Bride v Shire of Katanning
[2013] WASCA 154
•27 JUNE 2013
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: BRIDE -v- SHIRE OF KATANNING [2013] WASCA 154
CORAM: NEWNES JA
MURPHY JA
EDELMAN J
HEARD: 13 MARCH 2013
DELIVERED : 27 JUNE 2013
FILE NO/S: CACV 135 of 2011
BETWEEN: EDWARD JAMES BRIDE
Appellant
AND
SHIRE OF KATANNING
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram :ALLANSON J
Citation :SHIRE OF KATANNING -v- BRIDE [No 2] [2011] WASC 248
File No :CIV 2994 of 2009, CIV 2853 of 2010
Catchwords:
Local Government - Recovery of rates - Meaning of 'owner' in Local Government Act 1995 (WA) s 1.4
Legislation:
Conveyancing and Law of Property Act 1881 (Vic), s 2(iii)
Settled Land Act 1882 (Vic), s 2(10)(i)
Transfer of Land Act 1893 (WA), s 111
Municipal Corporations Act 1906 (WA), s 407
Local Government Act 1960 (WA), s 560(1)
Property Law Act 1969 (WA), s 23
Local Government Act 1995 (WA), s 1.4, s 6.26, s 6.32(1)(c), s 6.32(1)(c), s 6.41, s 6.44, s 6.55, s 6.66, s 9.40, s 9.41, s9.42
Result:
Appeal dismissed
Category: A
Representation:
Counsel:
Appellant: In person
Respondent: Mr P L Wittkuhn
Solicitors:
Appellant: In person
Respondent: McLeods Barristers & Solicitors
Case(s) referred to in judgment(s):
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27
Bride v Australian Bank Ltd [2000] WASC 116
Bride v Shire of Katanning [2008] WASC 131
Chief Commissioner of Land Tax v Macary Manufacturing Pty Ltd [1999] NSWCA 471; (1999) 48 NSWLR 299
Coco v The Queen[1994] HCA 15; (1994) 179 CLR 427
Costello v Chief Constable of Derbyshire [2001] 1 WLR 1437
County of Gloucester Bank v Rudry Merthyr Steam and House Coal Colliery Company [1895] 1 Ch 629
Coverdale v Charlton (1878) 4 QBD 104
CPT Custodian Pty Ltd v Commissioner of State Revenue [2005] HCA 53; (2005) 224 CLR 98
Doe v Finch (1832) 4 B & Ad 283; 110 ER 462
Edward James Bride and Wendy Margaret Bride as Trustees of the Pinwernying Family Trust v The Australian Bank Ltd [2000] WASC 310
Elders Rural Finance Ltd v Westpac Banking Corporation (Unreported, NSWSC, 24 August 1990)
Epic Energy (Pilbara Pipeline) Pty Ltd v Commissioner of State Revenue [2011] WASCA 228; (2011) 185 LGERA 169
Figgins Holdings Pty Ltd v SEAA Enterprises Pty Ltd [1999] HCA 20; (1999) 196 CLR 245
Four Maids Ltd v Dudley Marshall Ltd [1957] Ch 317
Georgeski v Owners Corporation SP49833 [2004] NSWSC 1096; (2004) 62 NSWLR 534
Glenn v Federal Commissioner of Land Tax [1915] HCA 57; (1915) 20 CLR 490
Government of the Islamic Republic of Iran v The Barakat Galleries Ltd [2007] EWCA Civ 1374; [2009] QB 22
Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216
Horlock v Smith (1842) 6 Jur 478
Inverugie Investments Ltd v Hackett [1995] 1 WLR 713
JA Pye (Oxford) Ltd v Graham [2002] UKHL 30; [2003] 1 AC 419
Kenny v Preen [1963] 1 QB 499
Kirby v Cowderoy [1912] AC 599
Leslie v Earl of Rothes [1894] 2 Ch 499
Lord Advocate v Lord Lovat (1880) 5 App Cas 273
Lyell v Kennedy (1889) 14 App Cas 437
Mabo v Queensland (No 2) [1992] HCA 23; (1992) 175 CLR 1
MacIntosh v Lobel (1993) 30 NSWLR 441
McMillan Properties Pty Ltd v W C Penfold Ltd [2001] NSWSC 1173; (2001) 40 ACSR 319
Mexborough Urban District Council v Harrison [1964] 1 WLR 733
Moors v Burke [1919] HCA 32; (1919) 26 CLR 265
Noyes v Pollock (1886) 32 Ch 53
Oliver v Oliver [1958] HCA 28; (1958) 99 CLR 20
Park v Brady [1976] 2 NSWLR 329
Partridge v MacIntosh & Sons Ltd [1933] HCA 38; (1933) 49 CLR 453
Perpetual Trustee Co Ltd v Valuer General [2008] SASC 169; (2008) 101 SASR 110
Plaintiff M70/2011 v Minister for Immigration and Citizenship [2011] HCA 32; (2011) 244 CLR 144
Powell v McFarlane (1977) P&CR 452
Radaich v Smith [1959] HCA 45; (1959) 101 CLR 209
Re Pyrtherch (1889) 42 Ch 590
Red Hill Iron Ltd v API Management Pty Ltd [2012] WASC 323
Shire of Katanning v Bride [2008] WASC 131
Shire of Katanning v Bride [2011] WASC 89
Southpac Custodians Ltd v Bank of New Zealand (1992) 2 NZ ConVC 95‑143
Syme v The Commonwealth [1942] HCA 29; (1942) 66 CLR 413
The King v Palmer (1804) 2 Leach 978; (1804) 168 ER 586
Towers & Co Ltd v Gray [1961] 2 QB 351
Trecap Pty Ltd and City of Swan [2006] WASAT 142
Wallis's Cayton Bay Holiday Camp Ltd v Shell‑Mex and BP Ltd [1975] QB 94
Western Australia v Ward [2002] HCA 28; (2002) 213 CLR 1
Wheeler v Baldwin [1934] HCA 58; (1934) 52 CLR 609
NEWNES JA: I agree with Edelman J.
MURPHY JA: I have had the advantage of reading Edelman J's reasons in draft. I gratefully adopt his Honour's recitation of the relevant statutory and factual background, the grounds of appeal and the issues in the appeal. I agree with his Honour that the appeal should be dismissed. Grounds 3, 5, 7 and 9 raise a point of construction concerning the rating provisions of the Local Government Act 1995 (WA). My reasons on the construction issue are set out below.
The statutory provisions
Section 6.55 of the Local Government Act 1995 provides:
6.55Recovery of rates and service charges
(1)Subject to subsection (2) and the Rates and Charges (Rebates and Deferments) Act 1992 rates and service charges on land are recoverable by a local government from -
(i)the owner at the time of the compilation of the rate record; or
(ii)a person who whilst the rates or service charges are unpaid becomes the owner of the land.
(2)A person who, by virtue of an Act relating to bankruptcy or insolvency or to the winding up of companies, has become the owner of land in the capacity of a trustee or liquidator, is not on that account personally liable to pay, out of the person's own money, rates or service charges which are already due on, or become due on that land while that person is the owner in that capacity. (emphasis added)
Section 1.4 of the Local Government Act 1995 relevantly defines 'owner' to mean:
(a)… a person who is in possession as:‑
(i)the holder of an estate of freehold in possession in the land, including an estate or interest under a contract or an arrangement with the Crown or a person, by virtue of which contract or arrangement the land is held or occupied with a right to acquire by purchase or otherwise the fee simple; or
(ii)a Crown lessee or a lessee or tenant under a lease or tenancy agreement of the land which in the hands of the lessor is not rateable land under this Act, but which in the
hands of the lessee or tenant is by reason of the lease or tenancy rateable land under this or another Act for the purposes of this Act; or
(iii)a mortgagee of the land; or
(iv)a trustee, executor, administrator, attorney, or agent of a holder, lessee, tenant, or mortgagee, mentioned in this paragraph;
or
(b)where there is not a person in possession, means the person who is entitled to possession of the land in any of the capacities mentioned in paragraph (a), except that of mortgagee[.]
Paragraph (b) of the definition of 'owner' in s 1.4, when it refers to a situation 'where there is not a person in possession' must mean, in context, where there is not a person in possession within the meaning of par (a).
Possession and construction
As both pars (a) and (b) of the definition of 'owner' in s 1.4 refer to 'possession', which is a technical legal term, it is convenient to commence with the following observations on the general law.
The meaning of the word 'possession' depends upon the legal context in which it is used: Western Australia v Ward [2002] HCA 28; (2002) 213 CLR 1 [478]; Moors v Burke [1919] HCA 32; (1919) 26 CLR 265, 271 ‑ 272.
Mr Lightwood, in his book A Treatise on Possession of Land (1894) 1, observed:
Possession is a matter of … difficulty, and it has sometimes been doubted whether it is a fact or a right. Primarily possession is a fact, but mere possession frequently secures for the possessor a certain measure of legal protection, and hence it becomes the source of a right known as the right of possession (jus possessionis). The exact nature of this right depends on the remedies granted for violations of it, and can only be stated after examination of those remedies.
Possession as a fact is often referred to as 'mere' possession (eg, Coverdale v Charlton (1878) 4 QBD 104, 127) or 'physical' possession (eg, Leslie v Earl of Rothes [1894] 2 Ch 499, 506) or 'actual' possession (eg, Glenn v Federal Commissioner of Land Tax [1915] HCA 57; (1915) 20 CLR 490, 501) or possession 'in fact' (eg, Georgeski v Owners Corporation SP49833 [2004] NSWSC 1096; (2004) 62 NSWLR 534 [106]. It was in this sense that Dixon J said in Wheeler v Baldwin [1934] HCA 58; (1934) 52 CLR 609, 626:
It also seems not improbable that neither party so used and occupied the land as to make her possession an evident fact.
