Case: Harlowe's Nominees Pty Ltd v Woodside (Lakes Entrance) Oil Co N.L. [1968] HCA 37 ; (1968) 121 CLR 483
Outcome: cited
taken that step, that the proper approach is to determine whether those persons acting on behalf of the Housing Associations are acting for proper purposes and could reasonably have engaged in that conduct. Barwick CJ, McTiernan and Kitto JJ said in Harlowe's Nominees Pty Ltd v Woodside (Lakes Entrance) Oil Co N.L. [1968] HCA 37 ; (1968) 121 CLR 483 at 493: Directors in whom are vested the right and the duty of deciding where the company's interests lie and how they are to be served may be concerned with a wide range of practical considerations, and their judgment, if exercised in good faith and not for irrelevant purposes, is not open to review in the courts. Whether the obligation of the Housing Associations and of those persons on their behalf is founded in the contractual relationship between the Housing Association and its members; or in the fiduciary obligation of the Management Committee of the Housing Associations to the members, or upon the Constitutions and Rule Books of the Housing Associations, in my view the appropriate question is for present purposes the same. I have referred above to the finding that each Housing Association, although having no legally enforceable right to any particular part of the $100 million, could reasonably expect and assume that a significant proportion of that sum would be spent on housing and facilities at its town camp. They were aware of the fundamental importance of the town camps land to their respective members. They had negotiated with the Minister for over 12 months. They could reasonably conclude that no "better deal" could be reached. They could reasonably conclude that, if they did not agree to the proposed subleases, the town camps would be compulsorily acquired. They understood the very strong desire of their members to avoid alienation of their land (the land held under the Special Purposes Leases or Crown Leases), and so were making the decision which would ultimately preserve their lands rather than have them compulsorily acquired. They had secured some consultation rights, both directly and through the Forum. They were aware that the $100 million was a package for all the Housing Associations, and its allocation would follow consultation through the Forum. They were aware that the $100 million was required to be expended over a period of five years, and so would provide promptly benefits to existing members, as well as to future generations. They had consulted widely with their members. They had the support of the Council in their decision. They were aware that, under the terms of the proposed subleases, they could be given a significant and direct ongoing role (as recognised in Recitals I and J of the proposed subleases, and in respect of community land, vacant land and after three years potentially as a Housing Authority). As senior counsel for the Housing Associations argued, the Housing Associations were aware that there was no other realistic opportunity available to secure the potential benefits to the town camps which the expenditure of $100 million would bring; they knew of the past "years of inadequate funding leading to substantial housing and conditions for the members and tenants"; and they believed that that funding to the Housing Associations through clause 6(a) of the proposed subleases would directly serve their primary function of relieving the poverty, sickness and suffering and helplessness of Aboriginal people in Central Australia, including their members. Finally, they were aware that the proposed subleases would not preclude them from continuing to engage in activities directed to the six "means" set out in Item 1.3(b) of the respective Constitutions and Rule Books, save to the extent that certain of those activities would be subject to the role and obligations and activities of the Executive Director under the proposed subleases, and they were also aware of the ongoing important role of the Council.