Reported Decision : (2005) NSW ConvR 56-121 New South Wales Supreme Court CITATION : Graham v Moree Local Aboriginal Land Council [2004] NSWSC 1178 HEARING DATE(S) : 11 November 2004 JUDGMENT DATE : 7 December 2004 JURISDICTION: Equity Division JUDGMENT OF : Windeyer J at 1 DECISION : Order made that defendant endeavour to obtain consents CATCHWORDS : LEASE - Agreement for lease - grant of lease required certain consents - existence of implied term that lessor would use reasonable efforts to procure consents - breach of implied term - as specific performance not available what order should be made LEGISLATION CITED : Aboriginal Land Rights Act 1983 s40B, s222 Crown Lands (Continued Tenures) Act 1989 Sch3 CASES CITED : Butts v O'Dwyer (1952) 87 CLR 267 Egan v Ross (1928) 29 SR(NSW) 382 PARTIES : Ronald Douglas Graham (Plaintiff) Moree Local Aboriginal Land Council (Defendant) FILE NUMBER(S) : SC 2690 of 2004 COUNSEL : Mr D A Smallbone (Plaintiff) Mr C Mantiziaris (Solicitor) (Defendant) SOLICITORS : Hopper & Co Lawyers (Plaintiff) Turnbill Hill Lawyers (Defendant) - 2 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION WINDEYER J TUESDAY 7 DECEMBER 2004 2690/04 RONALD DOUGLAS GRAHAM V MOREE LOCAL ABORIGINAL LAND COUNCIL (Administrator Appointed) JUDGMENT Issue 1 The plaintiff, Mr Graham, a proposed lessee from the defendant, the Moree Local Aboriginal Land Council (MLALC) as proposed lessor, entered into an agreement for the lease by Mr Graham from MLALC of certain land at Moree of which MLALC is registered proprietor. For a valid lease to be granted and obtained the consent of the New South Wales Aboriginal Land Council is required in respect of both parcels of land the subject of the agreement and the additional consent of the Minister of Lands was required for one parcel as it is held under a perpetual lease. Such consents were not sought. The question is whether an order should be made requiring MLALC to use its best endeavours to obtain such consent. Facts 2 The land in question is part of a rural property known as "Nardoola" in the Moree district. It comprises land in Certificates of Title Folio Identifiers 5/751121 and 15/751121. Lot 15 is freehold. Lot 5 is held under perpetual lease, or at least that is admitted in the pleadings. 3 The Aboriginal Land Rights Act 1983 provides: 40B Lease, use etc of land … (2) A Local Aboriginal Land Council may, subject to the provisions of any other Act and with the approval of the New South Wales Aboriginal Land Council: (a) lease land vested in it for a period of 3 or more years (including any option to renew the lease), and (a1) change the use of land vested in it, and (b) grant an easement over land vested in it, and (c) release an easement benefiting land vested in it, but only if the lease, change of use or the grant or release of the easement has been approved at a meeting of the Local Aboriginal Land Council specifically called for that purpose at which a quorum was present. … (3) The New South Wales Aboriginal Land Council may not refuse to give an approval of a lease or change of use under this section except on the ground that the terms or conditions of the lease are inequitable to the Local Aboriginal Land Council concerned or that the change of use would be detrimental to the interests of other Local Aboriginal Land Councils. 4 The Crown Lands (Continued Tenures) Act 1989 provides: Schedule 3 Transfer restrictions (Parts 2, 3 and 5 of Schedule 2) Part 1 General restrictions 1 Application of Part This Part applies to land comprised in a perpetual lease, a term lease or a special lease but only if: (a) the folio of the Register created in respect of the land contains a reference to this Part or a reference to a provision which by this Act is to be taken to be a reference to this Part, or (b) (Repealed) 2 Consent to transfer (1) Land to which this Part applies may not be transferred, leased, subleased, assigned or otherwise dealt with without the written consent of the Minister. (2) Subclause (1) does not apply to: (a) a mortgage or discharge of mortgage, (b) (Repealed) (c) a transfer to a Minister on behalf of the Crown, or to a public authority, of land comprised in a perpetual lease. (3) In this clause: public authority means : (a) a council within the meaning of the Local Government Act 1993 , or (b) public body declared by the Minister, by order published in the Gazette, to be a public authority for the purposes of this clause. 3 Invalidation of transfers etc A transfer, lease, sublease, conveyance, assignment or other dealing in contravention of this Part is not valid for any purpose. 4 Applications for consent An application for consent shall be made as prescribed. 5 Dealing with applications (1) The Minister has discretion to give or refuse consent to a dealing with land to which this Part applie s. Although there was no evidence of the fact, it was admitted that consent of the Minister for Lands was required for lease of the land held under the perpetual lease. 