Possession, as a fact, requires actual control to the exclusion of others: JA Pye (Oxford) Ltd v Graham [2002] UKHL 30; [2003] 1 AC 419 [40] ‑ [41]. For possession to be a source of right it is necessary for there to be an intention to exercise such control on one's own behalf and for one's own benefit: JA Pye (Oxford) v Graham [40]. In the disparate nomenclature of 'possession', actual control has been called 'factual possession' and has been seen as separate from an 'intention to possess': JA Pye (Oxford) v Graham [40]. There is, however, much to be said, in my respectful view, for the analysis by AES Tay (later Professor Tay) to the effect that intention is really an aspect of the necessary factual element of control which is inherent in the concept of possession as a fact: Tay AES, 'The Concept of Possession in the Common Law: Foundations for a New Approach' (1964) 4 Melbourne University Law Review 476, 494.
'Actual possession' is itself a term which has no definite, universal signification and its meaning, where used in a statute, must be drawn from the language and context of the statute: Moors v Burke (268 ‑ 269, 274). For the purposes of this judgment, where I use the term 'actual possession' in what follows, I mean actual control to the exclusion of others with the necessary intent.
The word 'possession' may also appear in the context of a reference to an 'estate in possession'. An 'estate in possession' is an estate in which the holder has a right of present enjoyment of the land and is to be distinguished from estates in expectancy, such as estates in reversion or remainder: Glenn v Federal Commissioner of Land Tax (496, 498, 500 ‑ 501); CPT Custodian Pty Ltd v Commissioner of State Revenue [2005] HCA 53; (2005) 224 CLR 98 [26]; Chief Commissioner of Land Tax v Macary Manufacturing Pty Ltd [1999] NSWCA 471; (1999) 48 NSWLR 299 [58]; Perpetual Trustee Co Ltd v Valuer General [2008] SASC 169; (2008) 101 SASR 110 [54] ‑ [57].
Subject always to the question of the context in which the inquiry arises, the holder of a freehold estate in possession who has actual possession of the land will generally be regarded as being 'in possession'. Also, subject to context, the holder of a freehold estate in possession who is in receipt of the rents from a tenant in respect of the land may be regarded as being 'in possession', although not in actual possession of the land. In the latter case, the freeholder is in possession in the sense that he or she not only has, but is in fact exercising, the 'right of present enjoyment' in the estate (in the words of Isaacs J in Glenn v Federal Commissioner of Land Tax (501)).
Exercising the right of enjoyment in this context refers to the exercise and use of the right and having the full benefit of it, rather than deriving pleasure from it (the word 'enjoy' has the same meaning when used in connection with a covenant for quiet enjoyment: Kenny v Preen [1963] 1 QB 499, 511).
Although a person with a freehold estate in possession may be 'in possession' in that capacity through a lease to a tenant, it is the tenant, and not the freeholder, who has the 'possession' which the law protects against interference from strangers. For this purpose, the landlord is himself or herself tantamount to a stranger because he or she has granted, out of the larger estate, the legal right of exclusive possession to the tenant for a term. It is the legal right of (exclusive) possession in the tenant which the law protects by remedies in actions such as ejectment and trespass (as to which, see, eg, Radaich v Smith [1959] HCA 45; (1959) 101 CLR 209, 222; Inverugie Investments Ltd v Hackett [1995] 1 WLR 713; Georgeski v Owners Corporation [106] ‑ [107]).
Proper construction of 'owner' in Local Government Act 1995
Definitions are not to be considered in isolation, but rather are to be inserted into the relevant operative provision and then the operative provision is to be construed as a whole and in context: Epic Energy (Pilbara Pipeline) Pty Ltd v Commissioner of State Revenue [2011] WASCA 228; (2011) 185 LGERA 169 [62], [150], [218]; Red Hill Iron Ltd v API Management Pty Ltd [2012] WASC 323 [127]. Similarly, where a definition contains prefatory words which are to be distributed amongst its separate elements, those words should, in my view, be read as incorporated into each of the elements of the definition and the definition, within the operative provision, is then to be construed accordingly.
Relevantly for present purposes, s 6.55 of the Local Government Act 1995, read with the definition of 'owner' in s 1.4 provides, in effect, that 'rates and service charges on land are recoverable by local government from':
(a)(i)a person who is in possession as the holder of an estate of freehold in possession in the land, including an estate or interest under a contract or an arrangement with the Crown or a person, by virtue of which contract or arrangement the land is held or occupied with a right to acquire by purchase or otherwise the fee simple; or
(a)(ii)a person who is in possession as a Crown lessee or a lessee or tenant under a lease or tenancy agreement of the land which in the hands of the lessor is not rateable land under this Act, but which in the hands of the lessee or tenant is by reason of the lease or tenancy rateable land under this or another Act for the purposes of this Act; or
(a)(iii)a person who is in possession as a mortgagee of the land; or
(a)(iv)a person who is in possession as a trustee, executor, administrator, attorney, or agent of a holder, lessee, tenant, or mortgagee, mentioned par (a); or
(b)the person who is entitled to possession of the land in any of the capacities mentioned in par (a) except that of mortgagee where there is not a person 'in possession' within the meaning of par (a).
In light of the discussion referred to in [7] ‑ [13] above and having regard to the observations of Edelman J in [88] ‑ [102] (which I respectfully adopt), in my view, the meaning of the word 'owner' as it is picked up in subpar (i) of par (a) of the definition of 'owner' in s 1.4 and applied to s 6.55, includes relevantly for present purposes:
•a person who is the registered proprietor of an estate in freehold who is in actual possession of the land;
•a person who is the registered proprietor of an estate in freehold who is exercising the right of present enjoyment in the freehold estate by, for example, the receipt of rents or profits.
Subparagraph (iii) of par (a) of the definition of the word 'owner' in s 1.4 refers to a person who is 'in possession as a mortgagee of the land'. At least in general terms, a mortgagee is 'in possession' if, pursuant to the mortgage, it is in actual possession in the sense described earlier or it is otherwise to be inferred, from its conduct, that it is in possession of the mortgagor's estate in the capacity of mortgagee. Thus, where the freeholder has granted a lease, and the tenant is in actual possession, Cotton LJ in Noyes v Pollock (1886) 32 Ch 53 (61 ‑ 62) said:
In order to hold that a mortgagee not in actual possession is in receipt of the rents and profits, in my opinion it ought to be shewn not only that he gets the amount of the rents paid by the tenants, even although he gets their cheques or their cash, but that he receives it in such a way that it can be properly said that he has taken upon himself to intercept the power of the mortgagor to manage his estate, and has himself so managed and received the rents as part of the management of the estate.
…
Undoubtedly, as I have said, if a mortgagee only intercepts rents after they have been received by the agents of the mortgagor, then those rents having gone to the mortgagor have not been intercepted by the mortgagee in such a way as to shew that he deprives the mortgagor of the control and management of the property. (emphasis added)
Bowen LJ in the same case (64) said:
But in the case where an estate is let to tenants, of course the mortgagee does not enter upon actual occupation of the demised premises. He may fall under the principle as a person who enters and takes possession of the rents and profits; but only, as it seems to me, if he does something which goes beyond the mere receipt of sums of money to which the rents and profits may amount, and reaches a point at which he displaces, for the purpose of realizing the security, the mortgagor from the control and dominion of the reversion of the estate which is demised. (emphasis added)
Noyes v Pollock has been referred to with evident approval by Williams J in Syme v The Commonwealth [1942] HCA 29; (1942) 66 CLR 413, 428 ‑ 429 and Samuels JA (Moffitt P agreeing) in Park v Brady [1976] 2 NSWLR 329, 339 ‑ 340.
Turning now to par (b) of the definition of 'owner' in s 1.4, the effect of it is, relevantly, as follows. Where the registered proprietor of the freehold estate is not in actual possession, or in possession through, eg, the receipt of rents, and where there is no mortgagee in possession (or other person in possession for the purposes of par (a) of the definition), the registered proprietor would be the person 'entitled to possession' of the land, and hence an 'owner' within the meaning of s 6.55(1) of the Local Government Act 1995. As the concluding words in the definition of owner in s 1.4(b) make plain, this is so even where the mortgagee is 'entitled to possession of the land'.
Disposition
In relation to grounds 3, 5, 7 and 9, in light of the foregoing and having regard to the matters referred to by Edelman J at [124] ‑ [134] and [135] ‑ [139], in my view:
(a)the acts of the Australian Bank, particularly Mr Fear's conduct in preparing to sell the land, were sufficient to establish the control and dominion necessary for the Australian Bank to have been 'in possession' as mortgagee by, at the latest, 13 September 1989;
(b)by 2005, at the latest, the Australian Bank was no longer 'in possession' for the purposes of subpar (iii) of par (a) of the definition of 'owner' in s 1.4 of the Local Government Act 1995.
The matters set out in [141](i) ‑ (v) of Edelman J's reasons indicate, in my view, that Mr Bride was in actual possession from 2005.
In light of the foregoing, it follows in my view that Mr Bride was the 'owner' for the purposes of s 6.55 of the Local Government Act 1995 on the basis that he was either:
(a)'in possession', by virtue of being in actual possession, as the holder of the estate of freehold in possession in the land from 2005; alternatively
(b)if not 'in possession' in that regard, he was as from, at least 2005, a person 'entitled' to possession of the land as the holder of the estate of freehold in possession in the land for the purposes of par (b) of the definition of 'owner' in s 1.4 of the Local Government Act 1995;
I agree with Edelman J for the reasons he has given that grounds 1, 2, 4, 6 and 8 should be dismissed. It is unnecessary to address the matters raised in the notice of contention insofar as they go beyond the matters already addressed in the disposition of the appeal.
EDELMAN J:
Introduction
Mr Bride, the appellant, is the registered holder of an estate in fee simple in land in Katanning in Western Australia (the Land). He holds the estate in the Land as a joint tenant with his wife.
