AI Carbon WA NO. 2 Pty Ltd v The Registrar of Titles - [2025] WASC 193

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   AI CARBON WA NO. 2 PTY LTD -v- THE REGISTRAR OF TITLES [2025] WASC 193
CORAM:   WHITBY J
HEARD:   1 MAY 2025
DELIVERED          :   22 MAY 2025
FILE NO/S:   CIV 1347 of 2025
BETWEEN:   AI CARBON WA NO. 2 PTY LTD
First Plaintiff
AUSTRALIAN INTEGRATED CARBON FINANCIAL SERVICES PTY LTD
Second Plaintiff
AND
THE REGISTRAR OF TITLES
First Defendant
MINISTER FOR LANDS
Second Defendant

Catchwords:

Creation of carbon rights and carbon covenants - Whether consent of Minister for Lands required to lodge a caveat over Crown land in relation to proposed carbon rights and carbon covenants - Proper construction of s 137(2) of the Transfer of Land Act (WA)

Legislation:

Carbon Credits (Carbon Farming Initiatives) Act 2011 (Cth)
Carbon Rights Act 2003 (WA)
Land Administration Act 1997 (WA)
Land Administration Regulations 1998 (WA)
Stamp Act 1921 (WA)
Transfer of Land Act 1893 (WA)

Result:

Application dismissed

Category: A

Representation:

Counsel:

First Plaintiff	:	W C J Zappia
Second Plaintiff	:	W C J Zappia
First Defendant	:	C G Mayne
Second Defendant	:	C G Mayne

Solicitors:

First Plaintiff	:	Hamilton Locke
Second Plaintiff	:	Hamilton Locke
First Defendant	:	State Solicitor's Office
Second Defendant	:	State Solicitor's Office

Case(s) referred to in decision(s):

Eon Metals NL v Commissioner of State Taxation (WA) (1991) 91 ATC 4841; 1991 22 ATR 601
Meyer v Solomon [2021] WASCA 168
Tisala Pty Ltd v Hawthorn Resources Ltd [2022] WASC 109

WHITBY J:

The plaintiffs are in the business of developing carbon sequestration projects throughout Australia, including Western Australia. As part of their business, the plaintiffs enter into carbon covenant agreements with landowners and lessees of pastoral leases, by which the landowner or the pastoral lessee provide the plaintiffs with a right to develop a carbon offset project. In return the landowner or lessee receives a fee or a share of the profit/equity in the project.
This proceeding relates to carbon covenant agreements that the plaintiffs entered into with pastoral lessees in relation to various pastoral leases over Crown land in Western Australia. Pursuant to these carbon covenant agreements, the pastoral lessees gave their consent to the creation of carbon rights and carbon covenants to the plaintiffs in respect of the land the subject of the pastoral leases.
The plaintiffs have sought the consent of the Minister for Lands (Minster), the second defendant, to register the carbon rights and carbon covenants on the titles of the Crown land. As at the date of these reasons, the Minister has neither consented to, nor refused to consent to, the registration of the carbon rights and carbon covenants.
As a result, the plaintiffs seek to register caveats on the titles to the Crown land pursuant to s 137(2) of the Transfer of land Act 1893 (WA) (TLA). The first defendant has indicated that it will reject the caveats unless the plaintiffs obtain the consent of the Minister to lodge the caveats.
The plaintiffs commenced these proceedings seeking a declaration that the written consent of the Minister is not required prior to the lodgement of the caveats and an order that the first defendant register the caveats as prescribed by s 141 of the TLA.
The defendants oppose the relief sought on the basis that a caveat in respect of a proposed carbon right or carbon covenant can only be registered against the title of Crown land with the Minister's consent.
Therefore, the issue in these proceedings is whether the plaintiffs require the written consent of the Minister in order to have the caveats recorded against the certificates of Crown land title.
For the reasons that follow, I find that the plaintiffs do require the written consent of the Minister in order to have the caveats recorded against the certificates of Crown land title.

