Ventana Pty Ltd v Federal Airports Corp & Anor [1997] FCA 538

Catchwords

CATCHWORDS

LOCAL GOVERNMENT - Town planning - whether State Planning Act and planning scheme purport to bind Crown in right of the Commonwealth - whether Federal Airports Corporation (FAC) or lessee from FAC required to obtain permit for use of land at a Federal airport for purpose of a weekend market.

CONSTITUTIONAL LAW - Crown - Crown immunity, whether Crown in right of the Commonwealth is bound by Planning and Environment Act (1987) (Vic) and planning schemes made thereunder - Statutory Corporation - Federal Airports Corporation (FAC) - whether entitled to Crown immunity - whether immunity extends to lessee from FAC.

Federal Airports Corporation Act 1986 (Cth) ss. 6, 7, 9, 10, 11, 12B, 15, 19, 21, 28, 29, 32, 33, 34, 35, 39, 40, 40A, 41, 45, 46, 47, 48, 54A, 54B, 54C, 55, 56, 65, 68, 72, 73

Planning and Environment Act (1987) (Vic) ss. 3, 4, 6, 8, 16, 43, 45, 95, 126

Interpretation of Legislation Act 1984 (Vic) ss. 38, 48

Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd (1978) 145 CLR 107

The Commonwealth v Rhind (1966) 119 CLR 584

Pirrie v McFarlane (1925) 36 CLR 170

Minister for Works (WA) v Gulson (1944) 69 CLR 338

Bropho v Western Australia (1990) 171 CLR 1

State Government Insurance Corporation v Government Insurance Office of New South Wales (1991) 28 FCR 511

Jacobsen v Rogers (1995) 182 CLR 572

Botany Municipal Council v Federal Airports Corporation (1992) 175 CLR 453

Shanahan v Scott (1957) 96 CLR 245 at 250

Kangaroo Point East Association Inc v Balkin (1993) 119 ALR 305

State Bank of New South Wales v Commonwealth Savings Bank of Australia (1986) 161 CLR 639

Townsville Hospitals Board v Townsville City Council (1982) 42 ALR 319

Paul Dainty Corporation Pty Ltd v National Tennis Centre Trust (1990) 94 ALR 225

Kinross v GIO Australia Holdings Ltd (1994) 129 ALR 283

Superannuation Fund Investment Trust v Commissioner of Stamps for South Australia (1979) 145 CLR 330

Hawthorn v State Bank of South Australia (1993) 112 ALR 691

Jellyn Pty Ltd v State Bank of South Australia (1995) 129 ALR 521

Wynward Investments Pty Ltd v Commissioner for Railways (NSW) (1955) 93 CLR 376

Commonwealth v Bogle (1953) 89 CLR 229 at 260

Australian Broadcasting Corporations v Redmore Pty Ltd (1989) 166 CLR 454

Yates Security Services v Keating (1990) 27 FCR 1

VENTANA PTY LTD v FEDERAL AIRPORTS CORPORATION and FAIRWAYS GROUP PTY LTD and FAIRWAYS LEISURE MARKET PTY LTD

VG 127 of 1995

Ryan J

20 June 1997

Melbourne

IN THE FEDERAL COURT OF AUSTRALIA)

)

VICTORIA DISTRICT REGISTRY ) No. VG 127 of 1995

)

GENERAL DIVISION )

BETWEEN: VENTANA PTY LTD

(Applicant)

AND: FEDERAL AIRPORTS CORPORATION

(First Respondent)

AND: FAIRWAYS GROUP PTY LTD

(Second Respondent)

AND: FAIRWAYS LEISURE MARKET PTY LTD

(Third Respondent)

Judge Making Order:Ryan J

Date of Order: 20 June 1997

Where Made: Melbourne

MINUTES OF ORDER

THE COURT ORDERS:

1. That the questions reserved pursuant to O. 29 r. 2 of the Federal Court Rules be answered as follows:

1. On their proper construction, do the Planning Act and the Kingston Planning Scheme purport to bind the Crown in right of the Commonwealth?

No.

2. Is the FAC entitled to the privileges or immunities of the Crown in right of the Commonwealth?

Yes.

3. If yes to 2, do those privileges or immunities extend to the activities of Fairways and Fairways Leisure in relation to the use of part of Moorabbin Airport for the purpose of a retail market?

Yes.

(a) by the FAC; or

(b) by the lessee

for a purpose not directly related to aviation notwithstanding that the use of the land is not permitted by the planning and environmental regulatory process provided for by the Planning Act and the Kingston Planning Scheme?

(a) Yes.

(b) Yes.

2. That the application herein be adjourned before Ryan J for further directions on a date and at a time to be fixed.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

Reasons

IN THE FEDERAL COURT OF AUSTRALIA)

)

VICTORIA DISTRICT REGISTRY ) No. VG 127 of 1995

)

GENERAL DIVISION )

BETWEEN: VENTANA PTY LTD

(Applicant)

AND: FEDERAL AIRPORTS CORPORATION

(First Respondent)

AND: FAIRWAYS GROUP PTY LTD

(Second Respondent)

AND: FAIRWAYS LEISURE MARKET PTY LTD

(Third Respondent)

Coram: Ryan J

Date: 20 June 1997

Place: Melbourne

REASONS FOR JUDGMENT

RYAN J: The applicant in these proceedings, Ventana Pty Ltd ("Ventana") is the owner of a large regional shopping centre known as "Southland" on the eastern side of the Nepean Highway at Cheltenham. It is also the owner of the Cheltenham Market directly opposite Southland on the western side of the Nepean Highway. About three kilometres from Ventana's properties is the Moorabbin Airport which is a Federal airport within the meaning of the Federal Airports Corporation Act 1986 (Cth) ("the FAC Act"). Pursuant to the FAC Act, Moorabbin Airport is vested in the firstnamed respondent, Federal Airports Corporation ("the FAC"). The local government entity for the area which embraces the Moorabbin Airport is the Kingston City Council which is the responsible authority for what was
formerly known as the Moorabbin Planning Scheme and is now known as the Kingston Planning Scheme promulgated pursuant to the Planning and Environment Act (1987) of the State of Victoria ("the Planning Act"). Clause 142-1 of the Kingston Planning Scheme allows Moorabbin Airport to be used as a civil airfield or for any other use that is granted a permit.

On 18 March 1994, the FAC granted a lease of portion of the Moorabbin Airport to the second respondent in these proceedings, Fairways Group Pty Ltd ("Fairways") which on 3 June 1994 assigned its interest under the lease to the third respondent, Fairways Leisure Market Pty Ltd ("Fairways Leisure"). From that time, that portion of the Airport land has been used to house, under cover, a collection of market stalls which trade at weekends.

Clause 5.2 of the lease stipulates:

The Tenant may not carry on a business at or from the Premises other than a Permitted Use without the consent of the Corporation.

By force of the definition in cl. 1 "Permitted Use" means the type of use set out as follows in item 7 of the Reference Schedule:

Covered Leisure Market, outdoor amusement park, outdoor arts and crafts display and sales, outdoor nursery and such other uses as the Corporation in its sole discretion may approve in writing.

Clause 4.15 of the lease provides:

Notwithstanding anything hereinbefore contained the Tenant may licence persons to use parts of the Premises for the purpose of conducting market stalls PROVIDED THAT such persons shall enter into
a Licence Agreement with the Tenant in the form approved in writing by the Corporation. The Tenant shall ensure that in operating their market stalls the Licensees will comply with all of the terms and conditions of this Lease. Should the Corporation determine that any Licence holder is unsuitable to sell goods on the Corporation's Land or is offering goods or advertising in such a way that is contrary to the interests of the Corporation then the Corporation may require the Tenant to immediately terminate the relevant Licence. In the event that the Tenant fails to terminate the Licence the Tenant appoints the Corporation its Attorney for the purposes of doing so.

By its amended statement of claim as proposed to be further amended, Ventana has alleged that the respondents have carried out the development of the market without submitting that development to the planning and regulatory process provided for by the Planning Act and the relevant planning controls implemented pursuant to that Act. It is then pleaded that, if the land at Moorabbin Airport were not in a Federal airport, the development and use of the land as a market would not be allowed by the law of Victoria unless they were submitted to the planning processes and controls erected pursuant to the Planning Act. By paragraph 16 of the amended statement of claim it is alleged that the conduct of the FAC has been ultra vires and in breach of ss 6 and 7(2) of the FAC Act. The conduct of the respondents is then said to have placed Ventana at a considerable competitive disadvantage as a result of which it seeks the following declarations:

A. A declaration that FAC is obliged to endeavour to ensure that the proposed operation of the market is a use of the land which would, if the land were not in a Federal airport, be allowed by the law of Victoria.

