NSW Government Bulletin

Public authorities and estoppels – when private and public regimes clash

Last year, we considered why public authorities generally will not be prevented from carrying out statutory duties or exercising statutory discretions, even when a public authority has mistakenly told a person they can do something, like claiming a tax deduction. This is because the public authority can correct its error, while the person’s reliance on the mistake becomes unfortunate.

Public or private?

Public authorities operate not only as administrators of legislation and policy, but also engage in commerce, own land adjacent to private land, and contract with people. While public authorities may not be prevented, even by a mistake, from exercising a statutory duty, there will be other cases where the public authority is treated as an ordinary party subject to private law. A NSW Supreme Court case gives a useful illustration of where the line falls between public and private action.

Northey v Bega Valley Shire Council

In Northey v Bega Valley Shire Council [2010] NSWSC 527, Northey owned and used private land on both sides of a creek. One creek bank inclined up to a wide road reserve. The road reserve was partly used for public recreation, accommodated a water main, and included an unsealed public road. Northey, halfway up the bank, had a fence preventing her cattle from wandering onto the road.

The fence was in disrepair. Northey wanted to level-off the incline and rebuild the fence on flat ground. She discussed this with a local council employee, who managed a local road repair crew. The manager cautioned against flattening the bank – doing so would jeopardise the road reserve, and likely become a legal nuisance. Instead, he suggested Northey move her fence up onto the road reserve itself. The pair plotted out a fence line, putting the fence five metres into the reserve. To allow continued access to the water main, the manager said the council would install and pay for two gates in the fence. Northey then built the fence, and the road crew installed the council’s gates.

A few years later, the council received complaints because the fence prevented recreation on the road reserve. The council asked Northey to remove her fence pursuant to section 138 of the Roads Act 1993 (NSW) (Roads Act). This prohibits structures from being placed on a road reserve without the roads authority’s consent. Section 107 allows a roads authority to remove the encroachments.

Should Northey’s fence remain?

The case raised interactions between private law and public law. The Roads Act suggested the fence could lawfully be removed, and that keeping it was unlawful. But equally, Northey had the manager’s permission to erect the fence, and the council paid for the gates. The fence also served a purpose, being a ‘dividing fence’ on an ‘occupational boundary’ between the road reserve and the private land.

No contractual or propriety right

Northey’s first argument failed. She had no propriety or contractual right for her fence (for example, there was no easement or similar). At best, Northey had a licence in the form of permission to place the fence on the road reserve. This meant there would be no trespass to land while the permission remained, but the permission could be withdrawn, like if an invitee is asked to leave private land.

Equitable estoppel

Next, an equitable estoppel was considered. This occurs where, using Northey and the council to illustrate, three elements are satisfied:

Northey assumed that a particular legal relationship existed between her and the council – that the fence could go onto the road reserve
the council induced Northey’s assumption by encouragement. The council also knew Northey was relying on the inducement when replacing the old fence and building on the road reserve;
the council could, but was yet to do so, give Northey formal legal rights, such as an easement, legally entitling Northey to keep the fence on the road reserve.

The estoppel is termed ‘equitable’ because, if established, the inducing party (the council) would be acting unconscionably if it withdrew the assumption it induced – that Northey can have her fence on the road reserve. Equity prevents or estops the person from unconscionably doing so. Instead, the aggrieved person – Northey – may request that the inducing party give legal effect to their representation or inducement. For example, by granting the necessary legal right.

Did the employee have authority to bind the council?

Where a public body is involved, a consideration is whether the person representing the body has authority. Could a road crew’s manager bind the council to allow a fence on a road reserve? It is quite common for people to object to, say, a council demolition order by saying “but your engineer said it was fine to build here”. For the manager to have relevant authority, one of the following needed to be established:

the council actually gave the manager permission to grant interests in the road reserve to private citizens. This could not be shown
even though the manager did not have the council’s actual authority, the council held the manager out as having such authority. For example, from the manager’s job title. This type of apparent or ostensive authority must be based on how the council holds the worker out, not the person’s self-generated claim to authority
finally, whether the manager could be treated as the council’s agent, like a solicitor acting for a client or real estate agent. Usually, the agent has authority over a limited factual landscape – a particular transaction or matter.