Background

The parties have filed an agreed statement of facts and issues. The relevant background is largely taken from those agreed facts.
Companies like the plaintiffs are able to register eligible offset projects for the purpose of creating and selling Australian carbon credit units pursuant to the Carbon Credits (Carbon Farming Initiatives) Act 2011 (Cth) (CCCFIA). While the CCCFIA sets up a scheme for the issue of Australian carbon credit units in relation to eligible offset projects, the creation of carbon rights and carbon covenants in respect of land is governed by Western Australian legislation.
As part of their business of developing eligible carbon sequestration projects, the plaintiffs entered into carbon covenant agreements with pastoral lessees in respect of the following pastoral leases:
(1)in respect of the first plaintiff:
(a)pastoral lease N049763 over Lots 14, 86, 116 and 142 on Deposited Plan 238307 (Meka Station Land) pursuant to the terms of a Carbon Covenant Agreement between the first plaintiff and Kerry Raymond Wark and Susanne Mary Wark dated 21 July 2021 as amended by the terms of a Deed of Novation undated between the first plaintiff, Kerry Raymond Wark (in his own right and in his capacity as executor of the deceased estate of Susanne Mary Wark), and Joseph Maynard Jenour and Nigel James Brown as trustees for the M & N Property Trust and a Pre‑Payment Deed dated 19 April 2024 between the first plaintiff, Joseph Maynard Jenour and Nigel James Brown as trustees for the M & N Property Trust and Joseph Maynard Jenour as trustee of the JM Jenour Family Trust;
(b)pastoral lease N050464 over Lots 20 and 33 on Deposited Plan 238058 (Beringarra Land), and pastoral lease N050465 over Lots 13, 29 and 216 on Deposited Plan 238330 (Milly Milly Land), pursuant to the terms of a Carbon Covenant Agreement between the first plaintiff and Tarmoola Investments Pty Ltd dated 13 February 2023 as amended by the terms of a Deed of Novation, Amendment and Restatement - Carbon Covenant Agreement dated 28 March 2024 between the first plaintiff, Tarmoola Investments Pty Ltd as trustee for the Tarmoola Investments Unit Trust and Lucid Carbon Pty Ltd; and
(c)pastoral lease N054187 over Lot 10 on Deposited Plan 238421 (Nookawarra Land), pursuant to the terms of a Carbon Covenant Agreement dated 28 June 2021 between Mervyn Joseph Tomkins and the first plaintiff;
(2)in respect of the second plaintiff:
(a)pastoral lease N050480 over Lot 225 on Deposited Plan 193792 (Byro Land), pursuant to the terms of a Carbon Covenant Agreement dated 28 July 2020 between the second plaintiff and Revive Nominees Pty Ltd; and
(b)pastoral lease N050597 over Lots 21 and 224 on Deposited Plan 193793 (Ballythunna Land), pursuant to the terms of another Carbon Covenant Agreement also dated 28 July 2020 between the second plaintiff and Revive Nominees Pty Ltd,
(collectively, the CCAs).
Under each of the CCAs, the pastoral lessee, as a registered interest holder, gave their consent to the creation of carbon rights and carbon covenants in favour of the relevant plaintiff in respect of the land the subject of the CCA.
On 15 July 2024, the first plaintiff sought the consent of the Minister to register the carbon right and carbon covenant over the Meka Station Land.
On 26 August 2024, the plaintiffs sought the consent of the Minister to the creation and registration of the carbon rights and carbon covenants over the Beringarra Land, the Milly Milly Land, the Byro Land and the Ballythunna Land.
On 13 September 2024, the first plaintiff sought the consent of the Minister to the creation and registration of the carbon right and carbon covenant over the Nookawarra Land.
As of the date of commencement of the proceedings, the Minister has neither consented, nor refused, to grant to either of the plaintiffs any carbon rights or carbon covenants in respect of the Crown land the subject of the CCAs. Therefore, the carbon rights and carbon covenants have not been registered on the title to the Crown land.
The plaintiffs have sought to lodge the following caveats:
(1)on 6 June 2024, the first plaintiff sought to lodge caveat Q018003 in respect of the Meka Station Land;
(2)on 14 June 2024, the second plaintiff sought to lodge caveat Q027152 in respect of the Byro Land and the Ballythunna Land;
(3)on 14 June 2024, the first plaintiff sought to lodge caveat Q027131 in respect of the Beringarra Land and the Milly Milly Land; and
(4)on 19 December 2024, the first plaintiff sought to lodge caveat Q260099 in respect of Nookawarra Land,
(collectively the Caveats).
Except for caveat Q260099, which is a 'subject to claim' caveat, the Caveats are absolute caveats.
The first defendant has issued requisition notices to the solicitors for the plaintiffs advising that the consent of the Minister to lodge the Caveats is required.
On 2 April 2025, the plaintiffs commenced these proceedings by writ seeking a declaration that the prior written consent of the Minister was not required prior to the lodgement of the Caveats and an order requiring the first defendant to register the Caveats in the manner prescribed in s 141 of the TLA. On 4 April 2025, I made orders dispensing with the requirement to file pleadings and programming the matter to an expedited trial. In accordance with those orders the plaintiffs filed an agreed statement of facts and issues.
The parties identified the following issues as arising in these proceedings:
(1)whether, for the purposes of s 20(2)(c) of the Land Administration Act 1997 (WA) (LAA), the interests that the plaintiffs are seeking to protect by way of registration of the Caveats are each an interest referred to in s 18(8) of the LAA;
(2)in relation to issue (1), whether the effect of s 137(2) of the TLA is to create or grant an interest in land;
(3)whether the plaintiffs require the written consent of the Minister (as defined in s 3(1) and s 7(1) of the LAA) in order to have the Caveats recorded against the certificates of Crown land title.
Each of these issues are interrelated. For that reason, I do not propose to consider each issue separately. I will consider the first and second issues as they arise when determining the third issue. What is evident, is that, in order to determine the issue of whether the plaintiffs require the written consent of the Minister to lodge the Caveats, I must decide upon the proper construction of s 137(2) of the TLA.

