Koompahtoo Local Aboriginal Land Council v CKT Developments Pty Ltd
[2006] NSWSC 862
•28 August 2006
CITATION: Koompahtoo Local Aboriginal Land Council v CKT Developments Pty Ltd & Anor [2006] NSWSC 862 HEARING DATE(S): 02/08/06
JUDGMENT DATE :
28 August 2006JUDGMENT OF: Gzell J DECISION: Council's proceedings to be dismissed. Mortgagee to have judgment against Council for outstanding principal and interest and order for withdrawal of caveat. Cross claims otherwise to be dismissed. CATCHWORDS: ABORIGINALS - Land Rights - Local Aboriginal Land Council in joint venture to develop its land - Council and joint venture partner enter into loan agreement - Council mortgages land to lender - Same issues as in Koompahtoo Local Aboriginal Land Council v KLALC Property & Investment Pty Ltd & Anor [2006] NSWSC 856 except as follows - No evidence of Council resolution authorising execution of mortgage - Whether chairman had ostensible authority to bind Council - Whether Council ratified the mortgage - Secretary's certificate under the Aboriginal Land Rights Act 1983, s 40D(2) had typographical error - Whether a proper certificate - Second certificate correcting error issued - Whether a proper certificate LEGISLATION CITED: Aboriginal Land Rights Act 1983
Real Property Act 1900
Fair Trading Act 1987CASES CITED: Koompahtoo Local Aboriginal Land Council v KLALC Property & Investment Pty Ltd & Anor [2006] NSWSC 856
Freeman & Lockyer v Buckhurst Park Properties (Magnal) Ltd [1964] 2 QB 480
Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549
Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd (1975) 133 CLR 72PARTIES: Koompahtoo Aboriginal Land Council - Plaintiff, 1st Cross Defendant to 1st Cross Claim, Cross Defendant to 2nd Cross Claim, 3rd Cross Claimant
CKT Developments Pty Ltd - 1st Defendant, 2nd Defendant to 1st Cross Claim, 2nd Cross Claimant, Cross Defendant to 3rd Cross Claim
LKM Capital Ltd - 2nd Defendant, 1st Cross Claimant
FILE NUMBER(S): SC 5114/03 COUNSEL: Mr B A Coles QC/ Mr G A Sirtes - Koompahtoo Local Aboriginal Land Council
Mr R G Forster SC/ Mr R Hollo/ Mr M O'Meara - LKM Capital LtdSOLICITORS: Bartier Perry - Koompahtoo Local Aboriginal Land Council
McCabe Terrill, Lawyers - CKT Developments Pty Ltd
Henry Davis York, Lawyers - LKM Capital Ltd
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
GZELL J
MONDAY 28 AUGUST 2006
5114/03 KOOMPAHTOO LOCAL ABORIGINAL LAND COUNCIL v CKT DEVELOPMENTS PTY LTD & ANOR
JUDGMENT
Introduction
1 This matter was heard immediately following Koompahtoo Local Aboriginal Land Council v KLALC Property & Investment Pty Ltd & Anor [2006] NSWSC 856 and these reasons should be read in conjunction with those in the earlier case. As between the Council and LKM, the evidence in one matter was evidence in the other.
2 This matter concerned lot 559 in Morisset, New South Wales which was zoned for residential use.
3 As in the earlier matter in which Sanpine was a party, the Council became the registered proprietor of lot 559 by transfer under the Aboriginal Land Rights Act 1983, s 36.
4 The points of distinction between this case and the Sanpine matter are, first, that there was no interposition of a trustee, secondly, there was no evidence of a Council resolution and, thirdly, that a typographical error in the original certificate under the Aboriginal Land Rights Act 1983, s 40D(2) was corrected by the issue of a later one.
5 The Council entered into a joint venture agreement with CKT Developments Pty Ltd in November 2000 to obtain a subdivision of lot 559 and to market and sell the subdivided lots.
6 A construction loan agreement was executed between LKM as lender and the Council and CKT as borrowers on 25 October 2001.
7 On 18 October 2001, the secretary of the Council issued a certificate in like terms to that in the Sanpine matter, save that the deposited plan was wrongly identified as numbered 1025292.
8 On 25 October 2001, the Council and LKM executed a mortgage which was registered.
9 On 21 December 2001, a further certificate was issued by the secretary of the Council identifying the deposited plan, correctly, as numbered 1025295. In other respects it was identical with the earlier certificate.
10 The loan was for an amount up to $300,000. Advances were made by LKM to the Council and CKT under the loan agreement and the mortgage. The loans were repayable on 25 October 2002. No repayments were made. On 2 September 2003, LKM gave notice to CKT under the Real Property Act 1900, s 57(2)(b) demanding payment of $142,439.15 representing principal and interest. In September 2004, LKM obtained judgment against CKT for $189,450. The judgment is unsatisfied. CKT was not represented at the hearing.
11 In June 2003, the Council lodged a caveat over lot 559.
The issues
12 The Council alleged that the joint venture agreement was void as it was not made in accordance with the requirements in the Aboriginal Land Rights Act 1983, s 40D(1). The same assertion was made against the loan agreement and the mortgage. The Council alleged that it did not approve or give authority for the making of the loan agreement or the mortgage. The Council sought declarations to those effects and orders expunging the mortgage from the certificate of title and delivery of the certificate of title to it.
13 LKM asserted that the Aboriginal Land Rights Act 1983, s 40D(1) did not apply to the joint venture agreement or the loan agreement and that it was protected by one or other of the certificates in terms of the Aboriginal Land Rights Act 1983, s 40D(2) so far as the mortgage is concerned. Upon registration of its mortgage it gained an indefeasible title under the Real Property Act 1900, s 42 and s 43.
