Aliraja v Susan Dukes, Commissioner of Titles - [2023] WASC 225

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   ALIRAJA -v- SUSAN DUKES, COMMISSIONER OF TITLES [2023] WASC 225
CORAM:   WHITBY J
HEARD:   9 JUNE 2023
DELIVERED          :   23 JUNE 2023
FILE NO/S:   CIV 1242 of 2023
BETWEEN:   MYRIAM MICHELLE PAULETTE ALIRAJA
Applicant
AND
SUSAN DUKES, COMMISSIONER OF TITLES
Respondent

Catchwords:

Administrative law - Judicial review - Commissioner of Titles refusal of compensation pursuant to s 196(1) of the Transfer of Land Act (1893) (WA) - Whether applicant's loss was 'occasioned by' breach of trust - Proper construction of s 196(1) TLA

Legislation:

Interpretation Act 1984 (WA)
Real Property Act 1860 (SA)
Real Property Act 1861 (SA)
Real Property Act 1886 (SA)
Real Property Act 1900 (NSW)
Transfer of Land Act 1893 (WA)
Transfer of Land Act Amendment Act 1909 (WA)
Transfer of Land Amendment Act 1950 (WA)

Result:

Application for judicial review dismissed

Category: B

Representation:

Counsel:

Applicant	:	Mr S Gethin
Respondent	:	Ms J E Shaw with Ms S Walsh

Solicitors:

Applicant	:	Fortuna Legal
Respondent	:	State Solicitor's Office

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

Craig v South Australia [1995] HCA 58
In Re Refugee Review Tribunal; Ex parte Aala, [2000] HCA 57; (2000) 204 CLR 82
Lincu v Registrar-General [2019] NSWSC 568
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24
Minister for Immigration and Citizenship v SZGUR (2011) 241 CLR 597
Parker and Another v Registrar General [1977] 1 NSWLR 22
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355

WHITBY J:

Summary

The applicant, Ms Myriam Aliraja, was the registered proprietor of a property in Ballajura (Property). Her father, Mr Aboubakur Aliraja, was her power of attorney for the purposes of dealing with the Property.
In April 2016, Mr Aliraja, as power of attorney for the applicant, transferred the Property to Mr Ahmed Seedat, his friend and accountant, on the premise that Mr Seedat would borrow money using the Property as security in order to invest in shares on behalf of Mr Aliraja. The consideration for the transfer was stated as 'Pursuant to an Agreement to Transfer and Declaration of Trust between the Transferor and Transferee dated 1 March 2016' (Trust Agreement).
In June 2016, Mr Seedat borrowed $305,875 (Loan) which was secured by a mortgage against the Property in favour of Permanent Mortgages Pty Ltd (Mortgage). Mr Seedat did not use the Loan to invest in shares or any other assets for the benefit of Mr Aliraja. The Mortgage has not been repaid.
Mr Seedat was later convicted of the murder of his wife and of a number of fraud offences. Mr Seedat is serving a term of life imprisonment with a non-parole period of 23 years and is bankrupt.
The applicant made a claim for compensation to the Commissioner of Titles, the respondent, pursuant to the Transfer of Land Act 1893 (WA) (TLA) (Claim). The Claim was for the amount of the outstanding Mortgage. The respondent refused to admit the Claim on the basis that the state was not liable to pay compensation pursuant to s 196(1) of the TLA (Decision).
The applicant seeks judicial review of the Decision on the grounds that it was based upon an incorrect construction of s 196(1) of the TLA and therefore, that the respondent fell into jurisdictional error.
The judicial review application raises two issues: (1) what is the proper construction of s196(1) of the TLA and (2) did the respondent make the Decision to refuse compensation pursuant to s 196(1) of the TLA in accordance with that proper construction?
For the reasons that follow, the answer to (1) is the proper construction of s 196(1) of the TLA is that the state is not liable for compensation for any loss, damage or deprivation where a breach of trust is a cause (being a not insignificant cause) of that loss, damage or deprivation, and the answer to (2) is yes.
As a result, the respondent did not fall into jurisdictional error and the application for judicial review must be dismissed.