B. A declaration that FAC is obliged to endeavour to comply with the planning and environmental regulatory processes provided for by the Planning and Environment Act 1987 (Vic.) and the relevant planning controls implemented pursuant to that Act in relation to the development and operation of the market.

C. A declaration that the development and operation of the market is unlawful unless it complies with the planning regulatory processes provided for by the Planning and Environment Act 1987 (Vic.) and the relevant planning schemes implemented pursuant to that Act.

After the taking of evidence directed to the applicant's standing and matters going to the Court's discretion to grant the declarations sought by Ventana, it was proposed that certain questions be formulated pursuant to O. 29 r. 2 of the Rules of this Court for decision separately from any other question and before any further trial in the proceedings. After further discussion as to which questions could be decided without the need to give notices to the Attorneys-General for the Commonwealth and the States pursuant to s. 78B of the Judiciary Act, the following questions emerged as amenable to the application of O. 29 r. 2:

1. On their proper construction, do the Planning Act and the Kingston Planning Scheme purport to bind the Crown in right of the Commonwealth?

2. Is the FAC entitled to the privileges or immunities of the Crown in right of the Commonwealth?

3. If yes to 2, do those privileges or immunities extend to the activities of Fairways and Fairways Leisure in relation to the use of part of Moorabbin Airport for the purpose of a retail market?

(a) by the FAC; or

(b) by the lessee

It is convenient to examine each of those questions separately and in the order in which they have been posed.

1. On their proper construction do the Planning Act and the Kingston Planning Scheme purport to bind the Crown in right of the Commonwealth?

Counsel for the FAC first invoked the presumption that a statute is not intended to bind the Crown which was applied by a majority of the High Court in Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd (1978) 145 CLR 107 in holding that the Trade Practices Act (Cth) did not apply to the Crown in right of the State of Queensland. In that context, Gibbs ACJ identified the question in these terms, at 116:

It is an established rule of construction that no statute binds the Crown unless the Crown is expressly named therein or unless there is a necessary implication that it was intended to be bound; there will be such a necessary implication if it is manifest from the very terms of the statute that it was the intention of the legislature that the Crown should be bound: Province of Bombay v. Municipal Corporation of Bombay [1947] A.C. 58, at p. 61. The Trade Practices Act, by s. 2A, expressly states that (subject to that section) it binds the Crown in right of the Commonwealth in so far as the Crown in right of the Commonwealth carries on a business, either directly or by an authority of the Commonwealth. The Act is however silent on the question whether it is intended to bind the Crown in right of a State. The question thus arises whether the rule to which I have referred means that a statute of the Commonwealth will not be construed as binding the Crown in right of a State unless it appears by express words or necessary implication that it was intended to do so. In other words, does the rule apply to the Crown in all its capacities, or only to the Crown in right of the community whose legislation is under consideration? When construing a Commonwealth statute does "the Crown", for the purpose of this rule, mean only the Crown in right of the Commonwealth or does it include the Crown in right of a State?

In the course of an extensive review of the authorities, his Honour noted, at 121:

Finally in The Commonwealth v. Rhind (1966) 119 C.L.R. 584 Barwick C.J. (1966) 119 C.L.R., at pp. 598-599 and Menzies J (1966) 119 C.L.R., at pp. 606-607, without discussion, held that the rule of construction that the Crown is not bound by a statute except by express mention or necessary implication applied to a State Act with the consequence that the Act did not apply to the Crown in right of the Commonwealth. Their decision of the question whether the State Act did so apply depended on the operation which they gave to the rule of construction. McTiernan J. agreed with the reasons of the Chief Justice (1966) 119 C.L.R., at p. 600. The other members of the Court, Taylor and Owen JJ., decided the case on other grounds. It appears right to say that the ratio decidendi of the majority was that the rule of construction applies although the statute was passed by the legislature of a State and the Crown concerned is the Crown in
right of the Commonwealth. However, the question was not the subject of discussion, and McTiernan J. who had formerly voiced opinions contrary to those which he there appears to have accepted without comment may have intended to decide the case on the construction of the section without recourse to the presumption.

In the same case, Stephen J was led by a similar path of reasoning to conclude at 129:

If, then, the assistance of this rule of statutory interpretation must be invoked it is, I think, the wide view of the rule that I should adopt. I regard it, in light of the authorities, as the now prevailing view and, in the absence of full argument, I have no occasion to do other than accept it. Accordingly, since the Act is devoid either of express reference binding the Crown in right of the States or of necessary implication to that effect, it should, I think, be interpreted as not binding the Commissioner for Railways of the State of Queensland.

In their joint judgment in Bradken, Mason and Jacobs JJ also referred to Commonwealth v Rhind (supra) and, after examining other authorities including Pirrie v McFarlane (1925) 36 CLR 170 and Minister for Works (WA) v Gulson (1944) 69 CLR 338, concluded, relevantly for present purposes, at 136:

This being the position, it would seem to us that at least as between the Commonwealth and the States there should be an identical presumption of legislative intention not to bind the Crown.

Counsel for Ventana relied on Bropho v Western Australia (1990) 171 CLR 1 where, in the joint judgment of six members of the High Court, it was acknowledged, at 16, that the consistent recognition of the presumption "has undoubtedly created a firm factual foundation for it". However, their Honours went on to say, at 22:

It follows from what has been said above that considerations of principle preclude recognition of an inflexible rule that a statute is not to be construed as binding the Crown or Crown instrumentalities or agents unless it manifests a legislative intent so to do either by express words or by "necessary implication" in the limited and stringent sense explained above. If such a legislative intent appears when the relevant legislative provision is construed in a context which includes the presumption against the Crown and its
instrumentalities or agents being so bound, that legislative intent must, as a matter of principle, prevail. That being so, earlier judicial statements to the effect that it must be manifest from the very terms of the statute itself that it was the legislative intent that the general words of a statute should bind the Crown, or that it must be apparent that the purposes of the statute would be wholly frustrated unless the Crown were bound, should be read as applying to the context of the particular statutory provisions involved in the cases in which they were made. Such statements should no longer be seen as precluding the identification of such a legislative intent in other circumstances or as warranting the overriding of a legislative intent which can be discerned in the provisions of a statute when construed in context.

The effect of the foregoing is not to overturn the settled construction of particular existing legislation. Nor is it to reverse or abolish the presumption that the general words of a statute do not bind the Crown or its instrumentalities or agents. It is simply to recognize that a stringent and rigid test for determining whether the general words of a statute should not be read down so as to exclude the Crown is unacceptable. In that regard, it should be remembered that the view that the rule of construction is not "inflexible, but is merely a presumption in favour of a particular meaning" was supported by statements of authority in this country at the time when the Province of Bombay Case was decided by the Privy Council (see, e.g., Minister for Works (W.A.) v. Gulson (1944) 69 C.L.R., at p. 358).

On the other hand, it must be acknowledged that, in the period since the Province of Bombay Case, the tests of "manifest from the very terms of the statute" and "purposes of the statute being otherwise wholly frustrated" came to be established as decisive of the question whether, in the absence of express reference, the general words of a statute bind the Crown. That being so, it may be necessary, in construing a legislative provision enacted before the publication of the decision in the present case, to take account of the fact that those tests were seen as of general application at the time when the particular provision was enacted. If, however, a legislative intent that the Crown be bound is apparent notwithstanding that those tests are not satisfied, that legislative intent must prevail.

In the case of legislative provisions enacted subsequent to this decision, the strength of the presumption that the Crown is not bound by the general words of statutory provisions will depend upon the circumstances, including the content and purpose of the particular provision and the identity of the entity in respect of which the question of the applicability of the provision arises. If, for example, the question in issue is whether the general words of a statute should be construed in a way which would make the Sovereign herself or himself in the right of the Commonwealth or of a State liable to prosecution and conviction for a criminal offence, the presumption against a legislative intent to that effect would be extraordinarily strong (cf. Canadian Broadcasting Corporation v. Attorney-General (Ontario) [1959] S.C.R. 188, at pp. 204-205. On the other hand, if the question in issue is of the kind involved in the present case, namely, whether the employees of a governmental corporation engaged in commercial and developmental activities are bound by general provisions designed to safeguard places or objects whose preservation is of vital significance to a particular section of the community, the presumption against the applicability of general words to bind such employees will represent little more than the starting point of the ascertainment of the relevant legislative intent. Implicit in that is acceptance of the propositions that, notwithstanding the absence of express words, an Act may, when construed in context, disclose a legislative intent that one of its provisions will bind the Crown while others do not and that a disclosed legislative intent to bind the Crown may be qualified in
that it may, for example, not apply directly to the Sovereign herself or to a Crown instrumentality itself as distinct from employees or agents. Always, the ultimate questions must be whether the presumption against the Crown being bound has, in all the circumstances, been rebutted, and, if it has, the extent to which it was the legislative intent that the particular Act should bind the Crown and/or those covered by the prima facie immunity of the Crown.

