New South Wales Supreme Court CITATION : Darkingjung Pty Limited v Darkingjung Aboriginal Land Council & Ors [2006] NSWSC 42 HEARING DATE(S) : 06/02/2006 JUDGMENT DATE : 10 February 2006 JUDGMENT OF : Bergin J DECISION : Application refused. CATCHWORDS : Application to transfer proceedings to the Land and Environment Court. - Whether proceedings fall within the description of those referred to in s 20(2) of the Land and Environment Court Act 1979. Aboriginal Land Rights Act 1983 (NSW) Environmental Planning and Assessment Act LEGISLATION CITED : Funeral Funds Act 1970 Land and Environment Court Act 1979 Supreme Court Act 1970 Aboriginal Community Benefit Fund Pty Ltd & Anor v Batemans Bay Local Aboriginal Land Council & Anor (1996) 92 LGERA 212 Aboriginal Community Benefit Fund Pty Ltd & Anor v Batemans Bay Local Aboriginal Land Council & Anor (1997) 41 NSWLR 494 Bathurst City Council v Saban [1985] 2 NSWLR 704 CASES CITED : Hillpalm Pty Ltd v Heaven's Door Pty Ltd (2004) 220 CLR 472 Murray v Wingecarribee Shire Council [2004] NSWSC 19 Owners of "Shin Kobe Maru" v Empire Shipping Co Inc (1994) 181 CLR 404 Scharer v State of New South Wales (2001) 53 NSWLR 299 National Parks and Wildlife Service v Stables Perisher Pty Limited (1990) 20 NSWLR 573 Darkingjung Pty Limited (plaintiff) Darkingjung Local Aboriginal Land Council (first defendant) PARTIES : Darkingjung Cattle Company Pty Ltd (second defendant) Darkingjung Housing Pty Ltd (third defendant) Darkingjung Funeral Fund Pty Ltd (fourth defendant) NSW Aboriginal Land Council (fifth defendant) FILE NUMBER(S) : SC 5634/05 A Robertson SC/K Morgan (plaintiff) COUNSEL : T Jowett (first to fourth defendants) J Kirk (fifth defendant) Norton White (plaintiff) SOLICITORS : Blackshield & Co (first to fourth defendants) Chalk & Fitzgerald (fifth defendant) - 14 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION BERGIN J 10 FEBRUARY 2006 5634/05 DARKINGJUNG PTY LIMITED v DARKINGJUNG LOCAL ABORIGINAL LAND COUNCIL & ORS JUDGMENT 1 The plaintiff, Darkingjung Pty Limited, by Summons filed on 28 October 2005 (corrected by Amended Summons filed on 9 December 2005), seeks declaratory relief in relation to transactions between it, as trustee, and the first defendant, Darkingjung Local Aboriginal Council; the second defendant, Darkingjung Cattle Company Pty Ltd; the third defendant, Darkingjung Housing Pty Ltd; and the fourth defendant, Darkingjung Funeral Fund Pty Ltd. The fifth defendant is the NSW Aboriginal Land Council. 2 On the first return date of the Summons, 2 December 2005, the fifth defendant apparently indicated its intention to object to jurisdiction and was ordered to file any Notice of Motion in that regard. That Motion, filed on 15 December 2005 seeks an order that, "the whole of the proceeding be transferred to the Land and Environment Court pursuant to s 72 of the Land and Environment Court Act". The Duty Judge referred the Motion to me for hearing on 6 February 2006. Mr J Kirk, of counsel, appeared for the fifth defendant, the applicant on the Motion. Mr A Robertson SC, leading Ms K Morgan of counsel, appeared for the plaintiff, a respondent to the Motion and Ms T Jowett, of counsel, appeared for the first to fourth defendants, the other respondents to the Motion. 3 The plaintiff is the trustee of the Darkingjung Local Aboriginal Council Trust (the Trust) established pursuant to a Deed of Trust on 9 March 2004. Although the details of the transaction are not in evidence, it is common ground that the first defendant sold some land to Mirvac in accordance with the Aboriginal Land Rights Act 1983 (NSW) (the Act) for approximately $42 million specifically with the approval of the fifth defendant. 4 A director of the plaintiff gave affidavit evidence that on 15 July 2004, the first defendant transferred $19,582,713.36 to the plaintiff to be held under the Trust. On 20 August 2004, $5 million was transferred pursuant to a loan agreement by the Trust to the second defendant. On 15 June 2005, $2,185,542.90 was transferred pursuant to a loan agreement by the Trust to Darkingjung Projects Pty Limited on behalf of the first defendant for its future operations. On 7 July 2005 the first defendant transferred two amounts, $5,453,374.25 and $651,907.40, to the plaintiff to be held under the Trust. On 23 August 2005, $500,000 was transferred pursuant to a loan agreement by the Trust to Darkinjung Projects Pty Ltd. On 18 August 2005, $5 million was transferred pursuant to a loan agreement by the Trust to the third defendant. On the same day $1.5 million was transferred pursuant to a loan agreement by the Trust to the fourth defendant. These payments, except those paid to Darkingjung Projects Pty Limited, are the subject of the declarations sought in the Amended Summons. 