Background

For the purposes of determining the judicial review application, I accept the applicant's evidence as to the facts giving rise to the Claim. The facts comprise the attachments to the affidavit of Stephen James Gethin in support of the Application sworn on 10 March 2023 (Gethin Affidavit). These facts were neither accepted or disputed by the respondent. These facts give context as to how the Claim has arisen, and are the facts that were before the respondent when she made the Decision.
The applicant was the former registered proprietor of the Property. Mr Aliraja, the applicant's father, and his wife supplied the funds for the purchase of the Property.
The applicant granted Mr Aliraja a power of attorney to deal with the Property. The power of attorney is dated 27 July 2000 and registered with Landgate.
Mr Aliraja's first language is French and his second language is English. He is a Moslem and a member of Perth's Islamic Community. He owned and drove a school bus service for the Western Australian Government. He is now retired.
Mr Aliraja's friend since childhood was Mr Seedat. Mr Seedat was a public accountant at FJH Pty Ltd trading as FJH Solutions Accountants and Advisors. Mr Aliraja placed complete trust in Mr Seedat to deal with his financial affairs because Mr Seedat was his friend, an accountant with what appeared to be a reputable firm and a well-respected member of the Perth Islamic community.
On 1 April 2016, Mr Aliraja transferred the title of the Property to Mr Seedat, using the power of attorney. Mr Aliraja did so in order to allow Mr Seedat to obtain funds secured by a mortgage against the Property and invest those funds for the benefit of Mr Aliraja. The consideration for the transfer of the property was the Trust Agreement. The Trust Agreement was lodged with the transfer of the Property.
The Trust Agreement contained the following express terms:
(1)all capital improvements costs relating to the Property shall be funded by the Beneficiary;
(2)the Trustee shall deal with the Property, all rights pertaining to the Property and all income and proceeds of the Property in such manner as the beneficiary may, from time to time, direct and not otherwise;
(3)the Trustee shall hold the Property as nominee and on bare trust solely for the Beneficiary as beneficial owner; and
(4)upon the Beneficiary making such payments to the Trustee as are required to meet the conveyancing, transfer duty and other expenses, and as and when demanded, the Trustee shall convey the Property to the Beneficiary as beneficial owner absolutely, and do whatever is necessary to enable the registration of the Beneficiary as the registered proprietor of the Property.
On 3 June 2016, the Mortgage was registered against the Property. On 6 March 2018, the Mortgage was transferred to Perpetual Corporate Trust Limited. The mortgage secured the Loan to Mr Seedat.
Mr Seedat did not use the Loan to make investments for the benefit of the applicant or Mr Aliraja.
In September 2018, Mr Seedat was arrested and charged with the murder of his wife. This is when Mr Aliraja discovered that the Loan had not been used for his or the applicant's benefit and that the Loan had not been repaid.
Mr Seedat was convicted of murder on 28 May 2019 and was sentenced to life imprisonment with a minimum non-parole period of 23 years. Following his conviction of murder, Mr Seedat was also convicted of a number of fraud and stealing offences.
On 1 December 2021, Ms Aliraja obtained a default judgment against Mr Seedat in the District Court for $448,831 (Judgment Debt) and for an order that Mr Seedat execute and deliver to the applicant a transfer of land transferring the title to the Property to her. Mr Seedat has executed the transfer but the title has not been transferred back to the applicant as the Property is still encumbered by the Mortgage.
On 12 September 2022, a sequestration order was made by the Federal Circuit and Family Court against the estate of Mr Seedat on the basis of the unpaid Judgment Debt.
On 1 November 2022, the applicant lodged the Claim pursuant to sections 201[1], 205 and 208 of the TLA. The Claim was supported by a statutory declaration of Mr Aliraja[2]. The Claim was for $505,880.71 being the amount outstanding under the Mortgage at the time of the Claim.
[1] The Claim did not originally seek compensation pursuant to s 201 of the TLA. However, at the hearing the applicant submitted that the Claim pursuant to s 208 of the TLA was enlivened by s 201 and s 205. Given that the Commissioner had regard to s 201 in deciding the Claim, no issue arises as a result of the failure of the applicant to expressly make the Claim pursuant to s 201.
[2] Gethin Affidavit Annexure SJG4.
By letter dated 13 December 2022, the Commissioner made the Decision on the grounds that Mr Seedat, as registered proprietor of the Property, is a trustee and s 196(1) of the TLA excludes the state from liability for compensation occasioned by a breach by a registered proprietor of any trust.
By re-amended application dated 9 June 2023, the applicant seeks judicial review of the Decision (Application).