At the heart of this appeal is the question of whether, at relevant times, Mr Bride was the 'owner' of the Land within the meaning in the Local Government Act 1995 (WA). The trial judge held that he was the 'owner' and is therefore liable for rates and charges. Mr Bride submitted that he was not the 'owner' of the Land at any relevant time. He submitted that the Australian Bank was, and is, the 'owner' because it took
possession as a mortgagee more than two decades ago and remains in possession. He submitted that it was the Australian Bank which is liable to pay rates and service charges amounting to $21,381.56.
The effect of s 6.55(ii) of the Local Government Act 1995 is that Mr Bride is liable to pay rates and charges if he is a person who, whilst the rates or service charges are unpaid, becomes the owner of the land. The trial did not concern any issue concerning rights of contribution, or any set‑off, which might arise under provisions of Mr Bride's mortgage with the Australian Bank. The Australian Bank was not a party.
The meaning of 'owner' in the Local Government Act 1960 (WA) and the Local Government Act 1995 has been the subject of different interpretations. One interpretation has been given by the State Administrative Tribunal. Another interpretation was given by the learned primary judge in his reasons for decision. Both decisions were of considerable assistance in elucidating this issue. In my view, however, a third interpretation should be adopted. This third interpretation was not the subject of argument before the trial judge or the State Administrative Tribunal. It depends, in part, upon the legislative history of the provision and historical materials which were not considered in submissions before the primary judge. Relevantly for these proceedings the meaning of 'owner' includes (i) the person on whose behalf the present right to enjoy the freehold title to the land is exercised, including by receipt of any rents and profits from a lease of the land; and (ii) a mortgagee who is exercising rights under a mortgage in relation to the use and enjoyment of the land, including a mortgagee who is in receipt of the rents and profits from a tenant in possession of the land.
The effect of this interpretation is that the appeal must be dismissed. The Australian Bank, as a mortgagee in possession, was the 'owner' of the Land for a period of time under the relevant definition. But it had ceased to be the 'owner' some time before 2005. As the trial judge held, by 2005 Mr Bride was the owner because he was the person who was exercising rights to enjoy the freehold title to the Land. But even if this were not the case then by 2005 Mr Bride would have been the 'owner' within the definition on an alternative basis. That alternative basis would apply because there would be no person exercising rights to enjoy the freehold title to the Land. In that case, Mr Bride would be owner because he was the person who was entitled to possession as the holder of the freehold title to the Land.
The two actions
The two matters from which this appeal is brought were tried jointly. In the first, CIV 2994 of 2009, the Shire claimed rates and charges from 1984 until 2004. The claim was brought in the Magistrates Court for $12,489.28. A counterclaim by Mr Bride brought the value of the claim within the jurisdiction of the Supreme Court and it was transferred to the Supreme Court. The hearing of the counterclaim has been deferred.
The second matter, CIV 2853 of 2010, was commenced in the Supreme Court. In relation to the rates and charges it effectively superseded the first because the Shire claims rates, service charges, emergency service levies, and interest from 1984 until the date of judgment, rather than until 2004. The second action also pleaded an alternative route to the liability of Mr Bride which was not raised in the first action.
Apart from emergency service levies, the rates and charges in the second matter were claimed by the Shire under the Local Government Act 1995. Emergency services levies were claimed under the Fire and Emergency Services Act 1998 (WA) which are recoverable in the same way as rates. For this reason, the submissions of the Shire on trial and on this appeal focused only on the Local Government Act 1995 (appeal ts 79).
In the second action, the primary judge found for the Shire in the sum of $21,381.56 with post‑judgment interest. Since the second action effectively superseded the claim in the first action, the orders in the first action included entry of judgment for the Shire but without any dollar amount of liability.
The primary judge's findings of fact in outline
The primary judge divided his findings of fact into three periods. The first period was from August 1984 until February 1987. The second period was from February 1987 until October 2005. The third period was from October 2005 until the present. The following borrows significantly from his Honour's clear summary of relevant matters during those three periods.
First period: August 1984 until February 1987
Since 1983, Mr Bride and his wife have been the registered proprietors as joint tenants of an estate in fee simple in land located in the district of the Shire of Katanning (the Land). The description of the Land on the certificate of title is lot 29 on diagram 62969, being the whole of the land in certificate of title vol 1682 folio 357. The area of the Land is 1.4542 ha.
Mr Bride described the Land, as it was in 1984, in the following way:
[I]t was a winery. It was properly secured. It was surrounded by a boundary fence which surrounded Lot 29 and Lot 30 and it had a common entrance to the property. The property in that time was used as a winery. It was in good condition. It was used as a point of manufacture and sale of wine and wine products and it was also used as a sale room for those things, so it was in good condition. It was a historic property.
The estate in the Land held by Mr and Mrs Bride was subject to a registered mortgage held by the Australian Bank Limited. The mortgage is dated 26 March 1982, and is in respect of six parcels of land. It was registered on 8 April 1982.
In about 1984, following default on the mortgage by Mr and Mrs Bride, the Australian Bank appointed Mr David Young and Mr John Anderson of Peat Marwick Mitchell & Co as receiver managers of the business and properties of Mr and Mrs Bride.
After the appointment of the receiver managers, Mr Bride and his wife went into bankruptcy. They left the Land. Between January 1985 and late 2005 Mr Bride did not go on to the Land.
The Australian Bank sold some of the properties owned by the Brides to realise its securities, but the Land remained unsold.
The second period: February 1987 until October 2005
On 12 February 1987, the Australian Bank appointed Mr Charles Fear and Mr David Young as its agents. Mr Fear and Mr Young were appointed after the sale of the Australian Bank's business to the Commonwealth Bank. They were appointed to collect a number of accounts owing to the Australian Bank in Western Australia. Mr Bride's account was one of those administered by Mr Fear, who was a chartered accountant and a registered liquidator, and a partner at Peat Marwick Hungerfords (later known as KPMG).
In about May 1988, the Shire served a summons for unpaid rates on Mr Bride. This summons was soon withdrawn but it sparked a series of correspondence involving assertions by Mr Fear that the Australian Bank had taken possession of the Land and attempts by Mr Fear to sell the Land. That correspondence is discussed in more detail later in these reasons.
Mr Bride said in evidence that until he left the land in 1984, the buildings were maintained in good repair and the land was fenced. During the period from 1987 until 2005, the main building fell into disrepair and suffered some damage, the fences were neglected, and a fire hazard developed.
In 1991, the Shire sent notice to the Commonwealth Bank regarding the dangerous condition of the building on the land. In May 1994, the Shire issued a notice to Mr Bride with regard to the poor appearance of the building on the land.
The Australian Bank made no claim to possession since 1989 and, as I explain later in these reasons, denied that it was a mortgagee in possession on a number of occasions after 1989.
On 5 December 2001, the Shire sent a further notice to Mr Bride regarding the condition of the premises, and the potential hazard created by the state of disrepair.
The third period: October 2005 to the present
In about 2005, a company called Baywin Enterprises Pty Ltd, with which Mr Bride was associated, purchased the adjoining lot (Lot 30) to the Land (Lot 29).
Prior to the sale to Baywin Enterprises, Lot 30 had been owned by Mr Bride. It is 2.4742 ha. Lot 29 (the Land) and Lot 30 are in a 'battleaxe' configuration, with access from Creek Street to Lot 30 by a driveway running along the western boundary of the Land. At the time of the purchase of Lot 30 by Baywin Enterprises, the boundary fence around the Land and Lot 30 had been pushed down.
Mr Bride enclosed the whole of the Land and Lot 30, as well as a small area at the north‑western corner of the Land, but not part of that lot, with star picket and ringlock fencing. He cleared the land against fire hazards. He repaired the old winery building on the Land, although not for use as a winery. His family currently store some property on the Land, and a friend carries on an electrician contracting business, with Mr Bride's permission, from the building. At the time Mr Bride re‑entered the Land, he wrote to the solicitors for the Shire, advising them that he had retaken possession and would be responsible for rates into the future. At trial he said that he was unaware of the legal position when he sent that letter. He said he occupies the land as squatter or trespasser, and not as an owner.
The statutory scheme
The statutory scheme generally
In broad summary, the relevant provisions of the legislative scheme creating a liability for rates and service charges under the Local Government Act 1995 to the trial of this matter are as follows:
(i)subject to exceptions which are not relevant to this case, all land within a district is rateable land: s 6.26;
(ii)when adopting the annual budget, a local government is to impose (by absolute majority) a general rate on rateable land within its district, and may impose, by absolute majority, a service charge: s 6.32(1)(a), s 6.32(1)(c);
(iii)a local government is required to give to the owner of rateable land, and the owner or occupier of land on which a service charge is imposed, a rate notice stating the date the rate notice was issued and incorporating or accompanied by the details and particulars prescribed: s 6.41;
(iv)the owner for the time being of land on which a rate or service charge has been imposed is liable to pay the rate or service charge to the local government and if there are two or more owners of the land they are jointly and severally liable to pay the rate or service charge, as the case requires: s 6.44;
(v)subject to an exception not relevant in this case, rates and service charges imposed under the Local Government Act 1995, together with any costs of proceedings for the recovery of the rates or services charges, are a charge on the land: s 6.43; and
(vi)if a rate or service charge remains unpaid after it becomes due and payable, the Local Government may recover it, as well as the costs of proceedings, if any, for that recovery, in a court of competent jurisdiction: s 6.56.
The Local Government Act 1995 makes provision for the recovery of rates and service charges as follows:
6.55.Recovery of rates and service charges
(1)Subject to subsection (2) and the Rates and Charges (Rebates and Deferments) Act 1992 rates and service charges on land are recoverable by a local government from -
(i)the owner at the time of the compilation of the rate record;
or
(ii)a person who whilst the rates or service charges are unpaid becomes the owner of the land.
(2)A person who, by virtue of an Act relating to bankruptcy or insolvency or to the winding up of companies, has become the owner of land in the capacity of a trustee or liquidator, is not on that account personally liable to pay, out of the person's own money, rates or service charges which are already due on, or become due on that land while that person is the owner in that capacity.
