Legune Land Pty Ltd v Northern Territory Land Corporation and Anor [2013] NTCA 7

 

PARTIES:                                         LEGUNE LAND PTY LTD

 

                                                         v

 

                                                            NORTHERN TERRITORY LAND CORPORATION

                                                           

                                                            AND

 

                                                            NORTHERN TERRITORY OF AUSTRALIA

 

TITLE OF COURT:                           COURT OF APPEAL OF THE NORTHERN TERRITORY

 

JURISDICTION:                               CIVIL APPEAL FROM THE SUPREME COURT EXERCISING TERRITORY JURISDICTION

 

FILE NO:                                          AP 12 of 2013 (21103427)

 

DELIVERED:                                   22 July 2013

 

HEARING DATES:                           3, 4 and 5 April 2013

 

JUDGMENT OF:                              RILEY CJ, SOUTHWOOD and BLOKLAND JJ

 

APPEALED FROM:                          KELLY J

 

CATCHWORDS:

APPEAL — Appeal against findings of the trial judge – claim by Legune Land Pty Ltd to an equitable lease over land owned by the Northern Territory Land Corporation — whether agreement reached between Legune Land and the Northern Territory of Australia — whether estoppel by convention applies to prevent the Northern Territory of Australia from denying the existence of the agreement — whether asserted agreement conferred an option to lease or profit a`prendre — whether “assignment” of rights under earlier agreement with predecessor in title — whether any rights in Legune Land Pty Ltd binding on Northern Territory Land Corporation — whether Northern Territory Land Corporation acknowledged existence of rights and undertook to hold registered interest subject to those rights — no agreement — no assignment — no estoppel — agreement propounded not such as to confer option or other interest in land — no equitable lease or profit a`prendre — no acknowledgement by the Northern Territory Land Corporation of rights in Legune Land – appeal dismissed.

Native Title Act (Cth)

Pastoral Land Act (NT)

Contracts Act (NT)

Law of Property Act (NT)

 

ALH Group Property Holdings Pty Ltd v Chief Commissioner of State Revenue of New South Wales (2012) 245 CLR 338

Bahr v Nicholay (No 2) (1988) 164 CLR 664

Beneficial Finance Corporation Ltd v Multiplex Constructions Pty Ltd (1995) 36 NSWLR 510

Bishop v Taylor (1968) 118 CLR 518

Booker Industries Pty Ltd v Wilson Park (QLD) Pty Ltd (1982) 149 CLR 600

Broken Hill Co Pty Ltd v Waugh (1988) 14 NSWLR 360

Brown v Dunn (1893) 6 R 67

Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226

Copperart Pty Ltd v Bayside Developments Pty Ltd (1996) 16 WAR 396

Ferguson v Hullock [1955] VLR 202

Foote & Ors v Acceler8 Technologies Pty Ltd and Ors [2012] NSWSC 635

Harvey v Pratt [1965] 1 WLR 1025

Jones v Dunkel (1959) 101 CLR 298

Lace v Chandler [1944] KB 368

Lee v Russell [1961] WAR 103

Legune Land Pty Ltd v Northern Territory Land Corporation & Anor [2012] NTSC 83

Mackay v Wilson (1947) 47 SR (NSW) 315

Maddison v Alderson (1883) 8 App Cas 467

Mangiola v Costanza (1980) A & NZ Conv R 331

NZI Insurance Australia Limited v Baryzcka (2003) 85 SASR 497

Olsson v Dyson (1969) 120 CLR 365

Pagnan spA v Feed Products Ltd [1987] 2 Lloyd’s Rep 601

Penrith RSL Club Ltd v Cameron & Anor (2001) 10 BPR 18,621

Presbyterian Church (NSW) Property Trust v Scots Church Development Ltd [2007] NSWSC 676

Steinberg v Federal Commissioner of Taxation (1975) 134 CLR 640

Toyota Motor Corp Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106

Vroon BV v Foster’s Brewing Group [1994] 2 VR 32

REPRESENTATION:

 

Counsel:

    Appellant:                                    P Dunning SC and S Williams

    First Respondent:                        D Robinson SC

    Second Respondent:                    MP Grant QC and R Bruxner

 

Solicitors:

    Appellant:                                    Povey Stirk

    First Respondent:                        Clayton Utz

    Second Respondent:                    Solicitor for the Northern Territory

 

Judgment category classification:   B

Judgment ID Number:                      Sou1306

Number of pages:                            135


IN THE COURT OF APPEAL

OF THE NORTHERN TERRITORY

OF AUSTRALIA

AT DARWIN

 

Legune Land Pty Ltd v Northern Territory Land Corporation & Anor

[2013] NTCA 7

No. AP 12 of 2013 (21103427)

 

                                                     BETWEEN:

 

                                                     LEGUNE LAND PTY LTD

                                                         Appellant

 

                                                     AND:

 

                                                     NORTHERN TERRITORY LAND CORPORATION

                                                         First Respondent

 

                                                     AND

 

NORTHERN TERRITORY OF AUSTRALIA 

    Second Respondent

 

CORAM:    RILEY CJ, SOUTHWOOD and BLOKLAND JJ

 

REASONS FOR JUDGMENT

 

(Delivered 22 July 2013)

RILEY CJ:

[1]       I agree that the appeal should be dismissed for the reasons given by Southwood J.

SOUTHWOOD J:

Index

[2]       INDEX

Introduction                                                                            [3]

Legune Land’s claims in the Supreme Court                          [8]

The history of the acquisition of Areas 1, 2 and 3              [17]

The findings of Kelly J                                                     [138]

The grounds of appeal                                                       [140]

Ground 5                                                                            [144]

Ground 6                                                                            [161]

Ground 8                                                                            [167]

Ground 9                                                                            [179]

Ground 10                                                                          [180]

Ground 11                                                                          [185]

Ground 12                                                                          [198]

Ground 13                                                                          [212]

Ground 14                                                                          [214]

Conclusion                                                                         [225]

Introduction

[3]       This is an appeal from a judgment of Kelly J dismissing (1) Legune Land Pty Ltd’s[1] claim for a declaration that the Northern Territory Land Corporation holds two areas of land known as Area 1 and Area 2 within the perpetual pastoral lease known as Spirit Hills Station on constructive trust for Legune Land to the extent of Legune Land’s entitlement to a lease or a profit a’prendre until such time as the areas of land are required by the Northern Territory for Stage 2 of the Ord River Irrigation Scheme; and (2) Legune Land’s claim for damages for breach of contract or, alternatively, equitable compensation against the Northern Territory.

[4]       Areas 1 and 2, and another area known as Area 3, were originally part of a perpetual pastoral lease known as Legune Station.  In 1999 the Northern Territory took steps to acquire Areas 1, 2 and 3 from Legune Station Pty Ltd, who was then the registered owner of Legune Station, for purposes of expansion of the Ord River Irrigation Scheme and for such other purposes as the Northern Territory may require.  However, for reasons to do with a native title claim over the whole of Legune Station, the acquisition was not completed until 2010.  After the acquisition was completed the land was incorporated in Spirit Hills Station which was owned by the Northern Territory Land Corporation. 

[5]       In 2000, which was before the acquisition of Areas 1, 2 and 3 was perfected, the registered title of Legune Station was transferred by Legune Station Pty Ltd to Legune Land.  In order for this to occur and to protect the Northern Territory’s interests, certain arrangements were made between Legune Land and the Northern Territory.  Legune Land’s case at trial was that those arrangements culminated in the Northern Territory granting a lease (or a profit a`prendre) of Areas 1 and 2 to Legune Land from 1 September 2001 until the land was required for use in the Ord River Irrigation Scheme.  Legune Land’s interests in the land survived the perfection of the acquisition of the land in 2010.  As the Northern Territory Land Corporation was aware of Legune Land’s interest in the land and had undertaken to recognise its interest, the corporation held the land on trust for Legune Land.  Consequently, the Northern Territory Land Corporation could not require Legune Land to stop grazing cattle on Areas 1 and 2 and vacate the land unless and until the areas were required for the expansion of the Ord River Irrigation Scheme.

[6]       The principal issues in the appeal are: (1) Does the evidence establish that Legune Land was granted an option by the Northern Territory to obtain a lease of Areas 1 and 2 (or a profit a`prendre)?  (2) Did Legune Land exercise the option and obtain a lease of Areas 1 and 2 (or profit a`prendre) before the areas were incorporated into Spirit Hills Station?  (3) Did the Northern Territory Land Corporation acknowledge Legune Land’s occupation and use of Areas 1 and 2 and undertake to recognise the rights of Legune Land in Areas 1 and 2 before those areas were incorporated in Spirit Hills Station? 

[7]       For the reasons set out below, the answers to each of these questions is no.  It has not been established by Legune Land that Kelly J erred in any way and the appeal should be dismissed.  The appellant’s submissions amounted to clutching at straws.  They lacked the ring of reality.

Legune Land’s claims in the Supreme Court

[8]       Legune Land’s claims at first instance were based on three steps.  The first step was to try and prove (one way or another) that the Northern Territory was bound by the terms of a Deed of Agreement alleged to have been made between Legune Land and the Northern Territory on 7 September 2000.[2]  

[9]       The First Right of Refusal Deed was executed by Legune Land before settlement of the transfer of Legune Station to Legune Land.  The document was executed in order to obtain the Northern Territory’s consent to the transfer of Legune Station.  Clause 2.2 of the First Right of Refusal Deed stated that:

If at the expiry of the Term the Territory desires that the Licensed Areas be used for grazing stock and no other purpose then the Territory will grant to the Lessee a first right of refusal to lease the Licensed Area from the Territory at a rental and upon and subject to conditions as the Territory may in its absolute discretion impose PROVIDED that such rental and terms and conditions shall not be less favourable than the terms and conditions upon which the Territory would be prepared to offer a lease of the Licensed Areas to any third party for the same purpose.

[10]    “Licensed Areas” was defined to mean Areas 1 and 2 and the Term of the license expired on 1 September 2001.  Legune Land claimed that cl 2.2 of the First Right of Refusal Deed granted Legune Land an option for a lease (or a profit a`prendre) of Areas 1 and 2. 

[11]    The second step was to try and prove that the preconditions for the exercise of the option had come into existence, the option had been exercised and Legune Land had been granted a lease of Areas 1 and 2 (or a profit a`prendre) before the acquisition of the areas of land by the Northern Territory had been completed.

[12]    The third step was to try and prove that the Northern Territory Land Corporation acknowledged and undertook to recognise the existence of the rights created by clause 2.2 of the First Right of Refusal Deed thereby giving rise to a constructive trust.

[13]    While the elements of the Legune Land’s case are clear enough, Legune Land faced a number of serious difficulties in proving its case.  First, the Northern Territory’s case was that, for a number of reasons, it had deliberately not executed the First Right of Refusal Deed.  Second, Legune Land could not produce a copy of the First Right of Refusal Deed which it claimed had been executed by the Northern Territory.  Third, Legune Land did not have any direct evidence that the First Right of Refusal Deed had been executed by the Northern Territory.  Fourth, even if it was established that the First Right of Refusal Deed was executed by the Northern Territory, that of itself did not amount to the grant of a lease of Areas 1 and 2.  Fifth, cl 2.2 of the First Right of Refusal Deed was drafted in a manner which did not readily convey that the clause was intended to be the grant of an option for a lease of Areas 1 and 2 to Legune Land.  Sixth, there was no evidence which had a tendency to prove that the pre-conditions to the exercise of the rights under cl 2.2 of the First Right of Refusal Deed ever came into existence; in particular, there was no evidence that the Northern Territory desired to use Areas 1 and 2 for grazing stock and no other purpose.  Seventh, there was no evidence to suggest that the Northern Territory had offered Legune Land a lease of Areas 1 and 2 in accordance with cl 2.2 of the First Right of Refusal Deed.  Nor was there any evidence to suggest that Legune Land had accepted any such lease.  Eighth, the terms of cl 2.2 are too uncertain and incomplete to constitute an agreement to enter into a lease.  No term or rent, or mechanism for calculating the term or rent, are specified in the clause.

[14]    To overcome these problems, Legune Land attempted to do three things.  First, it tried to construct a circumstantial case out of the conduct and conversations of various agents of the parties and various documents which were in the possession of the parties.  Second, it argued that the objective theory of contract restricted the use which the respondents could make of some of the evidence that was tendered on their behalf.  Third, it pleaded a number of alternative causes of action and suits to try and establish that the Northern Territory was bound by the terms of the First Right of Refusal Deed, including an agreement by conduct, part performance and estoppel by convention. 

[15]    Legune Land’s case in respect of each of its pleaded claims was severely hampered because none of its directors or owners was called to give evidence.  The natural inference being that they were incapable of giving evidence which supported any of Legune Land’s claims.[3]

[16]    The circumstantial case that was constructed on behalf of Legune Land was a very weak and strained case and it did not improve by being recast under the heads of different claims.  Nor did it improve by being repeated in this Court.  Legune Land’s case did not succeed on the balance of probabilities and it was more than met by the evidence tendered by the respondents.

The history of the acquisition of Areas 1, 2 and 3

[17]    The history of the acquisition of Areas 1, 2 and 3 and their incorporation into Spirit Hills Station and the dealings between the parties is as follows.

[18]    On 19 April 1995 a Memorandum of Understanding (MOU) about the development of Stage 2 of the Ord River Irrigation Scheme was signed by the Chief Minister of the Northern Territory and the Premier of Western Australia.  Under the MOU the Northern Territory was to make suitable land available for the expansion of the scheme.  Land was identified on Spirit Hills Station and Legune Station for that purpose.  The Northern Territory acquired Spirit Hills Station by publication of a Notice of Acquisition in the Northern Territory Gazette dated 15 November 1994.

[19]    On 13 August 1999 the Northern Territory entered into a Deed of Agreement[4] with Legune Station Pty Ltd for the surrender of three areas of land from Legune Station, being proposed NT Portions 5774, 5775 and 5776, in return for compensation of $900,000.  NT Portions 5774 and 5775 were designated for use in the expansion of the Ord River Irrigation Scheme.  NT Portion 5776 was designated for incorporation into the Keep River National Park.  The areas became known as Areas 1, 2 and 3.

[20]    The Excision Deed contained the following recitals and operative provisions of relevance to this appeal.

Recitals

A.     The Lessee is the registered proprietor of those parcels of land being NT Portions 798 and 3222, as contained in Perpetual Pastoral Lease No. 1062 and entered in the Register Book Volume 588 Folio 080 and known as Legune Station (“the Pastoral Lease”).

B.      The Territory wishes to acquire from the Lessee an area of approximately ONE THOUSAND ONE HUNDRED (1,100) square kilometres, the precise boundaries of which are to be surveyed, but generally including those parts of the Pastoral Lease shown on the plan which is Attachment “A” hereto (“the Land”) for the purposes of the Ord River Extension Scheme and/or such other purposes as the Territory may require.

C.      The Lessee and the Territory wish to document the terms and conditions upon which the Land shall be surrendered by the Lessee to the Territory.”

Operative provisions:

2.     Surrender and Compensation

2.1     The Lessee hereby surrenders the Land from the Pastoral Lease in favour of the Territory upon and subject to the following conditions:

2.1.1  The Territory grants the Lessee a licence (“the Licence”) to remain in possession of Area 1 and Area 2 (“the Licensed Areas”) on the following terms:

[There follow a list of conditions to the grant of the Licence over Areas 1 and 2 including condition (d): “that the Lessee shall not transfer sell lease licence mortgage charge dispose of or in any way or manner part with possession of the Licensed Areas or any part thereof during the Term;”.]

…. [Clauses not set out]

2.3     If at the expiry of the Term the Territory desires that the Licensed Areas be used for grazing stock and for no other purpose, then the Territory will grant to the Lessee a first right of refusal to lease the Licensed Areas from the Territory at a rental and upon and subject to such terms and conditions as the Territory may in its absolute discretion impose PROVIDED that such rental and terms and conditions shall not be less favourable than the terms and conditions upon which the Territory would be prepared to offer a lease of the Licensed Areas to any third party for the same purpose.

…. [Clauses not set out]

4.       Registration of Surrender

4.1     The Lessee shall upon payment of the Compensation Sum hand to the Territory an executed surrender of the Land from the Pastoral Lease in the form annexed hereto and marked “B” (“the Panel Form”) which shall be held in escrow by the Territory.   The Lessee hereby authorises the Territory to lodge the Panel Form for registration at the Land Titles Office in Darwin at any time after the expiration of the Term or the sooner lawful termination of the Licence but not before.”

[21]    The Excision Deed provided for: a partial surrender of the perpetual pastoral lease confined to Areas 1, 2 and 3; subject to certain conditions, a licence enabling Legune Station Pty Ltd to remain in possession of Areas 1 and 2 for grazing purposes; subject to earlier termination upon the Northern Territory giving six weeks’ notice that the land was required for the Ord River Irrigation Scheme, a licence term from 16 August 1999 to 1 September 2001; and a first right of refusal to Legune Station Pty Ltd for a lease over Areas 1 and 2 at a rental and on terms imposed by the Northern Territory if at the expiry of the licence on 1 September 2001 the Territory desired that those areas be used for grazing stock and no other purpose.  The Excision Deed imposed both benefits and burdens on the Northern Territory and Legune Station Pty Ltd.  The burdens on Legune Station Pty Ltd included the maintenance of all boundary and other fencing and fixed improvements within Areas 1, 2 and 3 in good condition and tenantable repair and condition.

[22]    On 16 August 1999 the Northern Territory paid Legune Station Pty Ltd compensation of $900,000 and the company executed a partial surrender of lease for Areas 1, 2 and 3.  The instrument of surrender was held in escrow by the Northern Territory pending the resolution of a native title claim over the whole of Legune Station.  The surrender was held in escrow because the Northern Territory was uncertain what impact the perfection of the surrender would have on the native title claimants’ prospects of success.  The effect of the execution and delivery of the partial surrender was to transfer the beneficial interest in Areas 1, 2 and 3 to the Northern Territory and leave Legune Station Pty Ltd with the bare legal title to those areas.

[23]    On 3 May 2000 Cridlands, who were the Darwin solicitors for Legune Land, sent a letter to Mr Tony Fowlestone who was the Director of the Land Management Branch of the Department of Lands Planning and Environment.  The letter was part of the due diligence that Cridlands was undertaking on behalf of Legune Land for the purchase of Legune Station and it requested information about compliance with lease covenants, Crown rental, proposed surrenders and any other matters that may affect Legune Land if it became the lessee.

[24]    On 4 May 2000 Mr Fowlestone replied by letter.  He stated that the conditions applicable to the perpetual pastoral lease were those set out in s 38 and s 39 of the Pastoral Land Act; there had been an acquisition of “230 square kilometres” (sic)[5] of land in the south of the property which had been proposed for inclusion in the development of Stage 2 of the Ord River Irrigation Scheme; and there was a native title claim over the whole of Legune Station.

[25]    The Land Management Branch of the Department of Land Planning and Environment is a separate branch to the Land Acquisition Branch of the Department.  The due diligence enquiries made by Cridlands were not the kind of enquiries that would have caused someone in the Land Management Branch of the Department to immediately give consideration to the status of the Northern Territory’s interest in Areas 1, 2 and 3 and how the interest should be protected.

[26]    On 18 May 2000 Cridlands wrote to Fox and Thomas, the principal solicitors for Legune Land, and informed them that the major issues for the purchase of Legune Station were the native title claim, any residual problems with stock subject to the Brucellosis Tuberculosis Eradication Campaign, the agreement with the Northern Territory about the expansion of the Ord River Irrigation Scheme and issues surrounding the proposed use of the property.

[27]    On 19 May 2000 Cridlands sent a facsimile to Fox and Thomas which had attached to it a copy of the Excision Deed.  The facsimile also advised Fox and Thomas that Legune Station Pty Ltd could not transfer Legune Station to Legune Land without the consent of the Northern Territory.

[28]    On 9 August 2000 Legune Land and Legune Station Pty Ltd signed the Contract of Sale of Legune Station.  Under the Contract of Sale, Legune Land did not purchase Areas 1, 2 and 3.  The land being sold was defined as the portions contained in the relevant perpetual pastoral lease but specifically excluding Areas 1, 2 and 3 which had been surrendered by Legune Station Pty Ltd to the Northern Territory under the Excision Deed.  The Contract of Sale was also conditional upon the consent of the Minister to the transfer of Legune Station to Legune Land.

[29]    The Contract of Sale contained a number of special conditions.  Special condition 6 of the Contract of Sale states:

 

6.  DEED OF AGREEMENT – NORTHERN TERRITORY

6.1   The Vendors disclose the existence of an agreement dated 13 August 1999 between the Northern Territory of Australia (“the Territory”) and Legune Station with respect to the surrender of approximately 1,100 square kilometres of land;

6.2   If registration of the surrender has not been effected prior to the Completion Date, the Purchaser will accept the title to the Land and will assume the obligations of Legune Station under the Deed of Agreement and will, if requested by the Territory, execute a further surrender to be registered following Completion by the Territory of the necessary surveys of the land being surrendered;

6.3   The Purchaser agrees to indemnify and keep indemnified Legune Station for any liability imposed upon it, or loss or damage suffered by it, as a consequence of the Purchaser’s failure to observe the obligations of Legune Station under the Deed of Agreement after Completion;

6.4   Subject to the consent of the Territory being obtained, Legune Station will assign any continuing benefits it has under the Deed of Agreement to the Purchaser with effect from the Completion Date; and

6.5   If the consent of the Territory is not obtained to the assignment referred to in the immediately preceding subparagraph, Legune Station will execute a Deed of Surrender of any remaining interests it has in such Deed of Agreement and in particular will not permit any other party to occupy or depasture stock on the land the subject of the surrender.”

[30]    Special condition 6.2 of the Contract of Sale provides that, if the surrender of Areas 1, 2 and 3 had not been registered by the completion of the Contract of Sale, then Legune Land would accept title[6] to the land and would assume the obligations of Legune Station Pty Ltd under the Excision Deed including the execution of a further surrender.  This sub-clause had force and effect regardless of whether any of the benefits that Legune Station Pty Ltd had under the Excision Deed were assigned to Legune Land.

[31]    On 22 August 2000 Mr Guy Riley, who was a legal practitioner with Clayton Utz the solicitors for Legune Station Pty Ltd, sent a letter to Mr Fowlestone advising him that Legune Station Pty Ltd and Legune Land had entered into the Contract of Sale for Legune Station and that settlement was due on 7 September 2000 which, at that time, was incorrect.  The Contract of Sale provided that settlement would take place on 6 September 2000.  A copy of the Contract of Sale was not enclosed with the letter.  Mr Riley also asked to be informed when the parties could expect the Minister’s consent to the transfer of Legune Station.

[32]    On 1 September 2000 Cridlands sent a letter to Mr Fowlestone and Mr John Pinney who was the Chief Executive Officer of the Department of Land Planning and Environment.  The letter enclosed a document described as an undertaking which contained particulars about Legune Land’s holdings of pastoral land in the Northern Territory, the shareholders of Legune Land and the use to be made of the property.  The purpose of providing the undertaking was to obtain the Minister’s consent to the transfer of Legune Station by demonstrating that Legune Land met the usual criteria applicable in determining whether a party was a suitable holder of a perpetual pastoral lease.

