This case exemplifies various interpretations of Local Government Act (LGA), enacted in 1993. According to this law, the city council may acquire private land in a compulsory way if it is necessary “for the purpose of its existence”. Nonetheless, there is an exception; it is illegal to compel the owners to sell their property if it is acquired by the council for the purpose of re-sale. We should also speak about some other constraint, namely if “the land forms part of, or adjoins or lies in the vicinity of, other land acquired at the same time” the consent of the owner is not obligatory. Parramatta City Council (the respondent) bought two parcels of land which belonged to Mac’s Pty Limited R & R Fazzolari Pty Limited (claimants). Later, it was transferred to such developer as the Grocon Group. The major task of the judges was to determine whether this acquisition or illegitimate.
The primary judge, Biscoe J, who held the first trial, arrived at the conclusion that these parcels of land were bought by the city council not for performing any of its functions, at least in accordance with Government Act. In addition to that, he stated that the transfer of the properties to the developer was conducted with the intention of gaining monetary benefit, which can be called a resale. The defendant advanced its counter-arguments, claiming that these parcels were required for the implementation of the so-called Master Plan, and the Grocon Group was only contributing to its realization. Therefore, the re-sale was only a subservient purpose but not the dominant one. His Honor did not concur with this statement, saying that the term other land refers to the property, which does not belong to the council at the present moment. While making his decision, he relied on the “principle of recoupment”. It essence lies in the following: if various interpretations are possible, the most optimal decision is that one, which minimizes the encroachment on human rights, including the right of property. This is approach, taken by the judge Biscoe J, and later it was supported by the High Court.
There is a different interpretive framework that can justify compulsory acquisition, made by the city council. For instance, according to the verdict, reached by the Court of Appeal, this purchase was within the scope of Local Government Act. The judges, Tobias, Hodgson and Palmer, emphasized the idea, that these private properties were a constituent part of Master Plan, which was subsequently one of the functions that the council performed. Moreover, the re-sale, itself, was only one of subservient purpose, but it was not the key objective that the agency was trying to achieve. He pointed out that resale was obligatory for further implementation of the plan and this land could be entrusted to any other developer, not only to the Grocon Group . He alluded to the similar cases, such as Thompson v Randwick Corporation or Auto Port Pty Ltd v Minister for Works.
On the whole, we may speak about some inconsistency in his reasoning because in compliance with the contract between the council and the Grocon Group, the former was to receive a payment of $51 million for a period of three years though officially. The major difficulty was to determine whether the council was carrying out any of its official duties. In point of fact, its main task is to deliver services to the community members. Naturally, it is quite possible to give a non-committal reply such as the promotion of Master Plan, but in this particular case, there is no concrete evidence, indicating that the City Council was pursuing any objective apart from resale. This is the main reason why the High Court of Australia confirmed the verdict, returned by the primary judge, Biscoe J.
If we try to compare the differences in legal reasoning between the judges, we may say that in the first case, Biscoe J focuses his attention to the very fact of resale which did not stimulate the effective functioning of the city council or respondent to be more exact. The reasoning of French CJ, the high-court judge was similar, and consequently, the actions of the council were proven to be illegitimate. As far as His Honor, Tobias JA is concerned; we may say that he gave preference to a different interpretive framework, arguing that the resale was only a part of a much bigger project. Yet, as it turned out the respondent did not manage to single out the exact tasks.
The importance of this case must not be underestimated because it provides a sufficient basis for solving similar controversies that may possibly arise in the near future. Apart from that, this case shows that the owners of private property can become virtually helpless against federal agencies that sometimes use their rights for commercial purposes. Arguably, this trial will result in some amendments to Local Government Act, which would impose more rigid restrictions on the city counsels. It is of the crucial importance to make this law more specific and more explicit. Now, it can be interpreted from various perspectives and may enable illegal operations.
References
Local Government Act 1993. Queensland Parliamentary Council. S, 188.
Refer to Local Government Act, S 188
Parramatta City Councill v R & R Fazzolari Pty Ltd; Parramatta City Council v Mac’s Pty Ltd (2007), (2007) 155 LGERA 362. Biscoe J.
Parramatta City Councill v R & R Fazzolari Pty Ltd; Parramatta City Council v Mac’s Pty Ltd (2008) 162 LGERA 1, Tobias JA. Hodgson JA. Palmer J.
R & R Fazzolari Pty Limited v Parramatta City Council. Mac’s Pty Limited v Parramatta City Council (2009). S384/2008 & S385/2008 (FRENCH CJGUMMOW, HAYNE, HEYDON AND KIEFEL JJ).