Do the plaintiffs require the written consent of the Minister in order to lodge the Caveats?

As a starting point, it is important to consider the nature of the interest that the plaintiffs are claiming in the Caveats. In each of the Caveats, the plaintiffs state that the interest they are claiming is 'as holder of a proposed Carbon Covenant pursuant to s 137(2) of the [TLA]'.[1]

Interest claimed in Caveats is not the carbon right or carbon covenant

[1] The interest claimed in the caveat lodged in respect of the Meka Station Land is claimed only 'as holder of a carbon covenant'. The first plaintiff accepts that it would need to amend this caveat to the reasonable satisfaction of the first defendant if it is successful in the proceedings.

The interest claimed in the Caveats is not the carbon right or the carbon covenant attaching to the Crown land. Carbon rights and carbon covenants are not created until they are registered.
The Carbon Rights Act 2003 (WA) (CRA) provides for the creation and effect of certain interests in land in relation to the effects of carbon sequestration from, and carbon release to, the atmosphere.[2] The proprietor of a carbon right may, in relation to any matter that may affect carbon sequestration or carbon release on the relevant land, enter into a carbon covenant with a person or persons who have an interest in land.[3]
[2] CRA long title.
[3] CRA s 10(1).
Carbon rights and carbon covenants cannot be created in any way other than under pt 2 and pt 3 of the CRA respectively.[4] Part 2 and pt 3 of the CRA provide that carbon rights and carbon covenants are created upon registration of a carbon right form or a carbon covenant form.[5] A carbon right form may only be registered if there is, inter alia, compliance with s 104B of the TLA. A carbon covenant form may only be lodged if there is compliance with s 104G of the TLA.
[4] CRA s 7(1).
[5] CRA s 5(1), s 6(1)(a), s 7(1), s 11(1), s 12(1)(a), s 13.
Section 104B of the TLA provides:
Registration of carbon right form
(1)A carbon right form shall not be registered unless it is accompanied by -
(a)the written consent of each person who has a registered interest in the freehold land or Crown land in respect of which the proposed carbon right is to be created; and
(b)the prescribed fee.
(2)If a carbon right form is in respect of Crown land, it shall not be registered unless there is compliance with section 18 of the Land Administration Act 1997.
Section 104G of the TLA, for all intents and purposes, mirrors s 104B in respect of carbon covenants.
When a carbon right form is registered, the carbon right is created and becomes a separate interest in the land.[6] When a carbon covenant form is registered it becomes a separate interest in the relevant carbon right and benefits, attaches to, and runs with, the relevant carbon right.[7]
[6] CRA s 6(1).
[7] CRA s 12(1), s 12(3).
The LAA regulates the creation of interests in, and transactions with respect to, Crown land.[8] Section 18 of the LAA provides for the circumstances in which Crown land transactions need the Minister's approval. For the purposes of these proceedings, the relevant subsections of s 18 are:
[8] LAA long title.
(1)A person must not without authorisation under subsection (7) assign, sell or transfer or otherwise deal with interests in Crown land or create or grant an interest in Crown land.
…
(6)An act done in contravention of subsection (1)… is void.
(7)A person or lessee may make a transaction under subsection (1) … -
(a)with the prior approval in writing of the Minister; or
(b)if the transaction is made in circumstances, and in accordance with any condition, prescribed for the purposes of this paragraph.
(8)This section does not apply to a transaction relating to an interest in Crown land if -
…
(b)that interest may be created, granted, transferred or otherwise dealt with under an Act other than -
(i)this Act; or
(ii)a prescribed Act;

…

Pursuant to the Land Administration Regulations 1998 (WA) reg 17B(a), the TLA is not a 'prescribed Act' for the purposes of s 18(8) of the LAA.
By the CCAs, the pastoral lessees agree to transfer and assign a carbon right and carbon covenant to the relevant plaintiff upon that right coming into existence. There is no dispute that, until the carbon right or carbon covenant is registered, the plaintiffs do not have a proprietary interest in the Crown land. There is also no dispute that the Minister's consent is required for the carbon right and carbon covenant to be registered against Crown land by virtue of s 104B and s 104G of the TLA and s 18(1) and s (7)(a) of the LAA.