5 The relief claimed in the Amended Summons is: (a) A declaration that the money (the "Trust Money") paid by the first defendant to the plaintiff [ on 15 July 2004 and 7 July 2005 as outlined above ] is held on trust by the plaintiff for the Darkingjung Local Aboriginal Land Council Trust, pursuant to the Trust Deed dated 9 March 2004. (b) A declaration that that part of the Trust Money which the plaintiff still holds is held on trust by the plaintiff for the Drakingjung Local Aboriginal Land Council Trust pursuant to the Trust Deed dated 9 March 2004. (c) A declaration that that part of the Trust Money loaned by the plaintiff to the second defendant [ on 20 August 2004 as outlined above ] was validly loaned pursuant to the Trust Deed by the plaintiff. (d) A declaration that that part of the Trust Money loaned by the plaintiff to the third defendant [ on 18 August 2005 as outlined above ] was validly loaned pursuant to the Trust Deed by the plaintiff. (e) A declaration that that part of the Trust Money loaned by the plaintiff to the fourth defendant [ on 18 August 2005 as outlined above ] was validly loaned pursuant to the Trust Deed by the plaintiff. 6 The fifth defendant's involvement in the litigation seems to have stemmed from a letter written by it to the directors of the plaintiff on 7 September 2005. Prior to that date the first defendant had obtained Senior Counsel's opinion in relation to the establishment of the Trust and both the first defendant and/or the plaintiff and the fifth defendant had obtained opinions in respect of the various payments, the subject of the relief sought in these proceedings. Without descending into the detail of these erudite opinions, which are in evidence, it is sufficient to observe that there are competing views as to, inter alia, the "lawfulness" of the payments by the first defendant to the plaintiff; the status of the Trust and whether the Trust might fail because some but not all of its objects are charitable. 7 The letter of 7 September 2005 referred to the lengthy history between 2003 and 2005 of obtaining and exchanging the legal opinions and advised that the most recent opinions the fifth defendant had obtained concluded that the payments were "unlawful" and that there was "no real scope for the resolution of the issue other than the repayment of the moneys". It was also suggested that to the extent the moneys could not be repaid "an issue would arise as to the personal liability of each of the directors" of the plaintiff. The letter also suggested that if the plaintiff was unwilling to repay the moneys, "it may be necessary to refer the matter to the Court". 8 The fifth defendant submitted that this case falls within s 20(1)(e) and s 20(2) of the Land and Environment Court Act 1979 (the LEC Act). The relevant provisions for consideration of the LEC Act are as follows: 71 Proceedings in Supreme Court (1) Subject to section 58, proceedings of a kind referred to in section 20(1)(e) may not be commenced or entertained in the Supreme Court. 20 Class 4 – environmental planning and protection and development contract civil enforcement (1) The Court has jurisdiction (referred to in this Act as "Class 4" of its jurisdiction) to hear and dispose of: … (e) proceedings referred to in subsection (2). (2) The Court has the same civil jurisdiction as the Supreme Court would, but for section 71, have to hear and dispose of proceedings: (a) to enforce any right, obligation or duty conferred or imposed by a planning or environmental law or development contract, (b) to review, or command, the exercise of a function conferred or imposed by a planning or environmental law or a development contract, (c) to make declarations of right in relation to any such right, obligation or duty or the exercise of any such function, and (d) whether or not as provided by section 68 of the Supreme Court Act 1970 – to award damages for a breach of a development contract. 9 The Act is a planning or environmental law for the purposes of s 20 of the LEC Act. 10 The fifth defendant made the following written submissions: 23. The case …falls within subs. 20(1)(e) and (2) of the LEC Act – most notably, paragraph (2)(c) thereof, along with paras (2)(b) and (2)(a). As such it is within the exclusive jurisdiction of the LEC. 33. Here, the central issue in dispute is whether the transfer of funds by [the first defendant] to the plaintiff was authorised by the [Act] particularly ss 52 and 152. Any determination of that issue does involve reviewing the exercise of functions conferred by the [Act]. And the making of the declarations sought would be in relation to rights and the exercise of functions conferred by the [Act]. 