Felixstowe Pty Ltd v Council of the City of Gladstone [1993] QCA 246

IN THE COURT OF APPEAL [1993] QCA 246 SUPREME COURT OF QUEENSLAND Appeal No. 28 of 1993 Brisbane [Gladstone City Council v. Felixstowe] BETWEEN FELIXSTOWE PTY LTD (Appellant) Respondent - and - COUNCIL OF THE CITY OF GLADSTONE (Respondent) Appellant The Chief Justice Mr Justice McPherson Mr Justice Pincus Judgment delivered 28 June 1993 Reasons of the Court ORDERS AS FOLLOWS: 1. Notice of appeal amended by adding as ground 3 that: The Planning & Environment Court erred in law in treating the appellant's intention, in applying for the relevant rezoning, as bearing upon the question whether that rezoning was applied for under cl. 9 of the deed. 2. Appeal allowed: Orders of the learned primary judge set aside. 3. The matter remitted to the Planning & Environment Court in order that it may be decided: (a) Whether cl. 9 of the rezoning deed is unlawful as being in contravention of s. 33(16C)(d) of the Local Government Act 1936. (b) Whether the said cl. 9 is unenforceable as being a penalty or in the nature of a penalty. (c) Whether Felixstowe Pty Ltd was in breach of the rezoning agreement as varied and if so whether the Council was precluded -- 1 of 8 -- from relying upon cl. 9 thereof by waiver, estoppel or election, having regard to the conduct of the Council and Felixstowe on and after 5 February 1986 to and including 7 December 1990. 4. The Planning & Environment Court to decide the appeal before it on the basis of the evidence already adduced and such further evidence as that Court may permit to be adduced. 5. Respondent to pay the appellant's costs of and incidental to the appeal to this Court to be taxed. 6. Indemnity certificate granted to the respondent under s. 15 of the Appeal Costs Fund Act (1973) in respect of the appeal to this Court. CATCHWORDS: LOCAL GOVERNMENT - whether claim for whether matter should be remitted to the Planning and Environment Court. Counsel: Mr D Gore QC with him Mr D Smith for the appellant Mr S Couper for the respondent Solicitors: Messrs Sly & Weigall as town agents for T Goodwin for the appellant Messrs Crouch & Lyndon for the respondent Hearing Date: 19 May 1993 -- 2 of 8 -- THE COURT OF APPEAL SUPREME COURT OF QUEENSLAND Appeal No. 28 of 1993 Brisbane Before The Chief Justice Mr Justice McPherson Mr Justice Pincus [Gladstone City Council v. Felixstowe] BETWEEN FELIXSTOWE PTY LTD (Appellant) Respondent - and - COUNCIL OF THE CITY OF GLADSTONE (Respondent) Appellant JUDGMENT - THE COURT Judgment delivered 28 June 1993 This is an appeal by a local authority from the Planning & Environment Court, which determined in favour of the respondent developer a claim for compensation relating to rezoning certain land at Gladstone. The Court awarded compensation assessed at $402,250; the appeal does not raise any question as to quantum but is based upon the contention, rejected by the learned primary judge, that the developer could recover no compensation on account of the provisions of cl. 9 of a rezoning deed dated 12 March, 1981. The case concerns two rezonings of land, one in 1977 and a second in 1991; the 1981 deed related to the 1977 rezoning. -- 3 of 8 -- 2 The general effect of the deed, the terms of which need not be set out in detail, was to require the developer to develop the land in accordance with a proposal contained in an annexed document. The development was to proceed in stages and the deed provided for stage 1 to be completed within two years from the rezoning of the land in question, and the whole development to be completed within five years. Clause 7 provided for the lodgment of a bond in the sum of $40,000 to secure performance by the developer. Clause 9 provided, in effect, that if the developer should fail in its obligations regarding the development for a period of one year, then the Council might apply for what was described by counsel before us as a "back zoning" - i.e. for a return of the land to its pre-1977 zoning. The clause concluded : "...and in the case of such rezoning being granted the Developer shall not be entitled to any compensation in respect to such rezoning whether on account of injurious affection or otherwise howsoever." The only issue before this Court was whether cl. 9, and in particular the portion of it we have quoted, removed what could otherwise have been a statutory entitlement to compensation for