In State Government Insurance Corporation v Government Insurance Office of New South Wales (1991) 28 FCR 511, French J regarded Bropho as not displacing the presumption discussed in Bradken that a statute is not intended to bind the Crown, but as merely favouring a more flexible application of the presumption. His Honour said, at 557:

The common law presumption that statutes are intended not to bind the Crown remains in force, but as a more flexible guide to construction which may be displaced without the stringent requirements that previously existed. The modification of the presumption would not, according to the High Court, have the effect of overturning the settled construction of particular existing legislation.

That view, that the stringency and inflexibility with which the presumption should be applied had been relaxed by Bropho, was confirmed by a later judgment of the High Court in Jacobsen v Rogers (1995) 182 CLR 572 where, in a joint judgment, Mason CJ, Deane, Dawson, Toohey and Gaudron JJ observed at 585:

Before the decision in Bropho, the presumption had been elevated to a rule of construction that the Crown was only bound by a statute by express mention or necessary implication. Moreover, the necessary implication was required to be manifest from the very terms of the statute in such a way that it was possible to say that "at the time when the statute was passed and received the royal sanction, it was apparent from its terms that its beneficent purpose must be wholly frustrated unless the Crown were bound" Province of Bombay v. Municipal Corporation of Bombay, [1947] A.C. 58, at p. 63. In Bropho, the Court denied the stringency and inflexibility of that rule and affirmed that it must be the legislative intention which ultimately prevails.

Taking the approach indicated by the authorities discussed above to whether the Planning Act discloses an intention to bind the Crown in right of the Commonwealth, it is to be noted, first, that, as Counsel for the applicant put it, it applies to the use and development of land rather than to the ownership, acquisition or disposition of proprietary or similar interests in land. Thus it is that an applicant for a permit under a planning scheme need not be the owner of the subject land although the owner must sign the application or indicate that he or she has been notified of it; (Planning Act ss 47 and 48).

Section 4(1) of the Planning Act details seven "objectives of planning in Victoria", the last of which is:

(g) to balance the present and future interests of all Victorians.

That list is followed in s. 4(2) by an even longer list of "the objectives of the planning framework established by this Act", the first of which is:

(a) to ensure sound, strategic planning and co-ordinated action at State, regional and municipal levels;

The phrase "at State, regional and municipal levels" recurs in s. 4(2)(c) and, in my view, is a significant implicit acknowledgement that the Planning Act is not concerned with planning actions or policies which the Crown in right of the Commonwealth might take or adopt in relation to the use and development of land even within the territorial limits of Victoria.

Section 6(1) of the Planning Act provides:

A planning scheme for an area-

(a) must seek to further the objectives of planning in Victoria within the area covered by the scheme; and

(b) may make any provision which relates to the use, development, protection or conservation of any land in the area.

Sub-section (2) of s. 6, without limiting sub-s. (1), stipulates an extensive list of prescriptions, many of them expressed in terms of extreme generality, by which a planning scheme may seek to control or regulate the use or development of land within the area covered by the scheme. One feature which a planning scheme may exhibit is that it may "designate land as being reserved for public purposes" [Planning Act s. 6(2)(c)]. However, "public purpose" is defined in s. 3 of the Planning Act as including "any purpose for which land may be compulsorily acquired under any Act to which the Land Acquisition and Compensation Act 1986 applies."

By s. 16 of the Planning Act it is provided:

A planning scheme is binding on every Minister, government department, public authority and municipal council except to the extent that the Governor in Council, on the recommendation of the Minister, directs by Order published in the Government Gazette.

"Public authority" is defined in s. 3 as meaning "a body established for a public purpose by or under any Act but does not include a municipal council". By force of s. 38 of the Interpretation of Legislation Act 1984 (Vic), in the absence of an apparent contrary intention, "Act" means an Act passed by the Parliament of Victoria. Other relevant definitions in the same section are:

"Crown" means the Crown in right of Victoria

"Minister" means the responsible Minister of the Crown for the time being administering the provision in which, or in respect of which, the expression is used or, if, for the time being, different Ministers are administering that provision in different respects, each of those Ministers to the extent that he or she is administering that provision in the relevant respect, and where a Minister of the Crown is referred to by the title of his or her Ministerial office, the reference shall be construed as including a reference to a Minister of the Crown for the time being acting for or on behalf of that Minister;

Moreover, s. 48 of the Interpretation of Legislation Act provides:

In an Act or subordinate instrument, unless the contrary intention appears-

(a) a reference to an officer or office shall be construed as a reference to such an officer or office in and for Victoria; and

(b) a reference to a locality, jurisdiction or other matter or thing shall be construed as a reference to such locality, jurisdiction or other matter or thing in and of Victoria.

A similar interaction between the New South Wales Environmental Planning and Assessment Act and Interpretation Act 1987 was held by the High Court in Botany Municipal Council v Federal Airports Corporation (1992) 175 CLR 453 to have the consequence that the FAC was not a "determining authority" for the purposes of the former Act. Section 43 of the Planning Act provides for unalienated Crown land forming the whole or part of a road which is closed to vest in the Minister administering the Land Act 1958, and s. 45 preserves easements over roads in favour of a municipal council or public authority. By s. 3 of the Planning Act, "Crown land" is defined to mean:

land which is or is deemed to be unalienated land of the Crown and includes-

(a) land of the Crown reserved permanently or temporarily by or under an Act; and

(b) land of the Crown occupied by a person under a lease licence or other right;

"The Crown", it will be recalled, is limited by s. 38 of the Interpretation of Legislation Act to the Crown in right of Victoria. It is also significant that sub-ss. 95(1) and (2) of the Planning Act provide for the making of applications for a permit by a Minister or government department by stipulating:

(1) Subject to sub-sections (2) and (3), an application for a permit by or on behalf of a Minister or government department must be made and dealt with in accordance with this Part.

(2) The Governor in Council may by Order published in the Government Gazette declare that a responsible authority must refer all applications in a specified class of applications for permits by Ministers or government departments to the Minister.

Finally, s. 126 of the Planning Act imposes penalties for the use or development of land in contravention of, or non- compliance with, a planning scheme or a permit, but, by sub-s. (4) provides:

This section does not apply to the owner of Crown land.

The consistency of the expressions of intention that the Planning Act should bind the Crown in right of Victoria warrants the application to the present case of a paraphrase of this passage from the joint judgment of Mason and Jacobs JJ in Bradken (supra) at 136:

Even if there were no presumption of an intention not to bind the Crown in right of a State but likewise no presumption of an intention to bind that Crown, so that it was necessary to examine the particular nature of the provisions made by the statute, the expression of an intention to bind the Crown in right of the Commonwealth and the absence of a like expression in respect of the Crown in right of the States would as a matter of construction lead to the conclusion that the Crown in right of the States was not intended to be bound.

Parity of reasoning suggests that the Crown in right of the Commonwealth was not intended to be bound by the Planning Act. However, to rebut that suggestion, Counsel for the applicant pointed to cl. 142 of the Kingston Planning Scheme which is in these terms:

142 RESERVED LAND

Purpose

To identify land for public use, including recreation, roads, railways, airfields, schools, hospitals, cemeteries and other government and semi-government uses.

142-1 Use of land

Land which is marked on the Planning Scheme map in the ways described in the table below is reserved for the use shown or for use by the authorities and departments named in carrying out their lawful functions.

The land may be used as described in the table or:

* As it was lawfully used immediately before the approval date.

* For a use that is granted a permit.

Reserved land occupied by a public authority or municipal council may be used in any way the authority or council may lawfully use it, provided it is consistent with the use for which the land is reserved.

Land is considered to be vested in a public authority or municipal council if the authority or council is appointed a committee of management under the Crown Land (Reserves) Act 1978 or a corresponding previous Act.

Then follows a list of planning scheme map references, each with a corresponding "use" including "AF" for which the use is "Civil airfield", designating, I take it, the whole of the land comprised in the Moorabbin Airport.

In the light of the meaning of "public authority" to be derived from the Planning Act, I am unable to construe that prescription as intended to apply, in terms, to the Crown in right of the Commonwealth. It is equally open to the interpretation that it adopts a convenient mechanism for describing the area of land occupied by the airfield against the possibility that it may, at some time, be used or developed by an entity bound by the Planning Act and the Kingston Planning Scheme. In any event, a planning scheme is a form of delegated legislation and the planning authority that is empowered under s. 8 of the Planning Act to prepare a scheme cannot, by the terms of the scheme, extend the scope or general operation of the Planning Act. The scheme is strictly ancillary; (Shanahan v Scott (1957) 96 CLR 245 at 250).