11 Section 20 of the LEC Act was described by Kirby P in National Parks and Wildlife Service v Stables Perisher Pty Limited (1990) 20 NSWLR 573 at 586 as follows: It is clear from the structure of s 20 (2) of the Land and Environment Court Act that par (a) and par (b) are designed to confer on the Court the same civil jurisdiction as the Supreme Court would otherwise enjoy, to make orders in the nature of the prerogative writs. Paragraph (c) confers the same jurisdiction in respect of declarations of right. 12 In that same case the Chief Justice described Class 4 proceedings as dealing "with the civil enforcement (for example, by way of injunctive relief or judicial review of administrative action) of environmental and planning legislation": at 577 per Gleeson CJ 13 The plaintiff submitted that the declarations it seeks are "in relation to" the interpretation of a Trust Deed and although that interpretation will necessarily require the interpretation of provisions of the Act, such does not equate with seeking a declaration in relation to any right, obligation, duty or function conferred or imposed by that Act. It submitted that unless the remedy being sought is that specifically identified in s 20(2), the exclusive jurisdiction of the Land and Environment Court is not triggered. In support of this submission reliance was placed upon what Young J (as his Honour then was) said in Bathurst City Council v Saban (1985) 2 NSWLR 704 at 709: My present state of thinking is that Court's power to make such an order as the plaintiff seeks is not affected by the Land and Environment Court Act s 20, notwithstanding that if an injunction was made on the public nuisance ground, it would have an indirect effect of making the defendants comply with the Environmental Planning and Assessment Act, s 76. There are two reasons favouring this view; (1) it takes very clear words to deprive a Supreme Court of jurisdiction; and (2) Wootten J's judgment in Grace Bros Pty Ltd v Willoughby Municipal Council [(1980) 44 LGRA 400] makes it clear that s 20 is not to be read so widely as to produce jurisdictional chaos between two State Courts. 14 The plaintiff also relied upon the Court of Appeal's decision in Aboriginal Community Benefit Fund Pty Ltd & Anor v Batemans Bay Local Aboriginal Land Council & Anor (1997) 41 NSWLR 494. It was submitted that the Court of Appeal held that proceedings which sought to enforce the performance of public statutory duties so as to ensure compliance with the Funeral Funds Act 1979 and to confine the expenditure of the two statutory bodies (the two Local Aboriginal Councils) to matters within the limits of their prescribed functions were not proceedings referred to in s 20(2) of the LEC Act. Sheller JA, (with whom Handley JA and Simos A-JA agreed) said at 512-513: Batemans Bay Aboriginal Land Council and New South Wales Aboriginal Land Council submitted that these proceedings were, in part, either to enforce a right, obligation or duty conferred or imposed by the Act or to make declarations of right, in relation to the exercise of a function conferred or imposed by the Act. With respect, I do not think that the proceedings based on a claim that Batemans Bay Local Aboriginal Land Council and New South Wales Aboriginal Land Council in seeking to implement the Aboriginal Land Council's scheme were acting beyond their statutory power fall within the category of proceedings described in subs 2. The appellants are neither seeking to enforce any right, obligation or duty conferred or imposed by the Act, nor are they seeking declarations of right in relation to any such right, obligation or duty or the exercise of any function conferred or imposed by the Act. The appellants contend that Batemans Bay Local Aboriginal Land Council and New South Wales Aboriginal Land Council have undertaken to do something they have no legal capacity to do and accordingly something unlawful: compare Ashbury Railway Carriage & Iron Co v Riche (1875) LR 7 HL 653 at 695. This being so the proceedings do not fall within s 20(1)(e) so that s 71(1) has no application. Are these proceedings referred to in s 20(2)(a) of the LEC Act? 15 It is very difficult to see how these proceedings could be categorised as proceedings for the enforcement of any rights, obligations or duties conferred by the Act on any of the parties to this litigation. Section 52 of the Act imposes certain obligations on the first defendant in respect of Accounts but there is nothing in the relief claimed here that could properly be categorised as an enforcement of such an obligation. Indeed, but for the passing reference in the written submission in relation to s 20(2)(a) the fifth defendant did not develop this aspect of its submissions. I am not satisfied that these proceedings are proceedings referred to in s 20(2)(a) of the LEC Act. Are these proceedings referred to in s 20(2)(b) of the LEC Act? 16 The proceedings referred to in s 20(2)(b) as proceedings "to review, or command, the exercise of a function conferred or imposed by a planning or environmental law" are in my view in the category to which Gleeson CJ referred in National Parks and Wildlife Service v Stables Perisher Pty Limited at 577. They are proceedings for "judicial review of administrative action" and, it seems to me, that proceedings do not fit within such a category merely because the Court will have to interpret the Act and "review" (used in the more general sense) the conduct of the first defendant and that of the plaintiff for the purpose of deciding whether the moneys are held on trust for the first defendant. 