5 Mr Chapman originally held the land under a lease for three years commencing on 10 September 1993. That lease included an option to renew for a further three years. He exercised the option. No new lease document appears to have been signed. There is no evidence that consents to these earlier leases or agreements were obtained. They might have been valid or they might have been invalid. It seems that no lease to Mr Graham was ever registered. 6 In 1998 the MLALC agreed to a new lease to Mr Graham, the required special meeting of the local council having been held and approving this. The agreement was for a lease for ten years with an option to renew for a further term of five years. Although not stated in the document the intended commencing date was 10 September 1999, so that it would follow immediately after the purported renewed term. The rent for the new lease was to be $5,000 per annum, the previous rent had been $4,000 per annum. There was an obligation to pay one half of the outgoings on the land. The document was in the form required for registration under the Real Property Act 1900. As it was not registered it could operate only as an agreement to enter into a lease. That is the claim made and admitted on the pleadings. 7 It is admitted that the grant of the lease was conditional upon the necessary consents being obtained and that it was an implied term that the lessor would apply for those consents and that it breached the implied term by failing to use all reasonable efforts to procure the consents. While the original pleaded claim was for specific performance of the agreement for lease – which claim could not have succeeded – the claim under the further amended statement of claim is for an order requiring the defendant land council to take appropriate steps to obtain the consents, or an order similar to that ultimately made as a result of the decision of the High Court of Australia in Butts v O'Dwyer (1952) 87 CLR 267 at 289. 8 There is an unresolved dispute between Mr Graham and the defendant about whether there are arrears of rents and outgoings, owing by Mr Graham from 1993 onwards. That claim is subject to a present action in the Local Court at Moree. It is clear that the financial affairs of the MLALC were in some disarray, at least by 1999. A Mr Brennan was appointed administrator pursuant to s222 of the Aboriginal Land Rights Act in 2000. Mr Gidley was appointed administrator in August 2003 and remains in office. Mr Graham denies any arrears of rent or at least any substantial arrears under the original agreements. It seems clear that outgoings due under the lease document had not been paid but at least until proceedings were commenced no request for outgoings was made. Mr Graham was not aware of any obligation as to outgoings, as apart from anything else, he cannot read. 9 The question as to outstanding rental was the subject of a considerable amount of evidence in the proceedings. Insofar as it related to any period prior to 10 September 1999, it seems to me to be irrelevant. If the local council resolved to grant a new lease at a time when there were arrears under an existing or earlier lease, then I would think that was a matter for it. In any event it is clear there is a genuine dispute about this. The amount which Mr Brennan claimed Mr Graham owed was clearly incorrect. 10 When Mr Brennan was appointed as administrator he began to press Mr Graham for arrears which he claimed to be due. He refused to recognize any right under the document which the plaintiff now claims, which the evidence establishes was signed on 26 March 1998. Mr Graham said that at the meeting on that date and after signature, Mr Floyd Tighe, the then chairman of the defendant council said: We owe you $5,460 for jacking up that house and restumping it in Alcare Street. The Land Council is having trouble with our cash flow at the moment and we are waiting on a request to the State and Regional Land Councils to give us some money. How about if we put $5,000 of the money we owe you to the rent on the new lease. That will cover the first year. And he said: "Righty oh. Sounds good to me". 11 Mr Tighe supports that evidence and I accept it. The evidence as to an amount of $16,350.00 claimed to be due to Mr Graham for the same work and other work was less convincing. It is unnecessary to decide this as it will be decided if necessary in the Local Court proceedings. 