I have derived no assistance in answering this first question from Kangaroo Point East Association Inc v Balkin (1993) 119 ALR 305 on which Counsel for Ventana relied. In that case there was no consideration of the terms of the Brisbane Town Planning Act 1964 (Qld) under which the Town Plan for the City of Brisbane was promulgated. The majority in the Queensland Court of Appeal (Macrossan CJ and Davies JA) were content to note, at 309 that "applied in accordance with its tenor, the development plan would restrict the use to which the subject land could be put". That was clearly right having regard to the specific terms of the prescription and the fact that the land had originally been zoned "Special Uses (Commonwealth Government)". Their Honours then went on to consider the application to the land of s. 4 of the Commonwealth Places (Application of Laws) Act 1970 and s. 52 of the Constitution.

It was also argued by Counsel for Ventana that the Planning Act should be construed from the starting point that it was intended to apply to all Commonwealth land to the fullest extent possible. However, nothing in the language of the Planning Act was indicated as supporting that premise. It was merely pointed out that a legislative scheme which is concerned to regulate in a coherent, aesthetically and environmentally sensitive way, the use and development of land throughout the State would be less efficacious if it were not applicable to a landholding entity as significant as the Crown in right of the Commonwealth. However, it is equally open to explain the absence from the Planning Act of any reference to the Crown in right of the Commonwealth by an assumption that the Commonwealth would not use or permit the use of its land in a way which ignored aesthetic considerations or the amenity of the area or was otherwise inappropriate or insensitive.

For these reasons, I have been unable to discern in the language or context of the Planning Act anything which, applying the presumption with all of the flexibility mandated by Bropho v Western Australia, warrants a departure from the starting point that it was not intended to bind the Crown in right of the Commonwealth. Accordingly, the first question must be answered, no.

2. Is the FAC entitled to the privileges or immunities of the Crown in right of the Commonwealth?

A similar question in Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd (supra) was regarded by Gibbs ACJ as presenting little difficulty because the Act establishing the Queensland Commissioner for Railways as a statutory corporation sole described the Commissioner as "representing the Crown" and prescribed that it "shall have and may exercise all the powers, privileges, rights and remedies of the Crown". His Honour, at 115, regarded as important whether the body in question is subject to direct ministerial control or is independent of the government, possessing discretionary powers of its own. The discharge of traditional public functions was also identified as a useful discrimen. See also State Bank of New South Wales v Commonwealth Savings Bank of Australia (1986) 161 CLR 639 where the High Court, in a joint judgment, arrived at a similar conclusion fixing on the facts that the State Bank had no corporators, was obliged to pay its profits into Consolidated Revenue, was subject to audit by the State Auditor-General and was empowered to make by-laws. It was also seen as significant that the seven members of the Board were to be appointed by the Governor of New South Wales although one of the appointees was required to have been elected by employees of the Bank.

However, in Townsville Hospitals Board v Townsville City Council (1982) 42 ALR 319, the fact that most members of the Hospital Board were appointed by the Governor-in-Council was not decisive of the present question. Gibbs CJ noted, at 325:

Although the Board is subject to quite stringent controls in relation to proposed building work, the Board retains an independent discretion to decide whether to engage in such work. The Board cannot be compelled to engage in the building work and whether it does so lies within its own discretion. However, if it does decide to engage in the work and needs to borrow or raise money or make
financial arrangements, it is subject to the controls provided by s 24. There is nothing to indicate that the purpose of those controls is to achieve any of the objects of the Building Act. The Minister, in deciding whether or not to approve of plans and specifications submitted by the Board, is not obliged to consider whether the Standard Building By-laws have been observed. The Minister in question is the Minister for Health or other Minister for the time being administering the Hospitals Act. No doubt the Minister might be expected to consider whether the building shown in the plans and specifications was a sound financial proposition. It may be assumed that he might also consider whether the building proposed was suitable for hospital purposes. It is unnecessary to decide whether the Minister might consider whether the plans and specifications complied with the Standard Building By-laws, for there is nothing in s 24 that obliges him to do so.

After a comprehensive review of the provisions of the Hospitals Act 1936 (Qld) it was held that it did not disclose an intention that hospitals incorporated under it should be accorded special privileges and immunities of the Crown not available to other legal persons. That case was applied by a Full Court of this Court in Paul Dainty Corporation Pty Ltd v National Tennis Centre Trust (1990) 94 ALR 225 where the Court emphasised the importance of "the statutory ability of the executive to control the instrumentality, whether in practice it does so or not," and concluded, at 251 in respect of the Victorian Arts Centre Trust:

The question is not an easy one to decide but, in our view, having regard to Gibbs CJ's reminder as to how easily the shield of the Crown can be provided for if that is the intention of the legislature, the better view is that the VACT, in its provision of a commercial service in the form of the Bass ticketing service, is not operating under that shield.

In Kinross v GIO Australia Holdings Ltd (1994) 129 ALR 283, Einfeld J examined the Government Insurance Office (Privatisation) Act 1991 (NSW) which had the effect of transforming the "old" Government Insurance Office, which had been a statutory body representing the Crown, into a company, the shares in which were owned by members of the public. The Privatisation Act sought to achieve that in two stages by vesting the business of the GIO in the first respondent and six months later selling shares in the first respondent to members of the public. The Privatisation Act provided that, in the interim period before public ownership, the Board of Directors of the first respondent were subject to the direction and control of the Minister. It was further provided that the first respondent and any of its subsidiaries were agents through which the State of New South Wales engaged in State insurance, and were, for that purpose, public authorities of the State. However, it was also stipulated that the first respondent and any subsidiary were not, and did not represent, the State of New South Wales except by express agreement with the Minister. In carrying out what he called a "finely balanced exercise", his Honour concluded at 293:

The Privatisation Act was clearly designed to provide a period during which an entirely new body to the former State-run and controlled entity (the old GIO) was to prepare the State's insurance agency for public sale. In essence this was the task of the directors of the first respondent subject to ministerial direction and control in particular matters thought necessary for the overall purpose. No doubt there was more than one purpose for injecting the intermediate Pt 7 status of the first respondent, but no specific purpose was disclosed by the statute for this status at all if ministerial control was at its heart. It would, as Townsville Hospitals suggests, have been simple enough to state such an intent unambiguously.

Furthermore, the function of the first respondent was essentially non-governmental - ie the promotion and sale of insurance policies and the conduct of money market and finance operations. It seems likely that the reserve powers of the minister were inserted to ensure that the political intention was not subverted and that the best possible presentation of the entity was achieved to ensure its successful public float. It must also be remembered that if the first respondent is immune from liability under the TPA, the second and third respondents, as companies completely independent of the State, are reaping the benefits of what would, on the present assumptions, otherwise have been unlawful conduct by them. This would be a manifestly unfair result which in the absence of express provision, the parliament should not be presumed to have intended.

Notwithstanding the extensive potential, even opportunity, for control by the minister given by the Privatisation Act, I find the absence of any express conferral of Crown status in Pt 7 such as assisted the task of French J in his Honour's conclusions on the old
GIO, and the manifestly commercial nature of the enterprise, to be decisive in favour of the applicant. Moreover, the first respondent was created as the first stage of the privatisation process, ie divestment of government ownership and control. In adopting the terminology used in Pt 7, especially s 36 where it would most obviously have been relevant, the drafters of the legislation deliberately ignored the express terms of s 3(3A) of the GIO Act bestowing Crown immunity on the old GIO. In my view, this was a sufficiently clear demonstration of the legislative intent to separate the first respondent from the Crown.

An illustration of the delicacy of the balance on which a resolution of this question can turn is afforded by Superannuation Fund Investment Trust v Commissioner of Stamps for South Australia (1979) 145 CLR 330 where Barwick CJ and Mason J concluded that the Trust incorporated under the Superannuation Act 1976 (Cth) was a manifestation of the Crown in right of the Commonwealth so that acquisitions of property by it were not exigible to State stamp duty. Stephen and Aickin JJ, on the other hand, concluded that the Trust could not be characterized as the Crown or a servant or agent of the Crown.

In Hawthorn v State Bank of South Australia (1993) 112 ALR 691, O'Loughlin J held that the respondent bank was an instrumentality of the Crown and protected by Crown immunity from proceedings under the Trade Practices Act. His Honour based that conclusion principally on the presence in the State Bank of South Australia Act 1983 (SA) of s. 6(4) which provided:

Notwithstanding that the Bank is an instrumentality of the Crown, the Bank is liable to rates, taxes and other imposts under the law of the State as if it were not such an instrumentality.