Proper construction of s 137(2) of the TLA

The plaintiffs seek to rely on s 137(2) of the TLA in support of their contention that the interest claimed in the Caveats is the 'deemed' interest in land arising by virtue of the plaintiffs having a proposed carbon right and/or proposed carbon covenant.
Before turning to consider s 137(2) of the TLA, it is necessary to consider the legislative framework within which that subsection operates. I will outline that legislative framework and then summarise the submissions of each of the plaintiffs and the defendants as to the proper construction of s 137(2) of the TLA.
Part V of the TLA deals with caveats. Section 136K(3) of the TLA provides that, subject to s 20 of the LAA, pt V of the TLA applies to caveats in respect of Crown land.
Section 137(1) in pt V of the TLA provides that any person claiming an unregistered interest in land, including a charge under any unregistered instrument or document, may lodge a caveat 'in an approved form forbidding the registration of any person as transferee or proprietor of and of any instrument affecting such estate or interest …'. So, in order to lodge the Caveats, the plaintiffs must be claiming an unregistered interest in land.
The plaintiffs say that their proposed carbon rights and carbon covenants under the CCAs are deemed, by virtue of s 137(2) of the TLA, to be unregistered interests in land for the purposes of s 137(1) of the TLA. Section 137(2) of the TLA provides:
A person claiming an interest in a proposed carbon right, carbon covenant or plantation interest may, before the relevant carbon right form, carbon covenant form or tree plantation agreement is registered, lodge a caveat under subsection (1) as if the person were claiming an interest in land.
I turn to consider the effect of s 20 of the LAA - remembering that s 136K(3) of the TLA makes caveats in respect of Crown land, including caveats claiming an interest pursuant to s 137(2) of the TLA, subject to s 20 of the LAA. A caveat can only be lodged against Crown land if the plaintiffs satisfy the requirements of s 20 of the LAA.
Section 20 of the LAA deals with caveats as to certain interests in Crown land. Section 20 of the LAA provides:
(1)Subject to subsection (2), a person claiming an interest in land the subject of certificate of Crown land title … may lodge a caveat with the Registrar under Part V of the TLA.
(2)A caveat can only be lodged under subsection (1) in respect of -
(a)a registered interest; or
(b)an interest approved by the Minister under section 18, but not registered; or
(c)an interest referred to in section 18(8).
Section 20(1) of the LAA permits a person claiming an interest in Crown land to lodge a caveat provided that interest is one of the three interests identified in s 20(2) of the LAA.
Section 3 of the LAA provides that an 'interest':[9]
… in relation to Crown land, means, except in Parts 9 and 10, charge, Crown lease, easement, lease, mortgage, profit à prendre or other interest, including such interests as are lawfully granted or entered into by a management body, and their counterparts under the repealed Act …
[9] Section 4 of the TLA provides that, in relation to Crown land, 'interest' has the same meaning as it has in the LAA.
The plaintiffs say that the interest that they are relying upon is an 'other interest' which is an interest as provided for in s 20(2)(c) of the LAA - being an interest referred to in s 18(8) of the LAA. As I have outlined, an interest under s 18(8) of the LAA is an interest that 'may be created, granted, transferred or otherwise dealt with under an Act other than [the LAA] or a prescribed Act' (my emphasis added).

Plaintiffs' submissions

The plaintiffs submit that the purpose of the CRA and, to the extent that the LAA and the TLA deal with interests created under the CRA, the LAA and the TLA, is to reduce carbon dioxide emissions, to incentivise people to remove carbon from the atmosphere and to avoid the release of carbon into the atmosphere. The plaintiffs say that a means by which to incentivise people is to enable them to gain an economic reward from the sequestration of carbon. The plaintiffs submit that Parliament achieves this by enacting the CRA which recognises the existence of carbon rights and carbon covenants.
The plaintiffs submit that, in order to achieve its purpose, the CRA, in conjunction with the LAA and the TLA, must provide certainty to investors and reduce barriers to entry into the carbon sequestration market. The plaintiffs say that the purpose of the legislation is achieved by allowing a person to lodge a caveat to preserve the status quo pending ministerial approval of carbon rights and carbon covenants. The plaintiffs say that there is a risk that, during the period of time between entering into the CCAs and obtaining ministerial approval to the registration of the carbon rights and carbon covenants contemplated by those CCAs, the Crown land will be dealt with in a way that is inconsistent with those proposed rights.