The court found the manager’s job, his actions and having the road crew install gates, which the council paid for, as establishing authority, likely ostensible.

Can there be a legal right?

The issue then became whether the council could grant the right Northey was induced to believe she had – that the fence could remain on the road reserve perpetually, or at least for a long while.

The difficulty was the council could not lawfully grant this right because:

the dividing nature of the fence on an ‘occupational boundary’ did not attract the Dividing Fences Act 1991. Section 25 excludes the Act’s application to fences on road reserves. This meant there needed to be a private agreement for the fence
the Roads Act dealt with structures placed on road reserves. Section 138 prohibited such structures unless the authority gave consent. Northey could not avoid this by establishing, for example, a land interest like an easement, which may have got around the section by being a land interest, not a work on a road;
However, even if consent was given, section 140 provided the public authority could at any time and for any reason revoke the consent. The discretion given by this section suggested against there being any estoppel – the law allowed revocation for any reason at any time.

Based on this, Northey’s fence had to be removed. “Where the capacity of a public authority to contract or otherwise fetter the future exercise of its powers or discretions is restricted by statute [ie section 140 in this case], those restrictions cannot be circumvented by resort to estoppel … equitable estoppel does not operate to enlarge [a public authority’s] statutory rights to deal with the land.”

Any lessons?

Even where a public authority involves itself in usual commercial activity, such as fencing between different parcels of land, there may be statutes, not known to those involved, which restrict what can actually be achieved. If an authority wishes to give rights beyond the statute’s limitation, careful consideration will be required to avoid fettering a discretion.

Author: Bede Haines

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New and Revised Practice Notes - Commercial and Corporations (C&C-1)
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New and Revised Practice Notes - General and Personal Insolvency (GPI-1)
This practice note outlines arrangements for the management within the National Court Framework (NCF) of applications in the Court that concern general and personal insolvency under the Bankruptcy Act 1966 (Cth). Read the full practice note here.

NSW

Supreme Court of NSW Decisions Reserved as at 29 July 2022. Read more here.
Supreme Court of NSW Decisions Reserved as at 22 July 2022. Read more here.

Published – articles, papers and reports

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Cases

Helm No. 18 Pty Ltd v North Sydney Council [2022] NSWLEC 1406
INTERIM HERITAGE ORDER: whether an interim heritage order over two residential properties found not to reach the threshold for local heritage listing, should be revoked.
Civil Procedure Act 2005, ss 56, 62.3; Heritage Act 1977, ss 4, 4A, 25, 29, 30, Pt 3; Land and Environment Court Act 1979, s 39; North Sydney Local Environmental Plan 2013, Sch 5.

Environment Protection Authority v Sphere Healthcare Pty Ltd [2022] NSWLEC 92
SENTENCING – environment offence – s 120(1) of the Protection of the Environment Operations Act 1997 (NSW) – polluted waters – significant harm – practical measures available but not taken – harm or risk of harm foreseeable – no financial benefit gained – upper middle range of objective seriousness – contrition and remorse demonstrated – co-operation with regulatory authority – early plea of guilty – no prior convictions – specific deterrence not warranted – general deterrence warranted – fine not reduced due to capacity to pay pursuant to s 6 of Fines Act 1996 (NSW) – monetary penalty imposed – publication order – investigation costs – legal costs.
Crimes (Sentencing Procedure) Act 1999 (NSW); Criminal Procedure Act 1986 (NSW); Environmental Trust Act 1998 (NSW); Fines Act 1996 (NSW); Protection of the Environment Operations Act 1997 (NSW).

Nyman v Secretary of the Department of Education [2022] NSWIRComm 1060
EMPLOYMENT AND INDUSTRIAL LAW – Public sector – Dismissal – Application for Public Sector Disciplinary Appeal – jurisdictional objections – whether appellant employed under a contract of employment for a specified period less than six months – whether application filed out of time.
Industrial Relations Act 1996 ss 97, 98, 100B.

