precincts. As a consequence it is alleged that the construction of the precincts will constitute a major airport development within the meaning of s 89(1)(e) which requires approval of a major development plan pursuant to Div 4 of Pt 5 of the A Act which has not occurred: pars 27 and 28 of the SOC.

9 Westfield and Centro allege that the purported approval of the Minister for the Outlet Centre Development Draft Major Development Plan on 25 June 2004, being the plan referred to in par 7B of the SOC was invalid as the plan did not comply with the requirements of s 91(1) and, in consequence was incapable of approval as a major development plan: par 28 of the SOC.

10 Westfield and Centro allege that the approval of the Building Controller on 24 September 2001 and 18 September 2002 given to BACL to carry out bulk earthworks on the Site was beyond the power of the Building Controller, was in contravention of s 101 and was of no effect. 11 Westfield and Centro allege that the carrying out of bulk earthworks on the Site by BACL since early 2003 constituted a contravention of s 90(1) and s 99(1): pars 33 and 34 of the SOC. 12 Finally, Westfield and Centro allege that no final Master Plan is in force, and none can be validly approved by the Minister which would permit BACL to engage in the activities pleaded in pars 6 to 7F inclusive of the SOC. 13 The substance of the case advanced by Westfield and Centro is that as a matter of construction of the A Act, BACL is required to operate and develop Brisbane Airport as an airport which provides aeronautical services to the civil aviation users and for such other uses related or incidental to such use of Brisbane Airport and BACL is prohibited from using Brisbane Airport or any part of it for any other use which involves significant trading or financial activities unrelated or not incidental to such use as an airport to facilitate movement of aviation traffic. It follows, in Westfield's and Centro's submission, that the provisions in Pt 5 of the A Act under the heading 'Land use, planning and building controls' are to be construed as limited to the operation and development of an airport as a place used to provide aeronautical services to civil aviation users, and for related or incidental purposes and for no other use of the land which comprises the airport. In support of their submission they rely upon statements in the explanatory memorandum to the Airports Bill 1996, statements of the relevant Minister in the second reading speech together with what is submitted is a clear statutory intention in the A Act to distinguish between an 'airport' as a facility which is operated by the lessee of an airport and an 'airport site' as the land area which falls within the boundaries of an airport. Importantly, they submit s 31(2) and s 32(1) are leading provisions (see Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382), which deal with the operation and/or development of an airport as a facility providing aeronautical services to users and not as the airport site at which such services are provided. As leading provisions, other provisions of the A Act, they submit, are to be construed so as to be consistent with s 31(2) and s 32(1) and to give effect to the policy they submit is evident in the two sections. 14 The resolution of the issues said to arise under s 32(1) involves a question of the proper construction of the section and a finding as to whether or not the conduct alleged against BACL, if made out, comes within the prohibition contained in that section. 15 Westfield and Centro contend that on the proper construction of s 32(1) the term 'the operation and/or development of the airport' means the operation and/or development of the airport for use as an aviation facility and for no other use. They further contend that the uses of the airport site (as defined in the A Act) of Brisbane Airport pleaded in pars 6, 6A and 7 of the SOC are not activities related, or incidental, to the use of Brisbane Airport as an aviation facility, because they have no, or no sufficient connection, to the aviation activities carried on at Brisbane Airport. In support of these contentions they rely upon the written reports and oral evidence of Dr Michael Tretheway (who is an economist with substantial experience in air transport, civil aviation markets, and airport administration), the secondary materials accompanying the introduction of the Airports Bill 1996, and the terms of the A Act itself. 16 BACL, the Minister and DFO contend that 'the operation and/or the development of the airport' in s 32(1) bears its ordinary meaning and means, in the case of the Brisbane Airport, the operation and development of the airport site known as Brisbane Airport. They contend that the use of an airport for the purpose of aviation activities is but one, albeit the primary one, of a range of possible additional permissible uses not inconsistent with the operation of the Brisbane Airport as an airport. They contend that the construction of buildings by BACL at Brisbane Airport and the subletting of those buildings for use by the sub-tenants for commercial activities is part of the operation and/or development of the Brisbane Airport. Alternatively, they contend such building and subletting is related to, or incidental to the operation and/or development of the Brisbane Airport. In support of their contentions they rely upon the statutory scheme privatising airports in Australia, the secondary materials, the terms of the A Act and the provisions of the airport lease for Brisbane Airport. BACL also relies upon the written reports and oral evidence of Dr John Kasarda who is Professor of Management at the University of North Carolina specialising in airport development. Dr Kasarda is a proponent of the concept of the 'Airport City' and his evidence relates to the emergence of multiple uses on airport sites as part of the integrated operation of the airport as a business which includes as one of its uses that of the provision of traditional aeronautical services. 17 Objection was taken to parts of the reports of both Dr Tretheway and Dr Kasarda on the grounds of relevancy and as swearing to the ultimate issue in the proceedings. I admitted the challenged material provisionally under s 57 of the Evidence Act 1995 (Cth). In relation to swearing to the ultimate issue, this is no longer a basis of objection to expert evidence: s 80 Evidence Act. The other evidence is to a greater nor lesser degree relevant although for reasons which I set out below much of the evidence of Dr Tretheway was of little or no weight in my deliberations. In the final analysis the oral expert opinion was not determinative of my view as to the proper construction of s 32(1) and to its application to the circumstances of BACL.

THE STATUTORY SCHEME 18 In 1996 the Commonwealth determined to privatise the major Australian airports. Prior to that time the airports were owned and operated by the Federal Airports Corporation ('the FAC') under the provisions of the Federal Airports Corporation Act 1986 (Cth) ('the FAC Act'). The FAC Act applied to Federal airports (as defined) and included Brisbane Airport. The functions of the FAC included a function to operate Federal airports: FAC Act s 6(a). The function in par 6(a) by the operation of s 8(1)(b) and s 8(1)(c) of the FAC Act extended to carrying on commercial activities at, or in relation to, Federal airports (s 8(1)(b)) and the providing, or arranging for the provision of facilities and services at, or in relation to Federal airports (s 8(1)(c)). It was expressly contemplated that in the performance of its functions it may use land at a Federal airport for a purpose not directly related to aviation and that a building may be erected on land at an airport for a purpose not directly related to aviation: FAC Act s 7(2)(d) and (e). In that case, the use or design and construction of a building was to accord with any State or Territory law (including Local Government laws) which would have applied to the airport if it had not been a Commonwealth place. 19 The statutory changes introduced in 1996 were contained in two enactments; the A Act and the Airports (Transitional) Act 1996 (Cth) ('the ATA'). In introducing the A Act the then Minister for Transport and Regional Developments (the Honourable John Sharp) said in his second reading speech (Hansard 23 May 1996 at 1305-1308): 'In essence this bill and the Airports (Transitional) Bill 1996 provide the legislative framework for granting of leases to airport specific companies and the transfer of assets and obligations associated with those airport operations from the Federal Airports Corporation to the companies. … Government Airports Policy The government's decision to establish long-term leasehold arrangements at federal airports will improve the efficiency of airport investment and operations in the interests of users and the general community. Leasing of the airports will facilitate innovative management and greater local involvement and input to decisions on their operation and development. Airports deliver highly specialised services to the Australian economy. There will be opportunities for greater autonomy of individual airports post leasing and for airports to cater better for the particular markets which they serve and therefore to meet the needs of local and regional economies. Aviation regulatory arrangements Leasing of airports does not change the regulatory arrangements in other areas of the government's aviation policy nor the fundamental roles played by the individual agencies. The Civil Aviation Safety Authority will continue to have primary responsibility for air safety in Australia. Airservices Australia will continue to provide facilities and services required for the operation of the national airways system. Regulatory provisions authorise the establishment and monitoring of quality of service performance indicators and the Australian Competition and Consumer Commission scrutiny to back up these aspect of the business. With the advent of leasing, the government is also aware that significant market power will move from the public sector to the private sector. The government is thus committed to putting into place an appropriate regulatory framework to protect the interest of current and future airport users and local communities. At present, the Federal Airports Corporation operates as a self-regulating government authority in respect of land use, planning and building and on-airport pollution control. Post leasing, these responsibilities will need to be assumed by the government itself to ensure appropriate public interest regulation of the activities of airport lessees and other users. As well as providing a regulatory regime which can replace those regulatory functions currently performed by the FAC, the Airports Bill establishes appropriate transparency and reporting obligations on airport operators. In summary the provisions ensure:

majority Australian ownership;
a five per cent limit on airline, and associate, ownership;
environment strategy requirements;
financial transparency. These provisions apply to 'core regulated airports' and other airports specified in the regulations. Core regulated airports are: Sydney, Melbourne, Brisbane, Perth, Adelaide, Darwin, Hobart, Launceston, Townsville, Coolangatta, Canberra, Alice Springs and Sydney West. There are also provisions relating to demand management, protection of airspace around airports and other on-airport activities. … Land use, planning and building controls There needs to be clarity and certainty on processes which allow government and community input, and a greater compatibility between on and off airport development. Accordingly, each regulated airport operator will be required to establish:
an airport master plan - essentially a long term land use plan to cover a 20-year period;
major development plans for projects, for example, runway, terminal development, at airports which can, where significant environmental impacts result, require appropriate environmental impact assessment processes as is currently the case; and
airport operators will also need approval for new building activities on airport sites. Master and major development plans, and environment strategies will be subject to ministerial approval. The bill ensures that the airport-operator company undertakes a 'public comment' process providing the opportunity for all interested parties to comment on master plans, major development plans and environment strategies. The views of airport users, such as the airlines and other tenants, state and local governments, will be a significant part of the comment process. … Status of FAC Master Plans The Airports Bill provisions require ministerial approval of airport master plans, which relate to a period of 20 years. These provisions are designed to provide a very high level of public consultation. There is a provision, too, which will allow the new airport operator to adopt an FAC master plan for the airport as its own draft master plan, but this plan cannot be approved without complying with the public comment provisions of the bill.' (original emphasis) 20 In introducing the ATA the Minister said (Hansard 23 May 1996 at 1310-1311): 'The primary purpose of this bill is to put into place a framework to facilitate leasing of all federal airports effectively as ongoing businesses under a two-stage sales process. It is proposed that Melbourne, Brisbane and Perth airports will be included in the first phase leasehold sales. … The bill provides for the transfer of airport land and other assets from the FAC to the Commonwealth; the granting of leases over the airports and transfer of associated assets to individual airport companies; and the orderly treatment of the FAC's debts during the sales process. Provision has also been made in the bill for the transfer of airport staff employed by the FAC to the airport companies. The companion bill, the Airports Bill 1996, will establish the regulatory regime for airports post leasing. This regulatory regime is designed to improve the efficiency of airport operations while ensuring the protection of airport user and community interest. Leasing the airports permits the government to retain some control over the land on which the airports are located. The long term of the lease will ensure that sales proceeds are similar to sale under freehold title. … As I have indicated, a number of measures designed to facilitate the leasing of the federal airports are contained in the bill now before the House. These measures provide for the land and associated assets of the FAC to be transferred to the Commonwealth, as well as provide for the Commonwealth to grant a lease over land at a particular airport to a company referred to as an airport lessee company. Following this, the bill provides the government with a flexible disposal strategy to grant an airport lease to a company either established by the Commonwealth or the purchaser. In both instances when the lease is granted, the FAC's contractual rights, obligations and liabilities are transferred to the airport lessee company. The bill also provides for airport staff to transfer to the airport lessee companies at the time a lease is granted over the relevant airport. The bill also contains provisions to enable transfer of accrued benefits and leave entitlements post-sale. These provisions are designed to ensure fair and consistent treatment of staff. … This bill is intended to provide a framework for the sale of leases over the airports currently operated by the Federal Airports Corporation. This bill and the companion Airports Bill 1996 are designed to promote the most efficient operation and maintenance of Australia's airport infrastructure, while ensuring that the benefits of increased efficiency are passed on to airport users and the community as a whole. The government is confident that these arrangements will ensure a fair return from the airports while allowing it to divest itself of a function in which its involvement is no longer essential.' 21 The simplified operation of the ATA is set out in s 3 which provides: '3 … The following is a simplified outline of this Act:

• This Act provides for the leasing of certain airports. • Airport land and other airport assets will be transferred from the Federal Airports Corporation (FAC) to the Commonwealth. • The Commonwealth will grant an airport lease to a company. The company is called an airport‑lessee company. • Immediately after the grant of the airport lease, the Commonwealth may transfer or lease certain assets to the airport‑lessee company. • Certain employees, assets, contracts and liabilities of the FAC will be transferred to the airport‑lessee company.' (original emphasis) 22 The granting of airport leases to companies is provided for in Part 3 of the ATA. The simplified operation of the Part is set out in s 19 which provides: '19 … The following is a simplified outline of this Part:

• The Commonwealth will grant an airport lease to a company. The company is called an airport‑lessee company. • Immediately after the grant of the airport lease, the Commonwealth may transfer or lease certain assets to the airport‑lessee company. • The Commonwealth may transfer certain contracts and liabilities to the airport‑lessee company. • Airport leases are granted subject to existing leases and other interests. • The existence of this Act may be noted on title registers. • The Lands Acquisition Act 1989 does not apply to anything done under this Part.' (original emphasis) The Part applied to five named airports with provision to add to the list by regulation; Brisbane Airport is one of the named airports to which the Part applied: s 20(d) ATA. 23 The power to lease to a company that is not owned by the Commonwealth is contained in s 22 of the ATA. That section provides: '22 … (1) The Commonwealth may grant an airport lease under this section. (2) The Commonwealth must not grant an airport lease under this section unless the lessee is a company none of whose shares are beneficially owned by the Commonwealth. (3) If a purported lease contravenes subsection (2), it is of no effect. Note: In addition to the requirements of subsection (2), a grant must comply with the rules in Part 2 of the Airports Act 1996.' 24 Certain terms used in the ATA adopt the definitions in the A Act. So far as is presently relevant the following definitions apply for the purposes of the ATA and the A Act: 'airport means an airport in Australia. … airport lease: (a) means a lease of the whole or a part of an airport site, where the Commonwealth is the lessor; and (b) when used in relation to an airport - means a lease of the whole or a part of the airport site of the airport, where the Commonwealth is the lessor. airport‑lessee company means a company that holds an airport lease. airport site means a place that is: (a) declared by the regulations to be an airport site; and (b) a Commonwealth place; and (c) used, or intended to be developed for use, as an airport (whether or not the place is used, or intended to be developed for use, for other purposes).' (original emphasis) 25 The objects of the A Act are contained in s 3 which provides: '3 Objects The objects of this Act are as follows: (a) to promote the sound development of civil aviation in Australia; (b) to establish a system for the regulation of airports that has due regard to the interests of airport users and the general community (c) to promote the efficient and economic development and operation of airports; (d) to facilitate the comparison of airport performance in a transparent manner; (e) to ensure majority Australian ownership of airports; (f) to limit the ownership of airports by airlines; (g) to ensure diversity of ownership and control of certain major airports; (h) to implement international obligations relating to airports.' (original emphasis) 26 The A Act also contained a simplified outline of the Act in s 4 which provided: '4 Simplified outline The following is a simplified outline of this Act: • This Act sets up a system for regulating airports. • A Commonwealth‑owned airport can only be leased to a company. The company is called an airport‑lessee company. • There will only be one airport‑lessee company for each airport and the company will not be allowed to lease another airport. • An airport‑lessee company's sole business will be to run the airport. • An airport‑lessee company can contract out the management of the airport to another company. The other company is called an airport‑management company. • This Act uses the term airport‑operator company to cover both airport‑lessee companies and airport‑management companies. • Airport‑operator companies are subject to the following ownership restrictions: (a) a 49% limit on foreign ownership; (b) a 5% limit on airline ownership; (c) a 15% limit on cross‑ownership for Sydney/Melbourne, Sydney/Brisbane and Sydney/Perth airports. • For each airport, there will be an airport master plan. • Major development plans will be required for significant developments at airports. • Building activities on airport sites will require approval. • Buildings and structures on airport sites must be certified as complying with the regulations. • For each airport, there will be an environment strategy. • The regulations may deal with environmental standards at airport sites. • An airport‑operator company may be required to give accounts and reports to the Australian Competition and Consumer Commission. • The Australian Competition and Consumer Commission will monitor the quality of airport services and facilities. • Airport‑lessee companies must give written consent before airport sites are varied or closed. • The regulations may implement certain international agreements relating to airports. • The regulations may deal with the control of the following matters at airports: (a) liquor; (b) commercial trading; (c) vehicle movements; (d) gambling; (e) smoking. • The regulations may control intrusions into prescribed airspace around airports. • An airport service will be a declared service for the purposes of the access regime set out in Part IIIA of the Trade Practices Act 1974 unless an access undertaking is given within 12 months after responsibility for the airport is transferred to the private sector. • The Minister may formulate demand management schemes for airports. • Airservices Australia will generally oversee the provision of air traffic services and rescue and fire fighting services at airports.' (original emphasis) 27 Part 2 of the A Act deals with leasing and management of airports. The Part applies to a core regulated airport or to an airport specified in the regulations: s 12(1). A core regulated airport is one of the airports named in s 7(1) of the A Act. Brisbane Airport is a core regulated airport: s 7(1)(d). Division 3 of Pt 2 of the A Act deals with the grant of airport leases. The Commonwealth is given a power to grant an airport lease under s 13. Section 14 contains rules which relate to the grant of an airport lease whether granted under the A Act or the ATA. A grant which does not comply with s 14(5) is of no effect. 28 Section 14(5) of the A Act provides: '(5) An airport lease complies with this subsection if: (a) there is a single lessee; and (b) the lessee is a qualified company; and (b) the term of the lease is not longer than 50 years (with or without an option to renew the lease for up to 49 years); and (d) if the airport is neither a joint‑user airport nor Sydney West Airport - the lease provides for the use of the site as an airport (whether or not the lease also provides for other uses); and (e) if the airport is a joint‑user airport - the lease provides for the use of the leased area for purposes in connection with the airport (whether or not the lease also provides for other uses); and (f) if the airport is Sydney West Airport - the lease provides for the development of the site as an airport or the use of the site as an airport, or both (whether or not the lease also provides for other developments or other uses); and (g) the lease provides for access to the airport by interstate air transport or international air transport, or both (whether or not the lease also provides for other access).' 29 Division 5 of Part 2 of the A Act originally dealt with authority to use the airport site as an airport. Section 31(2) in its original form authorised an airport-operator company 'to use the airport site concerned as an airport'. By the Aviation Legislation Amendment Act (No 1) 1997 (Cth)the original Div 5 was repealed and replaced by a new Div 5 which imposed a statutory obligation on an airport-operator company for an airport 'to use the airport site concerned as an airport': s 31(2). 30 Division 6 of Pt 2 of the A Act is headed 'Restrictions on lessees'. Section 32 of the A Act is contained in Div 6 and provides: '32 Airport‑operator company must not carry on non‑airport business

Airports other than joint‑user airports (1) An airport‑operator company for an airport (other than a joint‑user airport) must not carry on substantial trading or financial activities other than: (a) activities relating to the operation and/or development of the airport; or (b) activities incidental to the operation and/or development of the airport; or (c) activities that, under the regulations, are treated as activities incidental to the operation and/or development of the airport.

Joint‑user airports (2) An airport‑operator company for a joint‑user airport must not carry on substantial trading or financial activities other than: (a) activities connected with the airport; or (b) activities incidental to activities connected with the airport; or (c) activities that, under the regulations, are treated as activities incidental to activities connected with the airport.

Offence (3) A company commits an offence if: (a) the company is subject to a requirement under subsection (1) or (2); and (b) the company engages in conduct; and (c) the company's conduct contravenes the requirement. Penalty:2,000 penalty units.

Strict liability (3A) Strict liability applies to paragraph (3)(a). Note: For strict liability, see section 6.1 of the Criminal Code.

Loan securities (4) Subsections (1) and (2) do not apply to an airport‑lessee company for an airport if the company acquired its airport lease or airport leases by way of the enforcement of a loan security.

Validity of transactions (5) A contravention of this section does not affect the validity of any transaction.' (original emphasis) The other section contained in Div 6 limits the circumstances in which an airport-lessee company may enter into an airport-management agreement (as defined) in relation to the airport: s 33. 31 Part 5 of the A Act is headed 'Land use, planning and building controls'. The Part applies to a core regulated airport. The simplified outline of the Part is contained in s 67 which provides: '67 Simplified outline The following is a simplified outline of this Part: • For each airport, there is to be an airport master plan. • Major development plans will be required for significant developments at airports. • Building activities on airport sites will require approval. • Buildings and structures on airport sites must be certified as complying with the regulations.' (original emphasis) For each airport there is to be a final master plan: s 70. A final master plan is a draft master plan that has been approved by the Minister under s 81. 32 A draft master plan for an airport is to be prepared by the airport-lessee company and must relate to a planning period of 20 years: s 72. For the purposes of Div 2 of Part 5 it is assumed that the airport lease held by the airport-lessee company will continue in force for the duration of the planning period of the master plan: s 73. A final master plan remains in force for 5 years: s 77. Section 71 specifies the matters that must be set out in each draft or final master plan for an airport. 33 Section 71, so far as presently relevant, provides: '71 Contents of draft or final master plan …

Airports other than joint‑user airports (2) In the case of an airport other than a joint‑user airport, a draft or final master plan must specify: (a) the airport‑lessee company's development objectives for the airport; and (b) the airport‑lessee company's assessment of the future needs of civil aviation users of the airport, and other users of the airport, for services and facilities relating to the airport; and (c) the airport‑lessee company's proposals for land use and related development of the airport site, where the proposals embrace airside, landside, surface access and land planning/zoning aspects; and (d) forecasts relating to noise exposure levels; and (e) the airport‑lessee company's plans, developed following consultations with the airlines that use the airport and local government bodies in the vicinity of the airport, for managing aircraft noise intrusion in areas forecast to be subject to exposure above the significant ANEF levels; and (f) the airport‑lessee company's assessment of environmental issues that might reasonably be expected to be associated with the implementation of the plan; and (g) the airport‑lessee company's plans for dealing with the environmental issues mentioned in paragraph (f) (including plans for ameliorating or preventing environmental impacts); and (h) if a draft environment strategy for the airport has been approved - the date of that approval; and (j) such other matters (if any) as are specified in the regulations. Paragraphs (a), (b), (c), (d), (e), (f), (g) and (h) do not, by implication, limit paragraph (j). Note 1: Airsidemeans the part of the airport grounds, and the part of the airport buildings, to which the non‑travelling public does not have free access. Note 2: Landside means the part of the airport grounds, and the part of the airport buildings, to which the non‑travelling public has free access.

