Sita QLD Pty Ltd V State of Queensland [2000] FCA 1616

FEDERAL COURT OF AUSTRALIA

Sita Qld Pty Ltd v State of Queensland [2000] FCA 1616 CONTRACT – formation – whether contract for provision of a subsidy – written oral and implied terms alleged – authority of Minister of the Crown to enter into contract – damages – quantum if contract in existence Transport Operations (Passenger Transport) Act 1994 (Qld), ss 36, 39, 42, 49, 62, 143B State Transport Act 1960 (Qld) Government Owned Corporations Act 1993 (Qld) Queensland Competition Authority Act 1997 (Qld) SITA QUEENSLAND PTY LTD (ACN 070 097 219) v STATE OF QUEENSLAND QG 95 OF 1998 DOWSETT J 13 NOVEMBER 2000 BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY QG 95 OF 1998

BETWEEN: SITA QUEENSLAND PTY LTD (ACN 070 097 219)

APPLICANT

AND: STATE OF QUEENSLAND

RESPONDENT

JUDGE: DOWSETT J

DATE OF ORDER: 13 NOVEMBER 2000

WHERE MADE: BRISBANE

THE COURT ORDERS THAT: 1. The application be dismissed. 2. Damages be fixed at $4,896,214.60 Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY QG 95 OF 1998

BETWEEN: SITA QUEENSLAND PTY LTD (ACN 070 097 219)

APPLICANT

AND: STATE OF QUEENSLAND

RESPONDENT

JUDGE: DOWSETT J

DATE: 13 NOVEMBER 2000

PLACE: BRISBANE

REASONS FOR JUDGMENT

GENERAL BACKGROUND 1 The applicant sues the respondent for damages for breach of contract. For present purposes, references to the "respondent" include the Queensland Government, the Department of Transport and Queensland Rail. For many years, the applicant and other companies through which it claims have operated passenger bus services between Brisbane and the Gold Coast. The respondent has, from time to time, regulated these services. Prior to 20 December 1997 the applicant and the respondent were engaged in disputes and/or negotiations concerning the applicant's operations and associated matters. One matter in dispute was the validity of certain steps taken by the respondent pursuant to the Transport Operations (Passenger Transport) Act 1994 (Qld) (the "TOPT Act") and the effects of those steps on the applicant's business. The second area of difference concerned the level of fares charged by Queensland Rail for passenger services between Brisbane and the Gold Coast. The third area of dispute concerned bus services between Brisbane Airport and the Brisbane Central Business District ("CBD") and Brisbane Airport and the Gold Coast. 2 On 20 December 1997, Mr Cosimo Sita, a representative of the applicant, met with Mr Vaughan Johnson who was then Minister for Transport in the Queensland Government. The applicant alleges that at that meeting, agreement was reached, compromising the applicant's various claims against the respondent in consideration of the respondent agreeing to provide certain commercial incentives to the applicant. The respondent denies the agreement and pleads that Mr Johnson had no authority to enter into such an agreement. I will return to these matters at a later stage. 3 It is necessary, in order to understand much of the evidence in this case, to be aware of the geography of that part of south-east Queensland which lies between Brisbane Airport and the border between Queensland and New South Wales and the history of pubic transport in that area. Some of what follows may reflect judicial knowledge rather than the evidence, but all of it was assumed in the conduct of the trial. None of it is likely to be controversial. Distances should be taken as indicative only. 4 The city of Brisbane lies on the east coast of Australia about 100 kilometres north of the Queensland/New South Wales border. The Brisbane River flows through the city from west to east. Brisbane Airport lies in the eastern part of the city and north of the river. The Brisbane CBD lies west-south-west of the airport. Immediately to the south of Brisbane is another local government area, Logan City, which is a relatively new residential area containing some industry. Running along the coast from a point about seventy kilometres south of Brisbane to the Queensland/New South Wales border is a concentrated strip of commercial and residential development constituting the beach resort and local government area known as the city of Gold Coast. Although this area developed as a beach resort for residents of Brisbane, it has become a national and international resort. It is relatively close to Brisbane, and therefore to Brisbane Airport (which is both an international and a domestic airport). Many holiday-makers pass through that airport on their way to the Gold Coast. Others pass through Coolangatta Airport which is situated at the extreme southern end of the Gold Coast. 5 The road from Brisbane enters the Gold Coast at its northern end and runs more or less parallel to, and close to the coast until it reaches Coolangatta on the border. The road, of course, continues over the border and through Tweed Heads, a New South Wales beach resort which is, in effect, an extension of the Gold Coast. This was once the route of the main north-south coastal highway. As the area developed as a tourist resort and residential area, shopping and entertainment areas were built along this road, leading to substantial congestion. The combination of local traffic with "through traffic" from and to Brisbane became so great that the highway was re-located so as to by-pass the Gold Coast to the west, away from the resort areas which are naturally located close to the coast. This by-pass is part of the Pacific Highway which is the main coastal route between Brisbane and Sydney. Residential areas have also developed to the west of the traditional resort areas. 6 Many years ago there was a railway line from Brisbane to Southport, a commercial centre situated at the northern end of the Gold Coast. The line then continued to Coolangatta, passing well to the west of most of the resort areas. For one reason or another, the rail service was discontinued and the line and permanent way removed. At some stage, possibly in the late 1980s, the respondent determined that it was appropriate to reinstate the rail service, and a new line was constructed following a somewhat different route. In February 1996, rail services commenced between Brisbane and Helensvale, which lies at the northern end of the Gold Coast, but some kilometres inland from the coast. (See ex 6.) The line was subsequently extended to Nerang, an old township to the west of the Gold Coast and about one-third of the way between the northern end of that city and the border. It was later extended to Robina, which is about half-way between the northern end of the city and the border, and also well to the west. Prior to the opening of the new railway line, public transport between Brisbane and the Gold Coast was by bus. With the exception of the new railway line, bus travel is the only form of public transport within the Gold Coast. That railway line and the Pacific Highway both run through Logan City which is also served by local buses and by buses plying between Brisbane and the Gold Coast. 7 This case concerns the provision of the following bus services: · from Brisbane Airport to Brisbane CBD; · from Brisbane Airport to the Gold Coast; · from Brisbane CBD to the Gold Coast; · from Brisbane to Logan City; · within Logan City; and · within the Gold Coast. 8 I should say by way of explanation that road traffic between Brisbane Airport and the Gold Coast does not usually pass through Brisbane CBD. Such traffic rather travels over the Gateway Bridge which crosses the Brisbane River from a point quite close to Brisbane Airport on the north bank, but well to the east of Brisbane CBD. From the southern end of the bridge, a road carries traffic to the Pacific Highway, joining it just south of Brisbane and towards the northern end of Logan City. For some years now, the highway has been undergoing substantial upgrading.