Quarmby v Keating

[2008] TASSC 71

[2008] TASSC 71

CITATION:              Quarmby v Keating [2008] TASSC 71

PARTIES:  QUARMBY, Alan
  QUARMBY, Barbara Jean
  v

KEATING, John Majella Gerrard
QASAIR INVESTMENTS PTY LTD

TITLE OF COURT:  SUPREME COURT OF TASMANIA (FULL COURT)
JURISDICTION:  APPELLATE
FILE NO/S:  593/2007
DELIVERED ON:  19 November 2008
DELIVERED AT:  Hobart
HEARING DATE:  4 June 2008
JUDGMENT OF:  Crawford CJ, Slicer and Evans JJ

CATCHWORDS:

Limitation of Actions – Land - Adverse possession - What amounts to - Adverse possession does not run during any period when rates are paid by the owner.  

Land Titles Act 1980 (Tas), ss138T, 138U, 138V and 138W.
Aust Dig Limitation of Actions [30]

Statutes - Acts of Parliament - Interpretation Acts and clauses – Tasmania - References in a statute to repealed but re-enacted provisions in the same statute.
Land Titles Act1980 (Tas), ss40(3)(h) and 138W.
Hore v Albury Radio Taxis Co-op Society Ltd (2002) 56 NSWLR 210, referred to.
Aust Dig Statutes [41]

Real Property - Torrens title - Indefeasibility of title - Exceptions to indefeasibility - Adverse possession of others and possessory title – Tasmania - History of the law of obtaining title by adverse possession. 

Aust Dig Real Property [1268]

REPRESENTATION:

Counsel:
             Appellants:  W A Ayliffe
             Respondents:  M E O'Farrell
Solicitors:
             Appellants:  Baker Wilson
             Respondents:  Bradfields

Judgment Number:  [2008] TASSC 71
Number of paragraphs:  66

Serial No 71/2008
File No 593/2007

ALAN QUARMBY & BARBARA JEAN QUARMBY v
JOHN MAJELLA GERRARD KEATING & QASAIR INVESTMENTS PTY LTD

REASONS FOR JUDGMENT  FULL COURT

CRAWFORD CJ

SLICER J

EVANS J

19 November 2008

Order of the Court

Appeal dismissed

Serial No 71/2008
File No 593/2007

ALAN QUARMBY & BARBARA JEAN QUARMBY v
JOHN MAJELLA GERRARD KEATING & QASAIR INVESTMENTS PTY LTD

REASONS FOR JUDGMENT  FULL COURT

CRAWFORD CJ

19 November 2008

1. For the reasons expressed by Evans J, I agree that the appeal should be dismissed.

   File No 593/2007

ALAN QUARMBY and BARBARA JEAN QUARMBY
v JOHN MAJELLA GERRARD KEATING
and QASAIR INVESTMENTS PTY LTD ACN 100 911 493

REASONS FOR JUDGMENT  FULL COURT

SLICER J
19 November 2008

1. This appeal concerns the existence of equitable title through adverse possession and the statutory scheme for the obtaining of title, through that possession, provided by Parliament in its enactment of the Land Titles Act 1980, PtIXB ("the Act"). The appellants must establish that PtIXB does not exclusively govern the acquisition of possessory title. The appellants contend that they have obtained title in equity which, although not registerable, permits them to claim damages for trespass committed by the registered owner. The respondents' primary argument is that the scheme excludes all other means of obtaining possessory title and a claimant might only have the benefit of a trust in the interest of the registered proprietor pending determination of that claim.