Joint‑user airports (3) In the case of a joint‑user airport, a draft or final master plan must specify: (a) the airport‑lessee company's development objectives for civil use of the airport; and (b) the airport‑lessee company's assessment of the future needs of civil aviation users of the airport, and other civil users of the airport, for services and facilities relating to the area of the airport site leased to the company; and (c) the airport‑lessee company's proposals for land use and related development of the area of the airport site leased to the company, where the proposals embrace: … (6) In specifying a particular objective or proposal covered by paragraph (2)(a) or (c) or (3)(a) or (c), a draft or final master plan must address the extent (if any) of consistency with planning schemes in force under a law of the State or Territory in which the airport is located.' (original emphasis) 34 The A Act permits an airport-lessee company to adopt matters contained in documents of the FAC relating to the airport. Section 87(1) provides: '87 Transitional - adoption of FAC documents (1) A draft or final master plan for an airport may make provision for or in relation to a matter by applying, adopting or incorporating (with or without modification) any matter contained in a document that: (a) relates to the airport; and (b) was prepared for or by the Federal Airports Corporation when the airport was a Federal airport, or a Federal airport development site, within the meaning of the Federal Airports Corporation Act 1986. Note: All draft and final master plans must comply with the content rules set out in sections 71 and 72.' (original emphasis) 35 The power of the Minister to approve a draft master plan is contained in s 81. The matters to which the Minister must have regard are those contained in s 81(3) which provides: '81 Approval of draft by Minister … (3) In deciding whether to approve the plan, the Minister must have regard to the following matters: (a) the extent to which carrying out the plan would meet present and future requirements of civil aviation users of the airport, and other users of the airport, for services and facilities relating to the airport concerned; (b) the effect that carrying out the plan would be likely to have on the use of land: (i) within the airport site concerned; and (ii) in areas surrounding the airport; (c) the consultations undertaken in preparing the plan (including the outcome of the consultations); (d) the views of the Civil Aviation Safety Authority and Airservices Australia, in so far as they relate to safety aspects and operational aspects of the plan.' (original emphasis) 36 There is no statutory obligation on an airport-lessee company to develop and use the airport in accordance with the contents of the final master plan for the airport to which it relates. Rather, the plan operates to prevent development of the airport or building activities at the airport which are inconsistent with the final master plan: see for example s 94(5) and s 101(2). 37 A major airport development (as defined) requires a major development plan approved by the Minister under s 94 before a major airport development relating to the airport may be carried out: s 90(1). Section 89 contains the meaning of 'major airport development'. That section provides: '89 Meaning of major airport development (1) For the purposes of this Division, a major airport development is a development that is carried out at an airport site and that consists of: (a) constructing a new runway; or (b) extending the length of a runway; or (c) constructing a new building wholly or principally for use as a passenger terminal, where the building's gross floor space is greater than 500 square metres; or (d) extending a building that is wholly or principally for use as a passenger terminal, where the extension increases the building's gross floor space by more than 10%; or (e) constructing a new building, where: (i) the building is not wholly or principally for use as a passenger terminal; and (ii) the cost of construction exceeds $10 million or such higher amount as is prescribed; or (f) constructing a new taxiway, where: (i) the construction significantly increases the capacity of the airport to handle movements of passengers, freight or aircraft; and (ii) the cost of construction exceeds $10 million or such higher amount as is prescribed; or (g) extending a taxiway, where: (i) the extension significantly increases the capacity of the airport to handle movements of passengers, freight or aircraft; and (ii) the cost of construction exceeds $10 million or such higher amount as is prescribed; or (h) constructing a new road or new vehicular access facility, where: (i) the construction significantly increases the capacity of the airport to handle movements of passengers, freight or aircraft; and (ii) the cost of construction exceeds $10 million or such higher amount as is prescribed; or (j) extending a road or vehicular access facility, where: (i) the extension significantly increases the capacity of the airport to handle movements of passengers, freight or aircraft; and (ii) the cost of construction exceeds $10 million or such higher amount as is prescribed; or (k) constructing a new railway or new rail handling facility, where: (i) the construction significantly increases the capacity of the airport to handle movements of passengers, freight or aircraft; and (ii) the cost of construction exceeds $10 million or such higher amount as is prescribed; or (l) extending a railway or rail handling facility, where: (i) the extension significantly increases the capacity of the airport to handle movements of passengers, freight or aircraft; and (ii) the cost of construction exceeds $10 million or such higher amount as is prescribed; or (m) a development of a kind that is likely to have significant environmental or ecological impact; or (n) if a final environment strategy is in force for the airport - a development which affects an area identified as environmentally significant in the environment strategy; or (o) a development of a kind specified in the regulations. (2) Paragraphs (1)(a), (b), (c), (d), (e), (f), (g), (h), (j), (k), (l), (m) and (n) do not, by implication, limit paragraph (1)(o). (3) For the purposes of subsection (1), if: (a) the parties to a transaction do not deal with each other at arm's length in relation to the transaction; and (b) a cost arising out of that transaction is less than is reasonable; the amount of that cost is taken to be the amount of the cost that would have arisen if the parties had dealt with each other at arm's length.' (original emphasis) 38 An airport lessee company for an airport must not carry out, or cause or permit to be carried out on the airport site a building activity unless it is in accordance with an approval granted under the regulations or the activity is declared to be exempt from the requirement of an approval: s 99(1).

THE AIRPORT LEASE FOR BRISBANE AIRPORT 39 The lease to BACL was granted by the Commonwealth under s 22 of the ATA. The lease contained the following defined terms: 'Airport Site means the site (including the Structures thereon) which at Grant Time is named Brisbane Airport and the boundaries of which are as specified in regulations made pursuant to the Airports Act, a copy of which regulations is attached to this Lease. Grant Time means the time at which the Commonwealth grants this Lease to the Lessee, such time being the time on 2 July 1997 immediately after the FAC Land for Brisbane Airport vests in the Commonwealth. Master Plan means a final master plan as defined in the Airports Act. Structures means all fixtures (including buildings and other improvements of whatever nature) affixed to the Airport Site, whether constructed before or after the grant of this Lease, and includes without limitation such items as runways, taxiways, aprons, roads and dams on the Airport Site. Term means a term of fifty (50) years commencing at Grant Time.' (original emphasis) 40 The demise of the airport site was contained in cl 1.1 which provided: '1.1 Lease and concurrent lease In consideration of the payment by the Lessee to the Lessor of a premium which is not refundable in any circumstances, the Lessor grants to the Lessee pursuant to the Airports (Transitional) Act 1996 a Lease of the Airport Site (including the Structures) for the Term. This Lease operates as a concurrent lease over all that part of the Airport Site which is the subject of leases existing as a Grant Time.' (original emphasis) 41 The rights and obligations of BACL as to access and use of the airport site (as defined in the lease) are contained in Cl 3 of the lease. That clause provides: '3.1 Lessee must give access The Lessee: (a) must at all times: (i) subject to sub-clause 17.5, provide for the use of the Airport Site as an airport; (ii) subject to sub-clause 17.5, provide for access to the airport by interstate and international air transport; (iii) provide for access to the airport by intrastate air transport; (iv) not use, or permit to be used, the Airport Site for any unlawful purpose or in breach of legislation; and (v) not use any name other than Brisbane Airport for the Airport Site without the prior written consent of the Lessor. (b) may: (i) permit the Airport Site to be used for other lawful purposes that are not inconsistent with its use as an airport; and (ii) subject to sub-clause 3.1(c), sub-clause 5.15 and clause 12A, construct, alter, remove, add to or demolish the Structures; and (c) must not, without the consent of the Lessor, alter or demolish the Structure known as the Kingsford-Smith Memorial in which the aircraft known as the Southern Cross is housed. Refusal of access in certain circumstances 3.2 The Lessee shall not be in default of its obligations under sub-clauses 3.1(a)(ii) and (iii) if it: (a) complies with a demand management scheme under the Airports Act; or (b) refuses to give access to the Airport Site to all or any of the aircraft of an aircraft owner or operator: (i) where the owner or operator of the aircraft has failed to pay to the Lessee within twenty-one (21) days after the due date any amount due to the Lessee by the aircraft owner or operator for the use of the Airport Site; and (ii) where the Lessee has notified the Lessor of its intention to refuse access at least fourteen (14) days in advance of the first day on which it intends to refuse access.' (original emphasis) 42 Clause 10 of the lease deals with sub-leasing by BACL. That clause provides: '10 SUB-LEASING (a) The Lessee must not grant any sub-lease or licence which is inconsistent with any prohibition on sub-leasing or licensing set out in the regulations to the Airports Act or, unless the Lessor agrees otherwise in writing, with any written commitment sought and obtained from the Lessee by the Lessor in relation to sub-leasing which specifies this clause 10. (b) Without limiting sub-clause 10(a), the Lessee must not permit a sub-lease or licence granted under this Lease to be held by a trust without the written approval of the Lessor.' (original emphasis) 43 BACL was required by cl 12 of the lease to develop the airport site at its own cost in accordance with a development plan to be provided to the Commonwealth as lessor, such plan not to constitute a major development plan or a master plan for the purposes of the A Act. 44 The effect of the lease to BACL was to: (a) vest in BACL a leasehold interest in all of the lands contained in the certificates of title specified in the extract from the Airports Regulations attached to the lease for a term of 50 years with an option for a further term of 49 years; (b) oblige BACL: (i) to provide for the use of the airport site as an airport; (ii) to provide access to the airport by interstate, international and intrastate air transport; (iii) not to use, or permit to be used, the airport site for any unlawful purpose or in breach of legislation; (iv) not to use any name other than Brisbane Airport without the lessor's consent; and (v) not to alter or demolish the Kingsford-Smith Memorial without the lessor's consent. (c) permit BACL to: (i) use the airport site for other lawful purposes that are not inconsistent with its use as an airport; and (ii) carry on building activities on the airport site. (d) permit BACL to grant a sublease or licence of, or in relation to, part of the airport site for any permitted user which was not inconsistent with the use of the airport site as an airport, nor prohibited by the Airports Regulations. 45 When BACL acquired Brisbane Airport it acquired an interest in property to the whole of the site of the Brisbane Airport and the improvements on it, together with the benefits and burdens transferred to it by the operation of the ATA. It acquired the land and the business of Brisbane Airport as a going concern. The user of the airport site, which BACL was permitted to engage in as lessee during the term of the lease, was controlled by the lease and any applicable statutory provision regulating user of the airport site. There has been no contention that the lease to Brisbane Airport is other than valid and in compliance with s 14(5).