[33]    On 1 September 2000 someone within the Department of Land Planning and Environment requested a copy of the Contract of Sale and Cridlands facsimiled a copy of the contract to the Pastoral Management Branch of the Department.

[34]    On 3 September 2000 Ms Menz, who was then a junior solicitor at Cridlands, sent an email to Mr Fox of Fox and Thomas advising him, among other things, that: (1) the Pastoral Management Branch of the Department of Land Planning and Environment was presently attending to the consent to transfer of the pastoral lease; and (2) the vendor’s solicitor had informed her that the Deed of Surrender which was executed by Legune Station Pty Ltd had not been registered and matters had not proceeded further since the exchange of the Contract of Sale.  Ms Menz stated that as a result it was likely that the Legune Land would be required to take on the obligations of Legune Station Pty Ltd under the Excision Deed in accordance with special condition 6 of the Contract of Sale.

[35]    On 4 September 2000 Mr Fowlestone sent a memorandum to Mr Pinney which recommended that Mr Pinney exercise his delegation under s 68(3) of the Pastoral Land Act to consent to the transfer of the perpetual pastoral lease 1062, being Legune Station, from Legune Station Pty Ltd to Legune Land.  This recommendation was based on Legune Land meeting the usual criteria applicable to the holder of a perpetual pastoral lease and without reference to the Excision Deed and the surrender of Areas 1, 2 and 3 and the Land Acquisition Branch of the Department of Land Planning and Environment.  On 5 September 2000 Mr Pinney approved Mr Fowlestone’s recommendation.  However, the Minister’s consent was not immediately delivered to either Legune Land or Legune Station Pty Ltd.

[36]    On the morning of 6 September 2000 Ms Noreen Blackley, who was the Manager of the Lands Acquisition Branch of the Department of Lands Planning and Environment, became aware of the proposed transfer of Legune Station.  She became concerned that the transfer of the perpetual pastoral lease may jeopardise the Northern Territory’s acquisition of Areas 1, 2 and 3 which had yet to be perfected by registration of the surrender documents.  The surrender documents were still being held in escrow in accordance with the Excision Deed.  Ms Blackley became aware of this transaction about one hour before settlement of the Contract of Sale was originally scheduled to occur[7].  As a result, she entered into dealings with Cridlands.  She did so of her own motion without recommending to Mr Pinney that the Northern Territory enter into a Deed of Agreement with Legune Land or obtaining instructions from him to that effect.  Ms Blackley did not have authority to bind the Northern Territory in such matters.  Mr Pinney was the delegate of the Minster.  Neither Ms Blackley nor Ms Menz had a detailed recollection of their dealings.

[37]    Ms Blackley gave evidence that she had a general understanding that the effect of the Excision Deed was that the Northern Territory paid $900,000 for the surrendered areas.  She was aware that the surrender was not to be immediately registered on the title to Legune Station because the Northern Territory was uncertain about the impact registration would have on the native title claim over the whole of Legune Station.  She was aware that, under the Excision Deed, Legune Station Pty Ltd was to continue to use the surrendered areas for grazing cattle until 1 September 2001 unless the licence was terminated earlier by the Northern Territory.  She understood that, under the Excision Deed, Legune Station Pty Ltd had agreed not to sell or otherwise deal with the surrendered areas while the grazing licence was in place.  Ms Blackley had not seen a copy of the Contract of Sale for Legune Station.  Her only concern was to try and protect the Northern Territory’s interest in Areas 1, 2 and 3.

[38]    Ms Menz’s file notes of her dealings with Ms Blackley record the following.  On 6 September 2000 Ms Blackley telephoned Ms Menz and told her that the Department of Land Planning and Environment was withholding consent to the transfer of the perpetual pastoral lease of Legune Station because the Department needed an undertaking, a similar agreement with the purchaser to the agreement the Northern Territory had with Legune Station Pty Ltd and a surrender document executed by Legune Land.  After this telephone call, Ms Blackley telephoned Ms Menz again.  She advised Ms Menz that (1) the Department preferred not to register the surrender document executed by Legune Station Pty Ltd at that time; and (2) the Department would consent to the sale of Legune Station provided the proposed purchaser (a) signed a partial surrender, and (b) an agreement to take on the responsibility for the existing Deed of Agreement between Legune Station Pty Ltd and the Northern Territory.  The new agreement was to be confined to Areas 1 and 2.  Clause 2.1.2 of the Excision Deed which dealt exclusively with Area 3 was not appropriate for the new agreement.

[39]    On 6 September 2000 Fox and Thomas sent a form of undertaking to Simon Hall at Legune Land for signature.  The undertaking was signed by Mr Peter Campbell on behalf of Legune Land and then facsimiled to Cridlands.  The undertaking stated:

Legune Land Pty Ltd … hereby undertakes as follows:

1.        To be bound by and to the terms of a certain Deed of Assignment entered into between the Northern Territory of Australia and Legune Station Pty Ltd … dated 13 August 1999 as though and to the effect that Legune Land Pty Ltd had entered into the executed document in place of Legune Station Pty Ltd.

2.        In particular, Legune Land undertakes to execute all documents, Deeds and papers and to do all things that may be required by the Northern Territory and in particular the execution of any further form of surrender as may be required by the Northern Territory to give effect to the terms of the Deed of Agreement.

[40]    At some point in time a copy of the Undertaking was given to the Department of Land Planning and Environment.

[41]    At 4.11 pm on 6 September 2000 Ms Menz sent an email to Mr Fox and Mr Riley.  The email stated:

Norm, this is to confirm our telephone conversation, and Guy, for your information.

Noreen from Department of Lands has advised that they require an original Partial Surrender form executed by our clients, and an original new Agreement in the same terms as the Agreement with Legune Station Pty Ltd, except the Agreement is to be in relation to Areas 1 and 2 only – Area 3 is not to be included (although it is to be surrendered).

I will prepare the two documents and the clients will attend at Cridlands at 9 am tomorrow morning to execute them.  I have confirmed with Noreen that the documents will be delivered to the Department of Lands who will then provide the consent to the transfer.

Settlement is rescheduled for 11am tomorrow morning at the Lands Titles Office.

[42]    On its face the statement that “they require an … original new Agreement, in the same terms as the Agreement with Legune Station Pty Ltd” in Ms Menz’s email, does not accurately reflect Ms Menz’s file notes of the two telephone conversations that she had with Ms Blackley.  According to the file notes of those conversations, Ms Blackley sought a similar agreement under which Legune Land took on the responsibilities that Legune Station Pty Ltd had under the Excision Deed.  It should also be noted that Ms Menz did not state in her email that Department of Land Planning and Environment would provide a signed copy of the Agreement to Legune Land at settlement.  It is only the consent to the transfer of Legune Station that was to be provided.

[43]    At 4.12 pm on 6 September 2000 Mr Fox sent an email to Mr Riley which, among other things, stated:

We confirm our agreement to proceed to settlement on the basis of your undertaking that:

1.   ….

2.   You undertake on behalf of your clients that your clients will execute a Deed of Assignment of Benefit with respect to the original agreement with the Northern Territory of Australia and in addition execute a Deed of Surrender of Benefit of the benefits the subject of that Deed of Agreement and that you will deliver those documents as soon as possible after settlement [emphasis added].

[44]    Mr Fox’s email provides some evidence that at the close of business on 6 September 2000 the agents of Legune Land did not think that the Northern Territory was actually going to enter into an agreement with Legune Land in terms of the First Right of Refusal Deed or, in any event, did not think that any concluded agreement had been reached with the Northern Territory.  If a concluded agreement had been reached in terms of the First Right of Refusal Deed it would have been unnecessary for there to be an assignment of Legune Station Pty Ltd’s benefits under the Excision Deed.  It would only be necessary for Legune Station Pty Ltd to surrender its benefits under the Excision Deed in accordance with special condition 6.5 of the Contract of Sale. 

[45]    Nor did the agents of Legune Land think that the Northern Territory had consented to the assignment contemplated by special condition 6.4 of the Contract of Sale.  The email contemplates that any assignment of any benefits that Legune Station Pty Ltd had under the Excision Deed would only occur after settlement if at all.  If the Northern Territory had given consent to the assignment of Legune Station Pty Ltd’s benefits under the Excision Deed, it would not have been necessary for Legune Station Pty Ltd to execute the Deed of Surrender of Benefit.

[46]    Contrary to Ms Menz’s statement in her email to Mr Fox and Mr Riley on 6 September 2000, the Partial Surrender and First Right of Refusal Deed were not delivered to Ms Blackley prior to settlement on the morning of 7 September 2000.  Instead, at 9.52 am on 7 September 2000, which was only one hour before settlement, Ms Menz sent a facsimile to Ms Blackley which enclosed the First Right of Refusal Deed and a Partial Surrender.  The email stated:

We refer to our telephone conversation earlier today.

Please find enclosed the [First Right of Refusal Deed] and Partial Surrender, as requested by you, executed by Legune Land Pty Ltd.

Could you please confirm that the documents are satisfactory to you and that the Department is in a position to provide their consent to transfer at settlement at 11 am today at the Land Titles Office in Darwin?  We shall provide the original documents at settlement.

Please let me know if you have any queries.

[47]    Ms Blackley was not asked to arrange for the First Right of Refusal Deed to be executed by the Northern Territory prior to settlement so that the original deeds could be exchanged at settlement.  Ms Menz did not even give evidence that prior to settlement Ms Blackley confirmed that the documents were satisfactory.  Nor were Ms Blackley, or the Department of Lands Planning and Environment, asked by Ms Menz to provide consent to the assignment to Legune Land of the benefits Legune Station Pty Ltd had under the Excision Deed. 

[48]     The facts referred to in par [46] and par [47] above support Kelly J’s finding that the only agreement reached between the Northern Territory and Legune Land was that if Legune Land provided the First Right of Refusal Deed signed by Legune Land the Northern Territory would consent to the transfer of Legune Station to Legune Land.[8]  As matters transpired, the signed document was provided and the consent was given.  Nothing else occurred.

[49]    Ms Blackley’s evidence was that it was likely she considered the attachments to the facsimile transmission she received before settlement.  However, given that the facsimile transmission only arrived an hour before settlement, she doubted if she considered the attachments in any detail.  Her main concern was to satisfy herself that Legune Land would be producing a surrender document for the surrendered areas. 

[50]    The First Right of Refusal Deed facsimiled to Ms Blackley contained the following recitals:

WHEREAS

A.       The Lessee is the registered proprietor of those parcels of land being NT Portions 798 and 3222, as contained in Perpetual Pastoral Lease No. 1062 and entered in the Register Book Volume 588 Folio 080 and known as Legune Station (“the Pastoral Lease).

B.       The Territory wishes to acquire from the Lessee an area of approximately ONE THOUSAND ONE HUNDRED (1100) square kilometres, the precise boundaries of which are to be surveyed, but generally including those parts shown on the plan which is Attachment “A” hereto (“the Land”) for the purpose of the Ord River Extension Scheme and/or such other purposes as the Territory may require.

C.       The Lessee and the Territory wish to document the terms and conditions upon which the Land shall be surrendered by the Lessee to the Territory.

[51]    The recitals are inaccurate in two important respects.  First, at the time the First Right of Refusal Deed was executed by Legune Land, Legune Land was not the registered owner of the pastoral lease.  Legune Station Pty Ltd remained the registered owner until settlement.  Second, the Northern Territory had acquired the beneficial interest in Areas 1, 2 and 3 and the rights to acquire the legal title from Legune Station Pty Ltd and had paid $900,000 compensation to do so.

[52]    As to surrender and compensation, the operative part of the First Right of Refusal Deed contained the following provisions:

2.    Surrender and Compensation

2.1     The Lessee hereby surrenders the Land from the Pastoral Lease in favour of the Territory upon and subject to the following conditions:

2.1.1     The Territory grants the Lessee a licence (“the Licence”) to remain in possession of Area 1 and Area 2 (“the Licensed Areas”) on the following terms:

(a)   for a licence fee of $1.00 per annum (if demanded);

(b)   for a period commencing on the date hereof and expiring:

(i)     upon the expiration of six (6) weeks written notice by the Territory to the Lessee that the Licensed Areas are required by the Territory to be used for the Ord River Extension Scheme (“the Scheme”); or

(ii)    on 1 September 2001;

                                      whichever comes first (“the Term”);

(c)   that the Lessee shall not transfer sell lease licence mortgage charge dispose of in any way or manner part with possession of the Licensed Areas or part thereof during the Term;

(d)   that the Lessee shall not be placed in receivership, placed in liquidation or make any arrangement for the benefit of its creditors;

(e)   that the Lessee shall maintain all boundary and other fencing and fixed improvements (if any) within the Licensed Areas in good and tenantable repair and condition fair wear and tear excepted;

(f)   that the Lessee obtain written consent of the Territory prior to erecting, constructing, altering, renovating, dismantling or demolishing any structure or fixture within the boundaries of the Licensed Areas or undertaking any works within the Licensed Areas of any nature whatsoever which may alter the value of the Licensed Areas (whether detrimentally or not);

(g)   that no compensation monetary or otherwise will be payable to the Licensee in respect of any improvements made to the Licensed Areas in any circumstances; and

(h)   that a breach of any term of the License shall constitute a breach of a condition of this Agreement and that without limiting the rights of the Territory at law the License may be terminated by the Territory by notice in writing to the Licensee at which time the Territory forthwith be entitled to Register the Panel Form in accordance with clause 3 hereof.

2.2     If at the expiry of the Term the Territory desires that the Licensed Area be used for grazing stock and no other purpose then the Territory will grant to the Lessee a first right of refusal to lease the Licensed Area from the Territory at a rental and upon and subject to conditions as the Territory may in its absolute discretion impose PROVIDED that such rental and terms and conditions shall not be less favourable than the terms and conditions upon which the Territory would be prepared to offer a lease of the Licensed Areas to any third party for the same purpose.

[53]    Clause 2.1.1 of the First Right of Refusal Deed provides that the Licence referred to in the clause expires on 1 September 2001 at the very latest.  Any rights granted by cl 2.2 only come into existence after the expiry of the term of the Licence and if the Northern Territory desired the License Areas to be used for grazing stock and no other purpose.  Clause 2.2 does not specify the term of any Lease nor the rent payable under any lease.  Nor does the clause provide any mechanism for calculating the term of the lease or the rent payable.

[54]     The First Right of Refusal Deed ended with the following provision for signature by the Northern Territory:

IN WITNESS WHEREOF the parties have executed this Deed the day and year first herein before written.

SIGNED by                                                                                  For and on behalf of the                                                         NORTHERN TERRITORY OF AUSTRALIA                          Pursuant to a delegation under the Contracts Act                              in the presence of

…………………..                                                                   Witness                                                                                                                                                                                   

[55]    The First Right of Refusal Deed contained clear provision for the deed to be signed by someone who had appropriate authority under the Contracts Act (NT).  The only person who had that authority was Mr Pinney.  In the circumstances, simply receiving a copy the deed, which had been signed by Legune Land, and providing the Minister’s consent to the transfer of Legune Station at settlement is not conduct which evinces an intention that the Northern Territory be bound immediately to the deed.

[56]    On 7 September 2000 Ms Menz sent a facsimile, which enclosed a Deed of Assignment and a Deed of Surrender under special conditions 6.4 and 6.5 of the Contract of Sale, to Mr Riley.  In contrast to the facsimile sent to Ms Blackley, the facsimile asked Mr Riley to arrange for the documents to be executed before settlement.  It also confirmed that Cridlands had provided the Department of Land Planning and Environment with an executed Partial Surrender and the First Right of Refusal Deed.  In fact, Ms Menz had only sent a facsimile copy of each of those documents to Ms Blackley.

[57]    Settlement of the Contract of Sale occurred at 11.00 am on 7 September 2000.  At settlement the Northern Territory was given a copy of the First Right of Refusal Deed which had been executed by Legune Land and a cheque for rent payable in respect of the whole area of Legune Station which was consistent with Legune Land receiving legal title to the whole of the perpetual pastoral lease in accordance with special condition 6.2 of the Contract of Sale.  In return the Department of Land Planning and Environment provided the Minister’s consent to the transfer of the perpetual pastoral lease and a notice was recorded on the Record of Administrative Interests and Information on the title advising that the surrendered areas were the subject of a proposed acquisition.

[58]    After settlement, Legune Land took possession of Legune Station and the cattle which formed part of the Contract of Sale.  Thereafter, Legune Land continued to graze the cattle which it had purchased and were on Areas 1 and 2 on those same areas in the same manner that Legune Station Pty Ltd had done.   

[59]    At 1.00 pm on 7 September 2000 Ms Blackley sent an email to Mr Pinney to notify him that Legune Station had been transferred and to update him for his meeting with the new owners of Legune Station.  Ms Blackley reminded Mr Pinney of the arrangements that were in place between Legune Station Pty Ltd and the Northern Territory and informed him of the steps she had taken to protect the Northern Territory’s interests in the surrendered areas of land.  She stated that the solicitors for the purchaser were asked to provide another agreement and a new partial surrender document which were signed by the new owners.  The email did not attach a copy of the First Right of Refusal Deed.  Nor did Ms Blackley make a recommendation to Mr Pinney in the email that he should sign the First Right of Refusal Deed on behalf of the Minister. 

[60]    On the afternoon of 7 September 2000 Mr Pinney met with two of the owners of Legune Land.  Mr Pinney gave evidence that he did not recall who they were.  It was the first time that he had met with the representatives of Legune Land. His file note of the meeting states:

I spoke to two of the new owners today.

They are interested

1.        In leasing Areas 1 and 2 if the Ord#2 is delayed.

2.        Having 1st right of purchase on areas 1 and 2 if Ord#2 is cancelled.

They advised that the native title holders told them yesterday that they want Ord#2 constrained to the west of the Keep River.

[61]    The notes of the meeting do not suggest that the owners asked for a signed copy of the First Right of Refusal Deed or that Mr Pinney said that he would be signing the deed.  The representatives of Legune Land stated what their wishes were if the expansion of the Ord River Irrigation Scheme was delayed or cancelled.  The fact that they said that they were interested in a lease, if the Scheme was delayed, and in purchasing the surrendered areas, if the expansion of the Scheme was cancelled, suggests that they acknowledged that the Northern Territory was for all intents and purposes the owner of Areas 1 and 2 and Legune Land’s interest in those areas, at that time, was less than a leasehold interest.  Mr Pinney’s notes do not suggest that the First Right of Refusal Deed was discussed at all or that the representatives of Legune Land would be exercising any rights granted by that document.  The two owners of Legune Land were not called to give evidence about what was discussed during that meeting.  They were not even identified.

[62]    Mr Pinney gave evidence that his intention at that time was not to bind the Northern Territory to any agreement because he wanted to retain as much flexibility as possible for the Northern Territory.  The principal purpose he had in mind was the expansion of the Ord River Irrigation Scheme but he was also aware of the Miriuwung Gajerrong native title claim and the fact that the Northern Territory may have to make an offer of some land in order to resolve that claim.  He stated that at no time during the course of the meeting on 7 September 2000, or at any other time, did any representative of Legune Land suggest that the company had any right to occupy Areas 1 and 2.  At no time during the course of the meeting on 7 September 2000, or at any other time, did any representative of Legune Land suggest to him that the company had a first right of refusal for a lease of Areas 1 and 2.  At no time during the course of the meeting, or at any other time, did any representative of Legune Land request a lease of the two areas on the basis that the Northern Territory had determined that the land would only be used for grazing stock and no other purpose.  Mr Pinney’s evidence was consistent with the contents of the file note that he made of the meeting he had with the representatives of Legune Land on 7 September 2000.

[63]    On 8 September 2000 Ms Menz sent a facsimile to Mr Fox.  Among other things she stated:

We enclose with the original of this letter:

·    

·    

·     The original of the Deed of Assignment and Deed of Surrender (in respect of the Agreement with the Northern Territory) prepared by you and executed by Legune Station Pty Ltd;

·     The original Deed of Agreement executed by Legune Land – we shall forward a copy of the Agreement executed on behalf of the Northern Territory once it is available.

In relation to the agreement with the Northern Territory, the Department of Land Planning and Environment accepted the Partial Surrender form and an Agreement (in substantially the same form as was executed by Legune Station Pty Ltd) in exchange for production of the consent to transfer the pastoral lease at settlement.

However, the present Real Property Act (NT) will be replaced by the Law of Property Act (NT) (this is presently scheduled to occur in September 2000) and the form of partial surrender acceptable for lodgement at the Lands Title Office will be changed.  Therefore, the Department may require Legune Land to execute a replacement Partial Surrender form at that time.

[64]    On 13 September 2000 Ms Menz sent a letter to Ms Blackley which enclosed a further copy of the First Right of Refusal Deed.  Among other things, the letter stated:

Please find enclosed a further copy of the Deed of Agreement provided to you on 7 August (sic)[9] 2000, executed by Legune Land.

Once the Deed of Agreement is executed on behalf of the Northern Territory, could you please return one copy to this office, for our client’s records?

[65]    This was the first time that the Northern Territory was requested to return a signed copy of the First Right of Refusal Deed to either Cridlands or Legune Land.  The request was made after settlement and after the Northern Territory had provided the Minister’s consent to the transfer of Legune Station.  This tends to suggest that a concluded agreement had not been reached as yet and that the agreement was contingent on the Northern Territory signing the deed and delivering it to the solicitors for Legune Land.

[66]    By 13 September 2000 the Northern Territory had been provided with three copies of the First Right of Refusal Deed which had been executed by Legune Land.  Senior counsel for Legune Land argued that more than three executed copies of the deed had been provided to the Northern Territory but there is no evidence of this occurring.  No owners or representatives of Legune Land were called to give evidence that they signed more than three copies of the deed.  The wording of the facsimile that was sent to the Northern Territory on 7 September 2000 clearly states that a facsimile copy of the deed was enclosed with the facsimile.  The letter dated 13 September 2000, states that “a copy” of the deed was delivered at settlement and only encloses “a further copy” not “copies” of the deed.  If more than one signed copy of the deed had been provided to the Northern Territory at settlement there would be no need to enclose another signed copy of the deed on 13 September 2000. 

[67]    None of the copies of the First Right of Refusal Deed were executed by the Minister or Mr Pinney who was his delegate.  All three copies of the deed (including the facsimiled copy) which were provided to the Northern Territory were tendered in evidence and none of them was signed on behalf of the Northern Territory.  Mr Pinney gave evidence that he did not sign the deed and gave reasons for not doing so.  However, contrary to the usual practice of the Department of Land Planning and Environment, no formal written record of the decision not to sign the deed was produced by the Department.

[68]    The usual practice of the Department of Land Planning and Environment was that a record would be made of both a decision to sign and a decision not to sign such a deed.  In the circumstances, the fact the Northern Territory did not follow the usual process of recording that a decision was made not to sign the First Right of Refusal Deed does not have a tendency to prove the contrary.  There simply was no formal record at all of the decision on this occasion.  The lack of the formal record is not a piece of circumstantial evidence which tends to prove the deed was signed.  The lack of the record is not evidence of anything other than there was no record made by the Department.  Mr Pinney’s evidence is corroborated by the fact that all three copies of the deed which had been given to the Northern Territory were tendered in evidence and were not signed by the Northern Territory and by the fact that the copy of the deed sent to Mr Fox by Ms Menz on 8 September 2000 was not signed by the Northern Territory.