A similar conclusion was also reached by the Queensland Court of Appeal (Fitzgerald P, Pincus JA and Demack J in Jellyn Pty Ltd v State Bank of South Australia (1995) 129 ALR 521 where reference was made to s. 6(4) of the State Bank of South Australia Act quoted above and the Court continued:

The appellants sought to read s 6(4) down by reference to s 6(3), arguing that the respondent is only an instrumentality of the Crown to the limited extent required by s 6(3); that is, in holding its property "for and on behalf of the Crown". As will be seen below, even that might be of particular significance: Launceston Corp v Hydro-Electric Commission (1959) 100 CLR 654 at 662. However, the two subsections, 6(3) and (4), taken together do not support the conclusion for which the appellants contend. While the respondent is an instrumentality of the Crown in holding its property for and on behalf of the Crown, there is nothing in the language or evident policy of the two provisions which restricts the respondent's role as an instrumentality of the Crown to that purpose; in particular, the liability imposed upon the respondent by s 6(4) is not confined to those "rates, taxes and imposts under the law of the State" which relate to property held by the respondent.

After reviewing a series of other authorities the Court of Appeal went on to observe at 536:

The conclusion which we draw from these authorities is that the statutory description of the respondent as an "instrumentality of the Crown" in right of South Australia in the State Bank of South Australia Act (SA) establishes or confirms that it is the statutory corporation by which the Executive Government of South Australia performs the functions prescribed by that Act, which may be compendiously referred to as the business of banking, but does not of itself indicate that the respondent is the Crown, or servant or agent of the Crown, in right of South Australia or entitled to immunity from the operation of statutes by which the Crown is not bound. The legislative intention with respect to the respondent's entitlement to the immunity of the Crown is to be derived from the entire statute (Townsville Hospitals Board at CLR 289), including the description of the respondent as an "instrumentality of the Crown" in s 6(4). That description is an important part, but not the whole, of the statutory context to be considered.

The Court of Appeal then proceeded to consider the South Australian Act "by reference to the modern tests which have been enunciated by the High Court to ascertain whether a body is entitled to the shield of the Crown", and concluded, at 542 that:

the description "instrumentality of the Crown is an important consideration in determining whether the body is entitled to the shield of the Crown. Further indications that that was what the South Australian legislature intended for the respondent are to be found in the executive government's control of the respondent by its capacity to appoint and remove directors; the obligation of the director to consult with the Treasurer and consider his/her proposals; and the close connection between the executive government and the respondent in respect of its finances, with the Treasurer authorised to subscribe or loan funds to the respondent and guarantee its liabilities, the respondent obliged to pay part of its profits, including a component set by the Treasurer to the State's General Revenue and, importantly, the declaration in s 6(3) that the respondent "holds its property for and on behalf of the Crown".

Overall, the better view, in our opinion, is that the respondent is the Crown in right of the State of South Australia, as was decided in Hawthorn.

The FAC is established by the FAC Act as a body corporate with perpetual succession and a common seal and may sue and be sued in its corporate name. It has no corporators. Its functions are specified in s. 6 of the FAC Act as being:

(a) to operate Federal airports, and participate in the operation of jointly used areas, in Australia;

(aa) to establish airports at Federal airport development sites;

(b) to provide the Commonwealth, governments, local government bodies, and other persons, who operate, or propose to operate, airports or facilities relating to airports (including airports and facilities outside Australia) with consultancy and management services relating to the development and operation of those airports or facilities; and

(i) relate to airports or Federal airport development sites; and

(ii) are not specified in subsection 8(2); and

(iii) are declared by the regulations to be functions of the Corporation.

The FAC is required by s. 7(2) of the FAC Act to "endeavour to perform its functions in a manner" that conforms with various criteria including that it "is in accordance with the policies of the Commonwealth Government". Although it is empowered by s. 9(2)(g) and (h) to form, or participate in the formation
of, a company and to enter into a partnership, the FAC's exercise of those powers is circumscribed by ss. 10 and 11 of the FAC Act which provide:

10. (1) The Corporation must not:

(a) join in the formation of a company that would, upon its formation, be a subsidiary of the Corporation; or

(b) subscribe for, or purchase, shares in a company if, on the Corporation becoming the holder of those shares, the company becomes a subsidiary of the Corporation; or

unless the Corporation has informed the Minister, in writing, of its intention to do so.

(2) Where the Corporation holds a controlling interest in a company, the Corporation must ensure that the company does not do anything that the Corporation cannot do.

11. (1) The Corporation must not enter into a partnership unless it has informed the Minister, in writing, of its intention to do so.

(2) Where the Corporation can control the acts and things done by a partnership of which it is a member, it must ensure that the partnership does not do anything that it cannot do.

The Board of the FAC has, by virtue of s. 12B(1), as its purposes:

(a) to decide the objectives, strategies and policies to be followed by the Corporation.

(b) to ensure that, in performing its functions, the Corporation has proper regard to the matters referred to in subsection 7(2).

All members of the Board are appointed by the Minister and hold office for a term not exceeding five years specified in their respective instruments of appointment. They are restricted in engaging in outside paid employment by s. 15 which provides:

(1) Where the Chairperson has been appointed as a full-time member, he or she shall not engage in paid employment outside the duties of the office of Chairperson except with the approval of the Minister.

(2) A member appointed as a part-time member shall not engage in any paid employment that, in the opinion of the Minister, conflicts with the proper performance of the functions of the member.

The appointment of a member may, or shall, be terminated by the Minister on one or other of a number of grounds specified in s. 19.

The Minister also has power under s. 21(3) to convene, at any time, a meeting of the Board. As well, the Minister has extensive powers of specifying places, being land owned by the Commonwealth or the FAC, to become new Federal airports, to add such places to Federal airports and to excise them from Federal airports. The Minister is further empowered to declare that land owned by the Commonwealth or the FAC to be a Federal airport development site, to add such land to the development site or excise it from the development site. In addition, the Minister may close a Federal airport. If the exercise of any of the last-mentioned powers causes financial detriment to the FAC, it is entitled to be reimbursed by the Commonwealth in an amount to be determined by the Minister. Except with the consent of the Minister, the FAC cannot cease to operate a Federal airport as an airport; (s. 34).

By s. 28 of the FAC Act, land owned by the Commonwealth which becomes a Federal airport or Federal airport development site, or part of one, vests in the FAC which holds it "for and on behalf of the Commonwealth"; (s. 29). Other extensive powers to transfer property, buildings, fixtures or other assets to the FAC and to certify the boundaries of Federal airports are conferred on the Minister by ss. 32, 33 and 35.

Under Part V of the FAC Act, the FAC is required to develop and revise a corporate plan which is to include financial targets and has to give copies of each plan, including the financial targets, to the Minister. In formulating the corporate plan and identifying the financial targets, the Board of the FAC is obliged by s. 39(1) to consider the following matters:

(a) objectives and policies of the Commonwealth Government known to the Board and any directions of the Minister;

(b) the need for the Corporation to earn a reasonable rate of return on assets used;

(d) the need for the Corporation to establish and maintain a reasonable level of reserves having regard to the estimated future requirements of persons who will use Federal airports;

(e) the expectation of the Commonwealth that the Corporation will pay a reasonable dividend on the capital of the Corporation;

(ea) any financial detriments suffered by the Corporation as a result of a declaration by the Minister under section 25, 26, 26A, 26B or 27 (other than financial detriments for which the Corporation has been reimbursed under section 27A);

(f) any direction under subsection 41 (2) that the Corporation provide a specific facility for the benefit of the public;

(g) such other commercial considerations as the Board considers fit.

By s. 40, the Minister may direct the Board of the FAC to vary its financial targets and must be notified if the Board forms the opinion that matters have arisen which may prevent, or significantly affect, achievement of the objectives or financial targets specified in the Corporate Plan; (s. 40A). The extent to which the FAC is subject to direction by or on behalf of the Commonwealth Government is prescribed by s. 41 in these terms:

41. (1) Except as provided by this section or as otherwise expressly provided by this Act, the Corporation is not subject to direction by or on behalf of the Commonwealth Government.

(2) Subject to subsection (5), where the Minister is satisfied that it is desirable in the public interest to do so, the Minister may, by notice in writing to the Board, give directions to the Corporation with respect to the performance of its functions or the exercise of its powers.

(3) The Corporation shall comply with any direction under sub-section (2).

In Part VI of the FAC Act headed "Finance", the FAC's liability to tax is governed by s. 45, the first four sub-sections of which provide:

(1) Notwithstanding any other law of the Commonwealth, a State or a Territory, the Corporation is not liable to pay taxes.

(1AA)Subsection (1) does not apply to a law of the Commonwealth relating to sales tax or income tax.