Application

The grounds for the Application[3] are:
[3] At the hearing of the Application, Counsel for Ms Aliraja indicated that only grounds 2 and 5 were pressed. As a result, there was no need to consider grounds 1, 3 and 4.
2.The Respondent erred in law in that the Respondent's Decision was based on an incorrect construction of s 196(1) of the [TLA], in that it construed the words of that section: '… any breach by a registered proprietor of any trust, whether express or implied or constructive' - compensation for deprivation occasioned by which the State shall not be liable by reasons of that section - as applying to:
(a)a fraud by reason of which the person who committed the fraud became an express or constructive trustee of the land concerned, where there was a subsequent breach of that trust;
(b)further, or alternatively, a breach of trust being a subsequent fraud by the trustee of an express or constructive trust which (trust) itself arose by reason of an earlier fraud by which the trustee became the trustee;
(c)further, or alternatively, a breach of trust by the trustee of an express or constructive trust which (trust) arose by reason of an earlier fraud of the trustee, where both frauds were part of the same fraudulent scheme or course of action by the trustee, or
whereas the correct construction of s 196(1) excludes its application to loss, damage or deprivation occasioned by or in the circumstances referred to in paragraphs 2(a) to 2(c) above.
…
5.The Respondent's Decision was based on an incorrect construction of s 196(1) of the Act, in that it did not construe the words 'occasioned by' [in] that section as meaning 'solely occasioned by', whereas the correct construction of those words is 'solely occasioned by'.
The applicant seeks a writ of certiorari to quash the Decision and a writ of mandamus to compel the respondent to decide the Claim according to law. Alternatively, the respondent seeks an order setting aside the Decision and directing the respondent to decide the Claim according to law.
The applicant relies upon the Gethin Affidavit.
The respondent relies upon the affidavit of Robyn Denielle Tooke affirmed on 3 May 2023 in opposition to the Application (Tooke Affidavit).

Judicial Review - Legal Principles

Judicial review is not a review of a decision on its merits, it is a review of a decision to ascertain whether it involves jurisdictional error. A decision will involve jurisdictional error if the decision is made outside the limits of the powers and functions given to the decision maker: In Re Refugee Review Tribunal; Ex parte Aala, [2000] HCA 57; (2000) 204 CLR 82 [163].
It is not the role of the court to substitute its own decision on the merits for that of the decision maker where the legislation has conferred a discretion upon the decision maker. Rather the court's role is to decide the limits within which the decision maker must exercise their discretion. If a decision is made within those limits, then it cannot be impugned: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24.
The applicant bears the onus of establishing the legal and factual basis for the grounds of judicial review: Minister for Immigration and Citizenship v SZGUR (2011) 241 CLR 597 [67].

Issues

The TLA does not give the respondent power to determine questions of law. If the Decision was based upon an erroneous interpretation of the law, in this case upon an erroneous construction of s 196(1) of the TLA, then the respondent made the Decision outside the limits of the powers and functions given to her as the decision maker. Such an error would amount to jurisdictional error which would invalidate the Decision: Craig v South Australia [1995] HCA 58 [14].

It is not in dispute that the applicant has a prima facie claim for compensation pursuant to ss 201, 205 and 208 of the TLA and that the respondent made the Decision on this basis[4]. Having so decided, the issue which the respondent was then required to determine was whether the Claim was excluded by s 196(1) of the TLA. The respondent determined that the Claim was excluded by s 196(1) of the TLA because the loss suffered by the applicant was occasioned by a breach of trust.
[4] Although the Claim was expressed to be made pursuant to s 205, it was accepted by the respondent that the underlying basis for the Claim was both ss 201 and 205 of the TLA.
The Application raises the following issues for determination:
(1)What is the proper construction of s 196(1) of TLA? and
(2)Did the respondent make the Decision in accordance with the proper construction of s 196(1) of the TLA?
If the answer to (2) is no, then the Decision is affected by jurisdictional error and the applicant would be entitled to relief by way of a writ of certiorari quashing the Decision and a writ of mandamus directing that the respondent determine the Claim in accordance with the proper construction of s 196(1) of the TLA.
If the answer to (2) is yes, then the Decision was within the limits of the respondent's jurisdiction and the Application would be dismissed.

What is the proper construction of s 196(1) of the TLA?

Section 196(1) of the TLA relevantly provides:
196.State not liable in certain cases
(1)The State shall not under any circumstances be liable for compensation for any loss or damage or deprivation occasioned by any breach by a registered proprietor of any trust, whether express or implied or constructive…