1. The primary facts giving rise to this appeal have been comprehensively stated by the learned primary judge (Quarmby v Keating & Qasair Investments Pty Ltd [2007] TASSC 65) and are not the subject of significant challenge. In 1981, the first appellant had purchased land adjacent to that disputed in these proceedings. In that year the land was "repegged" by a surveyor and the boundary found to be almost identical to that shown in diagram 362/13D which is the basis of the second respondent's ("Qasair") present title. The surveyor noticed the presence of a "post and wire" fence on Lot 2 which he estimated had been there at that time for about 20 years. Lot 2 was one of three allotments subdivided from the original title, Certificate of Title, Vol 3108, Folio 99. The land subject to dispute forms part of Lot 2 and includes that portion marked by the observed fence line. Her Honour found that the land sold to the first appellant by Hay, who retained Lot 2, "was not defined by reference to Lot 1 in the contract, but by reference to an approximate area". The contract contained a term providing:

"The Vendors shall not be required to fence. These words shall have the meaning expressed by the Conveyancing and Law of Property Act. Prior to completion the Vendors will erect at their own cost upon that portion of the land identified in the First Schedule by the number 14B which is marked 'XY' on the plan annexed hereto a five strand post and wire fence."

1. Her Honour found that Hay and Quarmby "agreed between themselves where the fence provided for in clause 7 of the contract between the parties would be".  Quarmby took title to Lot 1 in 1982, registered in accordance with the Act as Certificate of Title Vol 139705, Folio 1.  Lot 2 was initially retained by Hay and transferred consecutively to two other identified persons, the last selling the land in turn to Qasair in 2003.  In April 2003, a further survey was undertaken with respect to Lot 1.  The surveyor determined that the fence already referred to encroached on Lot 2 by about 4 – 5 metres.  A dispute arose between the parties when the first respondent ("Keating") advised of his intention to erect a fence along the boundary shown on the title plan, rather than the existing stock fence.

1. The parties could not agree, and on three occasions in 2004 and 2006, Keating entered onto the land to claim and enforce his right.  In doing so, he destroyed the existing fence and subsequently damaged its successor re-erected by the first appellant.  The appellants sued for trespass, claiming damages for the fence and its replacement, aggravated damages for "mental distress and anxiety", and sought an injunction restraining the respondents from further entry and interference onto the property.  There is no dispute that the registered title plan describing Qasair's property includes the impugned land.  There is no significant issue as to the continued existence of the fence since 1981 and the use of the enclosed land by the appellants.

Claim of title

1. The appellants claimed both documentary and possessory title.  They claim that if their interest cannot be recorded under the Act, equity nevertheless permits occupation and the right to sue in trespass.  The learned primary judge rejected the claim based on documentary title, determining that if the appellants believed the land to be within their documentary title, "That belief was not … reasonably open to them on the evidence and, if held, could only be recklessly so", and she inferred that "at least Q [Quarmby] was well aware the southern boundary of his documentary title was not as represented by the fence".  The claim for possessory title was rejected on the basis that absent a vesting order, or at least the right to apply for such an order, made in accordance with the Act, the scheme of the Act operated to preserve Qasair's title.  There was no dispute that the appellants had occupied the land since 1981 without challenge until 2003.  There was no evidence that rates on the portion of the land had been paid by the appellants or remained unpaid.  The inference that they were paid by the respondents as part of the assessment for Lot 2 was more than open and the learned primary judge was entitled to conclude that the "registered proprietor from time to time did so".  No caveat had been placed on the title during the relevant period.

Limitation

1. The Limitation Act 1974, ss10 and 21, relevantly provide:

"10 ¾ (2)     No action, not being an action to which subsection (1) applies, shall be brought by any person to recover any land after the expiration of 12 years from the date on which that right of action accrued to him or, if it accrued to some person through whom he claims, to that person."

"21 Subject to section 13, at the expiration of the period prescribed by this Act for any person to bring an action to recover land (including a redemption action or an action to compel discharge of a mortgage) the title of that person to the land shall be extinguished."

1. The argument, as advanced, was that since no challenge had been made to occupation and enclosure, no other party had a right to bring an action to recover the land.   The Act, prior to 2001 provided through ss117 – 119, for the process whereby land was brought under the Act, through a vesting order, by (inter alia) recourse to the provisions of the Limitation Act. If the primary contention of the respondents that subsequent amendments provide the only vehicle for recognition and registration, the limitation argument fails. As at November 1993, the appellants were entitled to be treated as best claimants to title through adverse possession (the Act, s117(2)), with the right to the making of a vesting order. That right was affected by amendments made in April 2001 which provided a bar or extended the limitation period if the title owner had continued to pay rates on the claimed land.