[69]    The Northern Territory never sent a signed copy of the First Right of Refusal Deed to Cridlands or Legune Land and no further request was ever made for the Northern Territory to provide Legune Land with a signed copy of the deed.

[70]    On 1 September 2001 the licences said to have been granted to Legune Land by cl 2.1.1 of the Excision Deed and the First Right of Refusal Deed would have expired.  However, there was no communication about this, at all, between the Northern Territory and Legune Land, and Legune Land’s occupation of Areas 1 and 2 continued as it had immediately following the settlement of the Contract of Sale.  There is also no evidence that as at 1 September 2001 the Northern Territory wished Areas 1, 2 and 3 to be used for grazing stock and for no other purpose.

[71]    On 6 April 2003 an internal email was sent by Ms Gail McLeod to Ms Beve Griffiths.  Both Ms McLeod and Ms Griffiths were employees of the Department of Land Planning and Environment.  In the email, Ms McLeod stated that Parks and Wildlife were querying who was responsible for Areas 1, 2 and 3 within Legune Station.  Ms Griffiths was out of the office, so on 6 May 2003 Ms McLeod forwarded the email to Ms Blackley.   She asked Ms Blackley if she could identify who was responsible for the surrendered areas of land.  She also informed Ms Blackley that the Department of Land Planning and Environment had received an application for consent to a sublease of Legune Station to Legune Pastoral Co Pty Ltd and Peter Campbell FT Pty Ltd as trustee for the Peter Campbell Family Trust.  Mr Campbell was one of the owners of Legune Land.  The proposed term of the sublease was from 1 November 2002 to 31 October 2004.  Ms Blackley was asked to advise if the sublease would have any effect on the partial surrender of Legune Station.

[72]    At 2.05 pm on 6 May 2003 Ms McLeod sent an email to Ms Simone White, who was in the Department of Transport and Works, advising her that Legune Land was responsible for the surrendered areas within Legune Station.  The advice was consistent with special condition 6.2 of the Contract of Sale, cl 1 of the Undertaking executed by Legune Land on 6 September 2000 and cl 2.1.1(f) of the Excision Deed and the First Right of Refusal Deed.

[73]    On 29 May 2003 Povey Stirk, the solicitors who were now acting for Legune Land, sent a letter to the Pastoral Branch of the Department of Land Planning and Environment seeking consent under s 68 of the Pastoral Land Act to a sublease of the whole of Legune Station.  The letter made no mention of the areas that had been surrendered to the Northern Territory.

[74]    On 1 July Mr Peer Schroter at Povey Stirk telephoned Mr Fowlestone and they discussed the contents of Mr Fowlestone’s anticipated response to Legune Land’s application.  Mr Fowlestone raised two matters: (1) protection of the Northern Territory’s interest in the surrendered areas and (2) major development works that were being carried out on the lease.  During the conversation, Mr Schroter stated that he was not aware of the two matters raised by Mr Fowlestone because he had not received instructions about those matters from the Toowoomba solicitors.  Mr Schroter advised that he would relay the matters to Bernays and Bernays who were the Toowoomba solicitors for Legune Land.

[75]    On 2 July 2003 Mr Fowlestone replied by letter to Povey Stirk.  In his reply, among other things, he stated:

As discussed, there are two matters that need to be resolved before I can submit the application to the delegate of the Minister for consideration.

The first of the matters relates to the acquisition of NT portions 5774, 5775 and 5776 from Legune Land by the Northern Territory.  I would appreciate your advice on how the matter is to be dealt with having regard to the proposed sublease.  The delegate will need to be absolutely sure that the Territory’s interest is protected.  Ms Noreen Blackley of this Department … is the person to contact if you need any further particulars in this regard

The second matter relates to major development works that have been carried out on the lease.  I understand that the lessees are waiting for advice on the procedures, if any, they may be required to follow under the Environment Assessment Act.  The delegates of the Minister will need to be briefed about such requirements and how the proposed sublease might impact on these.  The delegate of the Minister will need to be absolutely sure that any lessee obligations will not be impacted on by the proposed sub-lease.

[76]    On 4 July 2003 Mr Fowlestone made a file note on a copy of the letter dated 2 July 2003 which states, “Bernays and Bernays[10] phoned.  4/7/03.  After speaking to Noreen Blackley and me, they will apply to vary the lease to include a covenant/condition to surrender the land at nil cost when requested to do so by the Minister.”  This file note tends to suggest that Legune Land acknowledged that the land was to be surrendered unconditionally at the will of the Minister.  No note was made to suggest that the solicitors for Legune Land maintained that any surrender was contingent on Areas 1 and 2 being used for the expansion of the Ord River Irrigation Scheme or was subject to the First Right of Refusal Deed.  It was Mr Fowlestone’s evidence that to the best of his recollection the Queensland solicitor did not suggest to him that there was any agreement between Legune Land and the Northern Territory relating to the surrendered areas.

[77]    On 25 August 2003 Ms Blackley met with Mr Campbell and a representative of the proposed sub-lessee.  On 26 August 2003 Ms Blackley sent the following email to Mr Fowlestone:

Met with Peter Campbell and Co yesterday to discuss the proposed sublease etc.

I advised that we would consent to the proposed sublease subject to the sublessee acknowledging that NTP 5774, 5775 and 5776 have been “acquired” but not yet surrendered out of the lease.  I don’t think we need to amend/vary the pastoral lease to note that the area will be surrendered.  Please forward me the details of the pastoralist’s solicitor i.e. name and address so that I can arrange the sign off of the acknowledgement.  Also may I have the details of the company (Family Trust) that will sublease?

Nicky D’Antoine is going to follow up with Parks to see if they will accept title over NTP 5776 – extension to Keep River National Park.  She is also going to follow up with DBIRD re status of the ORD proposal.

I mentioned to Campbell that we will need to start charging rental on NTP 5774 and 5775.  The first right of refusal over these two portions, should the land not be required by the Government for the ORD or some other purpose, will also form part of the “agreement to use these areas”.

I will let you know when the sublessee signs off.

[78]    The email is arguably some acknowledgment by Ms Blackley that Legune Land had an existing first right of refusal of some unspecified kind for Areas 1 and 2.  However, there is no suggestion that the first right of refusal had been exercised by Legune Land or that the preconditions for the exercise of the right had come into existence.  A reasonable inference from the contents of the email is that the first right of refusal had not been exercised because it was to form part of “the agreement to use these areas”.

[79]    There was then a further exchange of emails between Mr Fowlestone and Ms Blackley on 26 August 2003 during which Mr Fowlestone pressed on Ms Blackley a suggestion that before Legune Station was subleased the perpetual pastoral lease should be varied to incorporate a condition stating that Areas 1, 2 and 3 would be surrendered at nil cost when the Minister requested such surrender.  The exchange of emails ended with Ms Blackley sending an email to Mr Fowlestone in which she stated, “You are right – the longer term view – can you arrange for a variation to add a clause that says ‘the lessee will surrender NT Portions 5774, 5775 and 5776 when requested and no compensation is payable”.

[80]    On 23 October 2003 Mr Fowlestone sent a letter to Mr Robert Wiemers at Bernays Lawyers who were the principal solicitors for Legune Land. Among other things, the letter stated:

My understanding, following the meeting between representatives of your client company and the Property Purchasing Unit of this Department, is as follows:

·     Your client company was going to consult with you and make an application to vary the conditions of Perpetual Pastoral Lease 1062 to include a condition to the effect that the lessee would surrender NT Portions 5774, 5775 and 5776 from the lease at nil cost when called upon to do so by the Minister.  A copy of section 44 and 47 of the Pastoral Land Act (Variation of lease provision and noting variation of lease) is attached for your information.  You will note that the lessee is required to make an application in writing for a variation.  You may wish to suggest wording acceptable to your client in the application.

·     This Department was going to follow up the other issues relation to NT Portions 5774, 5775 and 5776 and continue negotiations with your client company in this regard (future surrender of the portions and agreement for your client to use these areas).  These are not areas that will delay a decision in respect of the application for consent to sublease Legune Station once the above mentioned variation has been registered on the lease.

[81]    Ultimately, no application to vary the conditions of Perpetual Pastoral Lease 1062 was made by Legune Land and Legune Station was not sublet.  Other than to state that he had some dealings with Mr Fowlestone in 2003, Mr Wiemers gave no evidence about the dealings between Legune Land and the Department of Land Planning and Environment in 2003.  Nor did Mr Campbell or anyone else on behalf of Legune Land give evidence about these dealings. 

[82]    The Department of Land Planning and Environment then proceeded to give consideration to the acquisition of Area 3 for use in Keep River National Park.

[83]    On 23 September 2004 Mr Fowlestone sent an email to Ms Griffiths, who was then in the Property Purchasing Branch of the Department of Planning and Infrastructure, which stated:

I refer to our brief discussion yesterday about the acquisition of land from Legune Station partly for park and partly for Ord Stage 2.

Bill Binns, Director of Park Management, advised me yesterday that Parks and Wildlife are proposing to include the land acquired for park in the Park Estate.  I undertook to ascertain the status of the land and let Bill know so Parks and Wildlife can decide, in consultation with its solicitors, how best to achieve this.

My understanding of the current status of the land is as follows:

·     The acquisition became a priority when Ord Stage 2 looked like it was going ahead;

·     In view of uncertainty in relation to indigenous land issues at the time the Government decided to pay the then lessee of Legune Station for the land in exchange for a signed surrender; and

·     The current status of the land is that it is part of Legune Station.

My only involvement in the matter was when the current lessee requested consent to sublease the whole of Legune [Station] to another company controlled by the lessee several years ago.  At that time I spoke to Noreen Blackley about how best to protect the Government’s interest in the land.  I suggested that if the land acquired was not to be surrendered from the lease, the lease should be varied to include a condition requiring the land to be surrendered at nil cost when requested by the Minister.

The lessee’s solicitor has not yet made the necessary application for variation.  Failure to progress the lease variation may or may not be related to the fact that the lessees and the [Northern] Territory and Federal Governments are consulting with regard to environmental assessment issues affecting the lease.

It will not be necessary to vary the Legune [Station] lease conditions if the acquired land can be surrendered from Legune [Station]. 

We now need to ascertain the following:

·     [Is] the indigenous land issue sufficiently clarified to enable the acquired land to be surrendered?

·     If so, what is the most appropriate tenure for the park and land for Ord Stage 2 respectively, e.g. perpetual Crown leases to Conservation Land Corporation and [Northern Territory] Land Corporation respectively?

The lessees of Legune [Station] have previously indicated that they would like to continue using the land acquired for Ord Stage 2.  This could be subleased to Legune [Land] by the [Northern Territory] Land Corporation if the Corporation is granted a lease.

Is it possible for Property Purchasing to resolve the above and finalise the acquisition please?

[84]    There does not seem to have been any response to Mr Fowlestone’s email.  However, on 5 September 2006 an enquiry about the status of the surrendered areas was made by Ms Carol Kinnaird who was a Planning Officer in the Parks and Wildlife Service of the Department of Natural Resources, Environment and the Arts.  This ultimately resulted in Ms Griffiths sending the following email to Mr Richard Morris, who was a Regional Manager Planning and Lands, on 25 September 2006.

As far as I am aware:

The Territory purchased by agreement part of NT Portion 798 (NT Portions 5775, 5774 and 576 Areas 1, 2 and 3 – Legune PPL1062 in August 1999.  NT Portions 5775 and 5774 for the extension of the Ord River Scheme Stage 2 and NT Portion 576 to be incorporated into the Keep River National Park).

Compensation in the amount of $900,000 was paid to the owners of Legune Station Pty Ltd.

A Deed of Agreement between the lessees Legune Station Pty Ltd and the Northern Territory of Australia was made 13 August 1999.  The Deed was stamped on 30 August 1999.  This Agreement provided for a licence whereby the lessee was to remain in possession of areas of 1 and 2 subject to certain terms.  The Agreement also granted the lessee a first right of refusal to be granted a licence to conduct from area 3 any tourist operation as may be approved in writing subject to certain terms.  The Agreement was for a period to September 2001 but could be terminated by the Territory by giving six weeks’ notice.  The Agreement was not transferrable. 

A partial surrender was executed by the lessee Legune Station Pty Ltd on 16 August 1999 for the above three portions and has been held in escrow by the Territory.  (In view of uncertainty in relation to Native Title issues at the time, the Territory decided to pay the then lessees of Legune for the land in exchange for a signed surrender).

On 7 September 2000 the PPL was transferred to Legune Land. 

On 13 (sic)[11] September 2000 the further Deed of Agreement was prepared between Legune Land Pty Ltd and the Territory.  This Deed was executed by Legune Land Pty Ltd but not the Territory.

By document 11307700: SLM126684: DWN, Legune Land Pty Ltd undertook:

To be bound by the terms of the Deed dated 13 August 1999 and acknowledge that it would observe all covenants contained therein as though and to the effect that Legune Land had entered into and executed such documents in place of Legune Station Pty Ltd; and in particular Legune Land Pty Ltd undertook to execute all documents, deeds and papers and do all things as may be required by the Territory and in particular the execution of any further form of surrender as may be required by the Territory to give effect to the terms of the Deed of Agreement.

The bottom line is that the current status of the land is that it is part of Legune PPL1062, i.e. surrender of the three NT Portions 5775, 5774 and 5776 as yet to be lodged/actioned.

[85]    Ms Griffiths was not called to give evidence.

[86]    On 14 November 2006 Mr Paul Wharam, a Director in the Land Administration Branch of the Department of Planning and Infrastructure, sought advice from the Aboriginal Land Division of the Solicitor for the Northern Territory about whether there were any implications (including revival of rights) under the Native Title Act (Cth) that would be relevant subsequent to the surrender of Areas 1, 2 and 3. 

[87]    On 2 May 2007 Ms Lucia Ku, a solicitor in the Aboriginal Land Division, of the Solicitor for the Northern Territory responded to Mr Wharam as follows:

I refer to your instructions to Anita Kneebone dated 14 November 2006 and your conversation with Judith Bonner on 22 November 2006 in regards to the above.  I note that I will be assisting Judith in providing this advice.

In your instructions of 14 November 2006 you indicated that the original intention of surrendering the three parcels was to make two of the three proposed parcels available for the Ord State Irrigation Scheme and the other parcel for addition to the Keep River National Park.  However, you further instructed that the scope of the Ord Scheme is now not immediately relevant, and that the subject parcel is not significant to the extension of the Keep River National Park.  From our file note on your telephone conversation with Judith, you advised that you would like to formalise the original deal, that is, take the part of the land your Department wants and give the lessees a grazing licence. 

It also appears from that file note that your Department was thinking that land should be held by NT Land Corporation as that is how Spirit Hills is now held.  Would you please confirm your instructions on what your Department proposes to do with the three proposed parcels once surrendered to the Territory, that is will all three parcels be transferred to NT Land Corporation as a PPL similarly to how Spirit Hills is currently held and then will each or any of the parcels be subject to a licence in accordance with original Deed of Agreement between the Territory and the current lessee of Legune PPL, or will there be some other arrangement and proposed use of the land.

Our files indicate that a tenure history was prepared by the then Department of Lands, Housing and Local Government, specifically for the part of the Native Title Determination Application covering the Legune Pastoral Lease on 7 April 1995, however I am unable to locate the supporting documentation attached to the tenure history.  Would you please provide an updated tenure history including attachments, that is, maps and copies of title documents?

I note in your instructions, you refer to the Native Title Determination Application with the National Native Title Tribunal, I assume the Native Title Determination application you are referring to has the National Native Title Tribunal reference number DC95/1 with the Federal Court number DG008/98, now NTD6008/98.

[88]    On 28 November 2007 Mr Stephen Hearn, a solicitor with the Solicitor for the Northern Territory, provided an advice to the Chief Executive of the Department of Planning and Infrastructure.  Mr Hearn concluded that: 

The addition of Areas 1, 2 and 3 to PPL 1149 [Spring Hill Station] to the Northern Territory Land Corporation will not raise any native title implications.

With respect to the ultimate use of Areas 1, 2 and 3, there will be native title issues that will have to be addressed at some time in the future, both before construction commences on the Ord Project within the boundaries of Areas 1 and 2, and before declaration of the national park of Area 3.

[89]    It seems that following the receipt of Mr Hearn’s advice, the Northern Territory determined that the most appropriate way to complete the acquisition of Areas 1, 2 and 3 was to add the surrendered areas to Spirit Hills Station perpetual pastoral lease which was held by the Northern Territory Land Corporation.  However, this did not occur until 2010.

[90]    In February 2008 Legune Land advised the Northern Territory that it proposed to invite expressions of interest for the purchase of Legune Station with a view to completion of the sale in July 2008.  No consent to transfer was sought or given at that time and ultimately the decision to sell Legune Station was abandoned.  The dealings between Legune Land and the Northern Territory about this proposal were as follows.

[91]    On 14 February 2008 Mr Robert Wiemers, the solicitor for Legune Land, received an email from Mr Mark Harrison seeking clarification of how Legune Station might properly be described in advertising for the sale of the perpetual pastoral lease given the three areas which were subject to the Excision Deed.  Mr Wiemers did not advise Mr Harrison that Areas 1 and 2 had been leased by Legune Land from the Northern Territory under cl 2.2 of the First Right of Refusal Deed.  Instead, upon receiving the email Mr Wiemers telephoned Mr Fowlestone and thereafter they had a number of telephone discussions on 18, 21 and 22 February 2008. 

[92]    During their first telephone call on 18 February 2008 Mr Fowlestone told Mr Wiemers that the acquisition of Areas 1, 2 and 3 had not been perfected because of something to do with native title.  During their second telephone call on that day Mr Fowlestone told Mr Wiemers that Areas 1, 2 and 3 were to be added to the Spirit Hills Station perpetual pastoral lease.  The Northern Territory could do that under s 66 of the Pastoral Land Act and Legune Land should tell any prospective purchasers that the Government will want the land back.  At no stage during either of these telephone calls did Mr Wiemers tell Mr Fowlestone that Legune Station had been granted a lease (or profit a`prendre) of Areas 1, 2 and 3 under cl 2.2 of the First Right of Refusal Deed.

[93]    After the first two telephone discussions with Mr Fowlestone on 18 February 2008, Mr Wiemers obtained instructions from the directors of Legune Land.  He did not give evidence about the instructions he received.  He then telephoned Mr Fowlestone a third time on 18 February 2008.  Mr Fowlestone then advised Mr Wiemers that arrangements were in place to transfer Areas 1, 2 and 3 to the Northern Territory Land Corporation.  He said that the Northern Territory Land Corporation would need to make a decision about leasing Areas 1, 2 and 3.  Once again, Mr Wiemers did not assert that the surrendered land had been leased to Legune Land or that the company had a profit a`prendre.

[94]    After the third telephone call with Mr Fowlestone on 18 February 2008, Mr Wiemers telephoned Mr McLean who was one of the directors of Legune Land and recommended that he telephone Mr Fowlestone.  Mr McLean then telephoned Mr Fowlestone.  During their telephone conversation Mr McLean asked Mr Fowlestone about the “leasing” arrangement which allows Legune Land to run cattle on Areas 1, 2 and 3.  Mr McLean stated that under the arrangement Legune Land pays $1 per year, any fixed improvements become the property of the Northern Territory and the Northern Territory is able to give Legune Land one month’s notice to vacate the three areas of land.  This is likely to have been a reference to the license referred to in cl 2.1.1 of First Right of Refusal Deed.  Mr McLean did not say that Legune Land had obtained a lease under cl 2.2 of First Right of Refusal Deed.  Nor was he called to give evidence about the leasing arrangement he was referring to when he spoke to Mr Fowlestone or the terms on which he understood Legune Land grazed cattle on Areas 1 and 2.

[95]    Following the telephone conversation between Mr Fowlestone and Mr Mclean it is likely that there was a telephone conversation between Mr Fowlestone and Ms Griffiths during which they discussed the status of Areas 1, 2 and 3.

[96]    There was then a fourth telephone discussion between Mr Wiemers and Mr Fowlestone on 18 February 2008.  During this telephone discussion Mr Fowlestone told Mr Wiemers that he believed that the Northern Territory could acquire Areas 1, 2 and 3 by an acquisition by agreement document and that the current arrangements regarding Legune Land agisting cattle on Areas 1, 2 and 3 could continue.  Once again, there was no discussion of a lease of Areas 1, 2 and 3.

[97]    On 21 February 2008 there was a fifth telephone conversation between Mr Fowlestone and Mr Wiemers.  There is disagreement between Mr Wiemers and Mr Fowlestone about what was said during this telephone call.  Mr Wiemers gave evidence that Mr Fowlestone said words to the following effect: (a) the proposal of the Northern Territory would be to take the excised areas and give a pastoral lease to Legune Land; (b) part would be taken for park purposes and to that end it may not be available to Legune Land; and (c) the Northern Territory was aware of the current arrangements that Legune Land had with the Northern Territory regarding the excised area and would endeavour to keep those arrangements in place when it transferred the excised areas to the Northern Territory Land Corporation.

[98]    Mr Fowlestone gave evidence that he disagreed with the statement that he told Mr Wiemers on 21 February 2008 that the Northern Territory would give a pastoral lease to Legune Land over the excised areas.  It was clear in his mind that the surrendered areas were to be vested in the Northern Territory Land Corporation and to the best of his recollection that is what he told Mr Wiemers.  Mr Fowlestone agrees that he said to Mr Wiemers that part of the surrendered areas would be taken for National Park purposes.  He disagrees that he said anything which might have suggested that Legune Land would be given a lease or occupancy over the balance of the surrendered areas.  Mr Fowlestone denies that he said anything to Mr Wiemers about any current arrangements that Legune Land had with the Northern Territory regarding the excised areas beyond the fact that Legune Land had continued to run cattle on the surrendered areas without any objection from the Department of Lands because of the delay in registering the acquisition of those areas.  To the best of Mr Fowlestone’s  recollection, he said words to the effect that, once the land had been transferred to the Northern Territory Land Corporation, Legune Land would have to deal with the Corporation.

[99]    Mr Fowlestone’s recollection of the telephone conversation with Mr Wiemers on 21 February 2008 is consistent with the work he was doing in February 2008 and the email he sent to Ms Griffiths which is set out in par [104] below.  At the same time as Mr Fowlestone was speaking to Mr Wiemers, he was preparing (1) a submission to the Minister of Natural Resources Environment and the Arts about the Northern Territory Land Corporation acquiring Areas 1, 2 and 3, and (2) a draft offer of Areas 1, 2 and 3 to be made by the Minister to the Northern Territory Land Corporation.  In order to prepare the submission and the draft he was liaising with Ms Griffiths. 

[100]  At 2.10 pm on 21 February 2008 (which is likely to have been before the telephone conversations referred to in par [97] above) Mr Fowlestone sent the following email to Ms Griffiths:

Thanks for the papers from the Spirit Hills files.

From the papers it seems that:

1.        Cabinet decided to acquire the lease;

2.        There was consultation with the NTLC;

3.        There was legal advice;

4.        The Minister then made an offer of the PPL to the NTLC at nil cost;

5.        The NTLC accepted the offer; and

6.        The acquisition was coordinated with the lease grant (Notice of Right to Grant of Interest lodged simultaneously with Gazettal of Acquisition)

In the Legune [Station] case, 1 has taken place, 2 has to be done, you are requesting 3, I am drafting 4, 5 will happen after an offer has been made and we will do 6 when the first five steps have been finalised.