The central issue at trial was whether Mr Bride fell within the terms of s 6.55(1). This provision is to the same effect as s 560(1) of the Local Government Act 1960. The minor differences in the provisions are not relevant to this case.
The 'owner' of the Land
Mr Bride falls within s 6.55 if he was (i) the owner of the Land at the time of the compilation of the rate record, or (ii) if he became the owner of the Land whilst the rates or service charges are unpaid.
The term 'owner' is defined in s 1.4 of the Local Government Act 1995 in terms which are not relevantly different from the Local Government Act 1960. That definition is set out later in these reasons.
Section 9.40 of the Local Government Act 1995 provides that if evidence of the imposition of rates is given by tender of a document purporting to be a certified copy of all or any part of the rate record it is to be presumed, unless the contrary is proved, that the rates were properly imposed and that the person charged with the amount payable in respect of the rate is obliged to pay it.
Section 9.41 provides that evidence that a person is the owner of land may be given by tendering a document purporting to be a certificate signed by the Registrar of Titles or an Assistant Registrar stating that the person's name appears in a register kept under the Transfer of Land Act 1893 (WA) as that of the owner of the land.
Section 9.42 provides that a person may be alleged to be, or at a stated time to have been, the owner or occupier of land and, unless the contrary is proved, the person is presumed to be or have been the owner or occupier of land, as alleged.
The Shire tendered, as an exhibit to the witness statement of Mr Mark Holden (the manager of corporate services for the Shire), a certified copy of the Certificate of Title to the Land, signed by the Registrar of Titles. That certificate showed that Mr Bride and his wife are, and have been since 20 July 1978, registered proprietors of the land, as joint tenants. The Shire also tendered an extract from the rates record of the Shire as at 30 April 2010 showing that rates and service charges, including penalty interest, of $19,270.03 was then owing. The effect of s 9.40 and s 9.41 is that both of these matters were presumed to be correct.
The trial proceeded on the basis that Mr Bride, who acted in person, asserted that the Australian Bank took possession of the Land in 1987 as a mortgagee in possession for the purposes of selling it, and that he asserted that the Australian Bank remains in possession: reasons of the primary judge, Bride v Shire of Katanning [2008] WASC 131 [7] ‑ [8].
The trial judge's conclusions on 'ownership' under the Local Government Act 1995
The primary judge's findings and conclusions can be summarised as follows:
(i)Since 1984 Mr Bride and his wife have been registered proprietors as joint tenants of an estate in fee simple in the Land [66].
(ii)A person is 'in possession as a mortgagee of land' if that person is in 'actual possession' or has 'factual possession' which connotes 'an appropriate degree of physical control' [67] ‑ [68].
(iii)The Australian Bank did not enter into physical possession. The Australian Bank did not exercise any degree of physical control, exclusive or otherwise, even during the period when it said (in correspondence) that it was in possession. The Australian Bank did not exercise any of the remedies under s 111 of the Transfer of Land Act. It did not enter the Land. It did not maintain the building, the Land, or the fences. No representative of the bank, or its agent KPMG, ever went to Katanning. The Australian Bank did not pay rates. See [69].
(iv)Mr Fear had the intention to possess the Land on behalf of the Australian Bank and declared that intention to at least some interested parties. Up to the end of 1989, Mr Fear pursued the sale of the property on behalf of the Australian Bank and those facts are not sufficient to establish possession by the Australian Bank [70].
(v)Mr Bride was not aware of Mr Fear's appointment until he came across the letters to Mr Putnin, his trustee in bankruptcy, in Mr Putnin's files [70].
(vi)Mr Bride's trustee in bankruptcy became aware that the Australian Bank was asserting possession as mortgagee at the time of the letter from Mr Fear in May 1988, more than 12 months after Mr Fear and Mr Young were appointed as the Australian Bank's agents [70].
(vii)The Australian Bank was not 'in possession as a mortgagee of land' within definition (a)(iii) of 'owner' in the Local Government Act 1995. See [67], [69].
(viii)From 1985 to 2005, Mr Bride was not 'in possession' of the Land although he was entitled to possession as the registered proprietor of an estate in fee simple. There was no person in possession of the Land [71].
(ix)From 1985 to 2005 there was no person 'in possession' of the Land, so since Mr Bride was entitled to possession of the Land as the registered owner of an estate in fee simple he was the 'owner' within the definition (b) of 'owner' in the Local Government Act 1995 [71].
(x)Since 2005, Mr Bride has been in possession and entitled to possession [72].
The effect of the primary judge's reasons was therefore that Mr Bride was liable for rates because he was either (i) the owner at the time of the compilation of the rate record (s 6.55(1)(i)); or (ii) a person who whilst the rates or service charges are unpaid becomes the owner of the land (s 6.55(1)(ii)). Perhaps for the avoidance of doubt, the Shire filed a notice of contention which included the allegation that Mr Bride was liable for rates on the basis that he had become the owner after 2005 and therefore fell within s 6.55(1)(ii).
The grounds of appeal
Mr Bride had 10 grounds of appeal. Some of them are without foundation. The grounds which concern the essence of the appeal are grounds 3 (the two grounds which were both numbered 3), 5, 7 and 9. Those grounds raise the question of the meaning of the definition of 'owner' in s 1.4 of the Local Government Act1995 and challenge relevant findings at trial of law and of fact in relation to that definition. For that reason those grounds are considered first.
Grounds 3, 5, 7 and 9: the 'owner' under s 1.4 of the Local Government Act 1995
Grounds 3 (that is, both of the two grounds that were numbered 3), 5, 7 and 9 raise issues concerning the meaning of the references to 'possession' in the definition of owner in s 1.4 of the Local Government Act 1995 and facts relevant to those issues. As Mr Bride was self‑represented it is understandable that the grounds raised overlapping issues and might have been expressed more concisely in places. It suffices to summarise the matters asserted in those grounds which affect the decision made by the trial judge:
(i)the trial judge erroneously found that physical possession of the Land was necessary in order for a mortgagee to be 'in possession';
(ii)the trial judge erred because having regard to the evidence, including the evidence of Mr Fear, Mr Bride and the 'business papers books and records' before the Court, the trial judge should have found that the Australian Bank was a mortgagee in possession; and
(iii)the trial judge erred because, having regard to the evidence of Mr Bride, the trial judge should have found that Mr Bride left the Land in January 1985 and did not return until February 2005, when he returned without the knowledge, permission or authority of the mortgagee, the mortgagee's agents and/or the mortgagee's solicitors.
There are some misconceptions evident in these grounds of appeal. First, the learned trial judge did find that Mr Bride left the Land in 1985 and did not return until 2005. Secondly, the learned trial judge did not hold that 'physical possession' was necessary in order for a mortgagee to be in possession although this had been the submission of counsel for the Shire. His Honour held that physical control was necessary [68] ‑ [69]. His Honour considered that physical possession 'may not be necessary' [31].
For the reasons explained below, Mr Bride's submission that the Australian Bank was in possession as mortgagee of the Land within the definition of 'owner' in the Local Government Act 1995 should be accepted. But the Australian Bank was no longer 'in possession' as a mortgagee of the Land by 2005. As I explain below, the effect of this is that the trial judge's conclusion at [72] is, with respect, correct. Since 2005, Mr Bride was liable for the rates and charges either because he was in possession as the holder of a freehold estate, or, even if not, he is liable because he was entitled to possession as the holder of a freehold estate in fee simple.
The meaning of 'owner' in the Local Government Act 1995
The definition of 'owner' in s 1.4 of the Local Government Act 1995 is as follows:
owner, where used in relation to land -
(a)means a person who is in possession as -
(i)the holder of an estate of freehold in possession in the land, including an estate or interest under a contract or an arrangement with the Crown or a person, by virtue of which contract or arrangement the land is held or occupied with a right to acquire by purchase or otherwise the fee simple; or
(ii)a Crown lessee or a lessee or tenant under a lease or tenancy agreement of the land which in the hands of the lessor is not rateable land under this Act, but which in the hands of the lessee or tenant is by reason of the lease or tenancy rateable land under this or another Act for the purposes of this Act; or
(iii)a mortgagee of the land; or
(iv)a trustee, executor, administrator, attorney, or agent of a holder, lessee, tenant, or mortgagee, mentioned in this paragraph;
or
(b)where there is not a person in possession, means the person who is entitled to possession of the land in any of the capacities mentioned in paragraph (a), except that of mortgagee; or
(c)where, under a licence or concession there is a right to take profit of Crown land specified in the licence or concession, means the person having that right; or
(d)where a person is lawfully entitled to occupy land which is vested in the Crown, and which has no other owner according to paragraph (a), (b), or (c), means the person so entitled; or
(e)means a person who -
(i)under the Mining Act 1978, holds in respect of the land a mining tenement within the meaning given to that expression by that Act; or
(ii)in accordance with the Mining Act 1978 holds, occupies, uses, or enjoys in respect of the land a mining tenement within the meaning given to that expression by the Mining Act 1904; or
(iii)under the Petroleum and Geothermal Energy Resources Act 1967 holds in respect of the land a permit, drilling reservation, lease or licence within the meaning given to each of those expressions by that Act; or
(f)where a person is in the unauthorised occupation of Crown land, means the person so in occupation.
The central issues of interpretation are:
(i)the meaning in par (a)(i) of 'a person who is in possession as the holder of an estate of freehold in possession in the land';
(ii)the meaning in par (a)(iii) of 'a person who is in possession as a mortgagee of the land'; and
(iii)the meaning of par (b).
The term 'possession' has a long legal history. McHugh J once observed that '[f]ew terms in law are as difficult to define as "possession". What it means in one branch of the law may be different from what it means in another branch of the law': Western Australia v Ward [2002] HCA 28; (2002) 213 CLR 1, 215 [478]. See also Towers & Co Ltd v Gray [1961] 2 QB 351, 361 (Lord Parker CJ).