Applicant's submissions

Counsel for the applicant submits that the respondent was in error in her construction of s 196(1) of the TLA because the Decision was either:
(a)made on the premise that s 196(1) of the TLA applied to exclude liability in circumstances where there was either:
1.a fraud perpetrated by which Mr Seedat became the registered proprietor and trustee (both express and constructive) of the Property and there was a subsequent breach of that trust by Mr Seedat granting a mortgage over the Property;
2.a breach of the express and/or constructive trust (which arose as a consequence of the fraud) by Mr Seedat granting a mortgage over the Property which was in and of itself a fraud; and/or
3.where there was an overall fraudulent scheme on the part of Mr Seedat which involved the fraud perpetrated by Mr Seedat when he became the registered proprietor of the Property and his subsequent fraudulent granting of a mortgage over the Property in breach of the express and/or constructive trust (which arose as a consequence of the first fraud);
(collectively ground 2 of the Application);
or
(b)not made on the basis that the applicant's loss was solely occasioned by a breach of trust (ground 5 of the Application).
The applicant submits, by ground 2, that the intended operation of s 196(1) of the TLA is to exclude liability on behalf of the state (for compensation to which an applicant would otherwise be entitled under the provisions in Part XII of TLA) only where a registered proprietor who is a legitimate trustee decides to act fraudulently.
This is to be contrasted, the applicant says, against the situation where the transfer of the property is itself occasioned by fraud, such as in this case and in the case of Parker and Another v Registrar General [1977] 1 NSWLR 22 (Parker). In such cases, the applicant submits, s 196(1) of the TLA does not operate to exclude liability on behalf of the state.
The applicant says that s 196(1) of the TLA does not apply to exclude the state's liability to pay compensation in circumstances where Mr Seedat did not deprive the applicant of her title in the Property in his capacity as express and/or constructive trustee of the Property - as he only became a trustee of the Property immediately after the fraudulent transfer of the title to the Property to him.
Further, or alternatively, by ground 5, the applicant submits that the proper construction of s 196(1) of the TLA is that it only applies to exclude liability where the applicant's loss is solely occasioned by a breach of trust.
The applicant relies upon Parker as authority for both grounds 2 and 5 of the Application.
In Parker, the applicants for compensation were fraudulently persuaded to transfer the title of their property to a company. The company then mortgaged the land and used the funds for its own purposes. The company became insolvent and the applicants commenced an action against the Registrar-General in the Supreme Court of NSW. The application for compensation was made pursuant to s 126(1)(a) and 5(b) of the Real Property Act 1900 (NSW) (NSW Act) which provided:
(1)Any person deprived of land or of an estate, or interest in land -
(a)in consequence of fraud …
may bring and prosecute in any Court of competent jurisdiction an action for the recovery of damages;
…
(5) in any of the following cases, that is to say -
(b) when the person liable for damages under this section is … bankrupt … such damages with costs of action may be recovered out of the assurance fund by action against the Registrar-General as nominal defendant.
The applicants succeeded at first instance. The Registrar-General appealed and relied upon s 133 of the NSW Act. Section 133 of the NSW Act provided:
The assurance fund shall not, under any circumstances, be liable for compensation for any loss, damage or deprivation occasioned by -
(a)the breach of a registered proprietor of any trust whether express, implied or constructive.
The NSW Court of Appeal's coram in Parker was Street CJ, Glass JA and Mahoney JA. Glass JA and Mahoney JA delivered separate judgments arriving at the same conclusion (although for different reasons) that the appeal should be dismissed. Street CJ agreed with the conclusions and reasons of each of Glass JA and Mahoney JA.
Glass JA and Mahoney JA both accepted that, upon recission of the contract which effected the fraudulent transfer of the property, a constructive trust arose which related back to the original registration of the transfer. This meant that the company had always held the title to the property on constructive trust for the applicant. The result of which was that the subsequent mortgage was granted in breach of that constructive trust: Parker p 27D and 27E respectively.
Glass JA was of the view that the purpose of s 133 of the NSW Act, upon its proper construction, was to protect the assurance fund from claims where the original default was that of the registered proprietor and that the section did not exclude claims for loss suffered due to a fraud falling within the meaning of s 126 of the NSW Act. Glass JA was of the view that to apply s 133 in such a way would be to render s 126(5) ineffective. To avoid such a result, his Honour said that the words 'occasioned by' in s 133 of the NSW Act meant 'solely occasioned by': Parker p 27F.

Mahoney JA held that the applicants' loss was not 'occasioned by' any breach of trust that occurred, but rather 'occasioned by' the antecedent fraud. His Honour held that the plaintiffs were 'deprived of land', within the meaning of s 126(1), when the company was registered as proprietor, which occurred before the company became a trustee. His Honour found that 'the company was party to a fraud which sought, by several steps, to achieve the result that mortgage moneys should be received by it and applied by it to its own purposes. [The company] becoming registered as proprietor and its granting the mortgage to the life assurance company were merely intended steps in the execution of the fraud….That which, in the present case, occasioned the loss, damage or deprivation was, in my opinion, not the postulated breach of trust, but the fraud.': Parker 32F -33A.
The applicant submits that the reasons of Glass JA and Mahoney JA are not inconsistent because Mahoney JA essentially found that the loss was not occasioned by a breach of trust but by the entire fraudulent scheme. Applying Glass JA's and/or Mahoney JA's analysis to the present case, the applicant says that the applicant's loss was not occasioned by a breach of trust, but rather by the original transfer which deprived the applicant of the ownership of the Property and/or by Mr Seedat's entire fraudulent scheme.
The applicant says that the case of Lincuv Registrar-General [2019] NSWSC 568 (Lincu), upon which the respondent relies, can be distinguished from Parker and this case for these reasons:
(a)in Lincu the registered proprietor was a legitimate trustee of the property at the time that he committed the fraud, whereas here and in Parker, a fraudulent transfer gave rise to a trust, either constructive and/or express; and
(b)the NSW Act has been amended after Parker and before Lincu was decided to amend s 133 by replacing the words 'occasioned by' with 'arising from' and to repeal s 126(5).
The applicant contends that Parker ought to be followed by this court in determining the proper construction of s 196(1) of the TLA because s 201(3) and s 196(1) of the TLA are substantially the same as s 126(5) and s 133 respectively of the NSW Act at the time they were considered in Parker.
In summary, on the applicant's case for judicial review, the proper construction of s 196(1) of the TLA is that it only applies to exclude liability in circumstances where:
(a)a registered proprietor who is a legitimate trustee decides to act fraudulently, that is where the original transfer of the title was not procured by fraud; and/or
(b)the loss suffered by the applicant is solely occasioned by a breach of trust.