17 These are not proceedings seeking judicial review of administrative action, that is a review of the exercise of the relevant function, nor are they proceedings to command the exercise of a relevant function. They are proceedings seeking declarations as to whether the moneys referred to in the prayers for relief are held on trust pursuant to the Deed of Trust which proceedings (for the purpose of deciding whether the moneys are held on trust) will include consideration of whether the payments were within power under the Act. I am not satisfied that the proceedings are proceedings of the kind referred to in s 20(2)(b) of the LEC Act. Are these proceedings referred to in s 20(2)(c) of the LEC Act? 18 Aboriginal Community Benefit Fund Pty Ltd & Anor v Batemans Bay Local Aboriginal Land Council & Anor was a case in which the plaintiffs had sought injunctions to restrain the defendants from carrying on and advertising the carrying on of a contributory funeral fund business (the scheme). The plaintiffs alleged that the scheme was unlawful because, inter alia, the intended respective functions of the defendant Aboriginal Councils were outside their functions and powers under the Act. A similar claim is made in this case. The fifth defendant claims that the payments were unlawful because they were not within the functions of the first defendant under the Act. 19 The fifth defendant sought to distinguish Aboriginal Community Benefit Fund Pty Ltd & Anor v Batemans Bay Local Aboriginal Land Council & Anor. Firstly, it was submitted that the relief sought in that case was injunctive relief whereas here the relief sought is declaratory. That is true but I am not sure that the distinction is of any real significance. The nature of the relief claimed in each case has to be analysed to decide whether it falls within the description of the proceedings in s 20(2) of the Act. Secondly, it was submitted that the key point in that case was that the limitation on power of the Local Aboriginal Land Council was said to arise from the general law and not from an express or implied limitation contained in the Act with the consequence that any injunctive relief would be based on the general law and not the enforcement of the Act. The fifth defendant relied upon the following analysis by McLelland CJ in Eq at first instance ((1996) 92 LGERA 212 at 216) as follows: On analysis, the critical matter arising under the Aboriginal Land Rights Act in these proceedings is not whether that Act imposes on either of the defendants an obligation or a duty to refrain from doing something, but rather whether having regard to the term of that Act, either of the defendants has the legal capacity to do something. Generally speaking, a statutory corporation (unlike a corporation existing at common law or created by charger) does not have legal capacity to do anything except exercise the functions for which it was incorporated (normally to be found expressly stated or necessarily implied in the statute by which it is created), and such things that are necessary for, or incidental to, the exercise of those functions. … It is not a matter of qualifying what would otherwise be an unlimited legal capacity by reference to some express or implied obligation or duty in the relevant statute, but rather a matter of ascertaining, on the true construction of the statute, the limits of the functions (or powers) conferred. … Accordingly, relief based on the limits of the legal capacity of the respective defendants as statutory corporations, in reliance on the terms of their incorporating Act, is not properly described as the enforcement of an obligation or duty imposed by that Act and does not give rise to any absence of jurisdiction in this Court to entertain these proceedings under s 71 of the Land and Environment Court Act . 