rezoning; the relevant provision is s. 3.5 of the Local Government (Planning and Environment) Act 1990. The learned primary judge held against the Council on this point and did so on the ground that the 1991 rezoning which was the basis of the compensation claim was not the result of the developer's default but occurred independently of -- 4 of 8 -- 3 that default; the judge held, to put it briefly, that there was rezoning, but not a cl. 9 rezoning. At the hearing before us, but not - or at least, not plainly - in the notice of appeal, it was contended that the primary judge erred in law in proceeding on the basis that unless there was shown to have been a rezoning consequential upon an application by the Council prompted by a default on the part of the developer, cl. 9 could not assist the Council. The submission was to the effect that the judge erred in that she took into account the motive or reason for the Council's application for the 1991 rezoning, in order to determine whether cl. 9 operated against the developer. The point we have just mentioned was not contested in this Court. Counsel said that there was no argument advanced below that the question arising under cl. 9 should be disposed of in the way in which her Honour dealt with it and the developer's counsel was not prepared to support her Honour's reasons. We were informed that the points the developer relied on below were : i. The Council waived stipulations as to time in the rezoning deed, or made an election precluding it from relying on clause 9. ii. Clause 9 of the deed was unlawful as -- 5 of 8 -- 4 being in contravention of s. 33(16C)(d) of the Local Government Act 1936. iii. Clause 9 was unenforceable as a penalty. It was argued for the respondent that her Honour's reasons, properly read, amounted to a finding that, assuming the Council could have exercised its rights against the developer under cl. 9, it elected not to do so when default occurred, but rather continued to insist on performance by the developer. In our opinion her Honour did not determine an issue of election in her reasons and they should not be so read; we say nothing as to whether a question of election arises in the case. Counsel were agreed that subject to the argument that the judge had determined an issue of election, which we reject, the case should be remitted to the Planning & Environment Court. We should add that this Court will not, in every case when an appealable error is conceded, necessarily accept the concession, without requiring the point to be argued. In the circumstances of the present case, however, it seems to us proper to do so. The parties were invited to make written submissions with respect to the form of order, and these have been made and considered. The only difference between the parties, on this question, relates to the breadth of the definition of -- 6 of 8 -- 5 the matters to be determined when the case is remitted. We have chosen to adopt the broader definition, suggested by the respondent. The orders will be : 1. Notice of appeal amended by adding as ground 3 that: The Planning & Environment Court erred in law in treating the appellant's intention, in applying for the relevant rezoning, as bearing upon the question whether that rezoning was applied for under cl. 9 of the deed. 2. Orders of the learned primary judge set aside. 3. The matter remitted to the Planning & Environment Court in order that it may be decided: (a) Whether cl. 9 of the rezoning deed is unlawful as being in contravention of s. 33(16C)(d) of the Local Government Act 1936. (b) Whether the said cl. 9 is unenforceable as being a penalty or in the nature of a penalty. (c) Whether Felixstowe Pty Ltd was in breach of the rezoning agreement as varied and if so whether the Council was precluded from relying upon cl. 9 thereof by waiver, estoppel or election, having regard to the conduct of the Council and Felixstowe on and after 5 February 1986 -- 7 of 8 -- 6 to and including 7 December 1990. 4. The Planning & Environment Court to decide the appeal before it on the basis of the evidence already adduced and such further evidence as that Court may permit to be adduced. 5. Respondent to pay the appellant's costs of and incidental to the appeal to this Court to be taxed. 6. Indemnity certificate granted to the respondent under s. 15 of the Appeal Costs Fund Act (1973) in respect of the appeal to this Court. -- 8 of 8 --