Respondent's submissions

The respondent says that it was open to her, upon a proper construction of s 196(1) of the TLA, to reject the Claim.
Counsel for the respondent submits that, upon its proper construction, s 196(1) of the TLA applies to exclude liability for compensation for any loss occasioned by a breach of trust on the part of the registered proprietor, whether or not that loss may also have been caused by fraud.
Firstly, this construction is to be preferred, the respondent says, because it gives natural and ordinary meaning to the words in s 196(1) of the TLA. The natural and ordinary meaning of s 196(1) of the TLA, the respondent submits, is that the state is not liable for compensation if the loss has been caused by a breach of trust (being a not insignificant cause) whether directly or indirectly, even if that loss was also caused by a transfer of title procured by fraud.
The respondent submits that the natural and ordinary meaning of s 196(1) of the TLA is supported by the definition of the word 'occasion' in the Macquarie Dictionary Online being relevantly 'the ground, reason, immediate or incidental cause of some action or result' (emphasis added).
Secondly, the respondent says that, when s 196(1) of the TLA is read in the context of the TLA as a whole, s 196(1) of the TLA operates to generally exclude the state from liability for compensation which would otherwise arise under the TLA.
Thirdly, the respondent submits that in the context of the TLA providing an administrative method for making a claim for compensation by s 208 of the TLA, parliament clearly intended to provide an efficient and easy process to make a claim for compensation. Therefore, a construction of s 196(1) of the TLA that supports this intention is one which should not require the respondent to decide legally and factually complex questions of causation.
Fourthly, the respondent submits that the proper construction of s 196(1) of the TLA which promotes the purpose and object of the TLA is one which accords with the legislative history of the relevant provisions of the TLA. That history being that trusts are not recorded on the register and therefore, the object and the purpose of the relevant provisions of the TLA is that the respondent is not liable for loss caused by a breach of trust of a registered proprietor.
Counsel for the respondent relies upon the case of Lincu in support of her submissions as to the proper construction of s 196(1) of the TLA.
In Lincu, five trustees held church property under a charitable trust. Two of the trustees died leaving Mr Lincu, Mr Kovacevic and Mr Krnjulic as trustees. Mr Krnjulac tricked Mr Lincu and Mr Kovacevic's into signing over the church property to him and his two sons. Mr Krnjulic later borrowed a large sum of money and granted a mortgage over the property as security. Mr Krnjulac was unable to repay the mortgage and became bankrupt. Mr Lincu and others paid out the mortgage and sought to recover the amount from the NSW Torrens Assurance Fund.
Kunc J was called upon to consider whether s 133 of the NSW Act applied to exclude the fund from liability. His Honour found that it did and summarised his reasons for so doing as follows:
(1)The natural and ordinary meaning of the Exemption in the context in which it appears does not require it to be read to the effect that it applies only where the breach of trust is the sole cause of the loss and damage nor does it invite an inquiry as to the 'true cause' when there are multiple causes. The Exemption operates in accordance with its terms, if one (not de minimis) cause of the loss and damage is a breach of trust, irrespective that there may be other causes;
(2)Changes in the statutory language and the scheme of the Fund generally since Parker mean that case is no longer binding or persuasive as to the construction of the Exemption;
(3)The legislative history and the various iterations of [the NSW Act] make clear that trusts are not a matter to which the legislation is directed, in particular trusts are not to be recorded on the register, and there is therefore no logical reason why the Fund should respond to loss and damage caused by the breach of trust of a registered proprietor;
(4)The legislation establishes an administrative method for dealing with claims for compensation from the Fund. As such, a construction of the Exemption which minimises the need for factually and legally complex analyses of questions of causation is to be preferred.
In summary, the respondent says that the proper construction of s 196(1) of the TLA is that the state is not liable for any loss caused by a breach by the registered proprietor of any trust, whether or not that loss could also be said to have been caused by fraud. The respondent says that s 196(1) of the TLA does not only apply where the sole cause of the loss was a breach of trust.