20 In a case where the Court was considering an application for an injunction it is not surprising that this analysis focused on the question of whether the proceedings were for the enforcement of an obligation as referred to in s 20(2)(a) of the Act. As I have already said, it seems to me that in each case consideration has to be given to the nature of the relief sought in the proceedings to decide whether the proceedings are of the nature described in s 20(2) of the Act. 21 The third distinction was contained in the fifth defendant's submission that in that case the opponent sought to restrain a proposed course of action whereas, in this case, the payments have already been made. It was submitted that the plaintiff (and presumably the other defendants) seek "court affirmation of the legality of what has taken place" and are not "relying on any general law limitation on power" but are "directly" asserting that what has been done was within the realm of the functions granted to the first defendant by the Act. It does not seem to me that the plaintiff is "directly" so asserting, rather it seems to me that the issue of whether the payments were within the functions or powers of the first defendant will be given consideration in deciding what has been sought "directly", that is, whether a declaration that the moneys are held on trust under the Trust Deed should be made. 22 The fifth defendant also submitted that in Scharer v State of New South Wales (2001) 53 NSWLR 299 the declaratory relief sought was said to be "directly within the terms of s 20(2)(c)" even though it made no mention of the Act and even though the key issue was the existence of an easement which, although deemed to be statutory, in substance depended upon issues of general law. However, as the first to fourth defendants submitted, Scharer was a case involving an issue relating to whether an easement existed in a national park. The Court held that equitable easements within a national park that pre-dated its creation, were deemed to have been granted under the relevant statute, an environmental and planning law, and thus falling within the jurisdiction of the Land and Environment Court. 23 The fifth defendant also referred to Hamilton J's decision in Murray v Wingecarribee Shire Council [2004] NSWSC 19 for the purpose of distinguishing it from this case. Hamilton J was dealing with an application to transfer to the Land and Environment Court proceedings seeking declaratory relief that a resolution passed by the defendant Council was void and of no effect, it being claimed that the proceedings fell within either s 20(2)(a) or (b) of the LEC Act. The Council, by the resolution, had purported to ban all political advertising on all land and buildings in the Shire and to require the General Manager to determine a number of sites in the Shire where candidates for election would be permitted to display a maximum of two complying signs for up to one month before the election. The plaintiff, a candidate for election, claimed that the resolution was ultra vires and, as a separate ground, that it breached the constitutional right of communication relevant to political discussion. 24 The defendant Council in that case claimed that the plaintiff was seeking to enforce a right that precluded the defendant Council from purporting to regulate political advertising; that if a right existed it must primarily arise from a planning and environmental law; that the power to make the declaration sought was based on the application and interpretation of a planning or environmental law; and thus the proceedings were within the exclusive jurisdiction of the Land and Environment Court under s 71 of the LEC Act [see par 4]. 25 Hamilton J said: 9 There is no cross claim in these proceedings. It seems clear to me that the proceedings brought by the plaintiff cannot be characterised as seeking to enforce anything arising under any planning law and cannot fall within paragraph (a) of s 20(2). The other substantive provision is in paragraph (b). Paragraph (c) really does not define the substance of proceedings but makes plain that the definition extends to proceedings seeking declaratory relief only. Mr Bilinsky conceded that he could not point to a particular provision of a planning law that authorised the impugned resolutions. He did, however, specify in further written submissions various provisions of planning laws which dealt with the defendant's powers over signage. He said, in effect, that, because these powers existed, the proceedings must be characterised as within paragraph (b) of s 20(2) as proceedings "To review ... the exercise of a function conferred ... by a planning or environmental law." 10 Although the distinction is not an entirely easy one, it seems to me that, where what is being reviewed is not the exercise of a function identifiably conferred by a provision of a planning or environmental law but the question of whether or not a power to do what has been done actually exists, jurisdiction remains in the Supreme Court by reference to the principle laid down by the Court of Appeal in the Batemans Bay case supra. 