12 Mr Graham in affidavit evidence of 27 October 2004, said that at a meeting with Mr Brennan in August or September 2000, when Mr Brennan had claimed that he was in arrears, Mr Brennan had refused to acknowledge any new lease. Mr Graham said he said to Brennan that he had a lease, that the Land Council had a copy of it, that he was not in arrears, and that he had $5,000 to pay the rent for the next year. He said he had shown the agreement to Mr Brennan who said "I'm not taking your money. I don't recognize the document. It's nothing". Mr Brennan denied this conversation, saying that he would have taken any money offered and applied it to arrears of rent. I am not prepared to accept that to be the position as it was obviously offered for the ensuing year and on this matter I prefer the evidence of the plaintiff to that of Mr Brennan. 13 One further matter should be mentioned about the sum of $5,640. There is evidence that the New South Wales Aboriginal Land Council advanced that to the defendant by cheque in favour of Mr Graham. Mr Graham said that he did not get it. I accept that. It would have been forwarded to the Local Council to pass on to him. There is no evidence that the Local Council did not bank it and subject to arrangements with its bank it would have been entitled to do this by reason of the set off agreed against the rent. I accept that Mr Graham did not receive that money. 14 By letter of 24 January 2001, Messrs. Webb and Boland, solicitors for the defendant Council, wrote to Mr Graham demanding the sum of $28,000 "being rent payable under a lease granted to you by the Land Council on the 10th September 1993." On 13 March 2001, the solicitors served a notice to quit by 15 May 2001. On that day or shortly thereafter the defendant effectively re-entered, Mr Brennan entering the property and placing locks on the gates. The plaintiff was prevented from entering after that. It follows of course that if he was entitled to a lease then it is likely that he suffered loss as a result of having been locked out. 15 In August 2001, the Local Court proceedings commenced. The claim continued to be for rent at $4,000 per annum up to 2001. Submissions of the defendant 16 Counsel for the defendant submitted that there would be no utility in making an order requiring the defendant to do what was in its power to procure the consents required for a lease. I do not think that is correct. At least so far as the s40B consent is concerned the Act sets out the basis on which consent can be withheld. It may not authorise refusal in the circumstances here. 17 Counsel then submitted that relief should not be given as it had not been shown that damages would not be a sufficient remedy. That argument also cannot prevail. It has always been accepted that in vendor and purchaser and lessor and lessee claims damages are not a sufficient remedy. Land has a particular location and value. This should, I consider, be extended to the situation here, because if consent is given specific performance would be ordered. 18 Finally it was submitted that in the exercise of discretion specific relief should be refused because Mr Graham has not performed his obligations because he has not paid rent from 10 September 1999 to 15 May 2001. I have determined that the rent up to 9 September 2000 has been paid. I have found that the rent for the following year was offered. Even had it not been I consider relief against forfeiture would be given for the eight month period if the money were now paid. If the necessary consents are obtained, then an order for specific performance would be conditional upon payment of the proportionate amount of a year's rent from 9 September 2000 until 15 May 2001, plus the payment of outgoings required pursuant to the agreement, from 10 September 1999 until the date of lockout. 19 There were additional defences relating to discretion, namely delay and acquiescence. These are pleaded in paragraphs 16 and 17 of the defence. They were specifically abandoned at trial. For that reason they need not be considered. Conclusion 20 The plaintiff is entitled to an order in the nature of that sought in item C of the further amended statement of claim. Any questions of damages will have to await the determination of the application for consent. For that purpose further consideration will have to be reserved. 21 The orders sought follow those apparently made in Egan v Ross (1928) 29 SR(NSW) 382, but I do not consider that any reference to a master should be necessary. The plaintiff should bring in a draft order in conformity with that in Butts v O'Dwyer. As I have said, if necessary an order for specific performance would be made upon obtaining the necessary consents, and subject to certain payments. This can be done on listing for further consideration if necessary. I will stand the matter over until some convenient date before the end of the law term so that the necessary declaration and order can be made. The plaintiff is to bring in the draft orders. ********** Last Modified: 12/15/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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