CONSTRUCTION OF THE AIRPORTS ACT 1996 46 The objective of the ATA and the A Act was to carry into effect a policy to sell specific airports in Australia to qualified companies by creating a long term leasehold interest in the airport sites of each of the named airports to which the ATA and A Act applied. The creation of those leasehold interests brought into operation all of the common law rules touching and concerning leasehold interests in land and the rights and obligations of the lessee to the use and enjoyment of the land during the term of the lease. Accordingly, the A Act is to be construed in conformity with the common law and an intention to alter the common law principles should not be attributed to it unless such an intention is manifested according to the true construction of the statute, especially in relation to the common law principles respecting property rights: American Dairy Queen (Qld) Pty Ltd v Blue Rio Pty Ltd (1981) 147 CLR 677 at 682-683. 47 At common law, a tenant, in the absence of a contrary covenant, may use the demised premises for any lawful purpose: Evans and Smith 'The Law of Landlord and Tenant' 4th Ed. at 107. Further, periodic tenants have the right to assign, sublet or otherwise dispose of an interest in a lease: American Dairy Queen at 683. 48 Subject to the covenants contained in the lease for the Brisbane Airport, BACL has those common law rights under its lease. The question in these proceedings is whether as a matter of construction the ATA or the A Act operates to deny to BACL the enjoyment of its common law rights as lessee of Brisbane Airport. 49 Neither the ATA nor the A Act purports to control all of the rights of a lessee under an airport lease. The principal objective of the ATA was to provide for the leasing of certain airports to an airport-lease company with consequential provisions to transfer over the business previously operated at the airport by the FAC. The definition of 'airport lease' in both the ATA and A Act makes clear that it is a lease of the whole or part of the airport site of an airport where the Commonwealth is the lessor. Further, an airport site as defined in each Act is not limited to a place where the only permitted user of the site is as an airport. The definition specifically includes sites which are used or intended to be developed for use for purposes other than as an airport. 50 Section 14(5) contains what is mandatory for the Commonwealth to do in order to grant a valid airport lease. It does not purport to be a code as to the contents of airport leases. Rather, it simply provides for certain features which must be contained in a lease of an airport site for that lease to be a valid and effective lease of the airport. The sub-section deals with user of the airport site in a non-exclusive manner. It requires that the lease contain a provision that provides for use of the site as an airport. 51 What is important is that the legislature has chosen an airport lease (as defined) as the medium by which it will sell interests in the named core regulated airports in Australia, which interests may be used as security to obtain money to fund the capital requirements and operations of the airport-lessee companies. Additionally, it has left the issue of user of the airport site under the airport lease (other than use of the site as an airport) to the agreement of the Commonwealth as lessor and the airport lessee, such agreement to be provided for within the covenants contained in the airport lease. Thus the range of permissible uses of an airport site is that contained within the provisions of the airport lease itself; depending on the terms of the airport lease in relation to a particular airport that use may be limited to use as an airport or may permit other uses of the airport site additional to its use as an airport. That is, each airport lessee company is left to its common law rights under the airport lease in relation to an airport. 52 In my opinion s 22 of the ATA and s 14 of the A Act are core provisions around which the legislature has constructed the regime of regulation contained in the A Act and, as appears from the extracts from the second reading speeches set out above, that was the intention of the Commonwealth government in moving adoption of the two Acts by the Parliament. Because the permissible user under an airport lease controls the activities which the airport-lessee company may engage in in relation to the airport site, the airport-lessee company's development objectives for the airport (s 71(2)(a)) and the airport-lessee company's proposals for land use and related development of the airport site (s 71(2)(c)) must be limited to the range of permissible uses available to the airport-lessee company under the relevant airport lease. So understood the contents of any draft or final master plan concerning land use and related development will be specific proposals falling within the general range of permissible uses of the airport site. Where an airport lease permits uses other than as an airport those additional uses, if the airport-lessee company wishes to engage in them, must be included in a draft or final master plan and must address the extent of consistency (if any) with planning schemes in force under a law of the State or Territory in which the airport is located: s 71(6). The control of land use and related development at a core regulated airport, including the use of the airport site as an airport, lies in the power of the Minister to approve, or refuse to approve, a master plan under s 81. Once approved the final master plan controls land use and related development at a core regulated airport by limiting it to development which is consistent with what has been approved in the final master plan. 53 In the same way as the permissible uses available under the airport lease give content to the provisions of the A Act dealing with the content and approval of draft and final master plans in relation to an airport, it is the terms of the airport lease which determine the type of development which may be undertaken on an airport site and determine whether the development is a major airport development to which Div 4 of Pt 5 of the A Act applies. 54 In my view, there is nothing in s 31(2) or s 32(1) which would deny to an airport-lessee company the right to exercise its common law rights as lessee under an airport lease, and where the lease permits of uses of the airport site, additional to its use as an airport, to use the airport site for those additional uses. 55 Section 31 is concerned with the conduct of an airport-operator company. That company may be either an airport-lessee company or an airport-management company. The section is concerned with the conduct of the airport-operator company in using the airport site as an airport. Its purpose is to provide a defence to, or an immunity from, proceedings sought to be brought against the airport-operator company based upon its conduct in using the airport site as an airport. Section 31(2) provides the statutory authorisation to and imposes the statutory obligation on the airport-operator company to use the airport site as an airport. It is the operation of the section which renders the conduct lawful and gives rise to a defence to, or immunity from, proceedings based upon such conduct. The section does not deal with other uses of the airport site which are permissible under an airport lease. The failure to deal with such additional uses is entirely consistent with leaving such uses to be dealt with by the covenants in the airport lease and by the operation of the land use, planning and building controls in Pt 5 of the A Act. 56 Westfield and Centro submit that the phrases 'the operation … of the airport' and 'the development of the airport' when used in s 32(1) of the A Act are used in a sense other than which they have in ordinary speech. They submit that the words have a particular technical meaning in the airport industry and among professionals who work within the industry. In support of this contention they rely upon the expert reports of Dr Michael Tretheway. Dr Tretheway bases his views on the meaning of the phrases in s 32(1) on the use and meaning of the phrase 'airport operation' as used in the standards for airport operation established by the International Civil Aviation Organisation ('ICAO') and the standards developed by ICAO for 'airport development'. Thus, he expresses his opinion on the questions asked of him in his reports by reference to the terms 'airport operation' and 'airport development'. The effect of adopting this approach is that he limits his consideration of activities 'required for airport operation [to] those needed to ensure the safe, secure and efficient handling of passengers and goods carried aboard the aircraft'. The term 'airport development' he opines 'generally refers to the planning expansion, improvement, or construction of facilities that enhance airport operations either by ensuring the ability to continue operations at current levels or to accommodate growth in airport operations'. For the purpose of analysing the connectivity between an activity and airport operation and development, Dr Tretheway defines the airport as a 'facility'. He states, 'The airport is a facility whose purpose is to facilitate the movement of aviation traffic-aircraft, people and cargo': par 2.4.6. 57 The question of whether an expression is used in any other sense than that which it has in ordinary speech is a question of law: NSW Associated Blue-Metal Quarries Ltd v Federal Commissioner of Taxation (1956) 94 CLR 509 at 511-512; Collector of Customs v Agfa-Gevaert (1996) 186 CLR 389 at 379. 58 The phrases 'the operation of the airport' and 'the development of the airport' are not defined in the A Act and they have no technical legal signification. There are clear indications that the legislature, when it wished to deal with an airport in its use for airport operations of the type identified by Dr Tretheway it did so by referring specifically to the use of the 'airport site as an airport' or by using the specific phrase 'airport operations' or 'civil aviation operations at the airport': see for example the definition of 'airport site' in s 5, s 14(5)(d), s 14(5)(e) and s 14(5)(f), s 31(2) and s 116(2)(c),(d),(f) and s 116(3)(c),(d),(f). The A Act as a whole anticipates that some airport leases will contain provisions for user of the airport site for uses other than airport operations and that airports will be used and be developed for use for purposes other than airport operations: see the definition of 'airport site' in s 5; s 14(5)(d),(e) and (f) and the distinction between 'landside' and airside' proposals for use and development of an airport in s 71(2)(c) and s 71(3)(c). The A Act in Pt 6 deals with the environmental management of airports to which the Part applies. The Part is concerned with environmental impacts arising from the 'airport operations' or 'the civil aviation operations' at the airport site. The environmental issues arising from the development of the airport site, on the other hand, are dealt with generally under Divs 3 and 4 of Pt 5 of the A Act. 59 I am satisfied that the use of the phrases 'the operation of the airport' or 'the development of the airport' were intended by the legislature to bear their normal meaning having regard to their subject matter and context. The legislature did not intend the phrases to have a different meaning dictated by an industry meaning attributed to the phrases 'airport operation' and 'airport development' as used in standards developed by ICAO for aviation services provided at airports. 60 In Collector of Customs v Agfa-Gevaert the High Court adopted as a helpful starting point for statutory construction some observations of Lord Simon of Glaisdale in Maunsell v Olins [1975] AC 373 at 391. His Lordship said: 'Statutory language, like all language, is capable of an almost infinite gradation of "register" - ie, it will be used at the semantic level appropriate to the subject matter and to the audience addressed (the man in the street, lawyers, merchants, etc). It is the duty of a court of construction to tune in to such register and so to interpret the statutory language as to give to it the primary meaning which is appropriate in that register (unless it is clear that some other meaning must be given in order to carry out the statutory purpose or to avoid injustice, anomaly, absurdity or contradiction). In other words, statutory language must always be given presumptively the most natural and ordinary meaning which is appropriate in the circumstances.' 61 The subject matter of Div 6 of Pt 2 of the A Act is 'Restrictions on lessees' of airports to which the Division applies. The airports to which the Division applies include those airports which are core regulated airports as defined: s 12(1)(a). The core regulated airports are listed by the name of the airport. Thus Div 6 applies to Brisbane Airport: s 7(1)(d). 62 In their written submissions Westfield and Centro submit that it is not part of their case that an airport site cannot be used other than an airport. Rather, their case, they submit is that s 32(1) operates to limit the conduct which can be engaged in by an airport-lessee company to aeronautical activities associated with the operation of the airport for aviation purposes. In my view such a construction is inconsistent with the other provisions of the A Act and the objectives sought to be achieved by the A Act and the ATA as a package. 63 In my view the object of s 32, in the context of the rules about airport leases contained in s 14(5), is clear. It is that for each core regulated airport there will be one airport-lessee company which may acquire only one airport lease (ss 16, 17, 19 and 20), which must satisfy the ownership provisions of Pt 3 of the A Act (s 21) and whose sole business is the airport, meaning the whole of the airport site the subject of the grant under the relevant airport lease. So understood there is a consistency as to the rights of user under an airport lease, which an airport lessee company may exploit commercially on the land to which the airport lease relates. The construction contended for by Westfield and Centro denies to an airport lessee rights of user of land at an airport additional to its use as an airport where s 14(5)(d),(e) and (f) and the definition of 'airport site' in s 5 and s 4 of the ATA specifically provide for the possibility of additional uses of an airport site being permitted under the airport lease of the airport site. In my view, it was not part of the statutory scheme that s 32(1) would be given a construction which would render otiose the role to be played by the grant of an airport lease as the median by which to sell core regulated airports in Australia to private interests in order 'to promote the efficient and economic development and operation of airports' (s 3(c)) and which would restrict the enjoyment of the common law property rights the airport lessee obtained under the airport lease, where those rights included rights of user additional to the use of an airport for aviation purposes. 64 Subdivision A of Div 6 contains s 32. It is directed to airport-operator companies (as defined) of an airport and the object of the section is to stop the airport-operator company carrying on a business other than the business of airport-operator company of the airport of which it is either the airport-lessee company or the airport management company. Business which is not relating to, or incidental to, the operation and/or development of the airport is prohibited. The sufficiency of the nexus between activities which are to be regarded as relating to or incidental to the operation and/or development of the airport, and thus to be regarded as permissible business activities of the airport operator, is to be determined from the statutory context having regard to the scope of the A Act: PMT Partners Pty Ltd (in liq) v Australian National Parks and Wildlife Service (1995) 184 CLR 301 at 330-331; O'Grady v Northern Queensland Co Ltd (1990) 169 CLR 356 at 365, 367, 376. 65 In the case of Brisbane Airport, the section is addressed to BACL and instructs it that it may not engage in substantial trading or financial activities other than activities relating to, or incidental to, the operation and/or development of Brisbane Airport. The evidence of Dr Tretheway as to the meaning of airport operations and airport developments, while relevant to identifying what is involved in the use of an airport as an aviation facility for aviation purposes, is too narrow to be of any assistance in defining the limits of the business of Brisbane Airport as carried on by BACL as the airport-operator company of that airport. Further his evidence as to whether or not it would be good policy in terms of airport regulation to allow non aviation operations and related development on airport sites cannot be used to support a construction of s 32(1) which would prevent such activity when the legislature has demonstrated with the A Act and the ATA a policy to allow such additional non aviation uses on an airport site subject to regulation and control of those uses by Parts 4, 5 and 6 of the A Act. In any event, I am not persuaded that it is the accepted industry view that an airport is a place which may only be used for the provision of aviation services to civil aviation users. 66 I am satisfied that it is the common understanding in the airport industry, of airport professionals working in that industry and of the public in general, that the operation of airports may include the provision of services and uses of site which are not aviation uses, for example, a hotel or retail outlets. In this respect I accept the evidence of Dr Kasarda that among airport professionals an airport is not regarded as a facility for the purpose of aeronautical activities and for no other purposes. I accept his evidence that there are examples of airports around the world where there is a mix of uses including examples where there are non-aviation uses carried on which have no direct relationship to the airports use as an airport other than that all are managed together as an integrated airport business. It is clear that whether or not such integrated uses and developments can or will occur will depend upon government policy and the availability of land and locations which will permit such development to occur. Indeed, much of the evidence of Dr Tretheway under cross-examination, and the views he has expressed in his published writings, are substantially in accord with the views of Dr Kasarda as to what is happening in contemporary airport development. The differences of view were as to whether or not such developments were good policy or differences as to how best to regulate the uses in order to produce the best economic outcomes for the airports and aviation transport and for the wider economy which relies upon airports as the drivers of economic activity and economic development. 67 The effect of Dr Kasarda's evidence which I accept is that to operate and/or develop an airport by operating and developing it for a mix of uses which included both aviation and non aviation uses would not be outside the contemporary acceptance of what constitutes the operation and/or development of an airport. 68 There is nothing in the A Act or ATA, or in the secondary materials accompanying such Acts, which would indicate an intention to limit the activities of an airport-lessee company under an airport lease to a narrower range of activities than those carried on by the FAC under its statutory functions to operate the core regulated airports including the extended functions. Those functions included carrying on commercial activities at or in relation to Federal airports, using land at a Federal Airport for a purpose not directly related to aviation and constructing buildings on land at a Federal Airport for a purpose not directly related to aviation: s 7(2) and s 8(1)(b) of the FAC Act. The secondary materials set out above, the provisions of the ATA and the inclusion of s 87 of the A Act, demonstrate a statutory intention that an airport lessee would acquire the whole of the activities carried on by the FAC at a core regulated airport and would continue those activities and develop the lands comprised in the airport lease, in accordance with the lease terms with or without the benefit of land use planning already undertaken by the FAC in respect of aviation and non-aviation uses. 69 The trading and financial activities of the airport-operator company which are prohibited under s 32(1) are those which do not relate to, or are not incidental to, the operation and/or development of the airport by the airport-operator company under the applicable airport lease or airport management agreement. If a trading or financial activity is one carried on under, and in accordance with rights given by an airport lease to an airport-lessee company to engage in the activity on the airport site, then the activity is part of the activities involved in the operation and/or development of the airport to which the airport lease relates. The prohibition contained in s 32 is in respect of substantial trading or financial activities not related to or incidental to these activities. 70 I am satisfied that on the proper construction of s 32(1) of the A Act, trading or financial activities carried on by an airport-operator company for a purpose allowed under the airport lease of an airport which is a purpose additional to the use of the land as an airport, are not trading or financial activities prohibited by s 32(1). Nor, are the activities related to or incidental to such additional user within the prohibition contained in s 32(1). 71 I am also satisfied that there is nothing in the A Act or the ATA which operates to take away the right of an airport lessee company to grant a sublease of part of an airport site for a purpose allowed under the airport lease, such right to sublet being a common law incident of the airport lease: American Dairy Queen (Qld) Pty Ltd at 683. However, the right to sublet and licence, under an airport lease is subject to regulation in accordance Subdiv C of Div 6 of Pt 2 of the A Act. That is, the power to sub-lease and licence may be subject to regulation by Regulations made under the A Act.