11 Furthermore, it was made plain in an earlier decision of the Court of Appeal that the relevant provisions of the LECA were to be construed as removing from this Court only power to entertain proceedings which fell within the relevant definitions. The provisions were not to be taken as depriving this Court of any power to construe or determine the ambit of provisions of planning laws in so far as those matters fell for determination in a matter which remained within the jurisdiction of this Court: see the decision of the Court of Appeal in Bryants Manly Vale Pty Limited v Francis (1986) 4 NSWLR 635 especially per Priestley JA at 642 - 643. 12 For these reasons, at least on the material available before me at this interlocutory stage, it does not seem clear that the proceedings fall within the class of proceedings excised from the jurisdiction of this Court, insofar as they rely upon a contention that the passage of the resolution was without power. Insofar as the plaintiff's claim rests on a contention that he has a constitutional right to display in public advertising material of the type contemplated and that the Council's resolution is in conflict with that right, the case is in my view even clearer. It seems to me that that claim certainly cannot be characterised as proceedings to enforce a planning instrument nor as proceedings to review the exercise of a function conferred by a planning or environmental law. 26 The fifth defendant submitted that the present proceedings are distinguishable from Murray v Wingecarribee Shire Council firstly because "again it was sought by an opponent of a course of action", and secondly "again, at least on the view taken in Bateman's Bay, any such limitation on the proposed action was based on the general law, not the statute". It seems to me that these are not distinguishing features. The relief sought was in respect of something that had already happened – the passing of the resolution. The relief sought required the interpretation of the planning statute and an assessment of whether a statutory power to do what had been done actually existed. 27 Hamilton J's observation that "paragraph (c) really does not define the substance of proceedings but makes plain that the definition extends to proceedings seeking declaratory relief only" [par 9] was not the subject of any submissions before me. The reference in s 20(2)(c) to "such function" seems to me to mean the function referred to in s 20(b), that is, a function conferred or imposed by a planning or environmental law. 28 The fifth defendant submitted that the payments, the subject of the relief sought, were in breach of or not authorised by s 52 (setting out the functions of Local Aboriginal Land Councils) and s 152 (regulating Local Aboriginal Land Council Accounts) of the Act. It was then submitted that because the Court will have to decide whether the payments fell within any of the functions under s 52 or were authorised under s 152 in order to decide whether the moneys are held on trust as claimed, the proceedings are for a declaration "in relation to the exercise of a function conferred or imposed by" the Act. It is true that it is envisaged that there will in the course of the proceedings be consideration of the Act and the Trust Deed and whether the payments were made within the confines of the Act and/or Deed. It seems to me that this is a situation similar to that with which Hamilton J was dealing and I respectfully agree with his Honour's observation that jurisdiction remains with this Court when what is being considered is the question of whether or not a power to do what has been done actually exists [at 10]. 29 The fifth defendant submitted that grants of power and/or jurisdiction to a court and in particular the Land and Environment Court should be broadly construed: Owners of "Shin Kobe Maru" v Empire Shipping Co Inc (1994) 181 CLR 404 at 420-421; Hillpalm Pty Ltd v Heaven's Door Pty Ltd (2004) 220 CLR 472 at [47]. Accepting that to be the position and also noting the breadth of the term "in relation to" in s 20(2)(c), I am of the view that these proceedings are not proceedings for a declaration in relation to the exercise of a function imposed or conferred by the Act. The declarations sought "relate to" the existence or otherwise of a trust and whether the moneys held may be categorised as trust money in proceedings that will include consideration of whether there was a power to do what was actually done. 30 I refuse to make the order sought in paragraph 1 of the Notice of Motion. I will hear the parties on costs and the balance of the Motion in relation to whether there should be pleadings in the matter. ********************** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.