At common law a distinction is often drawn between actual possession and the right to possession. The concept of actual possession generally requires a physical element (manifestation of exclusive control) and well as a mental element (an intention to exercise that control on one's own behalf). In some contexts there are further qualifications on each of these aspects of actual possession but these are not necessary to consider here.
Actual possession is often contrasted with the right to possess. But the two concepts are not wholly independent. For instance, a thief in actual possession has, by virtue of that actual possession, a right to possess which is exigible against all except the true owner: Costello v Chief Constable of Derbyshire [2001] 1 WLR 1437, 1446 [22] (Lightman J; Keene and Robert Walker LJJ agreeing); Government of the Islamic Republic of Iran v The Barakat Galleries Ltd [2007] EWCA Civ 1374; [2009] QB 22, 32 [15] (the Court); McMillan Properties Pty Ltd v W C Penfold Ltd [2001] NSWSC 1173; (2001) 40 ACSR 319, 325 [44] (Young CJ in Eq).
In this case, it is not necessary to explore the boundaries or contours at common law of actual possession or the right to possession. It suffices to say that where the term is used in legislation, the meaning of 'actual' possession can be ambiguous and the answer will depend on construction of the legislation itself: Moors v Burke [1919] HCA 32; (1919) 26 CLR 265, 268 (the Court).
Given the difficulties which surround the meaning of possession, it is unsurprising that different approaches have been taken in different cases to the interpretation of the meaning of 'owner' in s 1.4 of the Local Government Act 1995.
One approach was taken in the State Administrative Tribunal in Trecap Pty Ltd and City of Swan [2006] WASAT 142. In that case, Trecap leased land to another company which subleased it. Trecap argued that since it had parted with possession by leasing the land it was not 'a person who was in possession as the holder of an estate of freehold in possession in the land'. Nor, it submitted, was it liable under par (b) since the sub‑lessee was entitled to possession. The effect of this argument was that any land under lease would not be rateable, except for land which falls within the exceptional categories of land which is not rateable in the hands of the lessor (see s 6.26 and the definition of owner in par (a)(ii)).
The learned Senior Member of the Tribunal, with respect, correctly concluded that such an approach would undermine the purpose of the Local Government Act 1995.
The learned Senior Member then held that Trecap was liable under par (a) of the definition of 'owner' since the words 'in possession' bear their technical or legal meaning and Trecap had 'a present right of enjoyment, as the holder of an estate of freehold in possession in the land': see Trecap and City of Swan [18], [23] ‑ [24], [31], [61].
One difficulty with this interpretation is that the usual 'legal' meaning of possession is a relationship of 'right': see Wonnacott M, Possession of Land (2006) page 2. The general principle is that 'possession in law follows the right to possess. Inherent in the notion of the right to possess is the right of physical control': Western Australia v Ward (222 ‑ 215) [478] (McHugh J); Wallis's Cayton Bay Holiday Camp Ltd v Shell‑Mex and BP Ltd [1975] QB 94, 114 (Ormrod LJ). But a lease involves the grant of the legal right to possession of the land from the lessor to the lessee. The legal right to possession of the land is vested in the lessee.
The trial judge in this case took a different approach. After a careful examination of the detail of s 1.4, his Honour concluded that the phrase in par (a) referred to actual possession: 'in [actual] possession as the holder of an estate of freehold in possession in the land'.
As the learned trial judge observed, the actual possession approach avoids some contextual difficulties with the interpretative approach in Trecap and City of Swan. But the effect of the trial judge's construction is that in instances of leased land unless the landlord is treated as being in 'actual possession' then there is no person liable to pay rates other than some of the exceptional cases under par (a)(ii) for Crown land or non‑rateable land under s 6.26.
The reason why I consider that the terminology of actual possession should be avoided in this case is because a landlord who leases a fee simple to a tenant cannot be said to be in 'actual possession'. It is true that a landlord who is in receipt of rent or profits has sometimes been described as being in 'constructive possession' of the land, often for reasons relating to land taxes. But whenever the term 'constructive possession' is used 'the basic concept [is] the same: someone would be treated as having taken possession, without ever having done so': M Wonnacott Possession of Land (2006) page 8, 10. The concept of constructive possession is 'a fiction of law, and only signifies that though the actual possession may be in one person, the constructive possession may be in another': The King v Palmer (1804) 2 Leach 978, 981; (1804) 168 ER 586, 588 (Rooke J). Perhaps due to the fiction, Lightwood described as incorrect the approach of Lord Selborne in Lyell v Kennedy (1889) 14 App Cas 437, 456 ‑ 457 treating the landlord as in possession of the land by means of his tenant. Lightwood preferred to say that the landlord was in present receipt or possession of his rights as owner: Lightwood, J A Treatise on the possession of land (1894) 187.
Section 1.4 of the Local Government Act1995 does not use the language of 'actual possession' or 'constructive possession'. Those concepts need not be applied although, for the reasons explained below, the reference to 'in possession' in s1.4 should be interpreted to include a person being 'in possession' of rights held in fee simple even when a lease has been granted. This is a conclusion which depends exclusively upon construction of the Local Government Act.
A further approach was suggested by counsel for the respondent in this case. At the heart of counsel's submission was the proposition that a lessor with freehold title to land who leases the land to another, thereby granting exclusive possession of the land to the lessee, retains a right to possession of the land against all except the lessee, including the right to bring an action against all trespassers apart from the lessee (ts 59). This submission is not correct: Radaich v Smith [1959] HCA 45; (1959) 101 CLR 209, 222 (Windeyer J); Coco v The Queen[1994] HCA 15; (1994) 179 CLR 427, 435 (Mason CJ; Brennan, Gaudron & McHugh JJ); MacIntosh v Lobel (1993) 30 NSWLR 441, 454 (Kirby P) and the authorities cited in that case.
There is another, better, interpretation which achieves a result which is consistent with the words, the purpose, and the legislative history of the Local Government Act 1995, as well as a historical use of 'possession' in some related contexts. This interpretation was not argued before the trial judge but was raised during the hearing of this appeal. The better interpretation of the relevant parts of the definition of 'owner' in s 1.4 of the Local Government Act 1995 is set out in the following four propositions:
(i)in par (a), 'a person who is in possession as' generally means the person exercising a present right to enjoy the freehold title to the land. But, unlike the common legal terminology of 'actual possession', the expression in par (a) also includes the person having a freehold title who has exercised a right to lease the land to another.
(ii)in par (a)(i), 'the holder of an estate of freehold in possession in the land' is a compendious expression which excludes a freehold estate in remainder or a freehold estate in reversion. It is not necessary in this case to consider whether a 'freehold estate in possession' in par (a)(i) includes any other type of freehold estate in possession apart from the estate in fee simple, such as a freehold estate for life (the third category, a freehold estate in fee tail, having been abolished in Western Australia: Property Law Act 1969 (WA) s 23).
(iii)in par (a)(iii), 'in possession as a mortgagee of the land' means a mortgagee who is exercising present rights under a mortgage to use and enjoy the land. Like par (a)(i) it includes a mortgagee who is in receipt of the rents and profits from a tenant in possession of the land.
(iv)in par (b), 'where there is not a person in possession ... the person who is entitled to possession of the land in any of the capacities mentioned in par (a), except that of mortgagee' means that if there is no person exercising the legal right to possession as described in par (a)(i) to (iv), then the person in the categories in par (a), other than the mortgagee, with the legal entitlement to do so.
Each proposition above can be explained in turn.
The meaning of 'in possession' in par (a)
As to proposition (i), there are eight reasons which support the meaning of 'in possession as' to mean the person exercising the present right to enjoy the freehold title to the land including receipt of rent or income if the land is under lease.
First, a general definition of 'in possession' includes the person exercising the rights of an estate in the land. In a passage quoted with approval by Barrett J in Georgeski v Owners Corporation SP49833 [2004] NSWSC 1096 [102], Mr Mark Wonnacott differentiated the 'right' or entitlement to possession from the 'fact' of possession which involves the exercise of those rights to enjoy the incidents of an estate in land:
The relationship of fact (having or being in possession) exists when a person is, as a matter of observable fact, enjoying the rights and incidents of an estate or interest in land.
Secondly, as the trial judge observed, the use of 'in possession' in par (a) contrasts with 'entitled to possession' in par (b). The former is concerned with the exercise of rights as matter of fact. The latter is concerned with the legal rights or entitlements.
Thirdly, the legislative history of s 1.4 supports the interpretation of 'in possession' in the case of a freeholder to include the person obtaining rents and profits obtained from the exercise of a right as freeholder to lease the land to another.
The progenitor of the Local Government Act 1960 and the Local Government Act 1995 was the Municipal Corporations Act 1906 (WA). The Municipal Corporations Act, s 407, created a scheme where liability for rates was imposed on the occupier of land and the occupier, absent agreement, had a statutory right of recovery from the owner. A council could also recover the rates from the owner. Importantly, the owner, upon whom the ultimate liability would generally rest, was defined as
the person for the time being receiving or entitled to receive the rents and profits of land, whether on his own account or as agent, trustee, or attorney for another person, or who, if the land were let to a tenant at a rent, would be entitled to receive the rent as aforesaid. (emphasis added)
The new definition of owner contained in the 1960 and 1995 Local Government Acts referred specifically to lessees of land which is not rateable in the hands of the lessor (exceptional examples in s 6.26), Crown lessees, and agents of these exceptional types of lessee. But there was no other provision made for the liability for rates where, as in the previous legislation, 'the land [is] let to a tenant at a rent'. As already explained, it is unlikely to have been the parliamentary purpose or policy to exclude most land which is privately leased from liability for rates, simply by omission within the new definition. The interpretation of a statute in context includes consideration of the 'general purpose and policy of a provision': Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27, 47 [47] (Hayne, Heydon, Crennan & Kiefel JJ).