THE POSITION OF BACL UNDER THE LEASE FOR BRISBANE AIRPORT 72 BACL is entitled to use part of the site of the Brisbane Airport for any use which is not inconsistent with the use of the site as an airport. Accordingly it was entitled to include in a draft Master Plan its development objectives for the Brisbane Airport and its proposals for land use and related development of the airport site where those proposals included land use and related development which was other than the use of the site as an airport, and it was obliged to include such proposals if it wished to obtain Ministerial approval of them and to obtain their inclusion in the final Master Plan for the airport. 73 BACL is entitled to enter into a sub-lease of, or a licence relating to, a part of the site of the Brisbane Airport for a use or purpose other than the use of the site as an airport. 74 The only limitation on the rights of user of BACL under the Brisbane Airport lease is that no additional user may be engaged in which is inconsistent with the use of the site as an airport and the use must be included in a final Master Plan for Brisbane Airport. The same limitation carries over to its right as airport-lessee company for Brisbane Airport to grant subleases or licence relating to the airport site which are not prohibited by regulations under the A Act. Any development related to such additional user is subject to the development and building controls in the A Act. 75 There is no allegation in the SOC and it was not part of the case made against BACL that the land user pleaded in pars 6 to 7F inclusive of the SOC if made out would be inconsistent with the use of Brisbane Airport as an airport and therefore an impermissible user under the airport lease granted to BACL on 2 July 1998. The case against BACL is that it cannot operate a business at Brisbane Airport which involves trading or financial activities which are not related to or incidental to the use of Brisbane Airport as an aeronautical services facility by civil aviation users. 76 The original final Master Plan for Brisbane Airport was prepared and approved in 1996. Of the 2687 hectares which comprise the airport site it identified, around 400 hectares as available for commercial and industrial development. One of the precincts identified was a site of approximately 80 hectares at the southern entrance to the airport. What was proposed was a mix of business and commercial activities characterised by stand alone buildings surrounded by convenient car parking and extensive landscaped areas. The development was referred to in the Master Plan as 'Gateway Park'. Subsequently, the proposed development was to be known as 'Number 1 Airport Drive'. 77 The Gateway Park proposal was substantially based on an FAC proposal for the same site which is set out in a concept plan made in May 1996 headed 'BRISBANE AIRPORT Commercial Development Concept' and entitled 'Gateway Precinct'. The proposal included, among other commercial elements, a Retail Warehouse/Factory Outlet. 78 The detailed planning of Gateway Park by BACL commenced in March 1999 with the preparation for BACL of a consultant's report entitled 'Brisbane Airport Development Strategy Framework'. It was followed by the appointment of project managers and consultants in the period March to May 1999 and the production of Financial Feasibility Models for the Gateway Park project on 7 July 1999. On 30 July 1999 the Board of BACL approved management's proposal to develop detailed financial usage and development plans for Gateway Park. In December 1999 a 'Market Assessment of Proposed Gateway Park Retail Development' was produced by Urban Economics for use by BACL. 79 On 9 May 2000 BACL engaged The Buchan Group, Architects and Planners, and Stephen Pate Landscape Architects for the Gateway Park Development. The Buchan Group produced the first Master Plan for the Gateway Park Development in July 2000. The drawing numbered MP.01 is item 4 in Exhibit 13 and is the first of a series of Master Plans and various versions of Master Plans produced between July 2000 and 23 October 2003 which totalled not less than 60 layout versions. The original proposal was for a two stage development containing 71,650 square metres of retail space with 2870 car parking spaces. 80 In August 2000 APP Projects (project managers for the Gateway Park development) produced, in consultation with the consultants appointed to the project, a series of plans with the title block 'Gateway Master Plan' entitled 'Infrastructure Development - Stage 1' (Drawing No MP-01); 'Stage 1 Development' (Drawing No MP-02); 'Ultimate Development' (Drawing No MP03) and 'Ultimate Development' (Drawing No MP03 - Version 4). APP Projects also produced a document entitled 'Draft Development Plan for Gateway Stage 1 Development' to which the drawn plans were appended. The report stated in part: '3.7 Precincts 3.7.1 Hotel 3.7.2 Golf Course … 3.7.3 Retail As mentioned previously, the retail area will feature several key precincts, each with their own target market and identifiable character. The overall character of the retail area will be clean and contemporary, in keeping with the aesthetic of the Airport Development. Large retail buildings, wherever possible, will have "active" shopfronts and facades, creating life to carpark and street frontages. Colonnades along footpaths will create "verandah-like" spaces softening large scale buildings and providing sheltered access in and around the centre. The centre will focus around a "High Street" which will be closed off to through traffic. It will provide a variety of indoor and outdoor spaces for retail and public space. This street should have all the complexity of the old High Street with exciting shopfronts and facades, cafes and restaurants all within a landscaped and sheltered environment. Key terminating elements or focal points will be created at the ends of streets or major pedestrian spines running through the site, providing opportunity for important built forms and retail exposure. The retail area needs to project an image of entertainment and energy, above all a "place for people". Through the use of strong environmental graphics and signage; identification of the centre, specific precincts and individual tenancies are all able to develop a character which compliments and enhances the overall architectural language. The image and quality of the retail area will be to a much higher level than seen at most suburban retail/warehouse developments. The environment shall be enhanced by a substantial amount of shade and covered outdoor spaces suitable for both outdoor cafes and as covered access for shoppers to load goods into vehicles. … 3.7.4 Commercial … 5.3 Staging The development is currently defined into three distinct elements: · Infrastructure Consisting of roads, services and street landscape to suit the landuse development of the following: - Retail - Duty free/hardware - 27000 NLA - Hotels - Two 150 bed hotels - Commercial - Office block of 6000 NLA - Golf Course - 18 hole pitch and putt, 10 Ha. · Stage 1 - Building Development The delivery of the built form for retail, hotels, golf course and commercial building has a time frame of 2 - 4 years. · Ultimate - Gateway A mixed use development of retail, commercial and leisure providing a gateway link between the airport and the city of Brisbane and South East Queensland has a time frame of 8 - 10 years. The nature of this development, as with all developments, will see the stages modified and broken down into substages. A development programme is included in Section 8.' (original emphasis) 81 Section 8 of the document stated: '8 DEVELOPMENT PROGRAMME Detailed in Appendix B is the programme for infrastructure and Stage 1 works. A separate development programme for the Ultimate Development will be prepared. We note the following regarding the infrastructure/Stage 1 programme. 1. Infrastructure - The impact of the need for surcharges varies the time needed from between 12 months to potentially 2 years delivery. Detail testing will provide assurity regarding this key issue. 2. Golf - Programme is on the basis of two growing seasons, however there are ways to fast track delivery if appropriate. 3. Retail - The design and construction is relatively straight forward. The key drivers are pre-commitment, planning and having the time taken due to geotechnical issues. 4. Commercial - The key issue is pre-commitment. 5. Hotel - The nature as to where they are allocated on the site will enable the expeditious development subject to pre-commitment.' (original emphasis) 82 Appendix B contained a chart of time lines for the completion of infrastructure and Stage 1 of the Gateway Park Development. 83 The Rider Hunt cost analysis for the Stage 1 works attached to the Draft Development Plan was for a total cost for Stage 1 of $39,389.504. 84 On 31 August 2000 BACL held a function at the International Terminal at Brisbane Airport to launch 'Brisbane Airport City'. As part of that presentation the properties development manager of BACL, Mr Robert MacTaggart, said: '… One of our most exciting developments is the 80 - hectare Gateway precinct, at the entrance to the airport with easy access to both the Gold and Sunshine coasts. Civil construction for this $200 million development should start next year. Gateway is business zoned for premises including offices, high tech warehouses, automotive services, hotels and tourist and leisure facilities. It set to become the central business and leisure hub for the Australia TradeCoast area and an important service centre for businesses on airport and for the surrounding communities. Gateway is where the action will be. It may include a golf course and it is likely to house the airport's third passenger rail station.' (original emphasis) 85 In October 2000 Colliers Jardine were appointed leasing agents for the Gateway Park. By letter dated 12 October 2000 Mr MacTaggart set out his proposed action on obtaining sufficient commitment from tenants to support a formal proposal to the Board of BACL to commence Stage 1 construction. 86 On 2 February 2001 the Board of the BACL approved commencement of Stage 1 Gateway Bulk Earthworks. On 23 August 2001 BACL made application to the Building Controller for approval for bulk earthworks and site preparation works for the Gateway Park Stage 1. The value of the works as disclosed in the application was $3.5 million. A works permit dated 24 September 2001 was issued by the Building Controller in respect of such earthworks. BAC entered into a works contract with Abigroup Contractors Pty Ltd on 4 February 2002 to construct the Stage 1 bulk earthworks at the Gateway Park site. On 12 September 2002 an amended work permit was issued in respect of the Gateway Park Development. This permit allowed for the carrying out of bulk earthworks and site preparation for Stage II, the cost of such works being stated in the permit as $900,000. 87 On 1 November 2002 the Board of BACL approved expenditure up to an amount of $9.8 million for the construction by a contractor of a building ('DFO1') to be sub-leased to an unrelated entity to be used for factory outlet sales. On 25 July 2003 the Board of BACL approved expenditure in excess of $10 million for construction of a second building ('DFO2') or a larger building than that proposed to be constructed as DFO1. On 28 July 2003 BACL and DFO entered into an agreement for lease whereby BACL agreed to construct and sublease to DFO the building DFO1 for use as a factory outlet for 20 years. 88 On or about 26 February 2004 BACL submitted a draft development plan entitled 'Outlet Centre Development Draft Major Development Plan' seeking approval under s 94 of the A Act. The draft development plan provided for works which included the construction of the two buildings DFO1 and DFO2 with a combined floor area of approximately 21,340 square metres, the building being separated by a concourse area of approximately 908 square metres. The works include surface parking for 1008 cars and provides for the carrying out of certain earthworks, landscaping drainage, water works and other works. The draft major development plan was approved by the Minister on 25 June 2004. On 30 July 2004, DFO entered into an agreement to lease in respect of the second building (DFO2) and the concourse linking DFO1 and DFO2 for a term of 20 years. BACL has let contracts for the construction of the Outlet Centre and associated works. 89 On 9 April 2003 BACL entered in an agreement to lease an area of approximately 170,000 square metres for a golf course area including approximately 20,000 square metres as a golf practice range with SCG Projects on the terms contained in a written agreement for lease dated 9 April 2003. 90 Since October 2000 BACL has been actively seeking tenants to pre-commit to becoming tenants in a mixed use business, retail and leisure development on the site originally called the Gateway Development and now being marketed as Number 1 Airport Drive. The development is described in the current final Master Plan for Brisbane Airport approved by the Minister under the A Act on 7 May 2004 in par 13.5.5 as follows: '13.5.5 NUMBER 1 AIRPORT DRIVE Number 1 Airport Drive is intended to develop into Australia's first fully-integrated airport business, retail and leisure community. This will become Brisbane Airport's signature development and will provide a striking and distinctive contemporary design as visitors enter the airport at the existing southern entrance off the Gateway Motorway. Number 1 Airport Drive will feature a diverse and vibrant business centre including retail offices, golf course, visitors centre, hotels, mixed-use business facilities, offices, direct factory outlets, homemakers centre, tourism outlets, health centres, cafes and dining facilities. Facilities within this precinct will be characterized by stand-alone buildings setback from, and with good exposure to major roads and surrounded by convenient car parking areas, and extensive landscaped areas, particularly along road frontages. Built form will be characterized by landmark, attractive buildings set within landscaped grounds. This Precinct provides for a mix of business, commercial, retail and hotel activities that seek a location outside of the Brisbane CBD. Number 1 Airport Drive will form the business, retail and tourism hub for Brisbane Airport."' 91 The marketing of the development, which is directed to potential sub-lessees of lettable space in the proposed development, is, as appears in the material on the website maintained by BACL, of a fully integrated mixed use airport development with as constructed depictions of an aerial view of Number 1 Airport Drive, the Direct Factory Outlet Centre, the Shopping Villege, the Homemaker Centre and the Town Centre. 92 On the evidence I find that: (a) BACL intends to develop Number 1 Airport Drive generally in accordance with its stated objectives in par 13.5.5 of the current final Master Plan for Brisbane Airport. However, it has not resolved on the final form of the development. Save for the Outlet Centre development, the development remains in the realm of concept development; (b) There is no final design for the layout of Number 1 Airport Drive or for any building to be constructed within the development other than that contained in the Major Development Plan for the Outlet Centre. The final design of the Number 1 Airport Drive development will depend on the requirements of prospective tenants and what they are prepared to commit to under agreements for lease by way of sublease. It will also depend upon a consideration of new design concepts arising from an architectural competition for design concepts for the site won by Donovan Hill Architects. The new concept with its 'spine' is radically different from the work of the Buchan Group as reflected in the MPS-09 series of drawings. Further work on developing the new concepts is to be undertaken under Letters of Engagement of Donovan Hill and the Buchan Group dated 18 June 2004. (c) The development of Number 1 Airport Drive will occur at a rate determined by the willingness of tenants to enter into binding agreements for lease. The Board of BACL will not authorise expenditure beyond $1 million (the limit of management's authority to spend) in the absence of pre-commitment by a tenant to sub-lease a building; (d) The development of Number 1 Airport Drive will proceed as a staged development to match tenant pre-commitment and to avoid if possible the need to obtain a major development plan approval for any stage of the development. However, if there existed sufficient demand to justify the undertaking of a major airport development (as defined), BACL would (as it has done with the Outlet Centre development) prepare and seek approval of the Minister for any necessary major development plan; (e) BACL has no intention of doing other than constructing and leasing to tenants as sub-lessees buildings in the Number 1 Airport Drive development for a range of uses determined by BACL. Specifically BACL does not have any intention of operating any business of a type alleged in paragraphs 6 and 6A of the SOC; (f) BACL has not entered into any agreement to lease other than those with DFO and for the golf course and has not agreed to construct and presently does not intend to construct any new building on the site other than DFO1 and DFO2 for sub-letting; and (g) BACL has under consideration a proposal, if it successfully develops Number 1 Airport Drive in accordance with its development objectives as disclosed in the current final Master Plan for Brisbane Airport, to market the completed development to investors as a real property portfolio investment if it can lawfully do so having regard to the provisions of the A Act. Such an intention demonstrates that the operation of Brisbane Airport for aviation purposes is not interdependent with the development of Number 1 Airport Drive. Both uses can stand as separate uses to be exploited independently of each other. That said, the circumstance of two independent uses does not mean that the development of the Site in this way is not a permissible user under the airport lease. 