Determination

The starting point in statutory construction is to consider the words of the provision. The natural and ordinary meaning of the words provides a presumptive and persuasive meaning.[5]
[5] Barnes J, Dharmananda J and Moran E, Modern Statutory Interpretation (2023) [6.6] - [6.7] and the cases cited therein.
Regard must then be had to the context in which the statutory provision appears, that is regard must be had to the language and purpose of the statute as a whole: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 [69].
I am of the view that the natural and ordinary meaning of the words 'occasioned by' at first blush mean 'caused by' in the sense that the act in question is a not insignificant cause of the result. Therefore, section 196(1) of the TLA, on its ordinary and natural meaning, excludes liability where a breach of trust is a cause (being a not insignificant cause) of the loss suffered by the applicant.
This natural and ordinary meaning is consistent with:
(a)the dictionary definition of 'occasion', that is relevantly 'the immediate or incidental cause of some action or result'; and
(b)the fact that Glass JA in Parker read the word 'solely' into s 133 of the NSW Act (as it was at the relevant time) leading to the conclusion that, absent the word 'solely', the natural and ordinary meaning of the words 'occasioned by' in s 196(1) of the TLA was that the breach of trust may not be the only cause of the loss in order for the exemption to apply.
The natural and ordinary meaning is only presumptive. Section 196(1) of the TLA must then be considered in the context of the TLA as whole and having regard to the purpose of the legislation.
Section 196(1) of the TLA provides that '[t]he State shall not under any circumstances be liable for compensation for any loss damage or deprivation occasioned by any registered proprietor of any breach of trust' (emphasis added). The words 'under any circumstances' support a construction of s 196(1) of the TLA that it operates in any circumstances where there is a breach of trust, including where there are other causes, such a fraud, occasioning the loss.
Section 196(1) of the TLA is contained in Part XI of the TLA titled 'Restrictions on, and recovery of, payments of compensation by the State'. Sections 201 and 208, which govern the applicant's entitlement to compensation and the process by which the applicant can make a claim for compensation are contained in Part XII of the TLA titled 'Actions and other remedies'. The structure of the TLA is such that the purpose of s 196(1) is to exclude the State from liability where the applicant would otherwise be entitled to compensation under s 201. Section 201 relevantly provides:
201.Compensation of person deprived of land
(1)Any person deprived of land or of any estate or interest in land in consequence of fraud … may bring and prosecute an action at law for the recovery of damages against the person upon … who acquired title to the estate or interest through such fraud…
…
(3)…in case the person against whom such action for damages is directed to be brought as aforesaid … shall have been adjudged bankrupt … such damages with costs of action may be recovered by the State by action against the Registrar as nominal defendant.
(emphasis added)
Section 201 of the TLA recognises that an applicant who is deprived of land in consequence of fraud may bring an action against the person where that person acquired the title through fraud. In this context, to construe s 196(1) of the TLA as not applying to circumstances where the title was acquired through fraud and then there was a subsequent breach of trust or the breach of trust was part of an overall fraudulent scheme, would mean that s 196(1) of the TLA did not operate in respect of a portion of s 201 of the TLA. That cannot be correct. When s 196(1) of the TLA is construed in the context of s 201 of the TLA, it clearly is intended to apply to all of the circumstances in which the applicant has a cause of action under s 201 of the TLA, including where loss is also caused as a consequence of a fraudulent transfer of title or as part of a fraudulent scheme.
Further, s 208 of the TLA provides an administrative process for the applicant to make a claim for compensation. Section 208 provides:
208Claim for damages may be made to Commissioner before commencing court action
(1)Any person sustaining loss or damage in any case in which heretofore he would have been entitled to bring an action to recover damages against the State with the Registrar as nominal defendant may before commencing proceedings against the Registrar make application in writing to the Commissioner for compensation and such application shall be supported by affidavit or declaration.
The intent of such a provision, as outlined by Kunc J in Lincu, is to make a claim for compensation quicker and easier and to minimise recourse to the Court: Lincu [113]. In this context, a construction of s 196(1) of the TLA in accordance with its natural and ordinary meaning is supported, as opposed to a construction which may require determination of legally and factually complex issues of causation.
Finally, a construction of s 196(1) of the TLA which promotes the object and purpose underlying that section is to be preferred to a construction that does not promote that object or purpose: Interpretation Act 1984 (WA) s 18.