Allen Ralph Robinson as Trustee for the Trust Fund of the Fairfax Fellowships at Balliol College v Attorney General of New South Wales [2022] NSWSC 996
CHARITIES AND NOT-FOR-PROFITS – Charitable gifts and trusts – Whether cy-près or administrative scheme can be ordered – Termination of Australian trust and transfer of Sterling denominated assets to English trust – “Original purposes of a charitable trust” – Charitable Trusts Act 1993 (NSW), s 9(1).
Charitable Trusts Act 1993 (NSW); Trustee Act 1925 (NSW).

Abdelsher v Commissioner for Fair Trading [2022] NSWCATOD 81
ADMINISTRATIVE REVIEW – Home Building Act – internal review application unreasonably refused – jurisdiction – extension of time – summary dismissal.
Administrative Decisions Review Act 1997; Building Legislation Amendment Act 2021 (NSW); Civil and Administrative Tribunal Act 2013; Civil and Administrative Tribunal Rules 2014; Home Building Act 1989.

Fire Brigade Employees’ Union of New South Wales v Fire and Rescue NSW [2022] NSWIRComm 1056
INDUSTRIAL DISPUTE – retained firefighter – Post Traumatic Stress Disorder – assessment for duty and permanent incapacity – medical discharge.
Industrial Relations Act 1996.

Ballina Shire Council v Joblin [2022] NSWLEC 90
LOCAL GOVERNMENT – Powers, functions and duties – Orders – Non-compliance with development control order – Collateral challenge in criminal proceedings – Whether development control order invalid – Whether in-ground swimming pool a “building” – Literal, contextual and purposive approaches to statutory construction – Whether development control order uncertain.
Environmental Planning and Assessment Act (NSW), ss 1.4, 9.34, 9.37; Interpretation Act 1987 (NSW), ss 3, 33, 35; Swimming Pools Act 1992 (NSW), s 3.

Fisher v Queanbeyan Palerang Regional Council [2022] NSWCATAD 242
ADMINISTRATIVE LAW – administrative review – Government information – review of decision made following an order for the respondent to reconsider its decision – reasonable searches – Legal privilege.
Administrative Decisions Review Act 1997 (NSW); Civil and Administrative Tribunal Act 2013 (NSW); Evidence Act 1995 (NSW); Freedom of Information Act 1989 (NSW); Government Information (Public Access) Act 2009 (NSW); Local Government Act 1906 (NSW); Local Government Act 1993 (NSW); Roads Act 1993 (NSW); State Records Act 1998 (NSW); Uniform Civil Procedure Rules 2005 (NSW).

Legislation

Commonwealth

Act compilation
Environment Protection and Biodiversity Conservation Act 1999 29/07/2022 – Act No. 91 of 1999 as amended
Income Tax Assessment Act 1997 26/07/2022 – Act No. 38 of 1997 as amended
Competition and Consumer Act 2010 21/07/2022 – Act No. 51 of 1974 as amended
Corporations Act 2001 19/07/2022 – Act No. 50 of 2001 as amended

Bill

NSW

Proclamations commencing Acts
Mandatory Disease Testing Act 2021 No 13 – published LW 29 July 2022
Work Health and Safety (Mines and Petroleum Sites) Act 2022 – published LW 22 July 2022

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

NSW Government Bulletin

Public authorities and estoppels – when private and public regimes clash

Public or private?

Northey v Bega Valley Shire Council

Should Northey’s fence remain?

No contractual or propriety right

Equitable estoppel

Did the employee have authority to bind the council?

Can there be a legal right?

Any lessons?

In the media

Practice and Courts

Published – articles, papers and reports

Cases

Legislation

Share this

Key Contacts

Christine Jones

NSW Government Bulletin

Public authorities and estoppels – when private and public regimes clash

Public or private?

Northey v Bega Valley Shire Council

Should Northey’s fence remain?

No contractual or propriety right

Equitable estoppel

Did the employee have authority to bind the council?

Can there be a legal right?

Any lessons?

In the media

Practice and Courts

Published – articles, papers and reports

Cases

Legislation

Share this

Related Posts

NSW Government Bulletin

NSW Government Bulletin

NSW Government Bulletin

Key Contacts

Christine Jones