Amendment

1. In 1994, the Court decided Woodward v Wesley Hazell Pty Ltd B8/1994, declaring the acquisition of title by an adjoining landowner.  The registered proprietors had paid rates on the impugned land during the limitation period.  Government responded to concerns about the implications of the decision through presentation to Parliament of amending legislation, the Land Titles Amendment (Law Reform) Act 2001. In introducing the amendment to Parliament, the Minister said in his Second Reading Speech on 23 November 2000:

"The Government has approved an amendment to the law to safeguard an owner paying rates from being dispossessed. The onus of proving acquisition of title by adverse possession lies on the possessor. However, with the introduction of the bill, prior to making an application to the Recorder of Titles, an adverse possessor will have to have made requisite searches for the registered proprietor, determined who has been paying the rates and advertised of the intention of making such application. If the registered proprietor is paying rates and has been for the statutory period, the adverse possessor is precluded from making an application to the Recorder. This amendment will prevent circumstances similar to that of the Hazell case occurring again. If it is uncertain who is and has been paying rates, for example, because of imperfect council records, then an application will be at the discretion of the Recorder."

1. The Court is entitled to take into account the purpose of the amending legislation (Acts Interpretation Act 1931, s8A; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355) and make use of extrinsic evidence, including the Minister's speech (Acts Interpretation Act, s8B(3)(f)) in so doing. The Land Titles Amendment (Law Reform) Act commenced as and from 12 April 2001. It repealed the existing ss117 – 119 and did not revive its predeceasing provision (Acts Interpretation Act, ss14 and 16). It preserved rights accrued but here no declaration or vesting order was in existence (Acts Interpretation Act, s16(1)(b) and (2)(b)). No amendment was made to the Act, s40(3)(h) which did, and continues, to provide:

"(3)   The title of a registered proprietor of land is not indefeasible —

…

(h)subject to section 117, [now s138W, see Acts Interpretation Act, s17] so far as regards rights acquired, or in the course of being acquired, under a statute of limitations."

The amendments had retrospective effect (Natural Forests Pty Ltd v Turner (2004) 13 Tas R 44).

Scheme of amendment

1. The amendment provided for a new PtIXB entitled "Possessory Title".  It abolished "the rules of the common law for the acquisition of easements by prescription and the doctrine of lost modern grant" (s138I), replacing them with a right of use and enjoyment through a vesting application (s138T).  Divisions 3 and 4 provide for the procedure for vesting of easements and caveats protecting a claimed exercise of right.  Division 5 deals with Title by Possession.  Part IXB operates as a scheme.  The Act preserves the power of the Recorder to vest land in fee simple through s138D(1) which provides:

"(1)   If, on application to the Recorder, it is proved to his or her satisfaction that the applicant —  

(a)is in possession of registered land and no claim to recover the land has been made by the registered proprietor of that land or his or her heirs, personal representatives or assigns; and

(b)is entitled in equity and good conscience to be registered as proprietor of an estate in fee simple in the land in consequence of a sale of the land; and

(c)is unable to obtain a transfer of the land from the registered proprietor of the land because the registered proprietor is dead or residing out of Tasmania or cannot be found or for any reason it is impracticable to obtain his or her signature within a reasonable time —

the Recorder may, if in his or her opinion the case can properly be dealt with under this section rather than by an application under section 138W, make an order vesting the land in that person for an estate in fee simple.

(2)    Where the sale referred to in subsection (1) was not made by the registered proprietor, the Recorder must not make an order under that subsection unless —

(a)at least 15 years have elapsed since the sale; and

(b)at least 15 years have elapsed since the last registration on the folio of the Register constituting the title to the land of a transfer, mortgage, encumbrance or lease.

(3)    An order made under subsection (1) vests the land in the applicant subject to registered easements and other registered interests, except that it may vest the land free from any mortgage or encumbrance which could be discharged under section 91 if evidence satisfactory to the Recorder is produced.