Counsel for the plaintiffs submits that the purpose of s 137(2) of the TLA is to operate as a 'gap filler'[10] with the intention of lowering the barriers to entry in the carbon sequestration market. The 'gap' is a reference to that period between entering into the CCAs and the registration of the carbon right or carbon covenant. The plaintiffs say this 'gap' is created because the CRA provides that no interest in Crown land is created until the carbon right or carbon covenant is registered.
[10] ts 9.
The plaintiffs submit that, on its proper construction, s 137(2) of the TLA 'creates' an interest in Crown land and therefore, they may lodge the Caveats, without the consent of the Minister, by virtue of s 20(2)(c) of the LAA.
The plaintiffs referred to the Macquarie dictionary definition of the word 'create' meaning to 'bring into being', 'cause to exist', 'produce', to be 'the cause or occasion of', or 'to give rise to'. The plaintiffs say that s 137(2) of the TLA 'brings into being' and therefore 'creates' an interest in land which allows the plaintiffs to lodge the Caveats pursuant to s 137(1) of the TLA. The plaintiffs submit that this construction of s 137(2) is reinforced by the fact that s 137(2) does not contain an express prohibition on the registering of a caveat over Crown land in respect of a proposed carbon right or carbon covenant without the Minister's consent. The plaintiffs say that, where the intention is to create such a prohibition, then the TLA expressly provides, by s 104B and s 104G, that there must be compliance with s 18 of the LAA for a carbon right and a carbon covenant to be lodged. This demonstrates, the plaintiffs say, that the objective intention of the legislature is that s 137(2) of the TLA constitutes an exemption from the requirement to obtain the Minister's consent to the Caveats.
The plaintiffs say that this construction of s 137(2) of the TLA preserves the special position of Crown land. The Minister has ultimate control over the Crown land - if he or she does not consent to the registration of the carbon right or carbon covenant, then the caveat falls away as the plaintiffs no longer have a caveatable interest.
In response to the defendant's submission that s 20(2)(b) of the LAA is designed to allow the plaintiffs to protect their proposed carbon rights and carbon covenants over Crown land by lodging a caveat once the Minister's consent to a carbon right and carbon covenant is obtained, but before the carbon rights and carbon covenants are registered, the plaintiffs say that s 20(2)(b) of the LAA does not apply. The plaintiffs submit that the proposed carbon rights and carbon covenants are not interests approved by the Minister under s 18 of the LAA but not registered for the purposes of s 20(2)(c) of the LAA - as they are not 'interests' at all but for the deeming effect of s 137(2) of the TLA. The plaintiffs say that s 20(2)(b) of the LAA does not provide a mechanism by which a person is incentivised to remove carbon from the atmosphere.

Defendants' submissions

Counsel for the defendants submits that Crown land has special requirements recognised by Parliament and this is an important consideration when determining the purpose and meaning of the relevant legislation.
The defendants submit that a proposed carbon right and/or carbon covenant is not an interest in Crown land 'created' by s 137(2) of the TLA and therefore, the plaintiffs cannot lodge the Caveats in respect of the proposed carbon rights or carbon covenants without the prior approval of the Minister in writing as required by s 18(7) of the LAA.
The defendants submit that s 20(2)(c) of the LAA provides for the only circumstances in which a caveat can be lodged against Crown land. In order to invoke s 20(2)(c) of the LAA, the proposed carbon rights and carbon covenants claimed in the Caveats must be interests referred to in s 18(8) of the LAA, those being interests created under, in this case, the TLA.
The defendants submit that s 137(2) of the TLA does not have the effect of creating interests in land out of the proposed carbon rights and carbon covenants. The defendants submit that the words 'as if' in s 137(2) of the TLA are used for the purpose of creating a statutory fiction, the purpose of which is solely to allow the recording of a caveat where it would not otherwise meet the requirements of s 137(1) of the TLA.
The defendants say that s 20(2)(b) of the LAA deals with the 'gap' in time between the plaintiffs obtaining the Minister's consent to the registration of the carbon rights and the carbon covenants and the date of registration. The defendants submit that this is the only pathway for the plaintiffs to lodge a caveat over proposed carbon rights and carbon covenants and this pathway is premised upon the Minister having approved the carbon rights and carbon covenants.
The defendants also submit that, if s 137(2) of the TLA were construed as creating an interest in Crown land out of proposed carbon rights and carbon covenants, it would be inconsistent with the general purpose of the LAA, that being that no interest in Crown land, including a carbon right or carbon covenant created under the CRA, can be created without the consent of the Minister. The defendants say that s 18(8) of the LAA creates limited exceptions to the requirement for ministerial approval for interests in Crown land, but each of those exceptions assume the exercise of statutory power or oversight. The defendants submit that the legislature could never have intended for proposed carbon rights and carbon covenants over Crown land to fall within one of the exceptions to the requirement for ministerial approval provided for in s 18(8) of the LAA.