To enable me to complete my draft submission can you please advise:

·     NT Portion Numbers and areas for land being acquired from Legune [Station].

·     Cabinet Decision Number and what it generally said, e.g. acquire and vest in the NTLC or whatever.

[101]  At 5.34 pm on 21 February Ms Griffiths sent Mr Fowlestone a detailed email which set out the history of the acquisition of Spirit Hills Station and the steps which had been taken to acquire Areas 1, 2 and 3 on Legune Station.  The email was in similar terms to an email that Ms Griffiths sent to Mr Richard Morris on 25 September 2006.  Among other things, the email stated:

On 6 September 2000 with only one hour to settlement, Land Administration became aware of a proposed transfer of Legune PPL and in order to protect the Territory’s interest as it had already paid for the three areas of land within Legune, consent to transfer the lease was withheld.  Although the agreement executed on 13 August 1999 by Legune Station Pty Ltd stated that the agreement was not transferable that is exactly what the company was doing.

On 7 September 2000 a Deed of Agreement between the proposed purchaser, Legune Land, and the Northern Territory was executed by Legune Land but not the Territory [emphasis added].  The Deed was intended to bind Legune to the 1999 Deed to surrender the 3 defined areas to the Territory for the purposes of the Ord River Extension Scheme and/or such other purposes as the Territory may require.  Legune Land undertook:

·     To be bound by the terms of the Deed dated 13 August 1999 and acknowledged that it would observe all covenants contained therein as though and to the effect that Legune Land had entered into and executed such documents in the place of Legune Station Pty Ltd; and

·     To execute all documents, deeds and papers and do all things as may be required by the Northern Territory and in particular the execution of any form of surrender as may be required by the Territory to give effect to the terms of the Deed of Agreement.

On the same day a Form 51 Partial Surrender of Lease (Pastoral Land Act) was executed by Legune Land ….  The partial surrender has been held by the Northern Territory.

On 7 September 2000, following the signing of the Deed and the Partial surrender documents, consent to transfer was given and the Legune PPL was transferred to Legune Land.

On 11 September 2000 Land Administration advised Pastoral Branch that prior to granting any consent to transfer, mortgage or other dealing in relation to Legune to check with acquisitions re the land already purchased by the Territory ….

The bottom line is that the current status of the land is that it is still part of Legune PPL 1062. S99/246 has yet to be approved.

[102]  While on the face of the email there may be some confusion about whether Ms Griffiths was talking about one or two documents, the fact is that Ms Griffiths was referring to two documents namely, the Undertaking which was signed by Mr Campbell on 6 September 2000 and the First Right of Refusal Deed.  The First Right of Refusal Deed was executed by Legune Land on 7 September 2000 and expressly deals with the surrender of the three defined areas for the purpose of the ‘Ord River Extension Scheme’.  Whereas the Undertaking was executed on 6 September 2000 and makes no mention of the ‘Ord River Extension Scheme’, the dot points in the email are almost a direct quote from paragraphs 1 and 2 of the Undertaking that was signed on 6 September 2000.  Ms Griffiths is stating that (1) the Department Land Planning and Environment asked Legune Land to execute the First Right of Refusal Deed to bind Legune Land to the 1999 Excision Deed to surrender the Areas 1, 2 and 3 to the Northern Territory for the purposes of the ‘Ord River Extension Scheme’ and/or such other purposes as the Northern Territory may require; (2) the Northern Territory did not execute the First Right of Refusal Deed.  This is supported by her email to Mr Morris of 26 September 2006, where she expressly identifies both documents, and her email to Mr Fowlestone dated 22 February 2008 in which she sets out cl 2 of the First Right of Refusal Deed.

[103]  While there is no direct evidence about where Ms Griffiths obtained the information that the First Right of Refusal Deed had not been executed by the Northern Territory Government, it may be inferred from the email that she sent to Mr Fowlestone on 22 February 2008 that she had seen and read a copy of the First Right of Refusal Deed which had been signed by Legune Land but not by the Northern Territory.  How else could she have directly quoted cl 2 of the First Right of Refusal Deed in the email.

[104]  At 8.18 am on 22 February 2008 Mr Fowlestone sent Ms Griffiths an email in reply to Ms Griffith’s email of 21 February 2008.  The email states:

Thanks Beve.  That is very illuminating.

One of the shareholders of Legune [Land], (Mr McLean, I can’t find my note with his first name on it) phoned late yesterday afternoon.  The company’s proposed timetable for completing a sale is 28 July 2008.  Advertising for expressions of interest, inspections, due diligence enquiries, contact etc., will take place between now and July.

He and the company solicitor, Bob Wiemers, have asked about the “leasing” arrangement which allows the company to run cattle on the land being acquired.  According to Mr McLean, the company pays $1 per year, any fixed improvements they put on the land become the property of the Territory, and the Territory is able to give them one months’ notice.  Do you know if this is in writing?

With regard to the continuing arrangement once the land is handed over to the NTLC, it is something they, or any new owners, would need to take up with the NTLC at that time.

[105]  At 11.55 am on 22 February 2008 Ms Griffiths sent Mr Fowlestone the following email:

Basically – What leasing agreement? Legune Land signed a Deed on 7 September 2000 but the Territory did not execute the same.  There was a clause in the unexecuted Deed:

                         2.      Surrender and Compensation

2.1.      The lessee hereby surrenders the Land from the pastoral lease in favour of the Territory upon and subject to the following conditions:

2.1.1   The Territory grants the Lessee a Licence (“the Licence”) to remain in possession of Area 1 and Area 2 (“the Licensed Areas”) on the following terms:

(a)            For a licence fee of $1.00 per annum (if demanded);

(b)           For a period commencing on the date hereof and expiring:

(i)      Upon the expiration of six (6) weeks written notice by the Territory to the Lessee that the Licensed Areas are required by the Territory to be used for the Ord River Extension Scheme (“the Scheme”); or

(ii)    On 1 September 2001;

Whichever comes first (“the Term”) ….

If Legune is sold and transferred (hopefully by then without NT Portions 5774, 5775 and 5776) and the new owner wishes to use parts of NT Portions 5774, 5775 and 5776 it will need to take it up with the Northern Territory Land Corporation at that time.

[106]  At 3.05 pm on 22 February 2008 Mr Fowlestone sent to Ms Griffiths, for her consideration, a draft Ministerial briefing and a draft offer to the Northern Territory Land Corporation that he had prepared.  Among other things, the draft Ministerial Briefing stated:

….  In 1999, the Territory government entered into an agreement with the lessee of Legune Station to surrender two parcels of land for the Ord River Irrigation Area Stage 2 and one parcel of land for inclusion in the Keep River National Park.  At the time, uncertainty concerning native title resulted in the Government deciding to pay the $900,000 purchase price and obtain a signed surrender form for the land.  The surrender form was held by the NT Government, but not registered, pending resolution of native title issues.

In 2000, Legune Station was sold to the current lessee, Legune Land, and the Government entered into an agreement with the incoming lessee and obtained a surrender form from them for the three parcels of land.  Legune Land recently advised that it proposes to invite expressions of interest to buy the lease with a view to completing the sale by July 2008.

The Department of Justice has been consulted about the most appropriate way to complete the acquisition of the three parcels of land from Legune Station before the lease is transferred to the new lessee.  It has been agreed that the acquisition could be completed and the land included in a perpetual pastoral lease with the land currently contained in Spirit Hills Station without native title being affected.  The land can be held in the perpetual pastoral lease until native title issues are resolved to enable the land to be used for the purposes it is being acquired for.  The three parcels of land have been surveyed as NT Portion 5774, 5775 and 5776.

The matter has been discussed with Mr Peter Blake, Chairman of the NTLC, who has no objection to the proposal and indicated that the land could be managed in the same way the land on Spirit Hill Station is, i.e. land for Ord Stage 2 is sub-leased to an adjoining pastoral lessee and land for park is managed by Parks and Wildlife.

[107]  On 22 February 2008 there was a further telephone call between Mr Wiemers and Mr Fowlestone.  There is disagreement about what was said during this telephone call.  Mr Wiemers gave evidence that Mr Fowlestone said words to the following effect: (a) Mr Fowlestone had been talking to the Chairman of the Northern Territory Land Corporation; (b) in Mr Fowlestone’s conference with the Chairman of the Northern Territory Land Corporation it was discussed that the excised land would become part of Spirit Hills Station pastoral lease; (c) in the discussions with the Chairman of the Northern Territory Land Corporation, Mr Fowlestone was informed that the Northern Territory Land Corporation had arrangements in place regarding the agistment of cattle within the existing boundaries of the Spirit Hills Station Pastoral Lease with another adjoining owner; (d) if the excised areas were held by the Northern Territory Land Corporation and Legune Land was still the owner of the Station, Legune Land would need to talk to the Northern Territory Land Corporation; (e) the Northern Territory could get an approval within 3 weeks or so for the excision to be completed.  A survey plan needs to be drawn by the Surveyor General; (f) in the first instance, the Northern Territory Land Corporation was not the owner, so Mr Wiemers was to talk to Mr Fowlestone as the Northern Territory may have an offer at the time that the perfection of the excision occurred; and (g) finally, Legune Land’s agistment of cattle over the excised areas should be able to be managed in the same way as Spirit Hills Station already had in place with another adjoining land owner to the existing Spirit Hills Pastoral Lease. 

[108]  Mr Fowlestone gave evidence that he disagreed he said to Mr Wiemers that, in the first instance, Mr Wiemers should speak to him because the Northern Territory may have an offer for Legune Land at the time the excision was perfected. Mr Fowlestone stated that he would not have said anything to Mr Wiemers that indicated Legune Land could expect to have any right to use the surrendered areas after they were vested in the Northern Territory Land Corporation.  Nor did he tell Mr Wiemers that Legune Land would be granted a similar right to the excised land as the other adjoining land owner had been granted over other land within Spirit Hills Station.  At all times Mr Fowlestone’s position was that Legune Land would have to deal with the Northern Territory Land Corporation about any future use of Areas 1, 2 and 3.  Mr Fowlestone’s evidence was consistent with the email he sent to Ms Griffiths which is set out in par [104] above. Further, taken at its highest the statement which Mr Wiemers attributes to Mr Fowlestone that, “Legune Land’s agistment of cattle over the excised areas should be able to be managed in the same way as Spirit Hills Station already had in place with another adjoining land owner to the existing Spirit Hills Pastoral Lease”, is nothing more than an intimation of a future possibility.  It was certainly not an acknowledgement that Legune Land had an interest in the land comprising Areas 1, 2 and 3.

[109]  On 28 February 2008 the draft Ministerial was circulated to other members of the Department for their consideration.  Mr Fowlestone also stated in his email that the document was being sent to the Department of Justice for clearance to acquire the land from Legune Land before Legune Station was sold to a new owner.

[110]  On 19 March 2008 there was a meeting of the members of the Northern Territory Land Corporation at which the Corporation resolved to accept Area 3 from the Northern Territory.  Area 3 was to be incorporated into the Keep River National Park.

[111]  On 15 April the Ministerial Briefing, “RE: OFFER OF A PERPETUAL PASTORAL LEASE TO THE NORTHERN TERRITORY LAND COPORATION OVER SPIRIT HILLS STATION AND THREE PARCELS OF LAND ACQUIRED FROM LEGUNE STATION”, which was prepared by Mr Fowlestone, was signed by Mr Jim Grant the Acting Chief Executive Officer of the Department of Natural Resources, Environment and the Arts.  On 23 April 2008 the recommendations contained in the Ministerial Briefing were approved by the Minister.

[112]  On 21 July 2008 Ms Griffiths sent a letter to the directors of Legune Land. Among other things, the letter stated:

I refer to the surrendered parts of Perpetual Pastoral Lease 1062, more specifically proposed NT Portions 5774, 5775 and 5776 shown on survey plan S99/246 to the Territory.

To finalise the surrender please find enclosed Application to Note Acquisition by Agreement (…) to be executed and registered.  Could you please have the form executed by a Director and the Secretary of Legune Land and return to me for execution by the Northern Territory, stamping and registration?

Once the form is registered the title in respect of NT Portions 798 and 3222 will be cancelled and a new title issue to Legune Land over the balance of NT Portion 798 together with NT Portion 3222.

[113]  On 15 August 2008 there was a high level meeting between various employees of the Department of Natural Resources, Environment and the Arts, Department of Primary Industry, Fisheries and Mines and the Department of Planning and Infrastructure and members of the Northern Territory Land Corporation.  The meeting was chaired by Mr Peter Blake the Chairman of the Northern Territory Land Corporation.  At the meeting the following agreed outcomes were reached about Areas 1, 2 and 3 and noted in the minutes of the meeting:

Map 2 outlines the areas of Legune Station, now being added to Spirit Hills Pastoral Lease.  It was agreed these areas need to be put under effective management.

Area 3 is clearly intended to be part of the extension of the Keep River National Park.  It was agreed this area could be added to the Parks and Wildlife Management Agreement.

Area 1 is the part acquired for the future expansion of the Ord River Irrigation Scheme.  It was agreed that this area could best be offered to Laverton Nominees as an extension of their licence area and in exchange for the areas of Spirit Hills that will no longer be available to them.

It was noted that there is no future use for Area 2 that has been identified in the search of previous records.  Some recreational use by the public is known to occur.  Parks and Wildlife indicated that they will make enquires about the area as to any interest for conservation or park purposes.  At this stage they do not want to include the area in their management agreement.  They will advise if they have an interest at a later date.  The alternative is to offer all or part of it to Laverton Nominees for pastoral use purposes once Parks and Wildlife’s position becomes clear.

[114]  On 7 April 2009 Mr Blake sent a letter to the Director of Laverton Nominees Pty Ltd.  The letter informed Laverton Nominees Pty Ltd of changes which would have to be made when Laverton Nominees Pty Ltd’s licence to run cattle on Spirit Hill Station was renewed.  The advice was consistent with the outcome of the meeting held on 15 August 2008.  Among other things, the letter stated:

As you are aware, this Corporation granted to Laverton Nominees Pty Ltd a licence to use part of Spirit Hill Pastoral Lease (…) for a period of three years commencing 1 July 2006 and ending 30 June 2009.

Consideration needs to be given to what future arrangements may now be entered into beyond 2009.

….

The NT Government has offered the Corporation additional land to be added to the Spirit Hill Pastoral Lease being the former western part of Legune Station.  Transfer arrangements are now proceeding.  The area of Legune Station between the Keep River and Sandy Creek is intended for use in the future expansion of the Ord River Irrigation Scheme.  The future use of Legune Station west of Keep River is yet to be determined.  The Department of natural Resources, Environment and the Arts and Sports will be evaluating this area in the coming dry season.

The reason for apprising you of the above is that some changes to the areas available for you to use in the future agreement are necessary.

Attachment A indicates the area currently subject to your licence.  Attachment B indicates the areas to be set aside for the Ord River Irrigation Expansion as provided to the Corporation by the NT Government.  The latter could continue to be made available to you together with that part of Legune Station once transferred to the Corporation between Keep River and sandy Creek.  Whether additional areas of Legune Station west of the Keep River could also be included is yet to be determined.

[115]  By 15 May 2009 the transfer of Areas 1, 2 and 3 to Spirit Hills Station had not been completed and the existing arrangements between Laverton Nominees and the Northern Territory Land Corporation were extended for a further  six months. 

[116]  On 5 July 2009 Ms Griffiths sent a letter to the Directors of Legune Land.  Among other things, the letter stated:

….

Despite previous correspondence, email and telephone conversation in relation to this matter, no documentation has been received to date to enable the matter to be finalised and the land purchased by the Territory, remains with the PPL.

I advise that the Territory wishes to finalise this long outstanding matter.

As you will be aware, Legune Land Pty Ltd is unable to transfer the PPL to a new lessee until NT Portions 5774, 5775 and 5776 are surrendered to the Territory.

I have prepared updated documents to affect the surrender of NT Portions 5774, 5775 and 5776 ….  Please find enclosed an application to Note Acquisition by Agreement (….) to be executed and registered.  This document should be executed by Legune Land and returned for execution by the Northern Territory, stamping and registration.

….

Once all of the documents have been lodged and registered, the current title being … will be cancelled and a new title issued to Legune Land over the balance of NT Portion 798 and NT Portion 3222.

….

As this matter has been outstanding for a number of years I request that the documentation be executed and forwarded within 14 days from the date of this letter.

I intend to email a copy of this letter to Mr Brian McLean who was the last person from Legune Land to be in contact with the Northern Territory.

….

[117]  The documents were not executed within 14 days from 5 July 2009.  On 8 December 2009 another letter was sent by Mr Blake to Mr Ken Warriner at Laverton Nominees Pty Ltd advising that, as nothing had changed by that date, Mr Blake would have a new licence agreement prepared for Laverton Nominees Pty Ltd for Spirit Hills Station for the period of 1 January 2010 to 31 December 2010 covering the existing area on the same terms and conditions for his consideration.

[118]  On 18 December 2009 there was a meeting of the Northern Territory Land Corporation.  The minutes note that the transfer of parts of Legune Station to Spirit Hills Station was still to be completed.  The minutes also note that Mr Blake briefed members on a discussion with Mr Warriner and his solicitor and a draft letter of intent to Laverton Nominees Pty Ltd, setting out the intention of the Northern Territory Land Corporation to enter into a sublease with Laverton Nominees Pty Ltd was tabled and agreed.  The intention to progress a sublease of the existing area of Spirit Hills Station was noted with adjustments to be made to the area leased once the Legune Station areas were transferred.

[119]  At the end of December 2009 Legune Land executed the Application to Note Acquisition by Agreement for Areas 1, 2 and 3.  On 29 January 2010 new perpetual pastoral lease No. 01200 of Spirit Hills Station was issued to the Northern Territory Land Corporation with no conditions about Legune Land continuing to have an interest in Areas 1, 2 and 3.  Mr Blake believed the corporation was being granted a clear title to the areas and that Legune Land did not retain any interest in the surrendered areas.  He gave evidence that he had received no contact from Legune Land from early 2008 through to when the title to the surrendered areas was transferred to the Northern Territory Land Corporation.

[120]  On 12 February 2010 Mr Blake sent a letter to Legune Land advising that the Northern Territory Land Corporation required vacant possession of Areas 1, 2 and 3.  The letter stated:

As you are now aware the Northern Territory Government has now settled the transfer of NT Portions 5774, 5775 and 5776 from Legune pastoral Lease to Spirit Hills Pastoral Lease.

This Corporation is the owner of Spirit Hills which now includes these three portions.

Prior to this transfer being completed, the Corporation managed the former Spirit Hills Lease area under two agreements being:

1.   A management agreement with the Territory Parks and Wildlife Commission to manage the eastern part of the lease as a proposed extension of the Keep River national park; and

2.   A licence agreement with Laverton Nominees Pty Ltd (Consolidated Pastoral) to use the western part of the lease for pastoral purposes pending the land being required for the future Ord River Scheme expansion.

Now that the transfer of the land has been completed, the Corporation will be amending the areas of land allocated under the above two agreements.  This will involve the Parks and Wildlife area being extended to the west and to the north into PT Portion 5776.  Laverton Nominees will reduce their areas to the west and extend north to NT Portions 5775 and 5774.

The Corporation will now be proceeding to formalise these arrangements to be effective as soon as possible.  I understand that you may still have cattle on all or some of NT Portions 5774, 5775 and 5776.  I am advised by the NT Government representatives that you had no arrangement with them in respect of the cattle remaining on these areas.

The Corporation now requires vacant possession.  Could you please advise what cattle numbers if any you have on each of three portions 5774, 5775 and 5776?  Could you please also advise what program you will put in place for stock removal and when this will be completed for each of the portions?

The Board of the Corporation next meets on 3 March and I would appreciate your advice on these matters before then.  The Board will of course also address what agistment fees may be appropriate whilst the cattle remain on the Corporation’s land.

I would appreciate your attention to this matter.

[121]  After 12 February 2010, Mr Blake received telephone calls from Mr Peter Campbell and Mr Geoff Wagstaff on behalf of Legune Land in response to his letter to the company.  The minutes of a meeting of the Board of the Northern Territory Land Corporation on 3 March 2010 note that during these telephone calls Mr Campbell and Mr Wagstaff expressed concern about the request for vacant possession.  They indicated that they had “understandings” with the Northern Territory about the use of the transferred lands dating back several years.  They expressed the wish to either sublease or obtain a licence of the surrendered areas for their continued use.  Mr Blake advised Mr Campbell and Mr Wagstaff to put their concerns and request in writing for consideration of the Board at its meeting on 3 March 2010.  Neither Mr Campbell nor Mr Wagstaff were called to give evidence about these matters.

[122]  The minutes do not suggest that either Mr Campbell or Mr Wagstaff told Mr Blake that Legune Land had been granted either a lease or a licence of the surrendered areas by the Northern Territory.  Nor do the minutes suggest that either Mr Campbell or Mr Wagstaff asserted that the Northern Territory Land Corporation had acknowledged the existence of the alleged “understanding” with the Northern Territory.

[123]  On 26 February 2010 Bernays Lawyers, who were the solicitors for Legune Land, replied to Mr Blake’s letter in the following terms:

We act on behalf of Legune Land Pty Ltd which company has referred to us your letter to it of 12 February 2010 regarding the proposal by your Corporation to licence the area being NT Portions 5775 and 5774 for use by Laverton Nominees Pty Ltd and to licence NT 5776 as proposed expansion of the Keep River National Park. 

The history of our client’s occupation of the three portions mentioned above is that these three portions previously formed part of the pastoral lease for Legune Station and they were sold to the Northern Territory Government in 1999, shortly before our client purchased Legune Station, but still remained a part of the pastoral lease.  An agreement for grazing rights in favour of the former owners of the Legune Station, and then to our client, was entered into with the Government.  In 2002 and 2003 various discussions were entered into between our client and the Government in regard to proposed sub-lease of the pastoral lease and this also raised the question of grazing rights on the property.  In meetings between our clients and Nicky D’Antoine and Noreen Blackley of the Government 2003 it was determined that no sub-lease would be issued but that our client would be entitled to continue to graze cattle on the three portions.  It was also intimated to our clients in those meetings and in later telephone conversations with Mr Tony Fowlestone, civil servant, that, if the Government were to issue a formal lease or licence over those lands, it would be offered firstly to the existing Legune leaseholder.  The matter had also been raised in subsequent years and on each occasion our clients were basically told to continue with their grazing and pastoral management of the land.  The portions remain part of NT Portion 798 and in that respect our clients have been paying Crown rental on the portions, with the last payment of that rental having been made as at 1st February 2010.  We attach hereto a copy of the rental notice for the properties.  You will note that the area of the leased land is 3,060 square kilometres which was the area of the previous portion and the total annual rental for the whole of the NT Portions 798 and 3222 was $47,092. 

Whilst our clients have always been aware the Northern Territory Government has always had the right to excise the three portions of the land from Legune Pastoral Lease to use for the development of the Ord River Irrigation Scheme our clients have also been aware that the development of the Scheme is many years away.  In addition, our clients are also aware that the land being Portion 5774 was never going to be used for the Ord River Irrigation Scheme and they presumed that area of land would have also been available for use for grazing purposes and they could have negotiated a lease or licence to graze the land. 

