Obeid v Urban Renewal Authority Victoria

[2014] HCATrans 177

[2014] HCATrans 177

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M6 of 2014

B e t w e e n -

SAMIR OBEID

Applicant

and

URBAN RENEWAL AUTHORITY VICTORIA (FORMERLY VICTORIAN URBAN DEVELOPMENT AUTHORITY)

Respondent

Application for special leave to appeal

HAYNE J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 15 AUGUST 2014, AT 12.01 PM

Copyright in the High Court of Australia

MR S.R. MORRIS, QC:   If the Court pleases, I appear with my learned friend, MS J.M.F. TREWHELLA.  (instructed by Rennick & Gaynor)

MR C.J. DELANY, QC:   If the Court pleases, I appear with my learned friends, MR P.F. CHIAPPI and MS C. VAN PROCTOR.  (instructed by Russell Kennedy Solicitors)

HAYNE J:   Yes.  Yes, Mr Morris.

MR MORRIS:   Your Honour, this is a case concerning an acquisition made by VicUrban pursuant to section 42(1) of their Act, and there were some additional materials provided to the Court yesterday and I will call those the supplementary materials.  At the supplementary materials at page 32 there is set out section 42 and in subsection (1) it enables the authority to “acquire an interest in land by compulsory process”.  In subsection (2) it provides that:

The Land Acquisition and Compensation Act 1986 applies –

and that subsection (1) of the Act is the “special Act” for that purpose.

HAYNE J:   The acquisition in this case was worked by the instrument published in the Gazette, was it?

MR MORRIS:   That is so, your Honour.

HAYNE J:   Is that application book 104?

MR MORRIS:   Yes, your Honour.

HAYNE J:   And the dispute is about what interest was acquired?

MR MORRIS:   No, the dispute is about what interest has been divested as a consequence of the acquisition.

HAYNE J:   Yes, so what is divested by this instrument?

MR MORRIS:   Well, what is divested is the interest of Sandra Di Giulio as registered proprietor, and when one looks at the Certificate of Title that existed at the time of that particular acquisition, and that is to be found also in the supplementary materials ‑ for some reason the wrong Certificate of Title was put in the application book, and the interest was that of a registered proprietor of estate in fee simple.

HAYNE J:   Why does the taking of that interest have any effect on the tenancy?

MR MORRIS:   Well, it has the effect on the tenancy because the estate of fee simple is equivalent to the full ownership of the land and the taking or the acquisition of that interest necessarily has the effect of divesting all lesser interests.  Now, the ‑ ‑ ‑

HAYNE J:   Why?

MR MORRIS:   Well, two reasons, your Honour.  The first is that if we go back to the Act that I referred to, the Victorian Urban Development Authority Act 2003, in subsection (4) it provides that an:

interest in land acquired by the Authority under this section –

(a)vests in the Crown under section 24 of the Land Acquisition and Compensation Act 1986 despite anything to the contrary in that section; and

(b)      is deemed to be unalienated land of the Crown.

Now, in our submission, the deeming of the land to be unalienated land of the Crown necessarily means that when an interest is acquired by the authority any other interest in the land is divested by that acquisition.  The contrary argument might be that what has been acquired is the estate in fee simple without divesting a lessee interest, but that simply is inconsistent with the notion of deeming land to be unalienated land of the Crown.

KIEFEL J:   It would be a fundamental proposition, would it not, that if an interest in land was being acquired by compulsory acquisition that the notice would have to state with absolute clarity the nature of that interest?

MR MORRIS:   Yes, your Honour.

KIEFEL J:   And here the notice does not state that the interest of the lessee is being acquired.

MR MORRIS:   Absolutely, and if we look at the situation in Maddalozzo’s Case, we get a very similar situation.  That is in the supplementary material at page 65 and following.  There the notice of acquisition referred to estate in fee simple land, and that was interpreted by the High Court to be land that was held in an estate in fee simple, and it was held by the Court that that necessarily divested two mining leases that were in existence in respect of that land that was held in fee simple. 

In the reasons that were given, Chief Justice Barwick essentially said that when an estate in fee simple is required, that “is synonymous with land as the subject of acquisition”.  That is said at page 163 at line 20.  Justice Wilson made a similar observation at page 173 of the reported decision, that is page 77 of the supplementary materials, at line 25 where he observed that:

But I am unable to accept . . . that the Commonwealth can acquire a larger “interest in land” leaving undisturbed any lesser interest notwithstanding that the exercise or enjoyment of that lesser interest may impair the rights privileges and powers inhering in that larger interest.

Further, in Justice Aickin’s judgment at page 170 in the last paragraph, he observed that he “had the advantage of reading the reasons . . . of Wilson J” and he agreed with those additional observations.  So although, strictly speaking, it might be said that the ratio decidendi of Maddalozzo turns on the interpretation of the notice of acquisition in question, nonetheless it is true that three judges – and they were the only three judges to say anything about this – expressed the view that when a notice sought to acquire the estate in fee simple necessarily that would divest lesser interests such as a leasehold interest.