(1AB)The Corporation is not a public authority for the purposes of paragraph 23 (d) of the Income Tax Assessment Act 1936.

(1A) Subsection (1) does not apply to a law of a State or Territory relating to pay-roll tax.

See also Part VIA which seems to make the FAC liable for income tax and capital gains tax under the Income Tax Assessment Act 1936 in respect of any year of income from and after 1 July 1991.

By s. 46, the FAC is required to pay to the Commonwealth a dividend in an amount recommended by the Minister. The FAC has the facility to borrow money from the Commonwealth or elsewhere or to raise money in some other manner; (ss. 47 and 48). It also has power to invest moneys not immediately required for its purposes in a manner consistent with sound commercial practice and to enter into hedging contracts in relation to its actual or proposed borrowings; (ss. 54A and 54AB). By ss. 54C and 55, the FAC and each of its subsidiaries is subject to audit by the Auditor-General.

The power of the FAC to fix and vary aeronautical charges for the use by an aircraft of a Federal airport or the use of services or facilities provided by the FAC can only be exercised if notice is first given to the Minister who may, within 30 days, disapprove the proposed determination; (s. 56).

By s. 65 of the FAC Act, the FAC is required to prepare and give to the Minister an annual report on its operations during each financial year together with financial statements which must first be submitted to the Auditor-General. Section 68 under the heading "Duties of Corporation" provides:

Nothing in this Act shall be taken to impose on the Corporation or the Board a duty that is enforceable by proceedings in a Court of law.

By s. 72, the FAC is empowered to make by-laws with respect to a wide range of matters including:

...

(c) the terms and conditions governing the provision to, or use by, any person, or class of persons, of services provided by, or facilities owned or operated by, the Corporation;

...

(e) the protection and preservation of property of, or property in the custody or under the control of, the Corporation;

...

(k) regulating or prohibiting the use of vehicles at Federal airports and providing for signs and road markings for those purposes;

...

(n) regulating or prohibiting the carrying on of any activity at Federal airports or Federal airport development sites;

(p) the sale, supply, disposal, possession or control of liquor at a Federal airport or Federal airport development sites (including the sale, supply, disposal, possession or control of liquor by a person pursuant to a lease, licence or authority referred to in paragraph 9 (2) (b));

(q) gambling activities at a Federal airport or Federal airport development sites (including gambling activities engaged in by a person pursuant to a lease, licence or authority referred to in paragraph 9 (2) (b));

...

(s) the prohibition of interference with:

(i) services provided by the Corporation;

(ii) property of, or property in the custody or under the control of, the Corporation; and

(iii) airport officers;

The operation of State and Territory laws on by-laws made pursuant to s. 72 is governed by s. 73(1), (2) and (3) which provide:

(1) By-laws in force under paragraph 72 (1) (k) are not intended to exclude or limit the operation of any provision of a law of a State or Territory that deals with the use of vehicles and is capable of operating concurrently with those by-laws.

(2) By-laws in force under paragraph 72 (1) (p) in respect of a Federal airport or Federal airport development site have effect, in relation to that airport or site, to the exclusion of any provisions of the law of the State or Territory in which the airport or site is situated relating to the sale, supply or disposal of liquor.

(3) By-laws in force under paragraph 72 (1) (q) in respect of a Federal airport or Federal airport development site have effect, in relation to that airport or site, to the exclusion of any provisions of the law of the State or Territory in which the airport or site is situated relating to gambling activities.

The review, necessarily not exhaustive, which I have just undertaken of the salient features of the FAC Act discloses that a high degree of actual control of the FAC is required of the executive government of the Commonwealth, as well as "the statutory ability to control" which Stephen J in Superannuation Fund Investment Trust v Commissioner of Stamps (SA) (supra) at 348 indicated could weigh in favour of an intention to confer Crown immunity. The actual exercise of control is achieved through such matters as Ministerial appointment of the whole Board and compulsory audit by the Auditor-General, while the scope for control is provided, eg, by the power reposed in the Minister to disapprove the FAC's corporate plan and to disallow charges proposed to be fixed by it for aeronautical services. In my view, the degree of actual and potential Ministerial control far outweighs the significance of the autonomous discretions entrusted to the FAC in such matters as borrowing and short-term investment of funds.

It could also be said that the functions which the FAC has been created to perform have traditionally been the province of central government. The holding of land "for and on behalf of the Commonwealth" and the establishment and operation of Federal airports are traditionally public functions. However, as Stephen J also noted in Superannuation Fund Investment Trust v Commissioner of Stamps (SA) (supra) at 349, "what is a function appropriate to government may be answered differently in different ages and under the influence of differing social and political theories of the State". It may well be that when the current trend towards privatization has run its course, at least some of the functions entrusted by the FAC Act to the FAC will no longer be regarded as traditionally public. However, that time, I consider, has not yet arrived.

I have derived little assistance from the sections in the FAC Act dealing with the liability of the FAC to tax. The general exemption in s. 45(1) has engrafted on to it specific provisions exposing the FAC to liability to Commonwealth sales, income and capital gains tax and State payroll taxes. However, the very generality of s. 45(1) enables it to be regarded as a partial restatement, perhaps out of an abundance of caution, of a wider immunity which the FAC has been assumed to possess, no less than as indicating that the FAC was seen as inherently liable to tax. In this context, it is appropriate to recall the close connection between the FAC and the executive government in respect of finances as exemplified by its obligation to pay dividends to the Commonwealth in amounts to be determined from time to time by the Minister.

Similar considerations cancel out the conflicting tendencies of the wide grant by s. 72 to the FAC of by-law making powers and the specific conferral by s. 73 of the ability, by the exercise of that power, to exclude effective State or Territory regulation of the specified activities described as "the sale, supply or disposal of liquor" and "gambling activities". An implication that the FAC was assumed to be generally outside the shield of the Crown is weakened by the fact that both of those activities can, according to current notions, be regarded as outside the traditional province of central government. As well, the grant of power to make by-laws is, in general, an indication that the repository of the power is within the shield of the Crown; see State Bank of New South Wales v Commonwealth Savings Bank of Australia (supra) at 651 where it was observed:

the power to make by-laws invests the Bank with a regulatory role which, although it may be a modest one, is suggestive of governmental activity.

Within the scope of activity allowed to it by the FAC Act, the regulatory role ascribed to the FAC is far from modest.

I have not been unmindful of the observation of Gibb CJ in Townsville Hospitals Board v Townsville City Council (supra) at 326 that:

It is not difficult for the legislature to provide in express terms that a corporation shall have the privileges and immunities of the Crown and where it does not do so it should not readily be concluded that it had that intention.

However, giving all due weight to the significance of that omission from the express terms of the FAC Act, the matters to which I have drawn attention in the review just undertaken would, on balance, have lead me to conclude that the FAC was intended to be equated with the Crown in right of the Commonwealth. Moreover, the indications which I regard as, above others, compelling that conclusion in relation to the use and development of land are contained in s. 7(2) of the FAC Act which is discussed in more detail below in relation to the fourth question.

Section 7(2) requires that:

The Corporation shall endeavour to perform its functions in a manner that:

...

(d) ensures that, where land at a Federal airport is to be used for a purpose not directly related to aviation, being land in respect of which a lease, licence or authority has been granted to a person (other than the Commonwealth), the use would, if the land were not in a Federal airport, be allowed by the law of the relevant State or Territory (including laws made by a relevant local government body);

...

(e) ensures that where a building is to be erected on land at a Federal airport for a purpose not directly related to aviation, being land in respect of which a lease, licence or authority has been granted to a person (other than the Commonwealth), the design and construction of the building would, if the land were not in a Federal airport, be allowed by the law of the relevant State or Territory (including laws made by a relevant local government body);

Paragraphs (da) and (ea) correspondingly impose similar requirements in respect of land at a Federal airport development site.

In my view, those paragraphs unmistakably proceed on the assumption that State or Territory laws controlling or regulating the use of land and the design and construction of buildings thereon have no application of their own force to land at a Federal airport or Federal airport development site. In the absence of an express provision in the FAC Act denying that application, the assumption which I have just imputed to its framers can only be explained by an accepted legislative intention that the FAC is preserved from the operation of State and Territory laws, including planning and building controls, by the general immunity possessed by emanations of the Crown in right of the Commonwealth.

For these reasons, I have concluded that the second question should be answered, yes.

3. If yes to 2, do those privileges or immunities extend to the activities of Fairways and Fairways Leisure in relation to the use of part of Moorabbin Airport for the purpose of a retail market?