Disposition

The principles of statutory construction are well established.
Those principles were summarised in Meyer v Solomon by Buss P as follows:[11]
The statutory text is the surest guide to Parliament's intention. A decision as to the meaning of the text requires consideration of the context, in its widest sense, including the general purpose and policy of the provision.
The context includes the existing state of the law, the history of the legislative scheme and the mischief to which the statute is directed.
However, legislative history and extrinsic materials cannot displace the meaning of statutory text. Further, the examination of legislative history and extrinsic materials is not an end in itself.
The purpose of legislation must be derived from the statutory text and not from any assumption about the desired or desirable reach or operation of the relevant provisions. The intended reach of a legislative provision is to be discerned from the words of the provision and not by making an a priori assumption about its purpose.
Section 18 of the Interpretation Act 1984 (WA) provides that, in the interpretation of a provision of a written law (including all Acts for the time being in force), a construction that would promote the purpose or object underlying the written law (whether that purpose or object is expressly stated in the written law or not) shall be preferred to a construction that would not promote that purpose or object. The requirement in s 18 that one construction be preferred to another can apply only where two constructions are otherwise open. If the ordinary meaning conveyed by the text of a provision is to be modified by reference to the purposes or objects underlying the written law, the modification must be able to be identified precisely as that which is necessary to give effect to those purposes or objects and it must be consistent with the text otherwise adopted by the draftsperson. Section 18 requires a court to construe a written law, and not rewrite it by reference to its purposes or objects. (citations omitted)
[11] Meyer v Solomon [2021] WASCA 168 [77] - [81].
In accordance with these principles, to determine the proper construction of s 137(2) of the TLA, I am required to consider:
(1)the statutory text of s 137(2);
(2)the context of s 137(2), including its general purpose and policy;
(3)the effect of the LAA, specifically s 18 and s 20, and the CRA on the construction of s 137(2); and
(4)the language and purpose of all the relevant provisions of the TLA, LAA and CRA.
Before turning to consider the statutory text of s 137(2) of the TLA, it is helpful to consider the purpose of each of the TLA, the LAA and the CRA, as that legislation relates to carbon rights and carbon covenants over Crown land.
The principal object of the CRA is to provide for the creation and effect of carbon rights and carbon covenants, being interests in land that relate to carbon sequestration from, and carbon release to, the atmosphere. The CRA provides for the creation of carbon rights in respect of both freehold land and Crown land.[12] The proprietor of a carbon right has the legal and commercial benefits and risks arising from changes to the atmosphere that are caused by carbon sequestration and carbon release occurring in or on the land in respect of which it is registered.[13] A carbon covenant benefits, attaches to and runs with the relevant carbon right and the land over which the carbon right is registered.[14] Carbon rights and carbon covenants are creatures of statute - they are interests in land that are only created upon registration under the CRA.[15]
[12] CRA s 5(1).
[13] CRA s 8.
[14] CRA s 12(3).
[15] CRA s 6 and s 11 respectively.
The purpose of the LAA is, inter alia, to regulate the creation of interests in, and transactions in respect of, Crown land.[16] The LAA gives the Minister power to do all things necessary or convenient to be done for, or in connection with, the administration and management of Crown land.
[16] LAA long title.
For a carbon right or a carbon covenant to be registered, a form must be lodged in compliance with, inter alia, s 104B or s 104G of the TLA, which provide that, in relation to Crown land, there must be compliance with s 18 of the LAA. Section 18 of the LAA contains a general prohibition on a person from dealing with, creating or granting interests in Crown land unless the person is authorised to do so by the Minister or the transaction falls within one of the exceptions provided for in s 18(8).
The issue that requires determination in these proceedings is whether the Minister's approval is required to lodge a caveat in relation to a proposed carbon right or carbon covenant in respect of Crown land.
Part V of the TLA deals with caveats over land. By operation of s 136K(3) of the TLA, pt V applies to caveats over Crown land but is subject to s 20 of the LAA.
Section 20(2) of the LAA provides for the only three circumstances in which a person can lodge a caveat over Crown land. In order for the plaintiffs to lodge the Caveats over Crown land in relation to proposed carbon rights and carbon covenants, the Caveats must satisfy one of the three circumstances in s 20(2) of the LAA.
Each of the three circumstances in which a caveat may be lodged over Crown land, as provided for in s 20(2) of the LAA, require, in my view, there to be an interest in land to support the caveat. The effect of the provisions of the LAA is that there can be no equitable interests in Crown land.[17] As provided for in the CRA, an interest in Crown land in relation to a carbon right or carbon covenant only comes into existence at the date the carbon right or carbon covenant is registered.
[17] Tisala Pty Ltd v Hawthorn Resources Ltd [2022] WASC 109 [95].
Proposed carbon rights and carbon covenants are clearly not registered interests and therefore, do not fall within s 20(2)(a) of the LAA. The plaintiffs do not suggest otherwise.
As for s 20(2)(b) of the LAA, in my view, contrary to the defendants' submission, proposed carbon rights and carbon covenants cannot be, even once approved by the Minister, 'interests' approved by the Minister under s 18 of the LAA, but not yet registered. That is because the CRA provides that an interest in land is only created on the registration of the carbon right form or the carbon covenant form. The definition of interest in s 3 of the LAA is not broad enough to encompass proposed carbon rights and carbon covenants as it still requires the proposed carbon right or carbon covenant to be an 'other interest'. I do not accept the defendants' submission that s 20(2)(b) of the LAA creates a pathway for the plaintiffs to lodge caveats over Crown land in respect of proposed carbon rights and carbon covenants once the Minister has approved them, but before they are registered. In any event, the plaintiffs agree with this construction of s 20(2)(b) and there is no dispute that, on any construction of s 20(2)(b), it is not applicable to these Caveats.
That leaves s 20(2)(c) of the LAA. I accept that, if the effect of s 137(2) of the TLA is to 'create' an interest in land, that interest would be one that falls within s 20(2)(c) of the LAA by virtue of s 18(8) of the LAA. The converse applies - if s 137(2) of the TLA does not 'create' an interest in land, then the plaintiffs are not permitted to lodge the Caveats without the consent of the Minister. The plaintiffs do not have any avenue, other than via s 137(2) of the TLA, to lodge the Caveats without the Minister's approval.
The effect of s 137(1) when read with s 137(2) of the TLA is that s 137(2) creates an exception to the requirement in s 137(1) that the person lodging the caveat must have an interest in land. Section 137(2) provides that, where a carbon right or carbon covenant does not yet exist, a person claiming an interest in a proposed carbon right or carbon covenant may, before the carbon right form or carbon covenant form is registered, lodge a caveat under s 137(1) as if the person were claiming an interest in land.
The defendants referred to the case of Eon Metals NL v Commissioner of State Taxation (WA),[18] in support of their submission that the words 'as if' in s 137(2) of the TLA are used for the purpose of creating a statutory fiction.
[18] Eon Metals NL v Commissioner of State Taxation (WA) (1991) 91 ATC 4841; 1991 22 ATR 601 (Eon).
In Eon the relevant facts were as follows. Chevron sold mining plant and equipment located on a mine that Chevron operated to a company called Homestake. However, that mining equipment was never physically removed from the land. Eon Metal NL (Eon) later purchased the mining leases over that land from Chevron. Eon also purchased the mining plant and equipment that remained on the land from Homestake. Eon operated the mining plant and equipment on the land in the position it had always been. The issue in the proceedings concerned the payment of stamp duty. The relevant legislation was the Stamp Act 1921 (WA) (Stamp Act) which provided, by s 74(1), that every agreement for the sale of any estate or interest in any property shall be charged with the same ad valorem duty (to be paid by the purchaser) as if it were an actual conveyance on the sale of the estate, interest or property agreed to be sold. However, an exception was made in the legislation, by s 16(1) read with Item 2(7) of the Schedule, in respect of a conveyance or transfer of any estate or interest in 'goods, wares or merchandise'. Eon claimed that the exception applied to the mining plant and equipment because they were chattels and not fixtures. Eon submitted that the effect of s 74(1) was to deem the mining plant and equipment to have been conveyed separately from the land and therefore severed from the land, even though the equipment was not physically removed. Ipp J did not agree, holding that:[19]
The words 'as if' in s 74(1) are used for the purpose of creating a statutory fiction, and when used in that sense the purpose for which the statutory fiction is introduced is crucial: Muller v Dalgety & Co Ltd & Anor (1909) 9 CLR 693 at 696. Section 74(1) provides that - for the purposes of causing duty to be payable on an agreement for the sale of any estate or interest in property - the agreement itself is to be regarded as if it were a conveyance of the estate, interest or property concerned. Thus s 74(1) triggers the payment of duty upon the entering into of an agreement; the duty so payable being dependent on the character of the property sold. The 'as if'' provision s 74(1) is to be used for the purposes of that trigger alone. That provision is not intended to be used for the purposes of determining the character of the property concerned. The latter is a different and separate enquiry to which the 'as if' provision does not apply.
[19] Eon (605).