(4)    The Recorder may —

(a)reject an application under subsection (1) wholly or in part; or

(b)make such requisitions as to the title claimed to be acquired, or as to any other matter relating to the application, as he or she thinks fit.

(5)    The Recorder, if he or she does not reject an application under subsection (1), must —

(a)direct that notice is to be given in a form approved by the Recorder once in a newspaper published in this State and circulating in the locality in which the relevant land is situated; and

(b)state in the notice that on the expiration of one month after the date of that notice the Recorder may make and register a vesting order in favour of the applicant.

(6)    The notice is to be given to every person appearing by the Register to have any estate or interest in the land, or in any mortgage or encumbrance recorded on the folio of the Register relating to that land.

(7)    An applicant under subsection (1) must cause a copy of the notice to be posted in a conspicuous place on the land or at such place as the Recorder may direct and to be kept so posted for not less than one month before the granting of the application.

(8)    The notice is to appoint a time, not less than one month from the advertisement or service of the notice at or after the expiration of which the Recorder, unless a caveat is lodged forbidding it, may make a vesting order as provided in this section.

(9)    At any time before making a vesting order under this section, the Recorder may, notwithstanding any direction previously given by him or her as to the application under subsection (1), reject the application wholly or in part if the applicant fails to comply to his or her satisfaction with any requisition made or direction given by him or her.

(10)  On making a vesting order under this section, the Recorder —

(a)must make such recordings, cancellations and corrections in the Register as he or she considers necessary to give effect to the vesting order and to register the person in whom the order vests the land as proprietor of the land; and

(b)may call in any certificates of title and grants for the making of those recordings, cancellations and corrections."

It further provides for a 15 year elapsed period and requirements for notice, advertisement and the like.  It does not assist the appellants.  The right afforded by s40 existed as and from 1993 but had never been exercised.  The 2001 amendment altered the prescribed time and defined the process required for the making and registration of a vesting order.

1. The Act, Div5, s138T, states:

"A person who has been in possession of land owned by another person may acquire title to that land in accordance with this Division but not otherwise."

It uses the term "possession", not "possessory" title. Possession is a necessary precondition, but acquisition is only permitted through the operation of Div5. It restricts entitlement through s138U, relevantly providing:

"(1)   For the purposes of an application to acquire title to any land by possession, any period during which council rates have been or are paid by or on behalf of the owner is to be disregarded."

1. In determining an application for title based on possession, the Recorder is required to take into account a number of matters including the circumstances of the claim and the conduct of the parties (s138V), wider than that historically required. But for the requirement of s138U, the appellant would have, most likely, qualified for registration. Part IXB is an exhaustive scheme. It permits the conversion of a limitation bar to a registered interest in fee simple. But it requires a process and registration consistent with the Torrens system of land holding by registration.

Torrens system

1. The Act, s40(1), provides:

"For the purposes of this section 'indefeasible', in relation to the title of a registered proprietor of land, means subject only to such estates and interests as are recorded on the folio of the Register or registered dealing evidencing title to the land."

1. The commencing point for interpretation is as stated by Barwick CJ in Breskvar v Wall (1971) 126 CLR 376 at 385, namely: "The Torrens system of registered title of which the Act is a form is not a system of registration of title but a system of title by registration." (Approved by Gummow, Hayne and Callinan JJ in Black v Garnock [2007] HCA 31 at pars10 and 82, respectively.)

1. In his second reading speech introducing the first enactment of the legislation (South Australia, Legislative Council, Parliamentary Debates (Hansard), 4 June 1857 at 203 – 4, cited by Callinan J in Black at par72) Sir Robert Torrens said:

"The system of retrospective or derivative title is the grand source of complication, uncertainty, and expense, attending the existing practice. Whenever real estate is transferred, the history of the property has to be traced back to the original grant from the Crown, through all the intermediate hands, every mortgage deed, release, conveyance, settlement, must be produced and carefully examined, to see that there are no outstanding equities affecting the title. This renders conveyancing a laborious and costly process; but if after the labour has been expended and the cost incurred, the fruits of it could be secured and held available for future occasions, we should not have so much to complain of. The grievance is, that this labour and outlay has to be repeated again and again each time the property is dealt with. The solicitor of an intending purchaser or mortgagee is not content to accept the opinion given after full enquiry by the solicitor of a recent purchaser, it may be, only ten days before. He too must be furnished with an abstract and examine all documents for himself, and this process must be gone over again and again every time the property is dealt with, each transaction adding to the labour and cost of the subsequent one and increasing the risk and uncertainty. The chain of evidence, however lengthened, is no stronger than its weakest link, and in proportion as documents of title are multiplied, so are the risks that in one of them, an important word may have been omitted or some formality in execution neglected. Heavy as are the certain costs of conveyancing, the contingent risks of expensive costs in law and equity inherent in the system of derivative titles is probably much more burdensome to the land owner. The first and leading principle of the measure which I introduce is therefore designed to cut off the very source of all costliness, insecurity, and litigation by abolishing altogether the system of retrospective titles, and ordaining that as often as the fee simple is transferred the existing title must be surrendered to the Crown, and a fresh grant from the Crown issued to the new proprietor. The principle next in importance prescribes that Registration per se and alone shall give validity to transactions affecting land. ... This method is designed to give confidence and security to purchasers and mortgagees through the certainty that nothing affecting the title can have existence beyond the transactions of which they have notice in the memoranda endorsed on the grant."

1. The purpose and objects of the Torrens system in Tasmania is to introduce certainty of title (Black (supra), Callinan J at par72).  Its fundamental purpose is to give effect to public policy whereby the Register, of itself, states the nature of the interest and not side contractual agreements which do not "run" with the land (Queensland Premier Mines Pty Ltd v French (2007) 82 ALJR 115). Initial permission from Hay, the original transferor, did not give rise to personal equity, except through statute or estoppel (McGrath v Campbell (2006) 68 NSWLR 229). Subsequent transfers to Quarmby and Qasair vested, subject to any registered interest, the whole of the legal fee simple unaffected by any equitable estate. Any entitlement of the first appellant depended solely on the Limitation Act, itself affected by the Act and its amending provision.  The position is as stated by Hope JA in DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties [1980] 1 NSWLR 510 at 519 – 520, pars16 - 19:

"… an absolute owner in fee simple does not hold two estates, a legal estate and an equitable estate. He holds only the legal estate, with all the rights and incidents that attach to that estate. If he were to execute a declaration that he held the land in trust for himself absolutely, the declaration would be of no effect; it would give him no separate equitable rights; he would remain the legal owner with all the rights that a legal owner has. At least where co-extensive and commensurate legal and equitable interests are concerned, '... a man cannot be a trustee for himself': Goodright v Wells (10a), per Lord Mansfield. 'You cannot have a legal estate in trust for yourself': Harmood v Oglander (11a), per Lord Eldon. Secondly, although the equitable estate is an interest in property, its essential character still bears the stamp which its origin placed upon it. Where the trustee is the owner of the legal fee simple, the right of the beneficiary, although annexed to the land, is a right to compel the legal owner to hold and use the rights which the law gives him in accordance with the obligations which equity has imposed upon him. The trustee, in such a case, has at law all the rights of the absolute owner in fee simple, but he is not free to use those rights for his own benefit in the way he could if no trust existed. Equitable obligations require him to use them in some particular way for the benefit of other persons. In illustrating his famous aphorism that equity had come not to destroy the law, but to fulfil it, Maitland, op cit, at p 17, said of the relationship between legal and equitable estates in land: 'Equity did not say that the cestui que trust was the owner of the land, it said that the trustee was the owner of the land, but added that he was bound to hold the land for the benefit of the cestui que trust. There was no conflict here.'