Now, what happened in this case is that when the matter was before Justice Cavanough he accepted that contention and said that the estate held by the registered proprietor in this case of an estate in fee simple ought be understood as a full fee simple.  When the matter went on appeal, a week before the hearing of the appeal the respondent VicUrban amended their notice of appeal to rely on a new point, being the point that section 42(2) of the Transfer of Land Act operated to change the nature of the fee simple interest that was acquired.

In our submission, the Court of Appeal erred when it considered this.  It started off by misunderstanding what the proposition of Mr Obeid was.  Mr Obeid’s proposition was not that his interests had been acquired but, rather, had been divested and the Court of Appeal started off in its judgment stating that it had found that:

On the proper construction of the notice of acquisition, the Authority did not acquire Mr Obeid’s leasehold interest. 

That is at page 61 of the application book in paragraph 2 of the judgment.  Now, in our submission, if one considers the provisions of the Transfer of Land Act, what those provisions are concerned with is paramountcy or priority of interests rather than the content of an interest.  So it is not the case, in our submission, that the interest of the registered proprietor in an estate in fee simple is in any way changed by section 42 of the Transfer of Land Act. 

Rather, section 42 operates to make other interests paramount to that interest or be given primacy to that interest.  What the Court of Appeal has done is effectively redefined what is an estate in fee simple, utilising section 42 and, in our submission, that involves an error, and that error is illustrated by the parts of Maddalozzo that I have taken the Court to.  Effectively, what the Court of Appeal has done is conflate the notion of one interest being subject to another interest with the notion that that fact changes the first interest, in this case the estate in fee simple.

Now, in our submission, quite apart from that, if we go back to the Victorian Urban Development Authority Act, at the supplementary materials page P32, even if it was possible to redefine the interest being acquired in the way the Court of Appeal sought to do, that cannot mean anything in the context of section 42(4)(b) other than that the land itself is deemed to be unalienated land of the Crown. It is not possible to have an interest in land, preserving other interests, unalienated land of the Crown. Unalienated land of the Crown has to be the complete interest in the land, leaving aside native title issues which are not relevant here. If I could draw the Court’s attention to section 40 of the Victorian Urban Development Authority Act, that enables:

The Governor in Council, on behalf of the Crown, may grant to the Authority for an estate in fee simple –

(a)       land divested or surrendered under this Part; or

(b)any other land in the project area that is or is deemed to be unalienated land of the Crown –

In our submission, that reinforces our contention that when VicUrban acquires an interest in land, the land itself is deemed to be unalienated land of the Crown and it must be so because, as I have already said, there is no notion in law that one can have an interest in land being unalienated land of the Crown, it can only be the land itself.

If, for some reason, section 42(4) is not operative, and that was the assumption made in both of the courts below, and instead the matters proceeded based on the effect of section 24 of the Land Acquisition and Compensation Act, and it may be that the reason for that is that it was thought that by reason of section 3(3) of the Land Acquisition and Compensation Act, that Act overrode what was in the Victorian Urban Development Authority Act, although that is not the case because it is only subsection (1) of section 42 that is the special Act, not the whole of the Victorian Urban Development Authority Act.

But if we go back to section 24 of the Land Acquisition and Compensation Act, the court below failed to consider the effect of subsections (2) and (3) of that Act in the interpretation of subsection (1) of the Act.  If we look at subsections (2) and (3), effectively what they say is that in the case of a public authority that has an easement for drains or pipes or what have you overland, those easements are not divested upon an acquisition. 

But in the case of section 24(1) which applied in this case, there being no public authority involved, the language is that the interest in land described in the notice vested in the authority freed and discharged from all trust restrictions, encumbrances, et cetera, and it was conceded before Justice Cavanough by VicUrban that a lease fell within that collection of words. Justice Cavanough made the point that, having regard to Maddalozzo’s Case, if an authority wished to acquire an estate in fee simple without divesting the lessee interest, it would need to be very careful in the words that it used in the notice of acquisition.  That was not the case here.

It was not clear in the notice of acquisition as to whether or not the authority intended to divest the lessee interest, and in the circumstances, in our submission, it is clear that the consequence of the form of words used in the notice of acquisition was to divest all lesser interests, and what that means is that Mr Obeid and the others who have received similar notices in this area will have a right to claim compensation under the Land Acquisition and Compensation Act.  If it pleases the Court.

HAYNE J:   Thank you, Mr Morris.  We will not trouble you, Mr Delany.

There is no reason to doubt the correctness of the conclusions reached by the Court of Appeal in this matter.  Special leave to appeal is refused.  It must be refused with costs.

AT 12.17 AM THE MATTER WAS CONCLUDED