Fourthly, it is also pertinent that the definition to which par (a)(i) relates concerns the word 'owner'. Whatever the legal content of ownership, that term in common usage includes a freeholder who has leased the land to another. In Horlock v Smith (1842) 6 Jur 478, 479, Knight Bruce VC suggested that the common meaning of 'in possession' was 'when rents are paid to him, or by his order, or for his use'.
Fifthly, it is relevant, in interpreting legislation, 'to consider not only the pre-existing state of the law which it amends, but the continuing law which surrounds it, with which it must co‑exist and with which there should be some coherence': Plaintiff M70/2011 v Minister for Immigration and Citizenship [2011] HCA 32; (2011) 244 CLR 144, 210 [165] (Heydon J).
The interpretation of 'in possession' in par (a)(i) as including the receipt of rent by a lessor is consistent with the meaning given to possession in the Transfer of Land Act s 111 which provides for a mortgagee to enter into possession of 'the mortgaged or charged land by receiving the rents and profits thereof'. This was not a novel meaning even in 1893. It was modelled on well known 19th century legislation. For instance, the Settled Land Act 1882, 45 & 46 Vict, s 2(10)(i) defined 'possession' of land as including receipt of income and income as including 'rents and profits'. The Conveyancing and Law of Property Act 1881, 44 & 45 Vict, s 2(iii) provided that '[i]n relation to land, income includes rents and profits, and possession includes receipt of income'.
Sixthly, and also a matter of consistency and coherence, this meaning of 'in possession' in par (a)(i) is also consistent with a historical use of that expression by authors and judges.
A distinction was drawn from very early in the English law of estates between seisin and 'mere' possession such as possession by a lessee. Seisin described a person who possessed an estate in land as a freeholder: See Lightwood J, A Treatise on the Possession of Land (1894). As early as 1490, judges began to use the language of the freeholder being 'possessed', as a synonym for being 'seised' of the freehold: see 5 H VII 10 pl 2.
Even if the estate in land was leased to another for term of years and the lessee entered into possession of the land, the freeholder would remain 'seised' of the land, or 'possessed of the freehold'. The effect of this, as Pollock and Wright observed, was that '[a] freeholder who has let his land for years is seised, or possessed, of the freehold, but not possessed of the land': Pollock F & Wright R, An Essay on Possession in the Common Law (1888) ch 2. Similarly, Lightwood in A Treatise on Possession of Land (1894), 187, explained that 'the receipt of rent marks the landlord as being in possession of his rights as owner'.
In older cases, judges also explained that 'in possession' in this context meant 'seised of the estate of freehold': Doe v Finch (1832) 4 B & Ad 283, 300; 110 ER 462, 468 (Denman CJ).
Seventhly, the statutory text in the definition of owner in the Local Government Act 1995 distinguishes between a person who is 'in possession' in various capacities in par (a) and a person who is 'entitled to possession of the land' in par (b). Again, this suggests that the reference to 'in possession' in par (a)(i) is not restricted to possession of the land but might also encompass persons such as those who are in receipt of rents and profits from the land.
Eighthly, this interpretation is also supported by the inclusion in par (a)(i) of a person 'in possession' as the holder of equitable rights, and the inclusion in par (a)(iv) of the trustee of such a holder.
Paragraph (a)(i) expressly includes 'an estate or interest under a contract or an arrangement ... by virtue of which contract or arrangement the land is held or occupied with a right to acquire by purchase or otherwise the fee simple'.
This express inclusion incorporates an 'equitable estate in fee simple' which is an expression commonly used to describe the right of a purchaser of land under a specifically enforceable contract: Oliver v Oliver [1958] HCA 28; (1958) 99 CLR 20. That purchaser is also sometimes described as the beneficiary of a constructive trust: Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216 [129] (McLure P). The Local Government Act 1960 had expressly referred to 'the holder of a legal or equitable estate in fee simple ...'
In an instance involving such a contract or arrangement, the person who is the owner under the Local Government Act 1995 is the person who is 'in possession', that is the person who is enjoying the benefits of the freehold estate. That person will be either the beneficiary under par (a)(i) or the trustee under par (a)(iv).
The meaning of 'the holder of an estate of freehold in possession in the land' in par (a)(i)
Proposition (ii) set out above is that in par (a)(i), 'the holder of an estate of freehold in possession in the land' is a compendious expression which historically meant 'seised of' the land. Describing a holder as 'seised of' the land, meant that the person held a freehold estate in fee simple which was not a freehold estate in remainder or a freehold estate in reversion.
As the learned Senior Member in Trecap and City of Swan and the trial judge in this case both observed, the reference to 'estate of freehold in possession of the land' is a well known legal expression which means a freehold estate which is not an estate in expectancy. It is not a freehold estate which is in remainder (by act of the parties) or in reversion (by operation of law): Glenn v Federal Commissioner of Land Tax [1915] HCA 57; (1915) 20 CLR 490, 496, 498 (Griffith CJ), 500 ‑ 501 (Isaacs J); Blackstone W, Commentaries on the laws of England (1753), Book II, ch XI.
In other words, the 'estate in possession' is the 'estate to which some person has the present right of enjoyment': CPT Custodian Pty Ltd v Commissioner of State Revenue [2005] HCA 53; (2005) 224 CLR 98, 112 [26] (the Court).
The meaning of 'in possession as a mortgagee of the land'
From an early time in the development of the mortgage the term 'mortgage' meant a 'dead' pledge (mort gage) of title to the land. The mortgagee creditor had the right to possession and the right to the income from the land. No default, nor any notice, was necessary for entry into possession. As Harman LJ said '[t]he mortgagee may go into possession before the ink is dry on the mortgage unless there is something in the contract, express or by implication, whereby he has contracted himself out of that right': Four Maids Ltd v Dudley Marshall Ltd [1957] Ch 317, 320. See also Figgins Holdings Pty Ltd v SEAA Enterprises Pty Ltd [1999] HCA 20; (1999) 196 CLR 245, 261 [21] (Gaudron, Gummow & Callinan JJ).
A 'mortgage' under the Transfer of Land Act, such as that which governed the relationship between Mr and Mrs Bride and the Australian Bank, is different. The registered 'mortgage' takes effect as a security. It does not operate as a transfer of the land: see s 106; Figgins Holdings v SEAA Enterprises (261) [21] (Gaudron, Gummow & Callinan JJ) in relation to the equivalent Victorian provision. The registered mortgage confers no immediate right to possession upon the mortgagee: Partridge v MacIntosh & Sons Ltd [1933] HCA 38; (1933) 49 CLR 453, 468 (Dixon J).
Upon default, however, the registered mortgagee has remedies which include those under s 116 of the Transfer of Land Act. That section provides that a mortgagee shall have the same rights (until foreclosure or transfer upon sale) as if the legal estate in the land were vested in him.
Consistently with the meaning of the opening words 'in possession' in par (a)(i) (that is, as a person exercising the present right to use and enjoy the freehold title) the meaning in par (a)(iii) of 'in possession as a mortgagee of the land' means a mortgagee who is presently exercising the rights under a mortgage to use and enjoy the estate in the land.
Also consistently with par (a)(i), a mortgagee, like a freeholder, can be 'in possession' when the mortgagee is in receipt of the rents and profits from the lease of the property to another and when the mortgagee takes from the mortgagor the power and duty of managing the property and dealing with the tenants: Noyes v Pollock (1886) 32 Ch 53, 65 (Bowen LJ). Section 111 of the Transfer of Land Act reflects this meaning by providing that the mortgagee may enter into possession of the mortgaged or charged land by receiving the rents and profits thereof. As to the grant of new leases, as Pennycuick J explained in Mexborough Urban District Council v Harrison [1964] 1 WLR 733, 737, the grant of a new tenancy to a person other than the mortgagor amounts to the taking 'of possession' by the mortgagee.
The determination that a mortgagee is in possession, in the sense described above of presently exercising a right under a mortgage to use and enjoy an estate in the land (including the receipt of rents and profits from it), requires both an intention to do so as well as physical manifestation of that intention. As Lord Browne‑Wilkinson said in the leading speech in JA Pye (Oxford) Ltd v Graham [2002] UKHL 30; [2003] 1 AC 419, 435 ‑ 436 [40]:
[T]here has always, both in Roman law and in common law, been a requirement to show an intention to possess in addition to objective acts of physical possession. Such intention may be, and frequently is, deduced from the physical acts themselves. But there is no doubt in my judgment that there are two separate elements.
Counsel for the Shire at trial, and on this appeal, asserted that the requirement for 'physical acts' could only be satisfied by a mortgagee in three ways (i) a legal action for recovery of land, (ii) the receipt of rents or profits, or (iii) by the person, or one of its officers, physically setting foot on the property (appeal ts 38 ‑ 39). Whatever may be the position in relation to the requirements for an action for trespass to land, a physical presence on the land has not been a requirement for possession of an estate in land since livery of seisin fell into desuetude. Nor is physical entry a requirement for a person to be 'in possession' as a mortgagee of the land in the Local Government Act 1995. As explained above, the mortgagee can take possession by granting a new tenancy, or by writing to lessees and instructing them that the mortgagee is responsible for the management of the property, and the receipt of rents and profits.
The 'physical' element of possession which the mortgagee must demonstrate in order to take possession is the exercise of control in the manner of an occupying owner. As Slade J said in Powell v McFarlane (1977) P&CR 452, 470 ‑ 471, in a passage in which has been quoted with approval on many occasions:
Factual possession signifies an appropriate degree of physical control. It must be a single and [exclusive] possession, though there can be a single possession exercised by or on behalf of several persons jointly … The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed. … Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no‑one else has done so.
It is also well established that possession falls to be
considered in every case with reference to the peculiar circumstances ... the character and value of the property, the suitable and natural mode of using it, the course of conduct which the proprietor might reasonably be expected to follow with a due regard to his own interests.
See Lord Advocate v Lord Lovat (1880) 5 App Cas 273, 288 (Lord O'Hagan); Kirby v Cowderoy [1912] AC 599, 603 (Privy Council); Mabo v Queensland (No 2) [1992] HCA 23; (1992) 175 CLR 1, 213 (Toohey J).