(17) This relationship can, perhaps, be usefully illustrated by reference to the possession, and the right to possession, of land which is held by a trustee subject to a private trust. As legal owner, and subject to any disposition of the right, such as would occur upon the granting of a lease, the trustee has at law the right to possession of the land and, unless somebody else is in possession, under him or adversely to him, he also has the legal possession of the land. He may maintain trespass against anyone who infringes that possession, and ejectment against any person who, without his consent, takes possession. At law a cestui que trust has no right to possession. He cannot sue the trustee at common law in ejectment: Roe d Reade v Reade (18a). If the trustee holds as a bare trustee for a beneficiary absolutely entitled, that beneficiary is, in equity, entitled to be put into possession if he so wishes, but he cannot sue the trustee in ejectment. His right can be enforced only by an order made in the exercise of the equitable jurisdiction of the court. If necessary, the court will, upon an appropriate indemnity being given, compel the trustee to allow the beneficiary to use his name to bring ejectment. When placed in possession by the trustee, at law the beneficiary is merely tenant at will of the trustee, the tenancy being determinable at law at any time on demand of possession by the trustee: Garrard v Tuck (9a); Melling v Leak (14a). As a corollary, the trustee might at law determine the beneficiary's tenancy and recover the land from him in an action for ejectment, and the beneficiary would have no legal defence. He would, of course, have an equitable defence which he has long been able, by statute, to plead in the action at law.

(18) This position can be analyzed in a similar way in respect of all the rights given to a trustee who holds property at law in trust absolutely for a beneficiary. In some cases the rights vested in the trustee may be such that he cannot be compelled to allow the beneficiary to exercise it except (unless, because of the nature of the right, it is not permissible to do so) in his, the trustee's, name. If this analysis be correct, although the beneficiary has an interest in the trust property, the content of that interest is essentially a right to compel the trustee to hold and use his legal rights in accordance with the terms of the trust. Where the trustee holds absolutely for the beneficiary, the beneficiary has a right in equity to be put, so far as practicable and generally subject to appropriate indemnities being given, into a position where directly, or indirectly, or for all practical purposes, he enjoys or exercises the rights which the law has vested in the trustee.

(19) Although some provisions of the Real Property Act, 1900, such as s 42, appear to deny the existence of equitable estates in land under Torrens title, and although a trust interest cannot be registered in this title, equitable estates can undoubtedly exist in Torrens land. When validly created, they are interests in the land; and, although liable to be defeated, if another person becomes the registered proprietor of the land, they can be protected in a number of ways against that fate. Section 82 (1) provides that the Registrar-General shall not make any entry in the register book of any notice of trusts, whether expressed, implied or constructive; but a number of provisions in the Act authorize the lodging or entering of caveats by persons claiming, or creating, equitable interests which are designed to protect those interests, whether by the action of the Registrar-General himself, or by giving an opportunity to the beneficiary to take proceedings for the appropriate equitable relief to ensure that his rights are not destroyed. In theory, a beneficiary may be more liable to be defeated, if the property in which he has an interest is land under the Torrens system; but, in essence, the nature of his right is the same as where the title to the relevant land is under the common law system. Perhaps this is illustrated by the statutory right given to a beneficiary by s 87 of the Real Property Act to require the trustee, subject to obtaining an appropriate indemnity, to allow the beneficiary to use his name as plaintiff or defendant in any action of ejectment brought in respect of the possession of the land in which the trust interest exists."

1. Here it would require the making of a vesting order for the interest to vest (Corin v Patton (1990) 169 CLR 540). Before registration, any possessory title remains inchoate. The clause notes accompanying the introduction of the Bill into Parliament provide confirmation of the above interpretation in stating:

"The Limitation Act 1974 alone cannot though extinguish title to registered land.  Only registration of a successful application for a vesting order can do that.  This [s138W] is a necessary provision in a system which relies on registration to establish title."

Trust and concurrent interest

1. It is possible to have concurrent titles or interests in property (Mabo v State of Queensland (No 2) (1992) 175 CLR 1). The Act, PtIXA, recognises concurrence, but Parliament has provided a statutory scheme defining interest and eligibility within a substantive and procedural framework (Wik Peoples v Queensland (1996) 187 CLR 1). The commencing point is the concept of the indefeasibility of title which is subject to exceptions or forms of concurrent or conflicting interests, themselves a product of the power of the State (eg, acquisition) or equity.