You can appreciate therefore that it came as something of a surprise to our clients to learn of your Corporation’s intentions with respect to the licensing for the above portions.  In particular, given that the land was to be used for the Ord River Irrigation Scheme our clients do not believe that your Corporation should have the right to simply excise the land from the Legune Pastoral Lease to give to a third party for grazing purposes.  Our clients are particularly interested in continuing with the lease or licence for NT Portions 5774 and 5775.  They do not have any particular interest in NT Portion 5776 as this is escarpment land.

During the ten years that our clients have occupied Portions 5774 and 5775 they have spent a considerable amount of capital in improving the areas.  In particular, our clients have constructed a new fence along the southern boundary of the two portions, constructed roadways to other yards, put down new bores and pipelines, constructed water storages, put in new bore pumps and troughs and invested substantially in the eradication of woody weeds and feral animals.  Our clients would estimate that they have expended approximately $500,000 in the two portions which would include the value of capital improvements, maintenance and management costs.

Our clients currently run approximately 10,000 head of cattle on the portions at various times and the use of those portions for grazing purposes is of prime importance to our clients and indeed to the wellbeing of Legune Station and is of more importance to them than to their neighbour, Laverton Nominees Pty Ltd.  If our clients cannot continue with the use of Portions 5774 and 5775 then they would suffer substantial economic loss as they will face a gross overstocking problem on Legune Station and they would then need to effect the sale of approximately 9,972 head of cattle which are running on the two portions.  In addition, Legune Station has been run on the basis that Portions 5774 and 5775 were used for general grazing of stock and the flood plain country, which is contained in the remainder of Legune Station, is irrigated for use by young weaners and sale cattle.  If the breeding stock which is grazing on Portions 5774 and 5775 has to be sold then the property will be put into an imbalance which will again substantially affect our clients economically. 

At no time has our client not wished to continue with the use of the two portions mentioned above.  They had not put in any specific request for use of the portions following the resumption of those portions in the belief that having regard to their past contact with the Northern Territory Government, there would be an offer forthcoming to them in regard to the future use of the land and to either the lease or licence to use that land.

In these circumstances and given our clients track record with regard to the management of the land and also the fact that the two portions have prior to their purchase by the Government been part of Legune Station for probably the last 100 years we would submit that it is only fair that your Corporation should give the first offer of the licence to use Portions 5774 and 5775 to our client.

Our clients are more than happy to discuss with you your terms and conditions for use, including rental, etc. and they have always been more than happy to do this with the Northern Territory Government but in the past there have been no formal requests in this regard.

We attach to this letter for your perusal a list of livestock and infrastructure and other matters which pertain to the use of the two portions by our client and a copy of our client’s grazing and pastures management requirements for Legune Station for the 2008/2009 year which gives an indication of our client’s husbandry of the area.  We would be obliged if you could place this information before the Board at its meeting next week and let us know your Board’s response to our client’s request.

[124]  The letter from Bernays does not assert that Legune Land had a grazing licence or a lease over the acquired areas.  Nor was there any mention of the First Right of Refusal Deed.

[125]  At its meeting on 3 March 2010 the Board of the Northern Territory Land Corporation noted the response by Bernays Lawyers.  Mr Blake advised the meeting that the Northern Territory Land Corporation’s position had been explained to Legune Land’s representatives and the Corporation’s position about the transfer of Areas 1, 2 and 3 from Legune Station to Spirit Hills Station was minuted as follows:

1.        The Corporation had no involvement in The NT Government’s purchase of these portions in 1999 from the former lease owners.

2.        The Corporation had no involvement or knowledge of the arrangements with Legune Land Pty Ltd from the time of their purchase of Legune Station in 2000 until their 26 February 2010 response to the Corporation 12 February 2010 letter.

3.        No advice was received from the NT Government as to any existing undertakings or commitments to the company for their continued use of the land.

4.        In response to questions to the NT Government on the status of the land the Corporation was advised verbally that:

(a)            the original 1999 contract of purchase contained no arrangement concerning continued use of the land but did leave the land as a part of the Legune Pastoral Lease until the NT Government wished to take possession;

(b)           there was no agistment, sublease, licence or other formal arrangement for Legune Land regarding the use of the land;

(c)            the actions to take possession of the three land areas commencing in April 2008 when the then Minister offered the land to the Corporation did not include any arrangements for Legune Land to continue their use of the land; and

(d)           there were no conditions on the formal transfer of the land relating to future use of the land.

In these circumstances the Corporation did have knowledge of the matters raised in the Company’s response.

….

Members agreed it will be necessary to take advice from the NT Government before making any decisions in relation to Legune Land.

….

The Chairman will write to the Chief Executive of the Department of Lands and Planning to get advice on the history of the arrangements with Legune Land and ascertain if there was any NT Government commitment or understanding.

Further negotiations with Legune Land, Laverton Nominees and Parks and Wildlife will be necessary to reach an appropriate outcome.

[126]  On 5 March 2010 Mr Blake sent a letter to the Chairman of Legune Land.  Mr Blake advised Mr McLean that the issues which were raised in Bernays Lawyers letter of 26 February 2010 hinged on any understanding that may have been reached between Legune Land and the Northern Territory.  As the Northern Territory Land Corporation had no involvement or knowledge of the events in 1999 and, subsequently, the Corporation needed to take advice from the Northern Territory before the Corporation would be in a position to meet with the representatives of Legune Land to pursue the matter further.  Mr Blake also stated in the letter that the Corporation was advised there was no agistment arrangement in place and no conditions relating to Legune Land’s interest were placed on the Corporation on the transfer of the land.  The Corporation had no knowledge of Legune Land’s actual use of the land and the extent to which it was being utilised.

[127]  On 17 March 2010, on behalf of Legune Land, Bernays Lawyers sent a letter to the Northern Territory Land Corporation.  The letter asked if, pending answers being obtained from the Northern Territory Government and until 31 December 2010, Legune Land could be granted a licence to graze cattle on NT Portions 5774 and 5775.  It did not assert that Legune Land held either an existing licence or a lease of the Areas 1 and 2.

[128]  On 22 April 2010 Bernays Lawyers sent a further letter to the Northern Territory Land Corporation.  Among other things, the letter referred to the First Right of Refusal Deed and stated:

You will note particularly clause 2.2 of the Agreement which gives to our client a first right of refusal to lease the licensed areas from the NT Government if those areas are to be used for grazing stock.  You will also note that the original Licence Agreement was noted as expiring on 1 September 2001.  As we understand it, there were no other executed documents extending the term of the licence but in fact our client and the NT Government did continue the Licence and by implication it was continued on the terms and conditions outlined in the Deed of Agreement.

At no time, apart from your letter to our client of 12 February 2010 was our client ever requested to remove stock from the licensed areas or to cease its use and occupation of those areas and the NT Government well knew from its dealings with our client that our client was using the land for grazing purposes.  In those circumstances, our client acted on the basis that the Licence Agreement was continuing and it was on this basis that our client was awaiting advice from the NT Government regarding a future lease of the land after the Land was surrendered back to the Government.

We trust that this is of some assistance to you in regard to the resolution of the matter.

[129]  The letter of 22 April 2010 does not suggest that Legune Land had exercised the first right of refusal granted by cl 2.2 of the First Right of Refusal Deed.  The letter only asserts that the grazing licence was extended.  It asserts that the next step was contingent on the Northern Territory providing advice about a future lease to Legune Land.  The logic of the letter would dictate that any such advice was contingent on the terms of cl 2.2 of the First Right of Refusal Deed.

[130]  In April 2010 there was an out of session meeting of the Northern Territory Land Corporation which reviewed and made recommendations about what steps needed to be taken to resolve the issues that had been raised by the solicitors for Legune Land.  The minute of the meeting stated that, “Should Board members have any views or concerns in respect of the issues addressed in this paper, your advice would be appreciated.  A detailed discussion on issues will be appropriate at our June 2010 meeting when further information becomes available.”  The minute recommended that:

1.        An agistment licence to Legune Land be issued for the period 29 January 2010 to 31 December 2010 ….  The draft licence when prepared … be circulated to Board members for agreement;

2.        The agreement with Parks and Wildlife be amended by the addition of NTP 5776;

3.        A report on NTPs 5774 and 5775 be commissioned with an experienced pastoral person to ascertain the condition of the area and improvements as transferred to the Corporation;

4.        The Chairman be authorised to commence discussions with the relevant NT Government agencies to explore the issues outlined in this paper in relation to the future use of NTPs 5774 and 5775

[131]  On 12 May 2010 Mr David Ritchie, the Chief Executive of the Department of Lands and Planning, responded by letter to Mr Blake’s enquiries of the Northern Territory about Legune Land.  Among other things, the letter stated:

In September 2000, consent to transfer the Legune PPL from Legune Station to Legune Land was withheld by the Territory until a partial surrender of lease PSL (Partial Land Act) document was executed by Legune Land in respect of NT Portions 5774, 5775 and 5776 on the basis that the Territory had already paid the previous lessee for the land.  Although Legune Land Pty Ltd presented a new Deed of Agreement based on the original 1999 agreement between the Territory and Legune Station Pty Ltd, the Territory did not execute/sign the agreement, but held in escrow the executed partial surrender of lease (Pastoral Land Act) document and allowed the lease to transfer.

There was no agreement, formal or otherwise, in relation to Legune Land continuing to utilise NT Portions 5774, 5775 and 5776 or carry out extensive improvements.  There was also no evidence on the Department’s files to indicate any understanding between Government officers and the representatives of Legune Land to that effect.

While the Territory did not finalise the acquisition for a number of years, any improvements to parts of NT Portions 5774, 5775 and 5776 that Legune Land undertook were in my view in full knowledge that the Territory had paid for the land and that it would eventually be removed from the Legune Perpetual Pastoral Lease.  The acquisition was finalised when documents were executed by Legune Land and the Territory were registered on 29 January 2010 at the Land Titles Office. 

As previously agreed by Government, NT Portions 5774, 5775 and 5776 were subsequently added to Spirit Hills Perpetual Pastoral Lease held by the Northern Territory Land Corporation to be managed until such time as it is requested to be used for the purpose for which it was acquired, that is, the extension of the Ord River Scheme Stage 2, an extension to the Keep River National Park and/or such other purposes as the Territory may require.

The Department of Natural Resources, Environment, the Arts and Sport is arranging any rental adjustment that may be required under the Pastoral Land Act in relation to Legune Land Holdings.

Any claims by Legune Land in relation to the acquired land are matters for the Territory and not the NTLC.  If such a claim was made to this Department, further legal advice would be sought. 

[132]  On 26 May 2010, following receipt of Mr Richie’s advice, Mr Blake sent a further letter to Mr McLean, the Chairman of Legune Land.  Among other things, the letter stated:

The Corporation has now received advice from the NT Government in respect of the issues raised by Bernays on your behalf.  The Northern Territory Government through the Department of Lands and Planning has advised that there was no agreement, formal or otherwise, with your company for the continued use of NT Portions 5774, 5775 and 5776 or any agreement to carry out extensive improvements.

It advised that the agreement with the previous owners to acquire these three areas was not transferrable.  The previous owners were paid for the land.  The transfer of Legune Pastoral Lease to your company in 2000 was only approved by the NT Government when your company executed a partial surrender of the lease.  This was held in escrow for a number of years until such time as the NT Government actioned the completion of the acquisition.  This was completed on 29 January 2010.

As the owner of Spirit Hills Pastoral Lease, the Corporation will now deal with the matter of considering your request to continue to use the land in question, on the basis that the Corporation is not constrained by any existing or past commitments or understandings between the NT Government and your company.

Should you decide to further pursue the matters, prior to the Corporation’s ownership, you will need to take these matters up with the NT Government.

The Board of the Corporation again meets in mid June 2010.  The Board will again address a number of matters concerning Spirit Hills both in respect of your company’s interests and those of our existing licensee, Laverton Nominees and the Parks and Wildlife Commission.

In the meantime, I have obtained agreement from the Corporation Board to proceed with the documentation of a licence to your company to continue to use NT Portions 5774 and 5775 for pastoral purposes during 2010 subject to appropriate conditions and commercial terms.

The Corporation’s primary interest in owning and holding Spirit Hills Pastoral Lease is to achieve the objectives of:

1.      An extension of the Keep River National Park; and

2.      Preparing the Ord River Irrigation extension area for that future use.

Any pastoral use will be temporary only within the strict conditions and subject to termination or reduction of area as soon as the land is required for these purposes.

Your request to use NT Portions 5774 and 5775 beyond 2010 will be considered later in the year once the Corporation has completed its assessments and advice has been received from the Parks and Wildlife Commission in respect of their requirements relating to the proposed expansion of the Keep River National Park.

Again, this letter does not imply any commitment beyond 31 December 2010.

[133]  On 10 June 2010 Bernays Lawyers sent a letter to Cridlands seeking their assistance in determining the status of the Excision Deed.  Among other things, the letter stated:

The purpose of our letter is to seek your assistance in determining the status of an Agreement between the Northern Territory Government and Legune Station Pty Ltd dated 13 August 1999 by which Legune Station Pty Ltd, the previous owner of Legune Station and the vendor under the Contract of Sale with our client, surrendered approximately 1100 square kilometres of Legune Station to the Northern Territory Government in respect of the Ord River Extension Scheme and by which the Northern Territory Government granted to Legune Station Pty Ltd a licence to occupy and use the surrendered land for the period up to 1 September 2001.

We note that it was a condition of the Contract of Sale between Legune Land and Legune Station Pty Ltd that Legune Station Pty Ltd would endeavour to obtain an assignment of its interests under the Deed of Agreement with the Northern Territory Government to our client as Purchaser and if it was unable to do this then it would in fact surrender its interests under the Deed of Agreement.  Our client was particularly interested to take an assignment of the residual benefits under the Deed of Agreement with the Northern Territory Government.  We note from a copy of the letter from Clayton Utz, the Seller’s Solicitors, to your firm dated 6 September 2000 that firm stated that it had not formally sought consent of the Northern Territory Government to the assignment of the residual benefits.  However, Mr Guy Riley, the partner handling the matter, intimated that he had discussed the matter with Noreen Blackley who would telephone your firm.  He said that the position of the Territory was that they would like Legune Land Pty Ltd to sign a replacement surrender of those areas excised from the lease in return for its consent to the assignment of the residual benefits.  Following receipt of that letter an undertaking was given by our client to the Northern Territory Government that it would be bound by the terms of the Deed of Agreement entered into between the Northern Territory Government and Legune Station Pty Ltd on 13 August 1999 as though and to the effect that Legune Land had entered into and executed the document in place of Legune Station Pty Ltd and further that it would execute any documents, deeds and papers and do all things as may be required by the Northern Territory Government and in particular the execution of any further form of Surrender as may be required by the Northern Territory Government to give effect to the terms of the Deed of Agreement.

It appears that at settlement the Seller’s Solicitors handed over a Deed of Assignment of their interest under the Deed of Agreement and as well an executed Surrender of its rights under the Agreement.  Settlement of the sale proceeded on 7 September 2000 and following settlement under cover of a letter dated 8 September 2000 Ms Simone Menz of your firm forwarded to Messrs Fox and Thomas inter alia the original Deed of Assignment and Deed of Surrender in respect of the Agreement with the Northern Territory Government which was executed by Legune Station Pty Ltd and an original Deed of Agreement executed by Legune Land in the same terms as the Agreement between the Northern Territory Government and Legune Station Pty Ltd.  The letter went onto state that you would forward a copy of the latter Agreement executed on behalf of the Northern Territory Government once it was available.  The letter further stated that in relation to the Agreement with the Northern Territory Government the Department of Lands Planning and Environment accepted the partial surrender form and an Agreement in substantially the same form as was executed by Legune Station Pty Ltd in exchange for the production of its consent to transfer the Pastoral Lease at settlement.

We have been in communication with our client and at this point we have not been able to locate any copy of a Deed of Agreement between the Northern Territory Government and Legune Land which has been executed on behalf of the Northern Territory Government.

At the present time the Northern Territory Government has proceeded with the excision of the lands purchased by it from the Pastoral Lease for “Legune Station” but there has been some dispute with the Northern Territory Government regarding an ongoing licence to use the surrendered areas by our client.  Obtaining an executed copy of the Deed of Agreement between our client and the Northern Territory Government would be of considerable assistance on the matter.

We would be obliged if you could now check your records and if you could let us know whether or not your firm received any executed Agreement between Legune Land and the Northern Territory Government on the settlement and, if so, whether that Agreement remains in your possession or whether you have some record as to where it may have been forwarded following the receipt of the document by your firm.  If the document is still held by your firm we would appreciate it if you could let us have a Photostat copy of the same and we will arrange to obtain the original Agreement from you on authority from our client.

….

[134]  On 21 June 2010 Mr Blake sent a letter to Legune Land advising that a rental of $4500 per month would be charged for the proposed licence for Legune Land to graze cattle on the surrendered areas which now formed part of Spirit Hills Station.  On 8 July 2010 Clayton Utz, who are the Solicitors for the Northern Territory Land Corporation, sent the proposed Deed of Licence and associated documents to Mr Wiemers at Bernays Lawyers.

[135]  On 6 September 2010 Mr Blake sent a letter to Legune Land.  The letter stated:

I refer to my letters to you of 12 February 2010, 5 March 2010, 26 May 2010 and 21 June 2010.

Those letters very clearly advised you that NT Portions 5774, 5775 and 5776 are now owned by this Corporation as part of the Spirit Hills Pastoral Lease No 01200.  The letters also advised that following advice from the NT Government that “the Corporation is not constrained by any existing or past commitments or understandings between the NT Government and your company”, that your company is now dealing with this Corporation in respect of any continuing use of NT Portions 5774 and 5775.

The letters then outlined the terms and conditions that would be contained in a licence agreement to 31 December 2010. 

Subsequently the Corporation solicitors, Clayton Utz, forwarded a draft licence agreement to you solicitor, Bernays Lawyers, on 8 July 2010.  No response to the licence offers in the 26 May 2010 and 21 June 2010 letters has been received and your solicitors have advised ours that they await the company’s instructions. 

The Corporation Board met on 1 September 2010 and considered a number of matters concerning the Spirit Hills Pastoral Lease.

Of particular concern to the Corporation is the content of material promoting the sale of Legune Station which includes “plus 111,000 ha with the consent of the NT Government.  Presumably this relates to NT Portions 5774 and 5775 and is out of order.  Your company currently holds no rights to this land and any licence or other arrangement that is entered into with you will be non-transferrable and will terminate should you dispose of Legune Station.  These conditions are not negotiable. 

If you wish to continue to enter the proposed licence agreement to 31 December 2010, the Board requires a clear statement from your company in respect of its intentions to sell Legune Station and a retraction of any reference or intentions in respect of NT Portions 5774 and 5775 in any sale or sale material.

In respect of the draft licence agreement, the Board wishes the matter to be dealt with promptly subject to the above paragraph.  The Board will consider withdrawing from the proposed licence agreement if this is not the case.  There would appear to be no reason why the arrangements could not be finalised by 31 September 2010. 

[…]

[136]  On 19 October 2010 Bernays Lawyers sent a letter to Clayton Utz, the lawyers for the Northern Territory Land Corporation.  The letter advised that Legune Land had received extensive advice from senior counsel regarding its rights concerning the land known as Areas 1 and 2 (NT Portions 5774 and 5775).  Among other things, the letter stated:

Relevantly Legune Land received advice that it has actionable claims against a number of parties, including the NTLC, regarding the NTLC’s assertion that Legune Land does not have a continuing right of occupation of Areas 1 and 2. 

In relation to the NTLC, after a careful review of the material available to us, Legune Land has received advice to the effect that it has a cause of action against the NTLC in light of the NTLC’s stated refusal to recognise Legune Land rights in respect of Areas 1 and 2.  Legune Land’s position is the NTLC is bound to recognise Legune Land’s pre-existing rights in relation to Areas 1 and 2 by reason of the arrangements and understandings that we understand were made and reached between the Northern Territory and the NTLC at the time of, and in the lead up to, the transfer of those areas to the NTLC.

Obviously Legune Land’s knowledge of those matters is not perfect because they are peculiar within the knowledge of the NTLC and the Northern Territory.  However Legune Land has sufficient evidence from which it may be inferred that the transfer occurred in circumstances where the NTLC both knew of Legune Land’s rights and undertook to respect them.  That gives Legune Land an entitlement as against the NTLC to remain in possession for the purpose of grazing its cattle until the land is required for the Ord River Extension Scheme.

Legune Land intends to assert that right.  Legune Land is both presently in possession of the land, and intends to remain in possession. 

Junior counsel has now been briefed and senior and junior counsel are in the process of preparing the proceedings which will be commenced shortly against, inter alia, the NTLC to vindicate the above entitlement.

It necessarily follows that Legune Land does not wish to enter into a licence agreement with NTLC as put forward because it already enjoys an interest in respect of that land.

[137]  Of note, the letter from Bernays Lawyers does not specify or particularise the interest in the land comprised by Areas 1 and 2 that was asserted on behalf of Legune Land.

The findings of Kelly J

[138]  Kelly J made the following critical findings.

1.        Legune Land did not have an agreement with the Northern Territory.

2.        The agreement which Legune Land asserts with the Northern Territory would not have given rise to an interest in land.

3.        There was no evidence that when the Northern Territory Land Corporation acquired its registered interest in Areas 1, 2 and 3, it acknowledged that Legune Land had any interest in the land or undertook to hold its interest in the land subject to any rights that Legune Land may have possessed.  There is no evidence that when the Northern Territory Land Corporation acquired its registered title in Areas 1, 2 and 3, it was even aware that Legune Land claimed an interest in the land; indeed it is far from clear that at that time Legune Land claimed any interest in the land.

4.        There was no evidence that the First Right of Refusal Deed was signed by the Northern Territory.

5.        There was no agreement by conduct between Legune Land and the Northern Territory at the time settlement of the Contract of Sale occurred on 7 September 2000.

6.        The First Right of Refusal Deed was not properly characterised as a grant of interest in land.

7.        There were insufficient acts of part performance to evidence an agreement in terms of the First Right of Refusal Document.

8.        The Northern Territory and Legune Land did not adopt the First Right of Refusal Deed as the conventional basis of their relationship.

9.        Clause 2.2 of the First Right of Refusal Deed was neither an option for a lease nor an agreement for a lease.

10.    Areas 1, 2 and 3 were not subject to a constructive trust and Legune Land had no interest which was enforceable against the Northern Territory Land Corporation.

[139]  In my opinion, her Honour did not err in making any of these findings.

The grounds of appeal

[140]  The grounds of appeal were pleaded in a prolix and discursive manner.  The principal grounds of appeal were as follows:

1.        The trial Judge erred in finding that the First Right of Refusal Deed had not been signed by the Northern Territory (ground 5).

2.        The trial Judge erred in finding that there was no agreement by words or conduct in terms of the First Right of Refusal Deed (ground 6).

3.        The trial Judge erred in determining that Excision Deed was not assigned from Legune Station Pty Ltd to Legune Land (ground 8).

4.        The trial Judge erred in holding that the First Right of Refusal Deed was not the grant of an interest in land by Legune Land to the Northern Territory (ground 9).