14 By way of cross claim, LKM claimed against the Council declarations in estoppel, the repayment of principal and interest, the withdrawal of the caveat and judgment for possession. A case in estoppel and for damages under the Fair Trading Act 1987 was pleaded in the event that LKM’s principal relief was not available.
15 CKT issued a second cross claim against the Council for a declaration that the Council was estopped from denying the validity of the joint venture agreement and raising the Aboriginal Land Rights Act 1983, s 40D as a ground of invalidity of the joint venture agreement. It also claimed damages for breach of contract. Alternatively, damages were sought under the Fair Trading Act 1987.
16 A third cross claim was pleaded by the Council against CKT for an indemnity on the basis that CKT had been unjustly enriched. It was alleged that the moneys paid under the loan agreement were received by CKT for its benefit. As in the Sanpine matter, this claim was predicated upon the Court holding that the Council was liable to LKM in respect of moneys advanced or that LKM was entitled to possession of lot 559.
Authority to make the loan agreement and mortgage
17 William Edward Smith, the chairman of the Council, and William Edward James Smith, a member of it, signed both the loan agreement and the mortgage on behalf of the Council. It was submitted that they lacked the authority of the Council to do so and the loan agreement and the mortgage were unenforceable.
18 There was no evidence of a resolution of the Council authorising the making of the loan agreement or the mortgage. But the joint venture agreement bore the seal of the Council over the signature of Mr Smith as chairman and Mr Griffin as treasurer. It called for borrowings for joint venture purposes not exceeding $350,000 to be secured by a mortgage over the whole of lot 559.
19 Mr Smith, as chairman, executed and affixed the Council seal to the transfer in the Sanpine matter. As chairman he executed and provided to LKM an authority to sign contracts for the sale of land in relation to lot 559. The Council’s solicitors’ letter providing LKM with a copy of the executed loan agreement and mortgage described the documents as having been executed by the Council. The Council provided a copy of a statutory declaration by Mr Smith that purported to make declarations in relation to lot 559 on the Council’s behalf. The Council provided the certificate of title of lot 559 in connection with the mortgage, and the Council by its secretary provided LKM with the certificates of October 2001 and December 2001.
20 At the least, Mr Smith had the ostensible authority of the Council to enter into the loan agreement and mortgage on its behalf (Freeman & Lockyer v Buckhurst Park Properties (Magnal) Ltd [1964] 2 QB 480 at 503, Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549 at 584, Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd (1975) 133 CLR 72).
21 Furthermore, there was no evidence that a resolution of the Council authorising the execution of the two documents had not been made. A fire had destroyed records of the Council that may have included such resolutions. In any event, the Aboriginal Lands Rights Act 1983, s 64(b) provided that in any legal proceedings no proof should be required, until evidence was given to the contrary, of any resolution of an Aboriginal Land Council. No evidence was adduced from Mr Smith or anyone else of the lack of a resolution.
22 I am also of the view that conduct of the Council subsequent to the execution of the loan agreement and mortgage constituted a ratification of them. On 25 October 2001, the Council, on its letterhead, issued an invoice for $25,000 to CKT, claimed to be payable pursuant to the joint venture agreement with CKT. The source of those funds was the moneys advanced by LKM under the CKT loan agreement. Again, on 12 November 2001, on its letterhead, the chairman of the Council wrote acknowledging receipt of the payment of $25,000 as initial payment under the joint venture agreement. And the Council accepted the provision of services to the joint venture procured by the moneys advanced under the CKT loan agreement.
23 In my view the Council has failed to establish a lack of authority in its chairman to bind it by his execution of the loan agreement and the mortgage.
The validity of the loan agreement
24 It was submitted that the loan agreement was void because the Council had not complied with the requirements of the Aboriginal Land Rights Act 1983, s 40D(1). I reject that submission. Section 40(2) rendered void specified transactions in contravention of Div 4. Those transactions were any sale, exchange, lease, disposal or mortgage of, or other dealing with, land. The short answer to the submission is that the loan agreement could not be characterised as any of those transactions.
The validity of the certificate
25 For the reasons discussed in the Sanpine matter, I am of the view that LKM was protected by the first certificate issued by the secretary of the Council. In my view the minor typographical error in the number attributed to the deposited plan could not invalidate the certificate. There was no doubt that lot 559 was the land in question and the statutory requirement that its disposal by way of sale, exchange, mortgage or otherwise did not contravene s 40D of the Aboriginal Land Rights Act 1983 was clearly expressed.
26 If I be wrong in that view, LKM was entitled to the benefit of the certificate of 21 December 2001 that correctly identified the deposited plan. While, for the reasons explained in the Sanpine matter, one would normally expect a certificate to issue before, or contemporaneously with, a transaction to which s 40D(1) of the Aboriginal Land Rights Act 1983 applied, there is nothing in s 40D(2) or elsewhere in the Act that denies efficacy to a certificate issued after the event.
The Council’s proceedings
27 As in the Sanpine matter, so in this, it is unnecessary to consider the other defences of LKM and, in particular, the important question of indefeasibility of title under the Real Property Act 1900, s 42 and s 43.
28 In the result, the Council’s proceedings should be dismissed, as should its third cross claim, for the reasons explained in the Sanpine matter.
LKM’s proceedings
29 For the reasons explained in the Sanpine matter, LKM’s second cross claim should be dismissed. As to its first cross claim, it is entitled to judgment against the Council for the repayment of principal and interest under the loan agreement and the withdrawal of the caveat. As with the Sanpine matter, so in these proceedings, I will hear the parties on the claim for judgment for possession and an order for judicial sale. In other respects the first cross claim should be dismissed for the reasons explained in the Sanpine matter.
30 I will hear the parties on the appropriate terms of orders and on costs. I direct the parties to bring in short minutes of orders reflecting these reasons.
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