93 In my view BACL is entitled to develop Number 1 Airport Drive generally in accordance with par 13.5.5 of the current final Master Plan for Brisbane Airport because it is entitled under the provisions of its airport lease to use the site for uses additional to that of an airport which uses are not inconsistent with its use as an airport and because the proposed development was included in the original final Master Plan and is included in the current final Master Plan approved by the Minister under the A Act. 94 In my view BACL was entitled to enter into the agreements for lease which it has done with DFO for the construction and sub-lease of the two buildings DFO1 and DFO2, there being no allegation that the sub-leases were prohibited or contained terms prohibited by regulations made under the A Act. I am similarly of the view that BACL was entitled to enter into the sub-lease for the development of the golf course. 95 To lease buildings constructed by it to sub-tenants, for use by the sub-tenant to carry on a particular business, is not the carrying on by BACL of the business of the sub-tenant. The commercial activity engaged in by BACL is the improvement and leasing of part of the airport site as sub-lessor. To engage in such conduct is not to engage in the businesses or activities listed in pars 6 and 6A of the SOC. 96 Westfield and Centro fail to make out the contravention of s 32(1) pleaded in par 10 of the SOC. 97 For the reasons stated above, I do not accept the construction contended for by Westfield and Centro of s 71 of the A Act. It follows that the current final Master Plan for Brisbane Airport was one which complied with the requirements of s 71 and thus was capable of being approved by the Minister pursuant to s 81. That approval was given on 7 May 2004. Accordingly, the current final Master Plan for the Brisbane Airport is a valid and effective Master Plan for that airport for the purposes of the A Act. Westfield and Centro fail to make out the allegations pleaded in pars 10C, 34A and 34B of the SOC. 98 Westfield and Centro contend that Number 1 Airport Drive is a single integrated development which required a major development plan approved by the Minister under s 94 before construction of the development began with the commencement of bulk earthworks at the Site. They contend that the term 'development' when used in s 89(1) should be given its ordinary meaning and construed as meaning the unfolding or the bringing out of some latent capability in the property: Broken Hill Proprietary Company Ltd v Commissioner of Taxation (1968) 41 ALJR 377 at 381. They further contend that any activities which physically alter the land with some degree of permanency to the land itself fall within the meaning of development: University of Western Australia v City of Subiaco (1980) 52 LGRA 360 at 364. Their argument on this issue involves the following proportions: (a) BACL intends to develop Number 1 Airport Drive as a mixed use integrated development; (b) The earthworks undertaken are a necessary step to be taken to allow for construction of the buildings which will comprise the development; (c) Section 90 contemplates that an approved major development plan will be obtained before construction of a major airport development commences; (d) The proposed development of Number 1 Airport Drive is a major airport development within the meaning of s 89 for which an approved major development plan was required; (e) BACL has no approved plan for the proposed development of Number 1 Airport Drive; (f) The commencement of the earthworks constituted a contravention of s 90(1) by BACL; and (g) The approved major development plan which BACL obtained in 2004 in respect of the Outlet Centre Major Development is not a valid approval because: (i) it does not comply with s 91 in that it does not cover the other proposed buildings and precincts which together make up the Number 1 Airport Drive development; and (ii) the approval does not contain the material required by s 91(1)(a),(b),(c),(d) and (h) in any event. 99 Section 89(1) defines the meaning of a 'major airport development' for the purposes of Div 4 of Pt 5 of the A Act. The section, as a matter of construction, includes its own internal definition for the purposes of the section of what is a development that is carried out on an airport site. A development for the purposes of s 89 consists of one of the activities specified in sub-par 1(a) to (o) inclusive. Each of the sub-pars describes an activity which has a stated outcome, for example, in (1)(a) constructing a new runway. Activity involving a development of whatever nature that is carried out at an airport site that is going to have or may have environmental or ecological outcomes are dealt with in pars (1)(m) and (1)(n). Par 1(o) simply provides for an activity to be added to the list by regulation. 100 As a matter of construction s 89(1) does not apply to developments generally carried on at an airport site save in respect of their possible adverse ecological and environmental impacts. The scheme of the section is to deal with specific development activity and to require in respect of that activity that an approved major development plan be obtained. There is no allegation that sub-pars (1)(m),(n) or (o) have any relevant operation in respect of the proposed Number 1 Airport Drive development. The only possible sub-paragraph which may have a relevant operation with respect to any proposed development at Number 1 Airport Drive is sub-par (1)(e). That sub-paragraph concerns constructing a new building. In that case the applicable definition is: '(1) For the purposes of this Division, a major airport development is a development that is carried out at an airport site and that consists of: … (e) constructing a new building, where: (i) the building is not wholly or principally for use as a passenger terminal; and (ii) the cost of construction exceeds $10 million or such higher amount as is prescribed.' 101 Division 4 of Pt 4 of the A Act creates a regime for the control of certain types of development at airports. It requires in respect of major airport development (as defined) that the airport lessee company will not carry out such development otherwise than in accordance with a major development plan approved under Div 4. It provides for the creation of a draft major development plan by the company, which plan is to include the materials specified in s 91, and is to be exposed for public scrutiny and comment in accordance with s 92, before being given to the Minister to approve the plan or to refuse to approve the plan under s 94(2) having regard to the criteria in s 94(3) and s 94(5). The means chosen to enforce the obligations cast on the airport lessee company by the Division is the prohibition and sanctions contained in s 90. 102 Section 90 prohibits a major airport development (as defined) being carried out unless: (a) There is a major development plan approved under the Division relating to each major airport development sought to be carried out: (s 90(1) and s 90(4)); (b) The major airport development to which the approved plan relates is carried out in accordance with the approved plan: (s 90(1)(c) and s 90(4)(c); and (c) Any condition attaching to the approval is complied with: (s 90(2) and s 90(5)). 103 The requirement in (a) is a precondition to carrying out a major airport development. The requirements in (b) and (c) are designed to enforce compliance with the provisions of the approved plan and with any conditions attaching to the approval. To engage in conduct which contravenes the requirements in (a), (b) or (c) is a criminal offence: (s 90(3) and s 90(6)). 104 Division 4 is intended to operate whenever there is a major airport development as defined. The Division is not intended to be applicable to any activities which may be within the general concept of development at an airport but are not within one of the specific pars of s 89(1)(a)-(l) inclusive. The ordinary concept of development to which Westfield and Centro point in the two decisions referred to has no relevant operation for the purposes of s 89(1) other than in respect of developments falling within s 89(1)(m) and (n) which may have the stated environmental or ecological outcomes. 105 Section 89(1)(e) is concerned with constructing a new building where the conditions in (i) and (ii) are both satisfied. Section 89(1)(e)(ii) is concerned with the cost of the new building which is to be constructed at the airport. The requirement operates as a condition precedent to the application of the definition to the activity of constructing a new building. The threshold to be satisfied is that the cost of construction of that building will exceed $10 million. The clear legislative intention is that constructing a new building where the cost of construction will not exceed the minimum amount is not a development which requires a major development plan. However, such a new building remains subject to s 89(1)(m) or (n) if it will have the ecological or environmental outcomes provided for in those paragraphs, the building controls in Div 5, and, that constructing it for its intended use is consistent with any final master plan in force for the airport. 106 An airport-lessee company does not need an approved major development plan until it begins constructing a new building and only then when the reasonable transactional costs it has agreed to pay or incur (arising out of arms length dealing) to complete construction of the new building exceed $10 million: s 89(1)(e) and s 89(3). Until that time s 90 of the A Act does not have any possible application. 107 In my view, on its proper construction the applicability of s 89(1)(e) is intended to operate in respect of the specific activity dealt with, namely the constructing of a new building where the conditions in (i) and (ii) are made out. It was not the intention of the legislature to amalgamate the activity involved in building two or more buildings on the airport site and applying the $10 million minimum threshold to the aggregate cost of constructing all the buildings. Nor is s 89(1)(e) concerned with the relationship between buildings. Each new building, the cost of construction of which exceeds $10 million and which is not a passenger terminal, is for that reason alone a sufficiently substantial development to be treated as a major airport development. Accordingly, s 23 of the Acts Interpretation Act 1901 (Cth) while allowing s 89(1)(e) to be construed as relating to constructing a new building or new buildings, does not operate to remove from each of those buildings the necessary qualifications contained in (i) and (ii). That is, s 23 of the Acts Interpretation Act does not allow for the reduction of the minimum threshold fixed by the legislature as the cost of construction of a new building before it would become a major airport development. 108 Even if, contrary to my view, s 23 of the Acts Interpretation Act does allow the costs of multiple buildings to be aggregated to satisfy the $10 million threshold, Westfield and Centro fail to make out a case that BACL, within the meaning of s 89(1)(e), has commenced, or is about to commence, the activity of constructing a new building on the site without having a necessary Major Development Plan and thereby has engaged in, or is threatening to engage in, conduct contrary to s 90(1). 109 Westfield and Centro submit that whatever form the development at Number 1 Airport Drive takes it will involve the construction of a number of buildings and that the value of those buildings will exceed $10 million in total. Accordingly they submit the earthworks and provision of roadways and services is the commencement of construction of those buildings because it is a necessary step in their construction. In support of the submission they rely upon a decision of the High Court in Owendale Pty Limited v Anthony and Another (1967) 117 CLR 539. 110 The issue in Owendale Pty Limited v Anthony was whether or not a lessee of a lease under the City Area Leases Ordinance 1936-64 (ACT) complied with a covenant to commence to erect a building on the leased land by a specified date. A contractor engaged by the lessee began to remove trees from the site on the day before the expiration of the last notice served by the Commonwealth as lessor. By a majority the Court held that the lessee had 'commenced to erect a building within the specified time'. The important factual circumstances which lead to the majority conclusion were that once the clearing work commenced it continued until the site was cleared when the builder immediately entered onto the site and commenced to excavate the site to accommodate the hotel to be constructed on it. At the time that the earthworks commenced with the clearing of the site the plans for the building had been approved by the Commonwealth and a construction contract let to a builder which provided for the necessary clearing and excavations as part of the contract works. Because of a difficulty with the builder commencing the contract works prior to the specified date, the lessee engaged another contractor to commence the clearing and start the site preparation prior to the deadline which the contractor did. 111 In these circumstances Taylor J, with whom Barwick CJ agreed, said at 598: 'It was not contended that the operations which commenced on 14th April 1965 were undertaken as a pretence or that from then on until 7th May 1965 the work did not proceed continuously and it seems that the notice of determination was given by the Commonwealth in ignorance of the fact that operations had commenced. Nevertheless, the Commonwealth refused to reconsider the matter and the notice stands. In my view, however, the work which commenced on 14th April 1965 marked the commencement of the work for the erection of the building (cf. London County Council v. Marks & Spencer Ltd. ([1952] Ch. 549; [1953] A.C. 535) and constituting, as I think it did, compliance with the direction in the current notice pursuant to s. 22(5), no right to determine the lease arose pursuant to s. 22(6) of the Ordinance.' (original emphasis) 112 The other member of the majority, McTiernan J was of the view that 'the work was an initiatory step in the building operations which the performance of the lessee's covenant would involve': at 580. 113 Windeyer J, the judge at first instance, and the minority on appeal, Kitto and Owen JJ, were of the view that the work done did not go beyond preparation of the site with a view to erecting a building. Kitto J (at 583) came to the view he expressed in reliance upon a distinction drawn in Marks & Spencer Ltd v London County Council [1952] Ch 549 at 563, 564 between beginning 'works for the erection of a building' and beginning 'the erection of a building'. 114 In the Marks & Spencer Ltd decision, to which Taylor J also referred, the issue under consideration was whether or not 'works for the erection of a building' had been begun before a specified date where Marks & Spencer Ltdhad prior to that date demolished an existing building on a site where it intended to construct a new building. Harman J at first instance was of the view that there was a distinction between 'works for the erection of a building' and 'the erection of a building'. Although the former was a broader concept it still required an immediate relationship between the work and the commencement of the building. His Lordship was of the view that no such relationship existed because the demolition was finished before any construction on the building started. On appeal in the English Court of Appeal by a majority (Jenkins and Morris LJJ), it was held that the demolition works while not the erection of a building were 'works for the erection of a building' because that phrase included operations which were not in themselves building operations (Jenkins LJ at 563-564) and meant the totality of the things done for the purpose of erecting the building (Morris LJ at 573). The majority view was affirmed on appeal by the House of Lords for the same reasons as those expressed in the Court of Appeal: see [1953] AC 535 at 541, 543. 