The object and purpose of s 196(1) of the TLA can be inferred from the legislative history of s 196 of the TLA and similar provisions in the South Australian legislation from which s 196 of the TLA was derived.
There is no substantive difference between s 196(1) of the TLA as it is now and as it was when first enacted in 1893. When enacted, s 196(1) of the TLA relevantly provided:
The assurance fund shall not under any circumstances be liable for compensation for any loss damage or deprivation occasioned by the breach by a proprietor of any trust whether express, implied or constructive.
Similarly, there has been no material amendment to s 201 or s 208 of the TLA since enacted. The Second Reading Speech for the TLA bill did not make any reference to the s 196(1) or its intended effect.
In 1909, the parliament enacted the Transfer of Land Act Amendment Act (WA) (1909 TLA) to be read as one with the TLA: 1909 TLA s 1. Section 17 of the 1909 TLA mirrored s 196(1) of the TLA and was adopted from s 211 of the Real Property Act 1886 (SA) (1886 SA Act). Section 17 of the 1909 TLA relevantly provided:
17.The Assurance Fund shall not be liable for compensation for loss, damage, deprivation occasioned:
(a)by any breach by a registered proprietor of any trust, whether express, implied or constructive, or by the improper exercise of any power of sale expressed or implied in any mortgage or encumbrance;…
In the Second Reading Speech for the 1909 TLA bill[6], the legislative council stated:
[s 17 of the 1909 TLA] places beyond doubt the question that the assurance fund is not to be held liable for any breach by a registered proprietor of any trust. It was believed that the present law set this forth, but it is thought it would be better to clearly express it than to have any doubt about it.
[6] Second Reading Speech for the Bill for the 1909 TLA, Western Australia, Parliamentary Debates, Legislative Council, 30 November 1909, 1655 at 1656.
In 1950, the Transfer of Land Amendment Act 1950 (WA) was enacted to amend the TLA. Its effect was to directly amend s 196 of the TLA so that it reflected the language in s 17 of the 1909 TLA.
The legislative history of s 196 of the TLA, given it was adopted from s 211 of the 1886 SA Act, can be inferred from that of the South Australian legislation. The legislative history of the South Australian equivalent legislation is helpfully set out in detail in the respondent's outline of submissions[7].
[7] Respondent's Outline of Submissions dated 2 June 2023 pars 109 to 118.
In summary, the history of the South Australian legislation is:
(a)Real Property Act 1860 (SA) (1860 SA Act) - by s 162 the Registrar-General is prohibited from making any entry in the register book of the particulars of any trust or registering any trust instruments;
(b)1861 Report of Real Property Law Reform Commission of South Australia (1861 Report) - an inquiry in part to consider the issues of protection of trustees and beneficiaries of trusts under the 1860 SA Act. The 1861 Report concluded that the existing provisions of the 1860 SA Act, that is those that provided that beneficiaries under a trust may lodge a caveat forbidding dealings with the property without their agreement, were sufficient and that any provisions providing additional status for trusts would be complicated to administer[8];
(c)Real Property Act 1861 (SA) (1861 SA Act) - s 132 for the first time provides an exemption from liability for compensation for loss occasioned by breaches of trust - this is enacted in response to the recommendations of the 1861 Report; and
(d)1886 SA Act - s 211 is in the substantially the same terms as s 132 of the 1861 SA Act.
[8] Report from the Real Property Law Commission (SA Parliamentary papers, 1861, No 192 pp x-xi).
Having regard to the legislative history of s 211 of the 1886 SA Act, the provision upon which s 196(1) of the TLA is based, and the entirety of the TLA,[9] I find that the object and purpose of the TLA is not directed towards the registration of trusts. This object and purpose accords with the natural and ordinary meaning of s 196(1) of the TLA.
[9] Specifically sections 55, 83(2), 134, 182, 219, 220 and 229 of the TLA.
Neither the applicant nor the respondent could direct me to any decisions in this jurisdiction that have considered the proper construction of s 196(1) of the TLA. While both Parker and Lincu considered the same or a similar provision in the NSW Act (s 133), neither case is exactly on all fours with this one. While the words 'occasioned by' were contained in s 133 at the time it was considered in Parker, the NSW Act did not, at that time, provide for an administrative process to claim compensation. On the other hand in Lincu, while s 133 had been amended to replace the words 'occasioned by' with 'arising from', the NSW Act had also been amended to include a regime for administrative processing of claims. I place significant weight on the latter on these amendments in finding that Lincu is more persuasive than Parker in determining the proper construction of s 196(1) of the TLA.
In summary, I find that the proper construction of s 196(1) of the TLA is that the state is not liable for compensation for any loss, damage or deprivation where a breach of trust is a cause (being a not insignificant cause) of that loss, damage or deprivation and that the breach of trust does not have to be the sole cause of that loss, damage or deprivation.