For the applicant it has been contended that any immunity from the application of State laws which the FAC may possess as a result of an affirmative answer to Question 2, cannot extend to the use for private purposes by lessees of land held under lease from the FAC. However, that is to focus on the question solely from the perspective of the lessees. The correct question in this context is to ask whether a power in a State planning authority to prohibit, or subject to conditions, use by the lessee of land for a purpose specified by the FAC in a lease granted by it "would affect the exercise by [the FAC] representing the Crown to enter into such contracts, arrangements or understandings"; (Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd (supra) per Mason and Jacobs JJ at 137). See also Wynward Investments Pty Ltd v Commissioner for Railways (NSW) (1955) 93 CLR 376 where Kitto J indicated that "the question must always be whether the operation of the provision upon the subject would mean some impairment of the existing legal situation of the sovereign".

In my view, to acknowledge that a purpose for which the FAC may authorise land at a Federal airport to be used can be prohibited or rendered subject to conditions by force of a State planning law would be to curtail, or impair, severely the power conferred by s. 9(2)(a) and (b) of the FAC Act. Those paragraphs provide:

Without limiting the generality of subsection (1), the powers of the Corporation referred to in subsection (1) include, subject to this Act, power:

(a) to enter into contracts for the purposes of this Act;

(b) without limiting paragraph (a):

(i) to grant a person a lease of;

(ii) to grant a person a licence to occupy; or

(iii) to give a person authority to use;

an area, a building, or a part of a building, at a Federal airport or Federal airport development site for a purpose specified in the lease, licence or authorisation, which purpose may be or include:

(iv) the selling, for delivery at the airport or development site, or supplying, of any goods or services;

(v) the carrying on of, or soliciting for, any business; or

(vi) the erection, display or distribution of any advertisement or public notice;

That the grant of those very general powers of authorizing the purpose for which land might be used by lessees or other holders from the FAC was not intended by the draftsman of the FAC Act to be capable of being cut down by State planning laws is made clear by s. 7(2)(d) and (da) of that Act which I have discussed at the end of my consideration of Question 2 above.

It was submitted on behalf of Ventana that the majority judgment of Macrossan CJ and Davies JA in Kangaroo Point East Association Inc v Balkin (supra) is authority for the proposition that the use of land for non-public purposes by a lessee from the Crown is subject to control pursuant to State planning legislation. However, as I read their Honours' reasons in that case, they regarded their conclusion as being dictated by cl. 31 of the lease from the Commonwealth which obliged the lessees:

To comply with all statutes, ordinances, proclamations, orders or regulations affecting or relating to the premises or trading thereon and with all requirements which may be made or notices or orders which may be given by any governmental, semi-governmental, city, municipal, health, licensing or other authority having jurisdiction or authority over or in respect of the premises and to keep the lessor indemnified in respect of all such matters referred to in this subclause. If any statute, ordinance, proclamation, order, regulation or requirement, notice or order given by any governmental, semi-governmental, city, municipal, health, licensing or other authority does not apply to the premises or to the lessee because the lessor is immune and not subject thereto the lessee shall comply with that statute, ordinance, proclamation, order, regulation, requirement, notice or order as if the legal ownership of the freehold in the premises was vested in the lessee.

That their Honours regarded that covenant as the source of the respondents' obligation to conform with the Brisbane Town Plan is made clear from this passage (119 ALR 305) at 310:

It is true that the development plan may prevent the respondent lessees from using the subject premises for purposes which may be permitted by the Commonwealth as lessor. But, that does not affect any right or power or obligation of the Commonwealth. Indeed, it may be doubted whether, in view of cl (31) of their covenants, it affects any right of the respondents as lessees; that clause obliges them to comply with the development plan whether or not Commonwealth immunity affects its application to the land or to them.

As to the question free of the operation of cl. 31, it was observed, also at 310:

It is true that if the development plan had been in existence before the Commonwealth granted the lease, it could not have affected the Commonwealth's use of the land including the terms upon which it could have leased it or transferred it (Commonwealth v Bogle (1953) 89 CLR 229 at 260); nor could it have declared in advance the uses which may be made of the land by any lessee or purchaser from the Commonwealth: Attorney-General (NSW) v Stocks & Holdings (Constructors) Pty Ltd 1970 124 CLR 262 at 289. Any provision purporting to do so would plainly affect the Commonwealth's rights, in the first case directly, in the second indirectly. Nor would the development plan in the present case affect the Commonwealth's use of the land if, for any reason, the lease should terminate and the Commonwealth resume possession of the land.

The reference to the passage from Commonwealth v Bogle there cited is particularly illuminating because, in that case, Fullagar J observed:

But I should think it impossible to hold that the Parliament of Victoria could lawfully prescribe the uses which might be made by the Commonwealth of its own property, the terms upon which that property might be let to tenants, or the terms upon which the Commonwealth might provide accommodation for immigrants introduced into Australia.

For these reasons, I have been led to conclude that, quite apart from the question of whether a State planning regime which purported, of its own force, to restrict the use of land leased from the Commonwealth would be in conflict with s. 52(i) of the Constitution, for a State regime to apply to the use of land by such a lessee would necessarily infringe the immunity of the Crown in right of the Commonwealth. Accordingly, I would answer the third question, yes.

4. On its proper construction, does s. 7(2)(d) of the FAC Act have the effect that land at Moorabbin Airport in respect of which a lease has been granted to a person other than the Commonwealth can validly be used (a) by the FAC; or (b) by the lessee; for a purpose not directly related to aviation notwithstanding that the use of the land is not permitted by the planning and environmental regulatory process provided for by the Planning Act and the Kingston Planning Scheme?

Sub-sections (2), (3), (4) and (5) of s. 7 of the FAC Act provide:

(2) The Corporation shall endeavour to perform its functions in a manner that:

(a) is in accordance with the policies of the Commonwealth Government;

(b) ensures the safety of persons using airports;

(c) ensures that, as far as is practicable, the level of noise at airports is not such as to be detrimental to the communities near airports;

(ca) ensures that, as far as is practicable, the environment is protected from the effects of, and the effects associated with, the operation and use of aircraft (other than state aircraft within the meaning of the Civil Aviation Act 1988) operating to or from Federal airports;

(da) ensures that if:

(i) land at a Federal airport development site is to be used for a purpose that is not directly related to aviation; and

(ii) a lease, licence or authority in respect of the land is granted to a person other than the Commonwealth;

the use of the land for that purpose would be allowed by the law of the relevant State or Territory if the land were not in a Federal airport development site;

(ea) ensures that if:

(i) a building is to be erected on land at a Federal airport development site; and

(ii) the building is to be erected for a purpose that is not directly related to aviation; and

(iii) a lease, licence or authority has been granted in respect of the land to a person other than the Commonwealth;

the design and construction of the building would be allowed by the law of the relevant State or Territory if the land were not in a Federal airport development site;

(f) ensures that the Corporation and the communities served by Federal airports are good neighbours;

(g) enables the Corporation to earn a reasonable return on the assets used by the Corporation;

(h) enables the Corporation to pay reasonable dividends to the Commonwealth in accordance with this Act; and

(j) is in accordance with sound commercial practice.

(3) Subsection (2) shall not be read as limiting:

(a) any other provisions of this Act; or

(b) the responsibilities of the Department or of the Civil Aviation authority.

(4) Subject to any express provisions of this Act to the contrary, this Act shall not be read as implying that the Corporation is not required to comply with the laws of the Commonwealth relating to aircraft or aerodromes.

(5) A reference in paragraph (2)(da) or (ea) to a law of a State or Territory includes a reference to laws made by a relevant local government body.

Paragraph (d) of sub-s. (2) is made expressly referable to land "in respect of which a lease, licence or authority has been granted to a person (other than the Commonwealth)". The obligation on the FAC is, therefore, to endeavour to perform its functions, including those which relate to airports, in a manner which, in a relevant sense, ensures that the use, for a purpose not directly related to aviation, of land leased to a third person would, "if the land were not in a Federal airport," be permitted by the regulatory scheme in force in the relevant State. The words to which I have added emphasis acknowledge that a State regulatory scheme has no application of its own force to the use of the land by the third person.

The question therefore remains whether the FAC is obliged to ensure that the land use complies with the State regulatory scheme even to the point that a permit for it has been issued by the responsible authority.

I was referred to the discussion of amendments to the Bill which was ultimately passed as the FAC Act. As originally framed, the Bill proposed that sub-ss. (2), (3) and (4) of s. 7 of the FAC Act should be in these terms:

(2) The Corporation shall endeavour to perform its functions in a manner that-

(a) is in accordance with the policies of the Commonwealth Government;

(b) ensures the safety of persons using airports;

(d) enables the Corporation to pay reasonable dividends to the Commonwealth in accordance with this Act; and

(e) is in accordance with sound commercial practice.

