Capel v Williams and Michell

The High Court of Australia heard an appeal from the Supreme Court of New South Wales concerning the right of a volunteer to a free grant of Crown land. The appellant, Daniel Capel, held Volunteer Land Orders, which entitled him to 50 acres of land open to conditional sale. He sought to exercise this right over certain land, but his applications were rejected by the Government, which had purported to grant the land to the respondents, the Michells, under conditional leases. The dispute centred on whether the land was available for Capel's applications at the time he lodged them.

The central legal issue before the court was whether the Minister's action in "setting apart" Crown lands under section 4 of the Crown Lands Act Amendment Act 1905 (and its predecessor, section 4 of the 1903 Act) withdrew such lands from being available for selection by holders of Volunteer Land Orders, even if the land was otherwise "open to conditional sale" under the Crown Lands Acts. Specifically, the court had to determine if the notification under section 4, which specified certain classes of "holdings" for which the land would become available on a future date, prevented a Volunteer Land Order holder from applying for a grant before that specified date.

The Court reasoned that the power to "set apart" land under section 4 of the 1905 Act (and its 1903 predecessor) could only be exercised in respect of land already open to conditional sale. Such a notification did not withdraw land from the category of land open to conditional sale, but rather limited the types of "holdings" under the Crown Lands Acts for which the land was available. Crucially, the Court held that an application for a free grant under the Volunteer Force Regulation Act was not a "holding" within the meaning of the Crown Lands Acts. Therefore, the exclusion of certain classes of holdings in the notification did not affect the right of Volunteer Land Order holders. Furthermore, the Court found that the fixing of a future date for availability did not mean the land was not "open to conditional sale" in the interim for those not subject to the specific restrictions of the notification. The Court also noted that a specific exemption for "proclaimed special areas" under section 29 of the Crown Lands Act Amendment Act 1903 did not apply to areas set apart by the Minister under section 4.

The High Court allowed the appeal, reversing the decision of the Supreme Court. It declared that the appellant's applications for free grants of land were valid and that the areas described in those applications had become Crown lands contracted to be granted to the appellant upon lodging his applications. The Court ordered consequential relief, including specific performance if necessary, and dismissed the defence of bona fide purchase raised by the respondents Michell.