Having regard to the legal principles governing when a chattel becomes a fixture, Ipp J determined that some items of the mining equipment were chattels and others were fixtures.
In my view, Ipp J's analysis of the words 'as if' in s 74(1) of the Stamp Act is equally applicable to those words as they appear in s 137(2) of the TLA. The words 'as if' in s 137(2) are used for the purpose of claiming an interest in land pursuant to s 137(1) of TLA. Section 137(2) creates an exception for a person claiming an interest in proposed carbon rights and carbon covenants to the requirement in s 137(1) that a person must be claiming an interest in land. The words 'as if' must also be read in the context of the words that follow, being 'as if the person were claiming an interest in land' (my emphasis). Those words simply mirror the words of s 137(1) of the TLA - they do not say 'as if the person has an interest in land'. The ordinary meaning of the word 'create', as it appears in s 18(8) of the LAA, does not assist the plaintiffs. The effect of s 137(2) of the TLA is not to create, deem or 'bring into being' an interest in Crown land. Rather s 137(2) creates a statutory fiction, that fiction being the claim for an interest in land arising from a proposed carbon right or carbon covenant is to be treated as if it is a claim for an interest in land for the purpose of s 137(1) of the TLA. Section 137(2) is not intended to be used for the purposes of determining the underlying character of the proposed carbon right or carbon covenant. That is a different and separate enquiry to which the 'as if' provision does not apply. The underlying character of the proposed carbon right or carbon covenant is that, as provided for by the CRA, they are not interests in land until registered on the title to the land.
I find that, on its proper construction, s 137(2) of the TLA does not 'create' an interest in land for the purposes of s 20(2)(c) read with s 18(8)(b) of the LAA.
This construction of s 137(2) is consistent with the purpose of pt V of the TLA. The purpose of s 137(2), read with s 137(1) and s 136K(3), is to allow a person who is claiming an interest in a proposed carbon right or carbon covenant to lodge a caveat pursuant to s 137(1) as if they were claiming an interest in land, subject to, in relation to Crown land, s 20 of the LAA. What is the purpose of making s 137(2) of the TLA subject to s 20 of the LAA unless it is to require the approval of the Minister to lodge a caveat over Crown land? In my view, none. Section 20(2) of the LAA would add nothing to s 137(2) of the TLA if the plaintiffs' construction of s 137(2) is accepted. That cannot be correct. In my view, the inclusion of the words '[s]ubject to … section 20 of the [LAA]' contained in s 136K(3) of the TLA is intended to provide that caveats lodged over Crown land in relation to proposed carbon credits and carbon covenants require ministerial approval.
Further support for this construction of s 137(2) of the TLA is found in the fact that the plaintiffs' proposed carbon rights and carbon covenants in relation to Crown land are created pursuant to the CCAs - private agreements between the plaintiffs and the pastoral lessees, to which the Minister is not a party. If the plaintiffs were permitted to lodge the Caveats over Crown land without the approval of the Minister, the Minister would be prevented from granting or dealing with other interests in the Crown land, which would in turn prevent the Minister from performing his or her functions under the LAA.