(3) Sub-section (2) shall not be read as limiting-

(a) any other provision of this Act; or

(b) the responsibilities of the Department.

As recorded in Hansard for proceedings in the Senate on 13 February 1986, Senator Sanders moved amendments which included the insertion in cl. 7(2) of additional paragraphs corresponding with paragraphs 7(2)(d) and (e) of the present FAC Act. The Senator, in supporting his amendments, made these observations:

These amendments are basically to ensure that the Federal Airports Corporation Bill takes into account the wishes and desires of local government agencies. Members of the Australian Mayoral Aviation Council - AMAC - originally came to the Australian Democrats last year with a list of 12 requests as to where the Bill should be amended from their viewpoint. Nine of these requests were later dropped but three remained. Basically they involved, firstly, environmental functions of the Corporation, secondly, the planning, development and building control of the councils over the FAC and, thirdly, the payment of rates to the councils. We had a good look at this. We listened to AMAC and we consulted the Department of Aviation, through the Minister for Aviation (Mr Peter Morris), and we found that there were areas in the Bill which were unsatisfactory. One of those was the environmental area. It is extraordinary that the FAC has no environmental functions, when we consider that we are dealing with something as contentious as aircraft noise; there are no environmental functions in this Bill.

...

Another issue brought up by AMAC which we, as Democrats, considered and agreed to had to do with the planning and development and building controls of the FAC. There is no reason why the FAC should not adhere to local building requirements. The possibility of the FAC allowing a 15-storey hotel in a local environment where only five-storey buildings are allowed must be foreshadowed and dealt with in
the Bill. In fact there is a case at this time concerning Jandakot Airport in Western Australia where the local government has strict controls over the usage of its own land or area under its own control. The Department of Aviation has allowed a go-kart track to be built, much against the wishes of the local residents and local government but, since it is on government land, the local people have no control. This bothers the local people. It bothered the mayor in that area, who came to see me. This must be guarded against. But the local council should not be in a position to stipulate how buildings specifically related to aviation can be built. In other words, if the local government regulations call for certain type of structure and this would be in conflict with the aviation needs of that structure the aviation needs should receive precedence; it is only logical. The Democrats amendments (bb) and (bc) are designed to resolve this dilemma responsibly. Where buildings, et cetera, are not directly related to aviation they must adhere to the relevant State or Territory laws, including local government regulations and ordinances. The amendment agreed to by the Government is attached.

Senator Grimes, who was a Minister in the Government which accepted Senator Sanders' amendments, had this to say, apparently about the counterparts of s. 7(2)(d) and (e):

The legislation also points out that as far as non-aviation buildings are concerned - and that is what Senator Sanders is talking about in his amendment; buildings not directly related to aviation - the Corporation and the people running the airport should take into account the laws and building regulations of the councils around the airport, provided that they do not interfere with the conduct of their activities and their responsibilities in conducting that airport.

So, all in all, I do not think that the legislation would be catastrophically bad without Senator Sanders' amendment, but I do not think that Senator Sanders' amendment, in trying to clarify more and to add more to the functions and instructions that this Parliament gives the Federal Airports Corporation, should worry us. We should not be worried about putting that sort of thing in. In the end, I have even concluded that we should not be too worried about asking the Federal Airports Corporation to endeavour, in performing its functions, to ensure as much as possible that the communities and the airports are good neighbours.

However, deriving all the assistance that I can from that extrinsic material, I cannot discern in s. 7(2)(d) an intention that either the FAC or a lessee from it should be obliged to apply for and obtain a permit from the responsible authority for the use in question. In the first place, the introductory words of the sub-section, by requiring only that "the Corporation shall endeavour to perform its functions in a
manner that..." embody no more than an exhortation as to what the FAC should try to achieve as far as circumstances, and what can obviously be the conflicting demands of some of its various functions and powers, permit. Hortatory words of that kind, I consider, are inapt to import an enforceable obligation.

The difficulty of construing s. 7(2)(d) as doing more than make "limited provision for recognition of the requirements of State law" was adverted to by the High Court in Botany Municipal Council v Federal Airports Corporation (supra) where it was observed at 468:

the FAC is an authority to which the Environment Protection Act applies and, as such, the F.A.C. must endeavour to perform its functions in accordance with the policies expressed in and under that Act. Indeed, it would be quite remarkable if the Act were to contemplate that the F.A.C., which holds title to airport land and airport development sites for and on behalf of the Commonwealth, should abide by State law environmental requirements rather than the environmental requirements prescribed by the Environment Protection Act. That statement is subject to the qualification that, where particular land at a Federal airport or at a Federal airport development site is to be used for a purpose not directly related to aviation, the use of the land must be allowed by the law of a State or Territory. But the circumstance that limited provision is made for recognition of the requirements of State law emphasizes the fact that, in general, they do not apply.

It is next to be noted that s. 7(3) expressly provides that:

Sub-section (2) shall not be read as limiting

(a) any other provisions of this Act.

Other provisions of the FAC Act include, as has already been noted, s. 9(2)(b) conferring power to grant a lease of an area, a building or part of a building at a Federal airport for a purpose specified in the lease. Had s. 7(2)(d) been understood as requiring the FAC, amongst other things, to insert, in every such lease, a covenant by the lessee to obtain a planning permit for the specified use, neither s. 7(3) nor s. 9(2)(b) could have been allowed to remain in its present unqualified terms.

Another indication that s. 7(2)(d) was not intended to impose on the FAC an obligation enforceable at the suit of a State planning authority or a third party claiming to be adversely affected by non-adherence to some planning prescription in respect of land at a Federal airport is to be found in s. 68 of the FAC Act. By providing that "Nothing in this Act shall be taken to impose on the Corporation or the Board a duty that is enforceable by proceedings in a Court of law", s. 68 emphasises that the preceding catalogues of powers and functions are merely facultative and admonitory. The FAC's failure to "endeavour" as fully as some observers consider it might, to ensure the achievement of one or other of the desiderata listed in s. 7(2) cannot, in the face of s. 68, make it amenable to any remedy available as a matter of public law. On the view which I take of the FAC Act, the FAC may perform its functions conformably with s. 7(2)(d) by insisting that a lessee from it apply to a responsible State planning authority for a permit for the intended use of the land. Equally, however, the FAC may observe the admonition in s. 7(2)(d) by formulating, presumably after consultation with the planning authority, a set of conditions which it considers would attach to the grant of a permit for the proposed use if the State legislation applied to the land of its own force. The FAC may then require compliance with the conditions so formulated by means of appropriate lessee's covenants. Alternatively, it may embody its conditions in by-laws promulgated in exercise of the power conferred by s. 72. However, the FAC is not under any legally enforceable compulsion to adopt any of those means of "endeavouring" to ensure that the use of land, of which it is the lessor, would, if the land were not in a Federal airport, be allowed by the relevant State planning law. The Board of the FAC is made by s. 12B(1)(b) the sole judge of the propriety of its regard to the matters referred to in s. 7(2) including paragraph (d).

Although the requirement of s. 7(2)(d) is not to be disregarded, the fact that it may be considered in a given case not to have been observed sufficiently or at all will not expose the FAC to injunctive or other prerogative relief or invalidate a lease granted in exercise of the power conferred in unqualified terms by s. 9(2)(b); c.p. Australian Broadcasting Corporations v Redmore Pty Ltd (1989) 166 CLR 454 and Yates Security Services v Keating (1990) 27 FCR 1 per Pincus J at 24. Had it been intended to impose on the FAC an obligation enforceable by mandamus or injunction, or to invalidate a lease granted for use not permitted by State planning law, it could easily have been done in more peremptory and less convoluted terms than those employed in s. 7(2)(d).

For these reasons, Question 4 should be answered, (a) yes; (b) yes.

Conclusion

In the result, I shall order that the questions which I reserved for separate decision pursuant to O. 29 r. 10 should be answered:

1. No

2. Yes

3. Yes

4. (a) Yes

(b) Yes.

I shall hear Counsel at a mutually convenient time on the orders, including orders as to costs, which should be made in consequence of these answers.

I certify that this and the preceding forty-two (42) pages are a true copy of the Reasons for Judgment of his Honour Justice Ryan.

Associate:

Date:

Counsel for the Applicant: Mr H. McM. Wright, QC

with Mr N. O'Bryan

Solicitors for the Applicant: Holding Redlich

Counsel for the First Mr A. Robertson, SC

Respondent: with Mr S. Gageler

Solicitors for the First Blake Dawson Waldron

Respondent:

Counsel for the Second and Mr P.D. Santamaria

Third Respondents:

Solicitors for Second and Minter Ellison

Third Respondents:

Date of Hearing: 16, 17 and 18 October 1996

Date of Judgment: 20 June 1997

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