5.        The trial Judge erred in determining that there were insufficient acts of part performance to evidence an agreement in terms of the First Right of Refusal Deed (ground 10).

6.        The trial Judge erred in failing to find that Legune Land and the Northern Territory adopted the First Right of Refusal Deed as the conventional basis of their agreement from September 2000 onwards (ground 11).

7.        The trial Judge erred in construing cl 2.2 of the First Right of Refusal Deed in a manner which did not confer upon Legune Land an interest in Land in circumstances where the proper construction of cl 2.2, or alternatively cl 2.3 of the Excision Deed, conferred on Legune Land such interest in land as a lessee, or the holder of a profit a`prendre or a licensee, together with an option for a lease or alternatively a profit a`prendre, for the period from 1 September 2001 until the Excised Areas were required for the Ord River Scheme, subject to certain conditions being as at 1 September 2001 (ground 12).  

8.        The trial Judge erred in failing to hold: (a) that the conditions for the option for a lease, or alternatively a profit a`prendre, to become exercisable had been met as at 1 September 2001; and (b) that the option was exercised (ground 13).

9.        The trial Judge erred by failing to find the Northern Territory Land Corporation acknowledged to the Northern Territory as transferor, in the relevant sense, Legune Land’s interest in the land, and consequently that the Northern Territory Land Corporation held such land on constructive or resulting trust for Legune Land (ground 14).

[141]  As Mr Grant QC submitted on behalf of the Northern Territory, the above grounds of appeal are cumulative.  There are four stages or parts to the appeal.  In order to succeed in this appeal, Legune Land must be successful at every stage.  Success on one or other of the stages of the appeal only, will not result in the appeal being allowed.

[142]  The first stage of the appeal is about the alleged failure of Kelly J to find that there was a legally enforceable agreement between Legune Land and the Northern Territory in the terms of the First Right of Refusal Deed or the Excision Deed.  Grounds 5, 6, 8, 9, 10 and 11 constitute this stage of appeal.  The second stage of the appeal is about her Honour’s alleged failure to find that Legune Land had an option for a lease, or a profit a`prende, under either the First Right of Refusal Deed or the Excision Deed and thereby an interest in the land that comprised Areas 1 and 2.  Ground 12 constitutes this stage of the appeal.  The third stage of the appeal is about her Honour’s alleged failure to find that the conditions for the exercise of the option had been met as at 1 September 2001.  Ground 13 constitutes this stage of the appeal.  The fourth stage of the appeal is about Kelly J’s alleged failure to find that the Northern Territory Land Corporation acknowledged to the Northern Territory as transferor, in the relevant sense, Legune Land’s interest in the land, and consequently that the Northern Territory Land Corporation held the acquired land on constructive or resulting trust for Legune Land.  Ground 14 constitutes this stage of the appeal.

[143]  To succeed Legune Land must demonstrate that the evidence at the trial established that: (1) there was a legally enforceable agreement in terms of the First Right of Refusal Deed or the Excision Deed; (2) the terms of the agreement imposed an obligation on the Northern Territory to grant a lease (or profit a`prendre) over Areas 1 and 2 to Legune Land; (3) the existence of any conditions precedent to the exercise of the obligation to grant a lease (or profit a`prendre); (4) the Northern Territory offered Legune Land a lease of Areas 1 and 2 (or profit a`prendre) on certain terms which was accepted by Legune Land and thereby Legune Land had an interest in the acquired land; and (5) the Northern Territory Land Corporation held Areas 1 and 2 on constructive trust for Legune Land.  In respect of each of these matters Legune Land had the burden of proof.

Ground 5

[144]  As to ground of 5 of the appeal, Legune Land submitted that Kelly J erred in finding that the First Right of Refusal Deed was not signed by the Northern Territory.  That finding is set out in par [25] to par [28] of her Honour’s Reasons for Decision.  Her Honour found there was no evidence that the First Right of Refusal Deed was signed by the Northern Territory and plenty of evidence to the contrary.

[145]  In support of this ground of appeal the senior counsel for the appellant asserted that there exists, or existed, a copy of the First Right of Refusal Deed that had been signed by the Northern Territory.  This assertion was based on three grounds.  First, a complaint that Kelly J had failed to record the failure of the Northern Territory to discover or produce the original copy of the document that was handed over at settlement on 7 September 2000.  Second, an assertion that Ms Menz was likely to have handed over two copies of the document at settlement and had enclosed two copies of the document in her letter dated 13 September 2000.  Third, certain circumstantial evidence.

[146]  Grounds one and two are refuted by an examination of the known copies of the document and a consideration of the basis on which they were admitted into evidence. 

[147]  Two original copies of the First Right of Refusal Deed were tendered in evidence by Legune Land.  They appear at AB 811 – 823.  They are the copies which were in the possession of the Northern Territory and which were discovered by it.  A further copy of the First Right of Refusal Deed was faxed to Ms Blackley by Ms Menz on 7 September 2000.  A comparison of the signatures on all three of those documents reveals that no two versions of the signatures are the same.

[148]  The obvious question to ask then is what happened to the original of the document faxed to Ms Blackley on 7 September 2000?  If that document was handed over to the Northern Territory at Settlement then it might lend some support to an assertion that the document may have been signed and the evidence of Mr Pinney and the emails of Ms Griffiths are incorrect.  However, there is no such support.  On 8 September 2000 Ms Menz faxed and sent a letter to Mr Fox which enclosed certain documents including an original copy of First Right of Refusal Deed executed by Legune Land.  That enclosure appears at Ex P1 at p 133.  The signature of that document is the same as the one that was faxed to Ms Blackley on 7 September 2000.  That document remained in the possession of Legune Land as is apparent from the fact that a copy of the document was attached to Mr Wiemers’ letter to the Northern Territory Land Corporation on 22 April 2010.

[149]  So that it may be concluded that there were three original copies of the First Right of Refusal Deed and all of those documents were executed by Legune Land only.  One was handed to the Northern Territory at settlement on 7 September 2000.  One was sent to Mr Fox on 8 September 2000 and one was sent to Ms Blackley by letter on 13 September 2000.  The copies received by the Northern Territory on 7 September 2000 and 13 September 2000 were discovered by the Northern Territory and tendered in evidence.

[150]  The known copies of the First Right of Refusal Deed are all accounted for and none is signed by the Northern Territory.  For the assertions of senior counsel for Legune Land to hold true there would need to be at least a fourth copy of the document.  There was no evidence about any such document.  None of the owners or directors of Legune Land were called to give evidence that they had signed more than three copies of the First Right of Refusal Deed. 

[151]  The circumstantial evidence relied on by the appellant to establish the fact that the First Right of Refusal Deed was signed by the Northern Territory was as followsFirst, Ms Blackley’s requirement that Legune Land enter into an agreement with the Northern Territory that was similar to the Excision Deed before the Northern Territory would deliver the Minister’s consent to the transfer of Legune Station.  Second, Ms Blackley’s reasons for obtaining from Legune Land a copy of the First Right of Refusal Deed executed by Legune Land.  In particular, her understanding that the surrender of Areas 1, 2 and 3 had not been perfected and certain steps would have to be undertaken by the Legune Land in the future so that the surrender could be perfected.  She wanted an agreement in place so that all of the necessary steps could be taken to perfect the surrender.  Ms Blackley also wanted Legune Land to be responsible for looking after Areas 1, 2 and 3 until the surrender of the areas was perfected.  Ms Blackley wanted to ensure that Legune Land would not make a further claim for compensation for the surrendered areas.  Third, Ms Blackley’s practice of following up on any matters that needed to be attended to after settlement.  Fourth, Mr Pinney’s discussion with the representatives of Legune Land on 7 September 2000 and the file notes he made of that conversation.  Fifth, the fact that the Northern Territory does not have a formal administrative record of a decision not to sign the First Right of Refusal Deed.  Sixth, Mr Blake’s evidence that Mr Pinney did not tell the other members of the Board of the Northern Territory Land Corporation that he had made a deliberate decision not to sign the First Right of Refusal Deed.

[152]  In my opinion, none of these matters either individually or together logically gives rise to an inference that the First Right of Refusal Deed was in fact signed by the Northern Territory.  They merely provide a reason for obtaining a document that was signed by Legune Land which contained an undertaking or agreement by Legune Land to assume the obligations that had been imposed on Legune Station Pty Ltd by the Excision Deed before the Minister’s consent to the transfer of Legune Station was provided to Legune Land.  The fact that there is no formal administrative record that Mr Pinney did not sign the First Right of Refusal Deed is not probative of anything.  The fact of the matter is that there is no administrative record of the document either being signed or not signed.  The absence of this record is completely neutral it does not have a tendency to support the assertion that the First Right of Refusal Deed was signed.

[153]  During Ms Blackley’s cross-examination there was the following exchange between senior counsel for Legune Land and Ms Blackley about what occurred after the settlement of the sale of Legune Station:

Counsel:     So if at settlement there were documents that still required execution, you would have them executed?

Witness:     Yes and – yes.

Counsel:     And if they required registration you would ensure that they got registered?

Witness:     Yes.

Counsel:     And I trust that you will be relieved to know that, 12 years after the event, I am not going to ask you if you remember what you did with the documents on 7 September [2000].  But we can assume that you would have followed your ordinary practice in relation to how you dealt with those documents on 7 September, agreed?

Witness:     Yes.

Counsel:     So any document that required registration, for example, you would make sure it got sent off for registration?

Witness:     At the Titles Office do you mean?

Counsel:     Yes.

Witness:     Yes.

Counsel:     And any document that required execution on the Northern Territory’s part, you would make sure that it was put forward for execution?

Witness:     Yes.

Counsel:     Now if all that goes without incident, the reality is you are unlikely to remember all these years later that occurred. Agreed?

Witness:     Agreed.

Counsel:     What it is likely you would remember is that if there was some incident or objection within the Northern Territory Government to signing a document you negotiated that is something that you are likely to remember?

Witness:     12 years on, not necessarily.

Counsel:     All right.  You certainly, if somebody within the Territory refused to sign a document you had negotiated on behalf of the Territory, that is something that you would keep a record of, a written record of, agreed?

Witness:     No.

Counsel:     Well is it at least likely that you would keep a written record of it?

Witness:     If it was – yes, on a file or part of a file, there would be a file as to, you know, what happened.

Counsel:     You would not just leave it up in the air?

Witness:     No.

Counsel:     So if somebody said to you, “I am not going to sign this document” you would ensure that there was a file note on the file so there is a permanent record that would have been a positive decision not to sign it?

Witness:     That is what would normally happen.

Counsel:     Yes, well that would be your practice?

Witness:     Yes.

Counsel:     Thank you, and you have no reason to think you departed from your practice on this occasion?

Witness:     No.

Counsel:     And it would have been your practice, no doubt, that if that occurred to communicate to the person on the other side that, ‘Look we have changed our mind and we are now not willing to sign that document’?

Witness:     It would certainly be. Yes, have those discussions and follow that through.

Counsel:     And follow it through in writing again so there was a permanent record?

Witness:     Yes.

Counsel:     And that would be your normal practice?

Witness:     Yes.

Counsel:     And can you think of any reason why you would have departed from your normal practice on this occasion?

Witness:     I have no recollection as to …

Counsel:     No, no, if you can just attend to my question?

Witness:     Sorry?

Counsel:     You can think of no reason why you would have departed from that practice on this occasion?

Witness:     No.

[154]  The answers of Ms Blackley do not amount to evidence that the First Right of Refusal Deed was signed by the Northern Territory.  The cross-examination was completely hypothetical.  It commences on the premise that at settlement there were still documents that required execution.  There were no such documents.  She was then asked about her normal practice on the basis of that false premise. 

[155]  The facts were as follows.  The Northern Territory was not provided with a copy of the First Right of Refusal Deed that was capable of being signed by the Northern Territory prior to settlement nor was the Northern Territory asked to execute the First Right of Refusal Deed prior to settlement.  The Northern Territory was only provided with one original copy of the First Right of Refusal Deed at the settlement. That document was provided in exchange for the Minister’s consent to the transfer of Legune Station to Legune Land.  The document was for the Northern Territory’s own records.  Ms Blackley was not asked if she received the letter of 13 September 2000. Nor was she asked if she received the further copy of the First Right of Refusal Deed attached to that letter.  Nor was she asked if she recommended that document be signed by Mr Pinney.  Nor was she asked if that document was signed by the Northern Territory and returned to Cridlands.  The principles enunciated in Browne v Dunn[12] required senior counsel for Legune Land to directly put to Ms Blackley that she had recommended that the document be signed and that it was signed and returned to Cridlands.  He did not do so and this further weakens this very tenuous submission.

[156]  On the other hand, the Northern Territory led evidence to the effect that the Northern Territory had not signed the First Right of Refusal Deed.  Mr Pinney stated that only he held a delegation under s 7 of the Contracts Act (NT) authorising him to execute documents such as the First Right of Refusal Deed on behalf of the Northern Territory.  He was not involved in the dealings on 6 and 7 September 2000 leading up to the settlement of the sale of Legune Station.  He did not authorise any employee of the Department, or any other person, to enter into an arrangement on behalf of the Northern Territory with the prospective purchasers of Legune Station in terms similar to cl 2.1.1 and cl 2.3 of the Excision Deed.  His intention in September 2000 was not to bind the Northern Territory to any arrangement in relation to the surrendered areas because he wanted to retain for the Northern Territory as much flexibility as possible in the event that the land was required for some other purpose.  The principal purpose he had in mind at that time was the extension of Ord River Irrigation Scheme, but he was also generally aware that the Miriuwung Gajerrong people had lodged claims for native title to various areas of the Ord River region and the Northern Territory might have to offer land in order to achieve a settlement of those claims.  Mr Pinney recalled that at some time shortly following the settlement of the transfer of Legune Station on 7 September 2000 he was advised that the solicitors representing the new owners had sent to the Department a contract which had been signed by the new owners which purported to give them rights in terms similar to cl 2.1.1 and cl 2.3 of the Excision Deed.  He could not say for certain who advised him, but he was fairly sure it was Ms Blackley.  Whoever it was, Mr Pinney advised that the Northern Territory would not be entering into such an agreement and for that reason would not be signing the document.  His attitude at the time was that he was content for the new owners of the pastoral lease to use the land for the time being, but that he did not want the Northern Territory to be made subject to any legal or other obligation that would restrict its ability to take possession of the land as and when required.

[157]  Mr Pinney’s evidence is supported by the fact that all of the copies of the First Right of Refusal Deed that were given to the Northern Territory were produced in evidence and none of them had been signed by Mr Pinney or anybody else on behalf of the Northern Territory.  The only written communication between Mr Pinney and Ms Blackley was her email of 7 September 2000 and that did not contain a recommendation that he sign the First Right of Refusal Deed.  A signed copy of the First Right of Refusal Deed was not sent to Cridlands.  Ms Griffiths read an unsigned copy of the First Right of Refusal and did not see a copy of the First Right of Refusal Deed that had been signed by the Northern Territory.

[158]  Legune Land sought to discredit the reliability of Mr Pinney’s evidence by suggesting that he had no recollection of these events and had simply adopted Ms Griffiths account of what had occurred.  Legune Land submitted that Ms Griffiths had confused the Undertaking signed by Legune Land on 6 September 2000 and the First Right of Refusal Deed.  Mr Blake gave evidence that contradicted Mr Pinney’s evidence.  Mr Blake’s evidence was that Mr Pinney did not tell the Board of the Northern Territory Land Corporation that he had not signed the First Right of Refusal Deed.

[159]  Legune Land’s argument about the reliability of Mr Pinney’s evidence cannot be sustained in view of the evidence which supports his statement that he did not sign the First Right of Refusal Deed.  Ms Griffiths was not confused about nor did she conflate the two documents.  She clearly saw both the Undertaking signed on 6 September 2000 and a copy of First Right of Refusal Deed which was not signed by the Northern Territory.  At least one of her emails contained a quote from cl 2 of the First Right of Refusal Deed and she stated that the document was not signed by the Northern Territory.  Even if Mr Blake’s evidence is accepted, and Mr Pinney did not tell the Board of the Northern Territory Land Corporation that he did not sign the First Right of Refusal Deed, the rejection of Mr Pinney’s evidence on the basis that his memory had been infected by Ms Griffiths view of the situation does not prove that he signed the document.  Rejection of Mr Pinney’s evidence in this regard does not provide positive support for the proposition that he signed the document.[13]

[160]  The finding of Kelly J in this regard was correct and this ground of appeal should be dismissed.

Ground 6

[161]  As to ground 6 of the appeal, it was submitted by Legune Land that Kelly J erred in finding that there was no agreement by conduct between Legune Land, on the one hand, and the Northern Territory, on the other hand.  This ground is an alternative ground to ground 5 of the appeal.

[162]  At par [33] of her judgment Kelly J found that the words and conduct of Ms Menz and Ms Blackley only gave rise to an agreement that if the appellant provided Ms Blackley with an executed Surrender document and the signed First Right of Refusal Deed the Northern Territory would provide the Minister’s consent to the transfer of Legune Station to Legune Land.  The documents stipulated by Ms Blackley were delivered at Settlement and the Northern Territory delivered the Minister’s consent to the transfer of Legune Station at settlement.

[163]  In my opinion, Kelly J’s characterisation of the agreement was correct.  It is consistent with how the parties conducted themselves.  Ms Blackley did not have the authority to grant or transfer an interest in land held by the Northern Territory.  Her sole interest was to preserve the obligations that rested on the previous lessee and ensure that the Northern Territory did not have to pay anything more by way of compensation.  Ms Blackley’s evidence-in-chief, which was largely unchallenged, was that only the Secretary of the Department Land Planning and Environment could commit the Territory to an arrangement such as that proposed in the new agreement.  She had simply required an executed surrender of Areas 1, 2 and 3 and an agreement in which Legune Land assumed the responsibilities of Legune Station Pty Ltd which she could put to the Secretary of her Department.  Whether the agreement was to be accepted and signed by the Northern Territory was a matter for the Secretary.  Ms Blackley could not bind the Northern Territory.  This was known to Ms Menz and recognised by the signature clause contained in the First Right of Refusal Deed which contemplated that it had to be signed by somebody who had an appropriate delegation under the Contracts Act (NT).  Ms Blackley’s only interest was in protecting the Northern Territory not granting any interest to Legune Land.

[164]  Ms Blackley only received notice of the transfer of Legune Station on 6 September 2000 and a facsimiled copy of the First Right of Refusal Deed very shortly before settlement on 7 September 2000.  Ms Blackley was not provided with a copy of the document that contained an original signature of Legune Land prior to settlement and she was not asked to arrange for the Northern Territory to execute the document prior to settlement so that it could be exchanged at settlement.  The Secretary of the Department had not seen the document prior to settlement and had not been afforded an opportunity to take any advice about the document.  It was clear from the face of the First Right of Refusal Deed that any agreement was contingent upon the document being signed by the Minister’s delegate.

[165]  No witness was called on behalf of the appellant to give evidence that at the meeting at 1.00 pm on 7 September 2000 Mr Pinney acknowledged that an agreement had been made between the Northern Territory and Legune Land.  No evidence was led from Ms Menz that she regarded production of the consent at settlement as giving rise to a concluded contract.  Indeed, she sent a further copy of the First Right of Refusal Deed to Ms Blackley on 13 September 2000 and requested that the document be executed by the Northern Territory.  At settlement, Legune Land was still proceeding on the basis that it was necessary to obtain an assignment of the Excision Deed.  This was unnecessary if an agreement had been made between Legune Land and the Northern Territory in terms of the Excision Deed.

[166]  Ground 6 of the appeal is not made out.  Ground 7 of the appeal seems to be an extension of ground 6 and must fail for the same reasons.

Ground 8

[167]  As to ground 8, the appellant submitted that Kelly J erred in finding that the Excision Deed was not validly assigned from Legune Station Pty Ltd to Legune Land.  It is important to note that this ground of appeal does not plead that the licence granted to Legune Station Pty Ltd under cl 2.1.1 of the Excision Deed was assigned to Legune Land and that Kelly J had erred in finding that the licence granted to Legune Station Pty Ltd was not properly assigned to Legune Land.

[168]  Although it was never clearly stated by senior counsel for Legune Land, the submission about the assignment of the Excision Deed, that is, of both its benefits and burdens, appears to have been based on special conditions 6.2 and 6.4 of the Contract of Sale and the document entitled Deed of Assignment which was executed by Legune Station Pty Ltd on 7 September 2000. 

[169]  The operative part of the Deed of Assignment executed by Legune Station Pty Ltd stated:

1.        The Assignor does hereby assign to the Assignee the full benefits held by the Assignor pursuant to the [Excision Deed].

2.        The Assignee agrees to assume the obligations of the Assignor and will indemnify and keep indemnified the Assignor against any obligations of the Assignor pursuant to the [Excision Deed].

3.        To the extent necessary, this Deed of Assignment shall be conditional upon obtaining the consent of the Northern Territory of Australia.

[170]  In contrast to cl 3 of the Deed of Assignment, special condition 6.4 of the Contract of Sale expressly stated that the assignment of any benefits under the Excision Deed was subject to the consent of the Northern Territory.

[171]  Special condition 6.4 of the Contract of Sale and clause 3 of the Deed of Assignment recognise that there can be no valid assignment without the consent of the Northern Territory.  The consent of the Northern Territory was required for three reasons: first, the provisions of the Pastoral Land Act (NT); second, the provisions of cl 2.1.1 (d) of the Excision Deed; third, as the Excision Deed involved the imposition of both benefits and burdens on the Northern Territory and Legune Station Pty Ltd, there could not be a unilateral assignment of the Excision Deed by Legune Station Pty Ltd.  There had to be a novation.  Legune Station Pty Ltd had to be released from the Excision Deed by the Northern Territory and Legune Land had to be introduced as a new party to the Excision Deed.  This, at the very least, required the consent of the Northern Territory.  Where under an agreement, such as the Excision Deed, a party owes obligations to the other party to the agreement the obligations cannot be assigned without the consent of that other party.[14]  The obligations owed by Legune Station Pty Ltd to the Northern Territory under the Excision Deed were incapable of assignment without the consent of the Northern Territory.

[172]  Legune Land attempted to overcome the above requirements for the consent of the Northern Territory and, in particular, cl 2.1.1(d) of the Excision Deed[15] by arguing that the Excision Deed granted Legune Station Pty Ltd a lease over Areas 1, 2 and 3 and, as a consequence, under s 134 of the Law of Property Act the Northern Territory could not unreasonably withhold its consent to the assignment of the Excision Deed.  Further, it was said that cl 5.1(g) of the Excision Deed contemplated that there may be an assignment of the Excision Deed.  Finally, it was submitted that the Northern Territory’s provision of the Minister’s consent to the transfer of Legune Station at settlement also amounted to consent to the assignment of the Excision Deed. 

[173]  These submissions are without any merit for the following reasons.  First, the submissions do not deal with the ground of appeal that has been pleaded.  Second, s 134 of the Law of Property Act has no application to this case.  Clause 2.1.1 of the Excision Deed grants a licence not a lease and, in any event, the specific provisions of the Pastoral Land Act govern the situation here, not s 134 of the Law of Property Act.  Third, there is no evidence that Legune Land or Legune Station Pty Ltd, or anyone on their behalf, ever sought the Minister’s consent to the assignment contemplated by special condition 6.4 of the Contract of Sale. 