In Elders Rural Finance Ltd v Westpac Banking Corporation (Unreported, NSWSC, 24 August 1990) Bryson J reiterated this point and explained that depending on the character of the land, it is conceivable that slight acts might be sufficient to demonstrate a taking of possession.
For these reasons, I do not accept the submission by counsel for the Shire that a mortgagee can only take possession by (i) an action for possession, (ii) by receipt of rents or profits or (iii) by physical entry. None of the numerous texts cited supports such a limited approach, nor does the sole authority relied upon, the New Zealand decision of Master Williams QC in Southpac Custodians Ltd v Bank of New Zealand (1992) 2 NZ ConVC 95‑143.
The meaning of 'the person who is entitled to possession of the land'
The other relevant reference to possession is in par (b). Paragraph (b) says that 'where there is not a person in possession ... the person who is entitled to possession of the land of in any of the capacities mentioned in par (a), except that of mortgagee'. The reference to 'entitled' indicates that this paragraph is concerned with the situation involving a right to possession of the land where there is no person exercising rights to possession under par (a).
There are not likely to be many situations in which there is neither (i) a person exercising the rights of a freehold title (including of land under lease), nor (ii) a mortgagee in possession, nor (iii) a Crown lessee or lessee of non‑rateable land, nor (iv) a trustee, executor, administrator, attorney or agent of the person referred to in (i) to (iii). But in such a rare case, such as vacant land where no person is exercising rights within par (a), then par (b) imposes the liability for rates upon the person who is entitled to exercise those rights (apart from a mortgagee).
This meaning of par (b) is consistent with the definition of 'occupier' in the Local Government Act 1960 and the Local Government Act 1995. That definition focuses upon the person in actual occupation and, consistently with par (b) of the definition of 'owner' makes provision for the exceptional case where there is 'no occupier':
Occupier where used in relation to land means the person by whom or on whose behalf the land is actually occupied or, if there is no occupier, the person entitled to the possession of the land.
Was the Australian Bank in possession as a mortgagee of the Land?
The trial judge found that from 1985 to 2005, Mr Bride was not 'in possession' of the Land, in the sense of exercising any of the rights to the Land, although he was entitled to possession as the registered proprietor of an estate in fee simple. Putting to one side the position in relation to entitlement to possession during that period, it was common ground on this appeal that Mr Bride did not exercise any right to enjoy the freehold title to the Land between 1985 and 2005.
The trial judge held that the agent of the Australian Bank, Mr Fear, intended to possess the Land on behalf of the Australian Bank. However, the trial judge held that the Australian Bank was not a mortgagee in possession because it did not exercise any degree of physical control over the Land, exclusive or otherwise, even during the period when the Australian Bank said (in correspondence) that it was in possession.
With respect to the trial judge, the evidence supports the conclusion that the Australian Bank did perform sufficient acts demonstrating a dealing with the Land as an occupying owner might have dealt with it. As explained by Slade J in Powell v McFarlane, this is a conclusion which depends entirely upon the circumstances of the case, but the primary reason why I depart from the conclusion of the primary judge is that at the relevant time there was no person in possession, or in occupation, of the Land. It is that fact which significantly colours the evidence to which I refer below. An initial objection at the hearing of this appeal by counsel for the Shire to the admission of much of the evidence described below was made on the mistaken basis that it was not part of the trial record. That objection was later withdrawn.
On 5 October 1987, Mr Fear as agent for the Australian Bank wrote to the Shire Clerk at Kojonup Shire Council asking about zoning and rates payable and explained that '[t]he Australian Bank Limited is Mortgagee in possession in respect of [the Land] and is contemplating selling [the Land]' (GB 78).
On 27 May 1988, Mr Fear as agent for the Australian Bank wrote to Mr Bride's trustee in bankruptcy, Mr Putnin. Mr Fear explained that the Australian Bank had 'taken control of the [Land] ... as mortgagee in possession' and he said that as agent of the Bank he was arranging for the sale of the Land. He also asked Mr Putnin to advise whether there was any legal action instituted against Mr Bride in relation to unpaid rates by the Shire: if so, Mr Fear indicated that he would ask that this action cease as 'all outstanding rates and taxes are expected to be paid in full on settlement' (GB 79). There was no evidence of Mr Putnin's response to this letter.
On 3 November 1988, Mr Fear wrote again to Mr Putnin saying that the Australian Bank 'has now taken possession of the property as mortgagee in possession and is progressing to the appointment of selling agents'. He asked Mr Putnin to remove a caveat on the title to the Land (GB 81). Mr Putnin replied to this letter, saying that he had not been notified that the mortgagee had taken possession and that his enquiries of Mr Bride did not reveal this. Mr Putnin also explained that he thought that the Australian Bank's administration of the affairs of the Brides had been finalised and that the Land was unsaleable (GB 84).
On 29 November 1988, in a memorandum to an officer of the Australian Bank entitled 'sale of Katanning land', Mr Fear replied to a facsimile sent to him by the bank on 11 November 1988. There was no evidence about what that facsimile contained but Mr Fear's response described the facsimile as 'in relation to the sale of the Bride land'. Mr Fear explained that he had been advised by a solicitor acting for the Australian Bank that 'all necessary demands had been served on the Brides so as to enable the Bank to take possession of the property pursuant to its mortgage' (GB 86). A later letter from Mr Fear in September 1989 also suggests that the same solicitor later gave advice concerning the cost of removing a caveat for the purpose of sale of the Land (Supp GB 2). It is difficult to reconcile this evidence with an affidavit, sworn by the same solicitor in December 1994, in which the solicitor says that from perusal of the bank's files and to the best of his knowledge he is not aware of any action that the Australian Bank has taken to take possession of the Land (GB 101). But, in light of the evidence of Mr Fear's acts, the solicitor's awareness or recollection cannot affect the conclusion that the Australian Bank had taken control of the Land as mortgagee.
On 19 December 1988, Mr Fear's response was to deny that the Australian Bank's debt had been discharged and to deny that the Land was unsaleable. He referred to an agreement on 19 August 1986, to which Mr Putnin and the Australian Bank were parties, in which Mr Putnin had undertaken not to impeded the bank in realising the Land. Mr Fear also referred to his letter of 27 May 1988 and his advice that the Australian Bank had taken possession, and the absence of any response from Mr Putnin (GB 54 ‑ 55).
On 13 September 1989, Mr Fear, again writing as agent for the Australian Bank, wrote to the manager of a real estate agency, Estatewide Real Estate, enclosing a completed market appraisal form to obtain an opinion about the value of the Land. The market appraisal form was completed and signed by Mr Fear as agent for the Australian Bank. The opening line described him as 'agent for the mortgagee in possession' (GB 91; Supp GB 4).
As the trial judge found, by July 1989 the Land was listed for sale with Estatewide Real Estate. On 7 August 1989, Mr Putnin withdrew the caveat. Estatewide Real Estate valued the Land in the range of $5,000 to $10,000. There was a potential buyer prepared to offer $6,000 [55].
On 20 September 1989, Mr Fear, again as agent for the Australian Bank, responded to a letter from Estatewide Real Estate which had apparently enclosed an offer for purchase of the Land. Mr Fear explained that 'certain developments have occurred that will prevent a sale proceeding'. He also terminated the exclusive authority of Estatewide Real Estate to sell the property (Supp GB 3).
The developments to which Mr Fear referred were set out in a letter sent by him the previous day to the Australian Bank. The developments were the discovery of a caveat on the property lodged by Mr and Mrs Bride and the legal advice received by the Australian Bank's solicitor concerning the cost of removing the caveat (Supp GB 2).
As I have explained, all of these facts must be assessed in the context of the fact that there was no person in possession of the Land at the relevant time prior to the Australian Bank's assertion of control. In such a circumstance, the acts necessary for the Australian Bank to establish control of the Land as mortgagee in possession may be considerably less than in the case of land which was in the possession of another.
It is not necessary to decide whether a mere assertion of possession of land which is not in the possession of another could ever be a sufficient physical act of control. The acts of the Australian Bank, particularly Mr Fear's conduct in preparing to sell the Land, were sufficient physical acts to establish the control necessary for the Australian Bank to have been 'in possession' as a mortgagee of the Land from, at the latest, September 1989.
Did the Australian Bank cease to be in possession as a mortgagee?
Although, on this appeal, there was considerable focus upon whether Mr Bride's acts amounted to 're‑taking' possession, there is a preliminary issue which arises before that question can be examined. The preliminary issue is whether the Australian Bank ceased to be 'in possession' as mortgagee, in the sense described above of exercising its rights as mortgagee in possession.
One authority discussed in some detail by counsel for the Shire was Re Pyrtherch (1889) 42 Ch 590, 599, where North J said:
I have never heard it suggested, nor do I think it is the law, that a mortgagee is entitled to go into and out of possession whenever he likes. In my opinion, when he once takes upon himself the burden which is imposed on all mortgagees who are in possession, he must continue to perform the duty, and he cannot when he pleases elect to give it up.
Those remarks in that case were made in the context of a submission by the mortgagee, Mr Bishop, that having entered into possession he could be relieved of his duties by withdrawing as mortgagee and being replaced by a court appointed receiver. Later cases have taken a different approach to the question of when a mortgagee can be relieved of duties by appointment of a receiver: County of Gloucester Bank v Rudry Merthyr Steam and House Coal Colliery Company [1895] 1 Ch 629. But it is a different question whether the mortgagee has remained 'in possession' under par (a)(iii) of the definition of 'owner' in the Local Government Act 1995.
In contrast with the question of whether a mortgagee remains subject to duties, and accountable in equity, the issue under the Local Government Act 1995 is concerned with the imposition of a liability to pay rates upon the person who can be identified as exercising the right to enjoy the relevant estate. The definition of 'owner' is not concerned with whether the mortgagee may still owe duties to the mortgagor or whether the mortgagee remains liable to the mortgagor for a common account or accounting on the basis of wilful default.