Finally, turning to the matter of the Minister's rights under s 138B of the TLA to deal with a dilatory caveator. Section 138B of the TLA provides that the proprietor of the land may apply for the Registrar to serve the caveator with a notice that the caveat will lapse unless the caveator obtains an order from the Supreme Court extending the caveat. 'Proprietor' is defined in s 4 of the TLA as, in relation to Crown land, 'the holder of an interest in Crown land, a management body empowered under the [LAA] to grant or enter into interest in Crown land or deal with or create any other right or title of a proprietary nature in Crown land'. In submissions in reply, counsel for the plaintiffs conceded that the Minister is not a 'proprietor' for the purposes of s 138B of the TLA. Therefore, the Minister could not avail himself or herself of the mechanism provided for by s 138B of the TLA to have a caveat removed from Crown land.
Counsel for the plaintiffs submitted that, nonetheless, there was still a safeguard in place to prevent the spurious lodgement of caveats in relation to proposed carbon rights and carbon covenants over Crown land. That safeguard, the plaintiffs say, is the fact that there are minimum requirements that a caveat must meet before the first defendant will accept a caveat for registration, one of which is stating the basis upon which the person asserts that they have proposed carbon rights and carbon covenants. That would require the person to, for example, attach a copy of a carbon covenant agreement.
However, the problem with that safeguard is this - the person may have entered into a carbon covenant agreement but have not applied for the Minister's approval to register the carbon right and carbon covenant. This would mean that one of the consequences of adopting the plaintiffs' construction of s 137(2) of the TLA is that a person would be permitted to lodge a caveat over Crown land in relation to a proposed carbon right and carbon covenant, but would not be required to take any further action by way of seeking the Minister's approval to the carbon right or carbon covenant, thereby leaving the Minister without the ability to seek the removal of the caveat. In my view, such consequences could not be the intention of s 137(2) of the TLA.
I accept that the purpose of the CRA is to incentivise people to remove carbon from the atmosphere and that in order to do so they require certainty and reduced barriers to entry into the market. This purpose must, however, be balanced against the special position of Crown land. A construction of s 137(2) of the TLA that balances these considerations is one which permits the plaintiffs to lodge a caveat over Crown land in relation to proposed carbon rights and carbon covenants with prior approval of the Minister to do so.
The result is that the pathway for the plaintiffs to lodge caveats as if they are claiming an interest in land by way of proposed carbon rights and carbon covenants over Crown land is to obtain the approval of the Minister to lodge the caveats. Having lodged the Caveats without the consent of the Minister, the Caveats cannot be recorded at law.

Conclusion and final orders

For the reasons outlined above, by reference to the agreed statement of issues, I find that:
(1)the interests claimed in the Caveats are not interests referred to in s 18(8) of the LAA;
(2)s 137(2) of the TLA does not create or grant an interest in land; and
(3)the plaintiffs do require the written consent of the Minister in order to have the Caveats recorded against the certificates of Crown land title.
The proceedings should be dismissed. I will hear the parties as to final orders and costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
RP
Associate to the Honourable Justice Whitby
22 MAY 2025