115 The reasoning of Jenkins LJ in Marks & Spencer Ltd v London County Council is important because it exposes the factual similarities between that case and Owendale Pty Limited v Anthony and reveals why Taylor J was of the view that it was relevant to the issues before the High Court. Jenkins LJ said (at 562-563): '… The plaintiffs had entered into a building agreement with respect to the site, under which the plaintiffs were bound, directly or indirectly, to the Portman Estate to erect a building in accordance with certain plans and specifications approved by the Portman Estate. Further, the plaintiffs had obtained planning permission, subject to the conditions which my Lord has mentioned, for the erection of that same building. Further, with a view to carrying out the project and in accordance with their contractual obligations under the building agreement, the plaintiffs had cleared the site for the erection of the projected new building, although the supervening difficulties occasioned by rumours of war and ultimately by war itself had prevented them from carrying the project any further than that.' 116 His Lordship continued (at 563 - 565): 'Returning to the phrase against that background, it is "works for the erection or alteration of a building." That phrase seems to me to be a phrase of wide import, and the inference is that it was adopted so as to cover a wide field of work. If the legislature had intended to confine the application of section 78(1) to cases where buildings had been begun but had not been completed, inevitably the section would have run: "Where the erection or alteration of a building has been begun "but not completed." Here we have "works for the erection "or alteration of a building," so as to include, in terms, operations which are not in themselves building operations. For my part I find irresistible the conclusion reached by the judge as to the meaning of these words when he said: "It is clear that the "erection of a building need not have been begun, because "otherwise no meaning would have been given to the words "'works for.'" It is, therefore, in my view, not necessary, in order to bring a case within the subsection, that one should be able to point to some work of construction on the site and say: "That is part of the new building the erection of which "has been begun." It is enough if, on the facts, one can conclude that on the site in question operations have been carried out which are part of the totality of operations necessary on that site for the purpose of carrying to completion a particular building project. Where it is shown by the evidence that a building owner had in view a particular building project to be carried out on a site already built upon, and that his intention to carry out that project had never been abandoned, then work such as the demolition of the buildings already on the site, as a necessary preliminary to the carrying out of the building project, would, in my judgment, be "works for the erection or alteration of a "building" within the meaning of the subsection. Of course, where the works are of such a nature that in themselves they might or might not be works which were being carried out for the purpose of executing some particular building project, it may well be that the onus is then on the building owner to show, and to show clearly, that his intention from the outset had been to carry some particular building project through to a finish. Obviously, where a man had started pulling down a house with no more than a general intention of erecting something else in its place, he could not come within the subsection. Indeed, the very frame of the subsection and the whole scheme of the Act would exclude such a one from the benefit of the subsection, for section 78(1) in itself contemplates, and necessarily refers only, to a case where there is a projected building or alteration in respect of which planning permission has been obtained. In the present case, on the footing that the construction of the phrase "works for the erection or alteration of a building" which I have adopted is the right construction, there is, to my mind, no doubt that in commencing and carrying out through their contractors the demolition of the existing buildings, the plaintiffs had begun works for the erection of a building. There is no doubt about their intention. There is no doubt about the identity of the projected building. Not only was it the building referred to in the planning permission obtained in 1938, but it was also the building which the plaintiffs were under contract, directly or indirectly, with the Portman Estate to erect. The judge, as appears from his judgment, might well have come to the same conclusion as I have reached but for the fact that the plaintiffs, in the events which happened, entered into a contract for the demolition of the existing buildings with a demolition specialist who did not undertake any of the work of constructing the new building; whereas, so far as the work of constructing the new building was concerned, they had dealt with that separately through a firm named Bovis Ld. and had only made provisional arrangements with them for the building work, not amounting to a firm contract. But for my part, provided it is plain that the building owner concerned did genuinely intend to erect a particular, identifiable, projected building on the site of existing buildings, it cannot matter what contractual arrangements he may have made as regards the demolition of the old buildings and the erection of the new one. That is to say, the answer cannot depend on whether he has got one contractor to pull down and rebuild or has got two contractors, one of whom is going to do the demolition and the other the construction. Here I think the projected building is well identified, if only by reference to the building agreement.' 117 In both Marks & Spencer Ltd v London County Council and in Owendale Pty Limited v Anthony there was in contemplation a particular building which the owner intended would immediately be constructed upon completion of the preliminary preparatory site works. That is not this case. Even if 'constructing a new building' in s 89(1)(e) is to be construed as meaning or including 'works for the erection of a new building' those works will not commence if there is no specific building then in contemplation which can be identified. A general intention to build some sort of building on the site at some indeterminate further time does not have the necessary association of immediacy between the site works and the later construction of a new building for the site works to be regarded as the commencement of constructing the building. 118 I accept the evidence of Mr MacTaggart that the bulk earthworks involved the extraction of material from the golf course site and placement of that material with other imported material to ensure that the Site, the subject of the series of Master Plans for the Number 1 Airport Drive development concept, complied with flood level requirements. The earthworks, the road works and the provision of services were to develop the Site to the stage where construction of a building or buildings could be undertaken if BACL resolved by the Board to proceed to construct a building or buildings on the site and incur the costs of construction involved. None of the roadworks and services provided to the site at the time it was resolved to undertake the works or in their execution was building specific. Further, I find that BACL has not resolved to construct any specific buildings other than those provided for in the approved Major Development Plan for the Outlet Centre. I am satisfied that it is probable that BACL will resolve in the future to commence construction of further new buildings as part of the Number 1 Airport Drive development. However, I am satisfied that that will not occur until the design concepts introduced as a result of the architectural competition are finalised and buildings complying with the then design criteria, and satisfactory to the needs of tenants prepared to commit to a sublease, are designed and building approval is sought for their construction. There is no evidence that BACL presently intends to construct any building in breach of s 90, or intends to do other than obtain any necessary approved Major Development Plan, if it wishes to commence constructing a building which requires such an approved plan. 119 The works done under the two permits issued by the Building Controller were carried out to prepare the whole of the Site for development generally in accordance with the development's objectives stated in the original final Master Plan for Brisbane Airport and the design concepts developed between 2000 and 2003. As I have found earlier, they were not specific to any one or more buildings. There had been no firm decision made to construct any particular building. The works were completed before the Major Development Plan for the Outlet Centre was approved by the Minister in June 2004. At the time of the trial, although the contracts for the construction of DFO1 and DFO2 had been let, the activity of constructing those buildings on site had not commenced. 120 Section 89(1)(e) has no relevant operation with respect to the development pleaded in pars 6, 6A and 7 of the SOC unless and until BACL commences to construct a new building to carry the concept of such a development into effect. At that time whether or not s 89(1)(e) and Div 4 of Pt 5 of the A Act will apply to such an activity will depend, inter alia, on whether the cost of construction of that building will exceed $10 million or any then applicable minimum threshold. The carrying out of the bulk earthworks and the provision of roads and services, pursuant to the work permits obtained on 20 September 2001 and 12 September 2002, was not the activity of constructing a new building within the meaning of s 89(1)(e). 121 The contention that the approved Major Development Plan for the Outlet Centre development comprising the construction of DFO1 and DFO2 was invalid and ineffective was in part based upon the contention that components of the Number 1 Airport Drive precinct pleaded in the SOC could not be separately approved, or alternatively that s 91 required that the relationship with the other components in the Number 1 Airport Drive precinct development be disclosed in the draft Major Development Plan. Par 28A of the SOC also alleges that the Outlet Major Development Plan failed to contain the details required by s 91(1)(a),(b),(c),(d) and (h) of the A Act: see par 28A(b) of the SOC. 122 The Outlet Centre development, I find, is a separate stand alone development which does not require any of the other aspects under consideration in the conceptual plans to exist before the Outlet Centre can be constructed and commence to operate. It entails elements which require BACL to apply for and obtain a Major Development Plan if it wishes to construct the Outlet Centre as a stand alone development on the Site. That the Outlet Centre will have a design relationship with future development on the Site does not prevent its separate approval or require it to seek approval for any possible future development. 123 The major development plan for the Outlet Centre is in evidence. For reasons given above it was open to BACL to seek approval in respect of the construction of two buildings which came within the definition of s 89(1)(e). That is what it did by the giving of the draft Major Development Plan to the Minister. The obligations as to the matters to be included in the draft plan by s 91 are to be determined in relation to those two buildings as the relevant major airport development. 124 The background to the application for approval of the Major Development Plan was contained in part 1.1 of the application which stated: '1.1 Background The proposal described in this Draft Major Development Plan (Draft MDP) will result in the development of a 5.76 ha Outlet Centre by Brisbane Airport Corporation (BAC) located at the entrance to the Brisbane Airport site at the intersection of the Gateway Motorway and Airport Drive. The proposed development is known as the Outlet Centre (see Figure 1.1a). The Outlet Centre is located with the Gateway Park precinct which was identified in the 1998 BAC Master Plan as an area that will include a mix of 'business and commercial activities' (see Figure 1.1b). Gateway Park has more recently been re-named Number 1 Airport Drive and in this report the broader Number 1 Airport Drive area will be referred to as the 'precinct'. The entire precinct has recently been formed with bulk earthworks and is currently vacant. Its position adjacent to the arterial road network makes it a suitable location for the proposed development. The proposal involves two single storey buildings with a combined gross floor area of approximately 21,340m˛ to accommodate an outlet centre comprised of independent discount shops arranged around an internal mall system. The term "Outlet Centre" means a building comprised of many centrally managed, separately leased retail outlets in which the majority of outlets consistently offer for sale a substantial proportion of stock which is: · Sold below normal retail prices; and/or · Surplus, out of season, seconds or samples. It is proposed that the development consist of two buildings separated by a concourse area: · Building 1 - 10,627m˛ (gross floor area); · Concourse area - 908m˛ (gross floor area); and · Building 2 - approximately 9,804m˛ (gross floor area). Associated facilities include surface car parking for 1008 cars (on a non-exclusive use basis), installation of drainage and water treatment facilities, site landscaping throughout the site. Road and other works (not part of this Draft MDP) are proposed beyond the development boundary. Brisbane Airport Corporation is seeking permission for this development under Section 94 of the Airports Act 1996. Pursuant to Section 90 of the Airports Act 1996 the full proposed development cannot be undertaken until a 'Major Development Plan' is approved for the construction and operation of the Outlet Centre (including two buildings, concourse area, car park and associated facilities). However, if Building 1 (and associated facilities) alone were built, the value of this project would be under the $10M threshold identified in the Airports Act 1996 and would not require MDP approval. 1.2 Project Development Phases 1.2.1 Bulk Earthworks, Roads and Services Earthworks have now been completed for the entire precinct (within which the Outlet Centre site is located) Following the completion of the earthworks development a grass cover was established on site to prevent Aeolian erosion and dust generation.' (original emphasis) 125 On any fair reading of the draft Major Development Plan for the Outlet Centre, the information and materials required by s 91(1) were provided. Specifically and at a minimum the requirements were satisfied as below: (a) Section 91(1)(a) in part 1.6 of the draft plan; (b) Section 91(1(b) in parts 1.6 and 5.7.5; (c) Section 91(1(c) in part 5; (d) Section 91(1)(d) in part 1.6; and (e) Section 91(1)(h) in part 6. 126 It follows in my view that the approval of the draft Major Development Plan for the Outlet Centre by the Minister on 25 June 2004 was valid and effective for the purposes of Div 4 of Pt 5 of the A Act. 127 Westfield and Centro fail to make out the contraventions of s 90 and s 99 as alleged in par 34 of the SOC. 128 Finally, Westfield and Centro contend that it was beyond the power of the Building Controller to issue the earthworks approvals. The argument is based on s 101 which provides: '101 Building approval to be consistent with final master plan and major development plan (1) This section applies to an approval of a building activity, where the approval is granted under regulations made for the purposes of this Subdivision. (2) If a final master plan is in force for the airport concerned, the approval must not be granted unless it is consistent with the plan. (3) If: (a) the building activity is an element of a major airport development (within the meaning of Division 4); and (b) a major development plan is in force for that development; the approval must not be granted unless it is consistent with the plan.' (original emphasis) 129 At the time the approvals for bulk earthworks and associated works issued on 24 September 2001 and 12 September 2002 there was in force a final Master Plan approved by the Minister in 1998. That Plan in part 5 dealt with BACL's 'Development Concept'. Part 5.2 dealt with non-aeronautical development. The Gateway Park development on the site at the southern entrance into the Brisbane Airport off the Gateway Arterial Motorway was specifically dealt with in part 5.2.2 and again in respect of land use zones in part 12.4.1. The works, the subject of the two approvals, are totally consistent with what was contained in the then final Master Plan for the Brisbane Airport in respect of the subject site. It follows that there has been no contravention of s 101(2) of the A Act. There was no Major Development Plan in force at the time the approvals were granted and the building activity to which they related was not an element in a major airport development (as defined). Consequently s 101(3) had no relevant operation. 130 As I am of the view that the 1998 final Master Plan for Brisbane Airport was valid and effective notwithstanding that it provided for non-aeronautical development and that the development of the Brisbane Airport is not limited to the aeronautical development of it as an airport facility providing services to civil aviation users, there is no basis to construe the power of the Building Controller to approve a building activity as limited to an activity which is an element of an aeronautical development of Brisbane Airport. 131 It follows that Westfield and Centro fail to make out the contentions pleaded in par 32 of the SOC that the Building Controller had no power to grant the earthworks permits which it did and that they were in consequence of no force or effect.

