Wentworth Shire Council v Bemax Resources Limited and Ors

[2013] NSWSC 1047

Supreme Court of NSW

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Interrogate

Catchwords

1. CONTRACTS - construction of the contract - whether a clause limited council rates to $100K (plus "pegged" increases) for twenty years - issue of material to which the Court can have regard in the case of ambiguity and the relevance of the outcome of a particular construction (illegality or void contract) - alternative claims in estoppel and rectification raised but not determined.
1. ADMINISTRATIVE LAW - whether the council's agreement to fix rates for twenty years in the manner contained in clause 3.1 of the contract was beyond power and or a fetter on its power and hence ultra vires.

Quick Take

The Court held that a clause in a road agreement purporting to fix council rates at $100,000 per annum (adjusted only by rate pegging) for 20 years was, on its proper construction, a cap on rates but was ultra vires the Local Government Act 1993 (NSW) because it was not authorised by and was incompatible with the statutory scheme requiring annual rate-making by reference to valuations, ad valorem amounts, and specified procedures. The Court further held that a local council entering into a road acquisition agreement to fulfil planning consent obligations was not acting 'in trade or commerce' for the purposes of s 42 FTA or s 52 TPA, and that the council was not a 'trading corporation' under s 4 TPA, with the character of the act assessed from the perspective of the person doing the act rather than the recipient. Even if the misleading and deceptive conduct claims had succeeded on those threshold issues, the Court found on the evidence that the mining companies had not established causation or loss, as they would have proceeded with the road agreement regardless.