[174]  Examination of the evidence reveals the following.  As late as 6 September 2000 Legune Land did not know if Legune Station Pty Ltd or its solicitors had sought consent to the assignment referred to in special condition 6.4 of the Contract of Sale.  Settlement proceeded on the basis that consent to such an assignment was something which remained to be dealt with after settlement.  Neither Legune Station Pty Ltd nor Legune Land bothered to obtain consent to the assignment of the benefits that Legune Station Pty Ltd had under the Excision Deed after settlement.  Consent of the Northern Territory was never obtained.

[175]  There is no letter from either Cridlands or Clayton Utz[16] to the Department of Land Planning and Environment enclosing the Deed of Assignment prepared under special condition 6.4 and seeking the Minister’s consent to the assignment contemplated by that document.  On 6 September 2000, which was the original day for settlement of the Contract of Sale,[17] Ms Simone Menz at Cridlands prepared a checklist of all of the matters to be attended to before completion of the Contract of Sale.  Item 13 in the checklist is, “Written confirmation of the status of the [Excision Deed] with the Northern Territory referred to in Special Condition 6 of the Contract”. At 11.10 am on 6 September 2000 Mr Fox[18] sent an email to Ms Menz which contained a draft email to Clayton Utz which stated, among other things: “6. Would you please advise whether your client has applied for consent of the Northern Territory under special condition 6.4 [emphasis added] and, if so, advise whether their consent has been given and, if so, provide us with a copy of the Deed of Assignment prior to settlement.  7. If the consent of the Northern Territory has not been given under special condition 6.4, please urgently advise and submit to us a draft of the Deed of Surrender for our approval before settlement under Clause 6.5.”  Later on 6 September, Mr Fox telephoned Ms Menz.  During that telephone call it was noted that the Department of Land Planning and Environment had been told (presumably by Mr Riley at Clayton Utz) to register the partial surrender now.  If this occurred there would be no assignment of Legune Station Pty Ltd’s benefits under the Excision Deed. 

[176]  Ms Menz then received a telephone call from Ms Blackley who was then the Manager of the Lands Acquisition Branch of the Department of Lands Planning and Environment.  Ms Blackley advised Ms Menz that the Department preferred not to register the partial surrender at that point in time.  Ms Menz did not speak to Ms Blackley about the special conditions of the Contract of Sale.  Nor did she ask Ms Blackley if the Minister would consent to an assignment to Legune Land of the benefits that Legune Station Pty Ltd had under the Excision Deed.  At 4.12 pm on 6 September 2000 Mr Fox sent an email to Mr Riley at Clayton Utz asking Mr Riley to confirm their agreement to proceed to settlement on the basis of Mr Riley undertaking on behalf of Legune Station Pty Ltd that the company will execute both a Deed of Assignment of Benefit and a Deed of Surrender of Benefit of the benefits that Legune Station Pty Ltd had under the Excision Deed and that he would deliver those documents as soon as possible after settlement [emphasis added]. 

[177]  On 7 September 2000 Ms Menz faxed to Mr Riley a Deed of Assignment and a Deed of Surrender.  She advised him that Cridlands had provided the Department of Land Planning and Environment with an executed Partial Surrender and the First Right of Refusal Deed.  The Deed of Assignment and Deed of Surrender were executed by Legune Station Pty Ltd on 7 September 2000.  However, at no stage was either of those documents delivered to the Northern Territory.

[178]  Finally, it follows that there is no evidence that the consent of the Northern Territory to the assignment of the Excision Deed was unreasonably withheld.

Ground 9

[179]  Legune Land submitted the First Right of Refusal Deed amounted to a surrender of Areas 1, 2 and 3 by Legune Land subject to the condition set out in cl 2.2 of the document and that Kelly J erred in finding the contrary.  In my opinion, this ground of appeal cannot succeed because it is dependent upon there being an agreement in terms of the First Right of Refusal Deed and this was not established by Legune Land.  Further, Legune Land only ever obtained a bare legal title to Areas 1, 2 and 3.  It never obtained a beneficial interest in the land which comprised those areas.  It undertook to perfect the acquisition of Areas 1, 2 and 3 when required to do so by the Northern Territory and Legune Land ultimately did what it was required to do in order for the acquisition of Areas 1, 2 and 3 to be completed.  At no stage during that process did it assert any right based on cl 2.2.

Ground 10

[180]  As to ground 10, senior counsel for the appellant submitted that Kelly J ought to have found that that the Northern Territory engaged in acts of part performance from the time of apparently approving the First Right of Refusal Deed, to providing its consent at settlement to the transfer of Legune Station to Legune Land, to allowing cattle to remain on Areas 1, 2 and 3 after 1 September 2001, and by charging Legune Land rent on the basis of the total area of Legune Station (including Areas 1, 2 and 3) until the acquisition of those areas was perfected.  This ground of appeal is another alternative ground of appeal to the grounds of appeal about the alleged failure of Kelly J to find that the First Right of Refusal Deed had been signed by the Northern Territory.

[181]  In my opinion, Legune Land’s submission in support of this ground of appeal appears to be misconceived because it refers only to acts of part performance by the Northern Territory, not acts of part performance by Legune Land.  A plaintiff who seeks to rely on part performance must show three things.  First, there must be acts by the plaintiff in performance of the contract. It is not sufficient to point to conduct of the defendant as evidence of the contract alleged.[19]   Second, the acts performed by the plaintiff, or on behalf of the plaintiff, must referrable to the contract that is alleged.  The acts of the plaintiff must of their own nature be unequivocally referrable to the contract.  Third, the act or acts relied on by the plaintiff must have been done upon the faith of the agreement and must have involved, on the part of the person doing it, a change of position in relation to the subject matter of the contract of such a character that he or she would be unfairly prejudiced if the other party were to take advantage of it.

[182]  The acts of Legune Land sought to be relied on as part performance were identified Mr Grant QC as the execution of the partial surrender document, the taking of possession or the grazing of cattle on Areas 1, 2 and 3, and the payment of rent for the whole of Legune Station without any deduction being made for the surrendered areas.  I accept Mr Grant’s submission that these acts are not unequivocally and of their own nature referrable to the First Right of Refusal Deed.

[183]  Special condition 6.2 of the Contract of Sale provided that if the acquisition of Areas 1, 2 and 3 had not been effected prior settlement of the Contract of Sale then Legune Land would accept title to the whole of Legune Station and assume the obligations of Legune Station Pty Ltd under the Excision Deed and would, if requested by the Northern Territory, execute a further surrender document to be registered after settlement. If this occurred, then Legune Land would be required to pay rent for the whole of Legune Station calculated in accordance with the Pastoral Land Act.  Cattle which were already on Legune Station were part of the Contract of Sale and it may be inferred that some of those cattle were already grazing on Areas 1, 2 and 3 at the time that Legune Land took possession of the station and the cattle simply continued to graze on those areas.  Further, the obligations of Legune Station Pty under the Excision Deed, which were assumed by Legune Land under the Contract of Sale, included the maintenance of all boundary fencing and other fixed improvements within Areas 1, 2 and 3.  Further still, Legune Land never paid a licence fee of $1 per annum for the use of Areas 1 and 2 in accordance with cl 2.1.1(a) of the First Right of Refusal Deed.  There is no evidence of any acts by Legune Land that are unequivocally and of their own nature referrable to the First Right of Refusal Deed.

[184]  Even if Legune Land were entitled to the benefit of the doctrine of part performance, the licence granted by cl 2.1.1 of the First Right of Refusal Deed expired on 1 September 2001 and it was necessary for Legune Land to establish that it had acquired an interest under cl 2.2 of the First Right of Refusal Deed in accordance with its terms and Legune Land did not do so.

Ground 11

[185]  As to ground 11 of the appeal, senior counsel for Legune Land submitted that Kelly J erred in failing to find that Legune Land and the Northern Territory had adopted the First Right of Refusal Deed as the conventional basis of their relationship from September 2000 onwards.  It was submitted that her Honour ought to have found that there was no evidence of any other arrangement in place between the Northern Territory and Legune Land for the continued occupation of Areas 1 and 2.  This argument is yet another alternative basis of trying to establish a concluded agreement in terms of the First Right of Refusal Deed.

[186]  At first instance, Legune Land relied on the following matters to support this contention.

1.        Legune Land remained in possession of and continued to graze cattle on Areas 1, 2 and 3 after 1 September 2001.

2.        Legune Land continued to pay the full rental under the Pastoral Land Act based on the total area of Legune Station.

3.        The Northern Territory gave serious consideration to allowing Legune Land to sublease Legune Station.  The proposed sublease was sent to the Northern Territory.  The proposed sublease document contemplated the sublease of the whole of Legune Station from 1 November 2002 to 31 October 2004.

4.        Mr Fowlestone’s letter to Povey Stirk dated 2 July 2003.

5.        The telephone discussions between Mr Fowlestone and Mr Wiemers between 18 and 22 February 2008.

6.        On 22 February 2008 Mr Fowlestone wrote to Ms Griffiths in the following terms:

[Mr McLean] and the company solicitor, Bob Wiemers, have asked about the “leasing” arrangement which allows the company to run cattle on the land being acquired.  According to Mr McLean the company pays $1 per year, any fixed improvements they put on the land becomes the property of the Northern Territory and the Northern Territory is able to give them one month’s notice.  Do you know if this is in writing?

7.        The ministerial briefing of 16 April 2008

8.        Legune Land signed the further surrender documents when requested to do so by the Northern Territory in 2010.

[187]  Kelly J rejected this contention of Legune Land on the following grounds.

1.        There was no evidence that Legune Land remained in possession of Areas 1 and 2 in any sense other than grazed cattle on those areas with the acquiescence or tacit consent of the Northern Territory.  The agistment of cattle on those areas was more consistent with a bare licence terminable at will than the adoption of First Right of Refusal Deed.

2.        Payment of the full rental over the whole of Legune Station was not consistent with the First Right of Refusal Deed.  The deed provided for the payment of only $1 per annum (if demanded) for the right to graze cattle on Areas 1 and 2.

3.        The fact that the Northern Territory gave serious consideration to consenting to a sublease is neither here nor there.  There is no evidence that either side made any reference to the First Right of Refusal Deed or asserted any rights under that document during the 2003 negotiations.

4.        The fact that Mr Fowlestone wrote to Ms Griffiths in the above terms does not support the contention that at the time the parties adopted the First Right of Refusal Deed as the basis of their relationship.  It shows that Mr Fowlestone was not aware of the existence of such an agreement.  The assertions attributed to Mr McLean in the email are different to the provisions of the First Right of Refusal Deed.  In her response to Mr Fowlestone Ms Griffiths unequivocally denied that there was any such agreement.

5.        There is no need to adopt the First Right of Refusal Deed as the basis of why Legune Land signed the fresh surrender document when requested to do so by the Northern Territory.  Legune Land had a contractual obligation to do so under the Contract of Sale of Legune Station.

[188]  Senior counsel for the appellant submitted that to find as Kelly J did that Legune Land and the Northern Territory had not adopted the First Right of Refusal Deed as the conventional basis of their relationship was in error. He submitted that the finding should be rejected by this Court on the following basis.

1.        There was no evidence that the Northern Territory acquiesced in Legune Land grazing cattle on Areas 1 and 2.

2.        The continued charging of rent by the Northern Territory and the payment of the same was consistent with the adoption of the First Right of Refusal Deed and in particular the rights conferred on Legune Land by clause 2.2 of that document.

3.        Her Honour’s analysis of Mr Fowlestone’s correspondence was incomplete.  His correspondence expressly referenced each of Mr McLean and Mr Wiemers enquiring of the lease in place and Mr Fowlestone attributed to each person certain terms of the lease.

4.        Mr Fowlestone ultimately concluded in the Ministerial that he prepared that there was an agreement between the Northern Territory and Legune Land.

5.        It is more likely that Legune Land executed the further acquisition documents because the parties were acting in accordance with the terms of the First Right of Refusal Deed which had been executed by Legune Land at the request of the Northern Territory.

[189]  In considering Legune Land’s submission it again needs to be born in mind that Legune Land had the burden of proof as to this contention; and at no stage were any of the directors or owners of Legune Land called to give evidence about the basis on which they dealt with the Northern Territory or operated Legune Station until the acquisition of the surrendered land was perfected. 

[190]  Neither the continued grazing of cattle on Areas 1 and 2 nor the charging of rent for the whole area of Legune Station is referrable to the First Right of Refusal Deed.  Legune Land was charged rent under part IV of the Pastoral Land Act.  A consequence of accepting legal title to the whole of Legune Station in accordance with special condition 6.2 of the Contract of Sale was being subject to the ordinary operation of the Pastoral Land Act including the payment of rent assessed under that Act.  At the time of settlement on 1 September 2000, cattle which were subject to the Contract of Sale were already grazing on Areas 1 and 2.  Cattle have continued to graze on these areas ever since, that is, apart from those cattle which have been turned off in the course of the ordinary operation of the cattle station.  None of the directors or owners of the appellant were called to give evidence that the only reason that they continued to graze cattle on Areas 1 and 2 was because they assumed that there was an agreement between Legune Land and the Northern Territory in terms of the First Right of Refusal Deed.  None of the directors or owners of Legune Land were called to give evidence that they purchased additional cattle, or built, purchased or constructed structural improvements or water improvements or infrastructure within Areas 1 and 2 on the assumption that Legune Land had a lease of Areas 1 and 2 which only terminated upon the surrendered areas being acquired for use in the expansion of the Ord River Irrigation Scheme.  Nor was there any evidence that Legune Land only purchased Legune Station because it knew it had a lease over Areas 1 and 2 until those areas were acquired for the expansion of the Ord River Irrigation Scheme.  The Contract of Sale expressly provided that Areas 1, 2 and 3 were not included in the sale.  The price paid by Legune Land was for the balance of the area of the perpetual pastoral lease. 

[191]  There is no evidence that the Northern Territory ever communicated to Legune Land that the company had a lease of Areas 1 and 2 until the areas were required for the expansion of the Ord River Irrigation Scheme or at all.  There is no evidence that the Northern Territory exercised rights against Legune Land that would only exist if Legune Land’s alleged assumption about the existence of the First Right of Refusal Deed were correct.  There is no suggestion that Legune Land informed the Northern Territory that it was building any infrastructure or improvements within Areas 1 and 2 or that it was purchasing additional cattle or capital items because it had a lease of Areas 1 and 2.  All the Northern Territory has done is complete the acquisition of Areas 1, 2 and 3 once the native title issues were sufficiently clarified in circumstances where Legune Land had not purchased those areas and did not object to the completion of the acquisition of that land.

[192]  There is no evidence that the Northern Territory entered into any form of relationship with Legune Land at all.  It simply required Legune Land to undertake to abide by the obligations that Legune Station Pty Ltd had for the surrendered areas before it provided the consent to the transfer of Legune Station.  There is no suggestion or evidence that, knowing Legune Land was labouring under some mistake, the Northern Territory refrained from correcting Legune Land when it was the Northern Territory’s duty to do so. Nor is there any evidence that the Northern Territory made representations to Legune Land that were founded on the First Right of Refusal Deed being in place.

[193]  In my opinion, Kelly J’s conclusions, which are set out in par [188] above, about the dealings between the Northern Territory and Legune Land when Legune Land was considering subleasing Legune Station in 2003 and when Legune Land was considering selling Legune Land in 2008, are correct.  Those dealings are set out in par [73] to par [81] and par [90] to par [113] above.  None one of those dealings demonstrate that the Northern Territory and Legune Land adopted the First Right of Refusal Deed as the conventional basis of their relationship.  There was no mention of the First Right of Refusal Deed in any discussions or correspondence between the Northern Territory and Legune Land.  Legune Land never asserted any entitlements based on the First Right of Refusal Deed.  If anything, Legune Land was uncertain of its position in respect of Areas 1, 2 and 3.  In 2003 the Northern Territory was prepared to consider the sublease if its position was protected by a variation of the perpetual pastoral leas of Legune Station and the inclusion of a condition that the lessee surrender Areas 1, 2 and 3 at no cost when requested to do so by the Northern Territory.  In 2008 the Northern Territory started taking steps to perfect the acquisition of Areas 1, 2 and 3 before Legune Station was sold.  As matters transpired Legune Station was neither subleased nor sold.

[194]  Neither the telephone conversations between Mr Fowlestone and Mr Wiemers and Mr McLean nor the draft Ministerial prepared by Mr Fowlestone amount to an acknowledgement that the relationship between the Northern Territory and Legune Land was governed by the terms of the First Right of Refusal Deed.  The upshot of the discussions between Mr Fowlestone and Mr Wiemers and Mr McLean was that Mr Fowlestone informed them that Areas 1, 2 and 3 were being acquired by the Northern Territory and included in Spirit Hills Station and once that occurred Legune Land would need to negotiate with the Northern Territory Land Corporation.

[195]  The draft Ministerial was an internal Northern Territory document which recommended that Areas 1, 2 and 3 be offered to the Northern Territory Land Corporation.  It said nothing about recognising or preserving any rights that Legune Land claimed it had under the First Right of Refusal Deed.

[196]  As Mr Grant QC pointed out, it is significant to note that the rights now sought to be relied on by Legune Land were not asserted at the time Legune Land and the Northern Territory were facilitating the transfer of Areas 1 and 2 to Spirit Hills Station.  Secondly, Mr McLean was not called to explain what he meant in his telephone discussion with Mr Fowlestone in February 2008 where he asserted a lease terminable on one month’s notice.  There is no evidence from any principal of Legune Land as to why they did not instruct Mr Wiemers in 2008 in terms of the existence of the rights now asserted by Legune Land.  No principal from Legune Land gave evidence about the discussions with Ms Blackley in 2003.  No principal of Legune Land gave evidence as to the assumptions made by Legune Land regarding the existence of an agreement in terms of the First Right of Refusal Deed.  There was no evidence about any conduct being predicated on the existence of such an agreement.  There was no evidence, at all, directed to a purported exercise of the rights contained in cl 2.2 of the First Right of Refusal Deed.  There was no evidence from the principals of Legune Land about the discussion which took place with Mr Pinney at 1pm on 7 September 2000.

[197]  Estoppel by convention is founded on the conduct of relations between the parties on the basis of an agreed or assumed state of facts, which both will be estopped from denying.[20]  There is no estoppel unless it can be shown that the alleged assumption has in fact been adopted by the parties as the conventional basis of their relationship.[21]  In the absence of proof of custom, there is no evidence that the parties adopted the alleged assumption.  Estoppel by convention requires an assumed state of affairs to be an assumed state of fact.[22]  The evidence in this case does not go anywhere near establishing any of the elements of estoppel by convention.

Ground 12

[198]  As to ground 12, it was submitted on behalf of Legune Land that either cl 2.3 of the Excision Deed or cl 2.2 of the First Right of Refusal Deed conferred on Legune Land a conditional right to acquire a further lease (or profit a`prendre) of Areas 1 and 2.  The right was conditional on the happening of two events.  The first event was the expiry of the term specified by cl 2.1.1 of both the Excision Deed and the First Right of Refusal Deed.  The second event was the Northern Territory’s determination that the surrendered areas be used for grazing purposes only.  Legune Land asserted that upon the happening of these two events, the Northern Territory was under a positive obligation to grant Legune Land a first right of refusal on terms.  The positive obligation arose in consequence of the phrase “will grant” which appears in cl 2.2 and cl 2.3 and is mandatory in its terms.  This phrase is sufficient to refute any notion that only a negative promise arises under the clauses.

[199]  This ground of appeal cannot be sustained.  Properly characterised, cl 2.2 is simply a right of pre-emption and that form of first right of refusal does not contain an interest in land.  The distinction was explained in Mackay v Wilson[23] as follows:

Speaking generally, the giving of an option to purchase land prima facie implies that the giver of the option is to be taken as making a continuing offer to sell the land, which may at any moment, be converted into a contract by the optionee notifying his acceptance of that offer.  The agreement to give the option imposes a positive obligation on the prospective vendor to keep the offer open during the agreed period so that it remains available for acceptance by the optionee at any moment within that period.  It has more than a mere contractual operation and confers on the optionee an equitable interest in the land, the subject of the agreement; ….

But an agreement to give “the first refusal” or “a right of pre-emption” confers no immediate right on the prospective purchaser.  It imposes a negative obligation on the possible vendor requiring him to refrain from selling the land to any other person without giving the holder of the right of first refusal the opportunity of purchasing in preference to any other buyer.  It is not an offer and in itself it imposes no obligation on the owner of the land to sell the same.  He may do so or not as he wishes.  The right is merely contractual and no equitable interest in the land is created by the agreement.

[200]  In their terms cl 2.3 and cl 2.2 impose a negative obligation on the Northern Territory requiring it to refrain from leasing the land to any other person without giving Legune Land the first opportunity of leasing the land.  The obligation only arises if (1) the Northern Territory decides that it wants to use the land for grazing stock and no other purpose; and (2) the Northern Territory wants to lease the land.

[201]  As to the use of the word “will” in cl 2.3 and cl 2.2, I accept Mr Grant QC’s submission that the use of the word “will” does not alter the fact that the operation of these clauses does not commence until such time as the Northern Territory determines that the land is required for grazing stock and no other purpose and it determines that it wants to lease the land.  To the extent that the word “will” carries any compulsion with it, the compulsion only arises after the Northern Territory has made the two relevant determinations.  The Northern Territory remains completely free to make or not make any such determinations and therefore has not lost the freedom of alienation.  As the operation of each clause is constrained in this manner, the right granted by those clauses only extends to impose a personal obligation on the Northern Territory to make an offer if the relevant events occur.  No proprietary right is created.

[202]  In Beneficial Finance Corporation Ltd v Multiplex Constructions Pty Ltd[24] the following clause fell for consideration by the Supreme Court of New South Wales:

4.2 If the Bank decides at any time during the exclusivity period or the second period or such extended periods as may be agreed not to proceed with the Project, then it will allow Multiplex a first right of refusal during the exclusivity period or the second period (as the case may be) either to purchase the Site or to arrange for a third party to purchase the Site at a price and upon terms acceptable to the Bank in its absolute discretion. Multiplex shall not be entitled to any fee from the Bank for arranging the purchase whether to itself or any other entity or party. Multiplex acknowledges that the right granted by this clause is not exclusive to Multiplex and nothing in this clause or this Agreement may be read as preventing the right of the Bank to market the Site or the Project to any other party during the exclusivity period or second period or thereafter.”

[203]  The New South Wales Supreme Court determined that cl 4.2 only granted a right of pre-emption or a first right of refusal.  Young J stated:[25]

If on the true construction of the documents […], one can see that contingently or unconditionally the proprietor of property has put it out of his or her control to prevent the grantee from acquiring the property, then a proprietary right is conferred on the grantee.  If, however, the right of the grantee only extends to impose a personal obligation on the grantor to make an offer, then there is no proprietary right conferred.  As Sappideen and Butt say in their work on the Perpetuities Act […] at 138: “A right of pre-emption differs from an option in so far as the grantor of an option has parted with his freedom of alienation and is obliged to sell to the grantee at the request of the latter.