Irrespective of the duties, whether continuing or not, which the Australian Bank owed as a consequence of having taken possession, by 2005 at the latest it was a matter of fact the Australian Bank was no longer exercising any of its rights to take the benefit of, or enjoy, the Land and was therefore not 'in possession' for the purposes of the Local Government Act 1995. This conclusion is amply demonstrated by the trial judge's findings of fact:
(i)There was no evidence of any activity by the Australian Bank in relation to the land after 1989. Mr Fear did not remember when he ceased to be an agent of the bank, but he could put an outer limit on the term of his agency because he had retired from KPMG by 1992 [57].
(ii)In the 1994 proceedings between the Shire and Mr Bride the Commonwealth Bank and Australian Bank had both denied that they had taken possession. Both said that they were not prepared to carry out repairs on the property [59].
(iii)In the years since 1994, the Australian Bank and the Commonwealth Bank had maintained the position that they were not, and had not been, in possession. In proceedings in the Supreme Court, the banks denied that they were mortgagees in possession of the land: Edward James Bride and Wendy Margaret Bride as Trustees of the Pinwernying Family Trust v The Australian Bank Ltd [2000] WASC 310 [79].
Did Mr Bride re‑enter into possession?
In light of my conclusion that from at least 2005 the Australian Bank was no longer 'in possession' as a mortgagee of the Land, it is not necessary to reach any conclusion concerning whether, from 2005, Mr Bride was, within par (a)(i) of the definition of 'owner', in possession as the holder of an estate of freehold in possession in the land. The reason why this does not matter is because if Mr Bride was not 'in possession' within par (a)(i), then no person would be 'in possession' and, as the person entitled to possession under par (b), Mr Bride would still be the 'owner' under the Local Government Act 1995.
In any event, and with respect, the matters explained by the trial judge amply illustrate that, from 2005, Mr Bride was exercising the present right to enjoy the freehold title to the land with an intention to do so. This is demonstrated by the following findings of fact by the trial judge:
(i)Mr Bride enclosed the whole of the Land and the adjoining lot with star picket and ringlock fencing;
(ii)Mr Bride cleared the land against fire hazards;
(iii)Mr Bride repaired the old winery building on the Land;
(iv)Mr Bride's family currently store some property on the Land, and a friend carries on an electrician contracting business, with Mr Bride's permission, from the building; and
(v)In 2005 Mr Bride wrote to the solicitors for the Shire, advising them that he had retaken possession and would be responsible for rates into the future.
Conclusion on grounds 3, 5, 7 and 9
Although the Australian Bank was in possession as mortgagee of the Land for a period, that possession came to an end by 2005 at the latest since the bank, as a matter of fact, was no longer exercising its rights to the Land from that date. From 2005, Mr Bride was a person who, whilst the rates or service charges were unpaid, became the owner of the land either because (i) he was 'in possession' as the holder of an estate of freehold in possession in the land, or if not then (ii) he was the holder of an estate of freehold in possession in the land in circumstances where no person was in possession under par (a) of the definition of owner. Mr Bride is therefore liable for the rates under s 6.55(1)(ii).
Grounds 3 (both of them), 5, 7 and 9 must be dismissed.
Ground 1
Ground 1 is that the trial judge 'erred in law and fact in that he did not have proper regard for the findings of Chief Justice Martin, delivered 2 February 2011 and the comments and findings as transcribed by the Chief Justice on that date relating to these matters'.
The hearing before Martin CJ was an interlocutory hearing of a strike out and summary judgment application by the Shire: Shire of Katanning v Bride [2011] WASC 89. None of his Honour's observations as to fact or law were binding upon the trial judge.
In any event, it appears from Mr Bride's written submissions, par 6, that this ground of appeal is concerned with the Chief Justice's observations during argument that if the Australian Bank was in possession from 2005 as a mortgagee then Mr Bride's subsequent acts from 2005 could be as a trespasser. It may be correct that a freeholder who interrupts the possession of a mortgagee in possession commits trespass. But, as explained above, the Australian Bank was not a mortgagee in possession from 2005. Indeed, in his Honour's decision on the strike out application, Martin CJ accepted as a possibility that the factual circumstances might be construed as giving rise to 'the relinquishment of any claim to legal possession by the mortgagee of the land, reinforced by the retaking of physical occupation by the owner of the freehold' [7].
Ground 1 must be dismissed.
Ground 2
Ground 2 asserts that the trial judge erred in law and fact because he did not have proper regard to the findings of Martin CJ in a hearing on 4 July 2008 'in relation to the judgment of Parker J, Bride v Australian Bank, delivered 12 May 2000'. The ground of appeal refers to 17 paragraphs from the decision of Martin CJ.
The decision of Martin CJ to which Mr Bride refers is part of the background of the lengthy litigation preceding this appeal. The decision of Martin CJ concerned the proceedings initially brought by the Shire against Mr Bride in the local court for recovery of rates in relation to the Land. Mr Bride's denial that he was liable for the rates, and assertion that the Australian Bank was liable, was struck out. An appeal to a single judge of the District Court was refused. Martin CJ granted Mr Bride leave to appeal to the Court of Appeal. The decision of Martin CJ is Shire of Katanning v Bride [2008] WASC 131 (Bride [2008]).
In his decision, Martin CJ described the 'critical question' for the grant of leave to appeal as whether there is an arguable case that in earlier litigation involving Mr Bride and the Australian Bank, Parker J had not determined the same issue which Mr Bride sought to raise in his defence: Bride v Australian Bank Ltd [2000] WASC 116 (Parker J). After a detailed analysis of the decision of Parker J, the Chief Justice concluded that:
[A]t least one of the arguments [Mr Bride] wished to advance in opposition to the Shire's claim for rates was an argument based upon the proposition that the correspondence of 1988 provided evidence that the bank had taken possession at or around that time. That is a proposition which, so far as I can see on the materials presently available, has never been determined one way or the other.
Therefore an extension of time to appeal was granted: Bride [2008] [61] ‑ [62]. Orders allowing the appeal were subsequently made by consent.
All of the paragraphs cited by Mr Bride in his ground of appeal are concerned with observations by the Chief Justice in his decision relevant to his conclusion that Parker J had not determined the issue of whether, based upon correspondence with Mr Fear, the Australian Bank had taken possession. None of the observations by the Chief Justice affects the reasoning as set out above in relation to grounds 3, 5, 7 and 9 or the conclusion that Mr Bride was the 'owner' at least from 2005.
Ground 2 must be dismissed.
Ground 4
Ground 4 asserts that the trial judge erred in law and in fact
in that there was no evidence before His Honour that at any time ever was the title to the property, control of the property, right to sell the property, right to mortgage the property conveyed to assigned to and or given to Bride by the Mortgagee, the Mortgagee's agents and or the Mortgagee's solicitors.
Mr Bride held the freehold title to the Land. That freehold title was subject to the mortgage to the Australian Bank. Although the Australian Bank controlled the Land for a period of time as mortgagee in possession, the Australian Bank ceased, as a matter of fact, to assert that control by 2005 at the latest. The exercise and enjoyment of the rights by the freeholder or the mortgagee is the relevant question under par (a) of the definition of 'owner' in the Local Government Act 1995. The question is not the existence of any possible conveyance.
Ground 4 must be dismissed.
Ground 6
Ground 6 asserts that the trial judge erred in law, relying upon a query by the trial judge during argument (at ts 166) whether it is the law that 'if you have entered into possession as a mortgagee in possession, simply by abandoning physical occupation you haven't abandoned your role as a mortgagee in possession'.
Whether or not that proposition is correct, it is not relevant to this appeal. As explained above, the relevant issue in the definition of 'owner' under the Local Government Act 1995 concerning a mortgagee in possession is whether a mortgagee has ceased to assert control over land in the sense of exercising its right to use or enjoy an estate in the land. As I have explained, the Australian Bank had ceased to control the Land in that sense from at least 2005.
Ground 6 must be dismissed.
Ground 8
Ground 8 asserts that the trial judge erred in law in relying upon the decision of Parker J when the facts of the Australian Bank having been a mortgagee in possession in August 1984 are distinctly different from the facts of the Australian Bank, by the bank's agents, being a mortgagee in possession in 1987.
This ground must also be dismissed. The trial judge did not rely upon the decision of Parker J. Rather, in the passage in which the trial judge referred to the decision of Parker J in Bride v Australian Bank, his Honour explained that decision and the conclusion of Parker J that Mr and Mrs Bride had failed to establish the allegation that the bank had entered into possession of the Land in August 1984. The trial judge then explained that Martin CJ (while case manager of this case) had directed that Mr Bride could not defend the Shire's claim on the basis that in the period from August 1984 to about February 1987 the Australian Bank was in possession as mortgagee.
There is no appeal from this direction by Martin CJ. Nor could the direction have any effect on the conclusion that this appeal must be dismissed in light of the events occurring from at least 2005.
Ground 8 must be dismissed.
Conclusion
When the purpose of the definition of 'owner' in s 1.4 of the Local Government Act 1995 is considered, the outcome of the trial, and this appeal, requires the recognition of Mr Bride's liability for rates. The application of the definition of 'owner' to the liability for rates is concerned to provide a person such as the Shire with a means of recovering rates from the party who is exercising rights in relation to the Land. Only in the absence of a person exercising those rights will the Local Government Act 1995 impose liability on the party (other than a mortgagee) who has the right to an estate in the Land but who does not exercise that right. In circumstances in which Mr Bride is presumed to be the owner of the Land (s 9.42) and in circumstances in which, from 2005, he was the only person with any relationship with the Land, the matters to be considered by the Shire to identify the person responsible for rates point directly to Mr Bride.
The appeal must be dismissed. It is not necessary to address the matters raised in the notice of contention although most of those matters were either matters which had been found by the trial judge or issues raised in the appeal in any event.
14
34
7