CONCLUSION 132 Westfield and Centro have failed to make good any ground raised in the SOC in support of the relief sought. Their application will be dismissed. 133 None of the respondents in the proceedings Q64 of 2003 cross-claimed for declaratory relief. 134 In Q92 of 2003 DFO seeks declaratory relief. The granting of such relief is always discretionary and will only be made where there is some utility in doing so. 135 The direct interest of DFO in both proceedings was its contractual rights arising out of an agreement for lease dated 28 July 2003, as varied by Deed of Variation dated 30 July 2004, and a further agreement to lease dated 30 July 2004, and, the ability of BACL to lawfully perform its obligations under those agreements in favour of DFO. Those obligations go to constructing the buildings DFO1, DFO2 and the concourse area and subletting those areas to DFO for a term of 20 years for the commercial uses specified in the agreements. 136 I am not prepared to make the declarations sought in par 42 of DFO's fourth amended statement of claim dated 24 July 2004 in proceedings Q92 of 2003. At the present time too much of the development at Number 1 Airport Drive is merely conceptual, and in any event, to bring it into effect may or may not give rise to obligations under Divs 4 and 5 of Pt 5 of the A Act depending upon the exact nature of any final development and how the building activity elements of it are carried out. 137 I am prepared to make the following declarations: 1. The final Master Plan for the Brisbane Airport approved by the Minister for Transport and Regional Services on 7 May 2004 is a valid and effective final Master Plan for the purposes of the Airports Act 1996 (Cth). 2. The Major Development Plan for the Outlet Centre approved by the Minister for Transport and Regional Services on 25 June 2004 is a valid and effective Major Development Plan for the purposes of the Airports Act 1996 (Cth). 3. The works permits issued by the Building Controller for the Brisbane Airport on 24 September 2001 and 12 September 2002 under the Airports (Building Control) Regulations 1996 (Cth) are valid and effective works permits for the purposes of the Regulations and the Airports Act 1996 (Cth). 4. The entry into the written agreements to lease by Brisbane Airport Corporation Limited and Direct Factory Outlets Pty Ltd dated 28 July 2003 (as varied by Deed of Variation dated 30 July 2004) and 30 July 2004 respectively, and the carrying of the terms of such agreements into effect are: (a) not conduct by Brisbane Airport Corporation Limited in contravention of s 32 of the Airports Act 1996 (Cth); and (b) not prohibited by the operation of any of the provisions of the Airports Act 1996 (Cth) or the regulations made thereunder. 138 I will hear the parties on the question of costs. I certify that the preceding one hundred and thirty-eight (138) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cooper.

Counsel for the first Applicant: G A Thompson SC with D Clothier

Counsel for the second Applicant: G A Thompson SC with D Clothier

Counsel for the first Respondent: G Gibson QC with T Sullivan

Solicitor for the first Respondent: Mallesons Stephen Jaques

Counsel for the fourth Respondent M Hinson SC with S Lumb

Solicitor for the fourth Respondent: Australian Government Solicitor

Solicitor for the fifth Respondent: Australian Government Solicitor

Counsel for the sixth Respondent: S Doyle SC with B Porter

Solicitor for the sixth Respondent: Connor O'Meara

Dates of Hearing: 19, 20, 21, 22, 23, 26, 27, 29 July 2004 2, 4, 5, 6 August 2004

Date of last submissions: 12 August 2004

Date of Judgment: 3 February 2005

At a glance

Court

Decision date

Before

Source

Judgment (36 paragraphs)

Parties

Legislation Cited (6)

Cases Cited (8)