[204]  Likewise, neither cl 2.3 of the Excision Deed nor cl 2.2 of the First Right of Refusal Deed, deprive the Northern Territory of its freedom of alienation.

[205]  In support of its submission about the construction of cl 2.3 and cl 2.2 Legune Land relied on Penrith RSL Club Ltd v Cameron & Anor[26] and the following statement of  Bryson J:

The rights created by the Deed are not easy to understand or state concisely.  In my opinion the right created by the Deed was an option to purchase, notwithstanding the reference in cl2 to the first Right of Refusal. I have been guided by observations of Fullagar and Kitto JJ relating to the document under consideration in Woodroffe v Box & Anor (1954) 92 CLR 245; there are some similarities in the expressions used in that document and in the Deed.  As one of the events which could activate the obligation to offer the land for sale was Mr Hector Cameron's death and the Deed is said by cl1 to be binding on his executors it must be understood that there was a contractual promise that the executors of his estate would make the offer.  Notwithstanding the use of the inept expression "first Right of Refusal" the option conferred by cl3 is the only mechanism by which the Club had an opportunity to purchase the land.  Except in relation to the offer which the grantor was to make under cl3 the Club did not have a right of refusal under which the grantor could not sell the land to any other person without first making an offer to the Club.  The plaintiff's case was not presented on any such basis and in any event there is no evidence that Mrs Amy Cameron or her executors have ever proposed to sell the land to any other person.  According to the form of words used the Club's right under cl3 was to have the executors make an offer to the Club; the Club could then decide whether to accept the offer or not to accept it.  As executors had an obligation to make the offer the substance of the rights involved is to be ascertained by treating them as actually having made it, and the effect of doing so is that on Mr Hector Cameron's death the Club had an option to purchase the land at a price to be established in the way stated.

[206]  Penrith RSL Club Ltd v Cameron & Anor is distinguishable from this case because the operative effect of the clause under consideration in that case was different to the operative effect of cl 2.3 and cl 2.2.  The first right of refusal in the clause being considered in Penrith RSL Club Ltd v Cameron & Anor was triggered upon the death of the grantor.  Once the grantor died there was an express positive obligation on the executors to offer the land to the grantee for purchase.  It was not a negative obligation as is created by the clauses which are the subject of this appeal.  The observations made by Bryson J are directed to the situation where there was an express positive obligation conferred by the clause in question.  There is no such obligation created by cl 2.3 and cl 2.2 unless the Northern Territory decided that it wanted to use the land for grazing purposes only and it wanted to lease the land.  The Northern Territory could not lease Areas 1, 2 and 3 in those circumstances without first offering a lease to Legune Land.

[207]  Further, the breadth of the discretion that is given to the Northern Territory in cl 2.2 and cl 2.3 is inconsistent with the grant of a proprietary interest.  Both clauses are uncertain. So that no interest in land is created by either cl 2.3 or cl 2.2.

[208]  Further, the arrangements on which Legune Land now relies do not satisfy the essential requirements of a leasehold interest.  The essential terms that require the parties’ agreement will vary depending on the nature of the particular agreement.[27]  In the case of a lease or an agreement to lease [emphasis added], the essential terms will usually be the parties, the premises, the term and the rent.[28]

[209]  There is a well-recognised exception to the requirement for an agreement on all essential terms.  That is, where the agreement provides a mechanism for the determination of the omitted matter and the operation of that mechanism does not require the further agreement of the parties.[29]  In this case there was neither an agreed rent nor an agreed term nor an agreed mechanism for determining the rent or the term.

[210]  The term of the lease asserted by Legune Land is until such time as the surrendered land is required for the Ord River Irrigation Scheme.  The term of the lease is therefore uncertain.[30]

[211]  Legune Land’s submissions about a profit a`prendre cannot be sustained either.  There is nothing in the First Right of Refusal Deed which provides a mechanism for the company to obtain a profit a`prendre of open ended duration.  Nor is there any evidence of any sort of dealings outside of the terms of the First Right of Refusal Deed that gave rise to an interest in Areas 1 and 2 in the nature of a profit a`prendre.  The most that can be established on the evidence is a bare licence based on the Northern Territory suffering Legune Land to use the surrendered areas.

Ground 13

[212]  As to ground of appeal 13, Legune Land submitted that the conditions precedent to the exercise of the rights that Legune Land was granted under either cl 2.3 of the Excision Deed, or cl 2.2 of the First Right of Refusal Deed, were (1) the license granted by cl 2.1.1 had expired and (2) the Northern Territory desired at that time that Areas 1 and 2 were to be used for grazing stock and no other purpose.  As neither cl 2.3 nor cl 2.2 provided any mechanism for the exercise of the option, there was no requirement that any such communication, or election, be in writing or any specified period for its exercise.  On the evidence, it could be inferred that as at 1 September 2001 the Northern Territory desired that Areas 1 and 2 be used for grazing stock and no other purpose.  There was no sign of the expansion of the Ord River Irrigation Scheme being activated, Legune Land was using Areas 1 and 2 for grazing purposes and the Northern Territory had not given any indication that it wanted to use the surrendered land for any other purpose. By the statement made by Legune Land’s principals to Mr Pinney on 7 September 2000 that Legune Land would be interested in leasing Areas 1 and 2 if the expansion of the Ord River Irrigation Scheme was delayed, and by its continued occupation of Areas 1 and 2 after 1 September 2001 Legune Land by its conduct evinced an intention to exercise the option.  Consequently, the conditions for the grant of the first right of refusal were met. 

[213]  Legune Land’s submissions on this ground of appeal are lacking in substance.  There is no evidence from which it could be inferred that, as at  1 September 2001, the Northern Territory desired that Areas 1 and 2 be used for grazing stock and no other purpose.  The reason the Northern Territory had taken no steps to perfect the acquisition of the surrendered areas as at 1 September 2001 was that the Northern Territory was uncertain about the impact that completion of the acquisition would have on the native title claim over the whole of Legune Station.  The Northern Territory still wanted the surrendered land for the expansion of the Ord River Irrigation Scheme and the Keep River National Park or alternatively to use in negotiating a settlement of the native title claim.  There is no evidence that the Northern Territory ever considered leasing the surrendered land to any other party.  There is no evidence that the Northern Territory ever offered Legune Land a lease over the surrendered areas and Legune Land never accepted or asked for a lease over Areas 1 and 2.  Simply continuing to graze cattle in the same manner that cattle had been grazed on the surrendered areas since before the time of purchase of Legune Station by Legune Land does not evince an intention to do anything other than graze the cattle on that land.  There was no evidence about the terms and conditions of any lease.

Ground 14

[214]  As to ground 14, senior counsel for Legune Land submitted that the Northern Territory Land Corporation held Areas 1 and 2 on constructive trust for Legune Land because the Corporation had notice of Legune Land’s unregistered interest in Areas 1 and 2 and undertook to respect that interest.[31]  Senior counsel submitted that Kelly J erred by failing to find that the Northern Territory Land Corporation acknowledged to the Northern Territory as transferor, in the relevant sense, Legune Land’s interest in Areas 1 and 2, and that the Northern Territory Land Corporation held the land on trust for Legune Land.

[215]  Legune Land faced two major problems in maintaining this ground of appeal.  First, Legune Land failed to establish that it had an interest in Areas 1 and 2.  Second, Legune Land had grave difficulty establishing that there was some evidence from which an inference could be drawn, on the balance of probabilities, that the Northern Territory Land Corporation was aware of Legune Land’s alleged interest in Areas 1 and 2. 

[216]  Senior counsel for Legune Land submitted in his written submissions that the evidence which established that the Northern Territory Land Corporation had notice of Legune Land’s interest in the land may be summarised as follows.

First, the telephone conversations between Mr Wiemers and Mr Fowlestone in February 2008 and Mr Wiemer’s diary notes made contemporaneously with those conversations…

Second, the contents of the Ministerial Briefing note dated 16 April 2008 and the investigations Mr Fowlestone made over the preceding two months.

Third, and most significantly, the rejection that was compelled of Mr Pinney’s evidence that he did not sign the Legune Land First Right of Refusal [Deed] on behalf of the Northern Territory meant that not only must Mr Pinney be taken to have had knowledge of Legune Land’s interest in the land, but so did the [Northern Territory Land Corporation] given his seat on the Board.  That he did not communicate that knowledge to Mr Blake or other Board members is of no moment.

[217]  As to the telephone conversations between Mr Wiemers and Mr Fowlestone, at par [49] to par [62] and par [78] of his written submissions Senior Counsel for Legune Land stated the following.

49.     The next events which are critical occurred in February 2008.  Ultimately they involve competing recollections of Mr Wiemers and Mr Fowlestone, so it is important to set out a little of what those gentlemen had available to them 4 years later when giving their evidence.

50.     Mr Wiemers was admitted as a solicitor in 1971, having commenced practice as a five year clerk in 1966.  He has been in continuous practice since that time and practiced as a principal of a firm continuously since 1973.  He had a practice of making a diary note, usually in hand, of the nub of the matters discussed by him on the telephone on behalf of a client, attempting to ensure that he recorded all of the essential matters discussed, but not recording every word spoken.  He had an independent recollection of his discussions with Mr Fowlestone.  He also refreshed his independent recollection from his diary notes.

51.     Mr Wiemers was not challenged in cross-examination on the accuracy or contents generally, of those diary notes.

52.     On the other hand, Mr Fowlestone had no contemporaneous notes of those discussions.

53.     The above notwithstanding, the learned trial judge accepted Mr Fowlestone’s evidence where he denied speaking to Mr Wiemers of any proposal to give a pastoral lease to Legune Land, discussed below.  That evidence was contradicted by the contemporaneous diary note of Mr Wiemers.

54.     On 14 February 2008 Mr Wiemers was contacted by a marketing agent for Legune Land and initiated discussions with Mr Fowlestone, with whom he had previously dealt with regarding possible sub-lease, ultimately the proposed sale did not proceed.

55.     Mr Wiemers had four telephone discussions with Mr Fowlestone on 18 February 2008. 

56.     The first of those telephone discussions, from Mr Wiemers’ independent recollection refreshed by his diary notes, was a general discussion about the continued use of the excised areas and Mr Fowlestone informing Mr Wiemers that the excision had not been perfected at that stage because of something to do with native title.

57.     In the second telephone discussion on 18 February 2008, from Mr Wiemers’ independent recollection refreshed by his diary notes, Mr Fowlestone informed Mr Wiemers that Areas 1 and 2 were to be added to the Spirit Hills Pastoral Lease and that the Northern Territory could do that pursuant to s 66 of certain legislation given those areas were less than eight per cent of the station.  Mr Wiemers responded with the words to the effect that they were in fact about a third of the area of the station.  Mr Fowlestone responded that the Northern Territory could get urgent authorisation and Legune Land should tell any prospective buyers the government will want the land back.

58.     In their third telephone conversation on that day, again from Mr Wiemers’ independent recall refreshed by his diary note, Mr Fowlestone said words to the effect that the Northern Territory Land Corporation would need to make a decision regarding leasing the areas in question to Legune Land and that arrangements were in place to transfer title of Areas 1 and 2 from the Northern Territory to the Northern Territory Land Corporation.

59.     Mr Wiemers contacted one of the directors of Legune Land, Mr McLean, and recommended that he contact Mr Fowlestone which appears to have occurred.

60.     Mr Wiemers last conversation with Mr Fowlestone on 18 February 2008 appears to have been after Mr McLean had contacted Mr Fowlestone.  In the course of that discussion, again from Mr Wiemers’ independent recollection refreshed by his diary notes, Mr Fowlestone informed Mr Wiemers that he felt the Northern Territory could acquire Areas 1 and 2 by an acquisition by agreement document.

61.     Of particular relevance, Mr Wiemers recalls Mr Fowlestone saying words to the effect that Mr Fowlestone thought that the current arrangements regarding Legune Land agisting its cattle can continue regarding Areas 1 and 2 and that he had spoken to Mr McLean and a lady in the acquisitions area of the Department in which he worked.

62.     Mr Wiemers and Mr Fowlestone speak by telephone again on 21 February 2008.  In the course of that telephone discussion, from Mr Wiemers’ independent recollection refreshed by his diary notes, Mr Fowlestone says to Mr Wiemers:

                   (a)   The proposal of the Northern Territory would be to take the excised areas and give a pastoral lease to Legune Land.  That part would be taken for park purposes and at that end it may not be available to Legune Land.

                   (c)   The Northern Territory was aware of the current arrangements that Legune Land had with the Northern Territory regarding the excised areas and would endeavour to keep those arrangements in place when it transferred the excised areas to the Northern Territory Land Corporation.

78.    Mr Wiemers and Mr Fowlestone also speak on 22 February 2008 at 3.54 pm.  In that discussion, from Mr Wiemers’ independent recollection refreshed by his diary notes, Mr Fowlestone says to Mr Wiemers:

                   (a)   That Mr Fowlestone had been talking to the Chairman of the Northern Territory Land Corporation;

                   (b)   That in his conference with the Chairman of the Northern Territory Land Corporation it was discussed that the excised land would become part of Spirit Hills Pastoral Lease;

                   (c)   In those discussions Mr Fowlestone was informed that the Northern Territory Land Corporation had arrangements in place regarding the agistment of cattle within the existing boundaries of the Spirit Hills Pastoral Lease with another adjoining landowner;

                   (d)   That if the excised areas were held by the Northern Territory Land Corporation and Legune Land was still the owner of the station it would need to talk to the Northern Territory Land Corporation;

                   (e)   The Northern Territory could get an approval within three weeks or so for the excision to be completed;

                   (f)   In the first instance the Northern Territory Land Corporation was not the owner so Mr Wiemers should talk to Mr Fowlestone as the Northern Territory may have an offer at the time that the perfection of the excision occurred;

                   (g)   That Legune Land’s agistment of cattle over the excised area should be able to be managed in the same way as Spirit Hills Station already had in place with another adjoining land owner to the existing Spirit Hills Station perpetual pastoral lease [emphasis added].

[218]  In his oral submissions, senior counsel for Legune Land submitted that the critical evidentiary matters for establishing that the Northern Territory Land Corporation had acknowledged Legune Land’s interest in  Areas 1 and 2 were the draft Ministerial Briefing, which was emailed to Ms Griffiths at 3.05 pm on 22 February 2008 and appears at pages 229 and 230 of trial exhibit P1, and the discussion that it records with Mr Blake:

The Department of Justice has been consulted about the most appropriate way to complete the acquisition of the three parcels of land from Legune Station before the lease is transferred to a new lease.  It has been agreed the acquisition could be completed and the land included in the perpetual pastoral lease with the land currently contained in Spirit Hills Station without native title being affected.  The land can be held in the perpetual pastoral lease until native title issues are resolved to enable the land to be used for the purposes it is being acquired for.  The three parcels of land have been surveyed as NT Portions 5774, 5775 and 5776.

The matter has been discussed with Mr Peter Blake, Chairman of the NTLC, who has no objection to the proposal and indicated that the land could be managed in the same way land on Spirit Hill Station is, i.e. land for Ord Stage 2 is subleased to an adjoining pastoral lessee and land for the Park is managed by Parks and Wildlife.

[219]  Senior counsel for Legune Land submitted that the above quote recorded the conversation between Mr Blake and Mr Fowlestone which occurred before Mr Fowlestone spoke to Mr Wiemers on 22 February 2008 and that, when taken in conjunction with Mr Fowlestone’s statement to Mr Wiemers on 22 February 2008 that “Legune Land’s agistment of cattle over the excised area should be able to be managed in the same way as Spirit Hills already had in place with another adjoining land owner to the existing Spirit Hills Pastoral Lease” constitute the necessary acknowledgement by the Northern Territory Land Corporation.  

[220]  In my opinion, none of the matters referred to in par [216] to par [219] above suggests that Mr Blake or any other member of the Board of the Northern Territory Land Corporation were told anything at all about any arrangements between Legune Land and the Northern Territory as to the use of Areas 1, 2 and 3, let alone acknowledged the existence of any rights alleged to have been acquired by Legune Land.  The two passages of the draft Ministerial Briefing which are relied on by Legune Land simply state that the acquisition of Areas 1, 2 and 3 could now be completed and the land incorporated in Spirit Hills Station and that Mr Blake told Mr Fowlestone that the land could be managed in the same way as the existing land comprised in Spirit Hills Station (which was by a grazing licence or sublease to Laverton Nominees Pty Ltd).  There is no suggestion at all that Legune Land is to given a sublease by the Northern Territory Land Corporation or that Mr Blake was told anything about Legune Station other than that advice had been received that the acquisition of the land could now be completed.  Even if Mr Wiemers’ version of his conversation with Mr Fowlestone on 22 February 2008 is accepted, the statement attributed to Mr Fowlestone is nothing more than an expression of his opinion about what should occur in the future.  There is no evidence about what Mr Fowlestone said to Mr Blake; and, apart from what is contained in the draft Ministerial Briefing, there is no evidence about what Mr Blake said to Mr Fowlestone.  That is, there is no evidence that Mr Blake said to Mr Fowlestone words to the effect that Legune Land could continue to agist cattle on Areas 1 and 2 after the land had be incorporated in Spirit Hills Station in the same manner that the other adjoining pastoralist did.

[221]  There was considerable evidence led by the Northern Territory and the Northern Territory Land Corporation which contradicted the submissions that were made on behalf of Legune Land.  Mr Blake, the Chairman of the Northern Territory Land Corporation, gave evidence that he was not aware that Legune Land had any interest in Areas 1 and 2.  He recalled receiving a telephone call in February or early March 2008.  He thought it was a woman who telephoned; however, he had no reason to doubt that the conversation with Mr Fowlestone occurred.  The person, who he spoke to, gave no advice about any continuing commitment to the owners of Legune Station or any continuing interest by them and there was no discussion on previous or existing use of the three areas of land proposed to be transferred.  Mr Pinney, who had been the Chief Executive Officer of the Department of Lands Planning and Environment and a member of the Corporation, gave evidence that he told the other members of the Board of the Corporation that he did not sign the First Right of Refusal Deed.  As to the conversation that he had with Mr Blake before he spoke to Mr Wiemers on 22 February 2008, Mr Fowlestone gave evidence that at no time during that discussion with Mr Blake, or on any other occasion, did he indicate to Mr Blake that Legune Land made any claim of a right or entitlement in respect of the surrendered areas, or that there might be circumstances giving rise to the possibility of such a claim if the areas became vested in the Northern Territory Land Corporation.  In addition, at no time during that discussion with Mr Blake did Mr Blake suggest to Mr Fowlestone that Legune Land would be granted a right to use the surrendered areas.  Mr Fowlestone understood Mr Blake to be referring to the possibility that a sublease might be granted to an adjoining pastoral lessee rather than to Legune Land in particular.

[222]  Mr Blake’s evidence was consistent with his conduct which is set out in par [110] to par [134] above. 

[223]  Further, Mr Fowlestone gave evidence that during his telephone conversation with Mr Wiemers on 22 February 2008 he would not have said anything to Mr Wiemers that indicated Legune Land could have any right to use the surrendered areas after they were vested in the Northern Territory Land Corporation.  Nor did he tell Mr Wiemers that Legune Land would be granted a similar right to the excised land as the other adjoining land owner had been granted over land within Spirit Hills Station perpetual pastoral lease.  At all times, Mr Fowlestone’s position was that Legune Land would have to deal with the Northern Territory Land Corporation about any future use of Areas 1, 2 and 3.

[224]  Having reviewed the evidence, I am satisfied that the findings made by Kelly J at par [50] to par [53] of her Honour’s Reasons for Decision are correct.  This ground of appeal fails to be established.

Conclusion

[225]  The appeal should be dismissed and the parties should be heard further as to costs.

BLOKLAND J:

[226]  I agree with Justice Southwood’s reasons and agree the appeal should be dismissed.

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[1]    Hereafter referred to as ‘Legune Land’.

[2]    The deed is hereafter referred to as the ‘First Right of Refusal Deed’.

[3]    Jones v Dunkel (1959) 101 CLR 298

[4]    Hereafter referred to as ‘the Excision Deed’.

[5]    The Northern Territory had in fact acquired not 250 but 1,100 square kilometres of Legune Station.

[6]    That is, legal title to the whole of Legune Station.

[7]    As matters transpired completion of the Contract of sale did not occur on 6 September 2000.  It occurred on 7 September 2000.

[8]    Legune Land Pty Ltd v Northern Territory Land Corporation & Anor [2012] NTSC 83 at par [33]

[9]    The Deed of Agreement was provided to the Northern Territory on 7 September 2000.

[10]   The principal solicitors of Legune Land in 2003.

[11]   The First Right of Refusal Deed was prepared and executed by Legune Land on 7 September 2000.  A further copy of the deed was sent to the Northern Territory on 13 September 2000.

[12]   (1893) 6 R 67

[13]   Broken Hill Co Pty Ltd v Waugh (1988) 14 NSWLR 360 at 365 -366; Steinberg v Federal Commissioner of Taxation (1975) 134 CLR 640 at 694; Lee v Russell [1961] WAR 103 at 109

[14]   Olsson v Dyson (1969) 120 CLR 365 at 388; ALH Group Property Holdings Pty Ltd v Chief Commissioner of State Revenue of New South Wales (2012) 245 CLR 338 at pars 12, 26 and 27.

[15]   Cl 2.1.1 provided that Legune Station Pty Ltd shall not transfer or dispose of in any way Areas 1, 2 and 3 during the period of the licence granted by cl 2.1.1.

[16]   The solicitors for Legune Station Pty Ltd

[17]   As matters transpired the Contract of Sale was completed on 7 September 2000.

[18]   Legune Land’s principal solicitor at Fox & Thomas

[19]   Ferguson v Hullock [1955] VLR 202; Maddison v Alderson (1883) 8 App Cas 467 at 475

[20]   Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226 at 244-245

[21]   ibid.

[22]   ibid.

[23]   (1947) 47 SR (NSW) 315

[24]   (1995) 36 NSWLR 510

[25]   (1995) 36 NSWLR 510 at 524 per Young J.

[26]   (2001) 10 BPR 18,621 at 18,623.

[27]   Vroon BV v Foster’s Brewing Group Ltd [1994] 2 VR 32 at 68; Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd’s Rep 601 at 619; Foote & Ors v Acceler8 Technologies Pty Ltd and Ors [2012] NSWSC 635 at [21].

[28]   NZI Insurance Australia Limited v Baryzcka (2003) 85 SASR 497 at 506; Harvey v Pratt [1965] 1 WLR 1025 at 1026-1027; Copperart Pty Ltd v Bayside Developments Pty Ltd (1996) 16 WAR 396 at 408; Foote & Ors v Acceler8 Technologies Pty Ltd and Ors [2012] NSWSC 635 at [21].

[29]   Booker Industries Pty Ltd v Wilson Park (Qld) Pty Ltd (1982) 149 CLR 600; Toyota Motor Corp Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 at 202; Foote & Ors v Acceler8 Technologies Pty Ltd and Ors [2012] NSWSC 635 at [22].

[30]   Bishop v Taylor (1968) 118 CLR 518; Lace v Chandler [1944] KB 368; Mangiola v Costanza (1980) A & NZ Conv R 331.

[31]   Bahr v Nicholay (No 2) (1988) 164 CLR 664; Presbyterian Church (NSW) Property Trust v Scots Church Development Ltd [2007] NSWSC 676 at [114].