This proper construction of s 196(1) of the TLA is supported by:
(a)the natural and ordinary meaning of the words of the section;
(b)the context within which the section appears in the TLA as a whole; and
(c)the object and purpose of the TLA as determined from its legislative history.

Did the respondent make the Decision in accordance with the proper construction of s196(1)?

In accordance with the proper construction of s 196(1) of the TLA, the respondent was not required to decide the Claim on the basis that s 196(1) of the TLA only applied to exclude liability where the loss was solely occasioned by a breach of trust. The respondent had jurisdiction to decide to reject the Claim provided she did so on the basis that a breach of trust was a cause (being a not insignificant cause) of the applicant's loss, damage or deprivation.
The respondent made the Decision to reject the Claim on the following grounds:
… I confirm that I do not admit this Claim because the registered proprietor of the [Property] is a trustee and section 196(1) of TLA excludes the State from liability for compensation '… occasioned by any breach by a registered proprietor of any trust …'
…
Based upon the information and evidence I have considered, Mr Ahmed Dawood Seedat is the registered proprietor of the Title to the [Property], in the capacity of trustee. This is stated in the Transfer, in the [Trust] Agreement and by the [a]pplicant in the Statutory Declaration.[10]
[10] Gethin Affidavit SJG 5 p 56.

The respondent does not specify in the Decision whether she considered the event which occasioned the loss was the initial transfer of the property, the granting of the mortgage and/or an overall fraudulent scheme by which the title to Property was transferred and the Mortgage was granted. However, given the proper construction of s 196(1) of the TLA, the respondent was not required to. The respondent does specify that the Decision is made on the basis that s 196(1) of the TLA applies to exclude liability given that Mr Seedat is the registered proprietor of the Property in the capacity as a trustee.
The respondent set out in the Decision the registration summary relevant to the title of the Property which includes the granting of the Mortgage to Permanent Mortgages Pty Ltd on 3 June 2016 (later transferred to Perpetual Corporate Trustees Pty Ltd on 6 March 2018).[11]
[11] Gethin Affidavit SJG 5 p 56.
The applicant submits that the facts provided in support of the Claim did establish, or are capable of establishing, that the transfer of the title of the Property:
(a)was fraudulent;
(b)was not in breach of trust because the trust was only established as a result of the transfer; and
(c)was the 'root cause'[12] of the plaintiff's loss.
[12] Applicant's outline of submissions in reply dated 8 June 2023, par 24.
Even in the event that the applicant's characterisation of the facts was wholly accepted by the respondent, it was still open to the respondent, upon the proper construction of s 196(1) of the TLA to find that one, not insignificant, cause of the applicant's loss was the granting of the Mortgage. The applicant accepts that the granting of the Mortgage was a fraud that was committed by Mr Seedat as trustee of the Property, although the applicant says that her loss 'was clearly also occasioned by [Mr] Seedat dishonestly becoming a trustee of the title to the [Property] in the first place, to facilitate his subsequent fraud as trustee'[13] (emphasis added).
[13] Applicant's Outline of Submissions dated 8 June 2023 par 26.
Further, it is a specific term of the Trust Agreement (which was lodged with the transfer) that Mr Seedat would hold the Property as a nominee and on a bare trust and that he must deal with the Property and all rights pertaining to the Property in such a manner as the applicant may from time to time direct and not otherwise. On the basis of this evidence, it was open to the respondent to find that the granting of the Mortgage was in breach of trust and was a not insignificant cause of the applicant's loss.
Therefore, the answer to the question 'did the respondent make the Decision in accordance with the proper construction of s196(1)?' is 'Yes'.

Conclusion and Orders

Both the applicant and Mr Aliraja have suffered terrible consequences as the result of the actions of Mr Seedat. There is no question about this. The respondent expressed, in her Decision, and by her counsel at the hearing of the Application, the sympathy that she had for the applicant and her father and the circumstances in which they find themselves. I share those sentiments. The respondent however, has been given power to make decisions by the TLA and is bound to do so within the limits of that legislation. That is what the respondent did in this case and I have found that she did so within the limits of the power conferred upon her by the legislation.
I find that:
(a)the proper construction of s 196(1) of the TLA is that the state is not liable for compensation for any loss, damage or deprivation where a breach of trust is a cause (being a not insignificant cause) of that loss, damage or deprivation; and
(b)the respondent did make the Decision in accordance with the proper construction of s 196(1) of the TLA.
It follows that the answer to issue (2) is yes and therefore, the Application must 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.
CB
Associate to the Hon Justice Whitby
23 JUNE 2023