1. The appellants claim that the Act itself recognises the existence of a trust outside of registration through the operation of s138W. That section relevantly provides:

"(1)     Subject to this section, the Limitation Act 1974 applies to the title of a registered proprietor of an estate in registered land in the same manner and to the same extent as that Act applies to the title of a proprietor of land which is not registered land.

(2)      The estate of a registered proprietor of registered land is not extinguished by the Limitation Act 1974, but where the estate would have been extinguished if the land had not been registered land, the registered proprietor of the estate is taken to hold that estate in trust for the person who, under that Act, would have acquired title to that estate if that land had not been registered land.

(3)      …

(4)      A person who claims that the registered proprietor of an estate in registered land holds that estate in trust for him or her under subsection (2) may apply to the Recorder in an approved form for an order vesting in him or her the legal estate which he or she would have acquired if the land had not been registered land."

1. Two problems arise.  The first is the remedy provided by subs(4).  It is the only method by which the claimed title can be recognised or conversion of that title into fee simple.  The title might be claimed but remains inchoate until the claim is recognised as valid within law.  An occupier might claim, by limitation, title as against the world, but it is the title of the registered proprietor which he or she must defeat.  He might claim easement (but not profit a prendre (s138R)) or fee simple.  But it is a claim against the title of the registered proprietor.  The Limitation Act does not extinguish that title except through s21, but until the claim is recognised, the interest remains unregistered. Adverse possession absent application and/or vesting has no place under the Torrens system unless it is part of the statutory scheme (Shaw v Garbutt [1996] NSWSC 400; Chan v Cresdon Pty Ltd (1989) 168 CLR 242).

1. Until acceptance, the registered proprietor holds the primary interest, here fee simple on trust until the happening of an event of registration. The registered proprietor holds that fee simple on trust for the claimant. Section 138W does not provide for concurrent trusts or a trust for other than the interest of the title holder. It prevents sale or disposition pending the determination of the claim for possessory title. It is a protective, not an active, trust, a shield, not a sword, transitory in nature. The interest claimed can be protected by caveat (the Act, ss138E, 138Z).

1. The purpose of s138W is to preserve the inchoate right pending determination by the Recorder and permit interim injunctive relief and prevent further registration of dealings with the land until notice is given to the registered proprietor (J & H Just (Holdings) Pty Limited v Bank of New South Wales (1971) 125 CLR 546, Barwick CJ at 552 approved in Black (supra) Callinan J at 76). The making of an application for registration of possessory title would itself preclude further and different registration. As the clause notes state:

"It is not sufficient, however, simply to provide that the estate of a registered proprietor is not extinguished by the Limitation Act 1974, because this would mean that the registered proprietor could evict a person who has a right to a vesting order, and would, of course, always do so as soon as that person makes an application."

Trespass

1. Possession might ground an action for trespass against anyone except a title holder. An action for trespass against a title holder for conduct occurring whilst that person holds the land on trust in accordance with the Act, s138W, could only be maintained upon acceptance and registration. A person with possessory title can remain in occupation until lawfully ejected, or at least until the issue of validity has been determined. (Wheeler v Baldwin (1934) 52 CLR 609). But the occupier has no better title than the registered proprietor. A right accrued through or created by statute can only be transformed into enforceable remedy through statute (Saarinen v University of Tasmania (1997) 7 Tas R 154). The appellants might have acquired a right against Hay personally, but it did not survive transfer of title. In that case the registered proprietor would have been bound in equity by matters affecting him personally (Breskvar v Wall (supra); Mercantile Mutual Life Insurance Co Ltd v Gosper (1991) 25 NSWLR 32; Bahr v Nicolay (No 2) (1988) 164 CLR 604; McGrath v Campbell (supra) at pars85 – 98).  That personal right might have grounded an action in trespass but not as against a successor in title.  Here the appellants claimed the right to bring an action in trespass through the title held by the registered proprietor (cf Spark v Whale Three Minute Car Wash (Cremorne Junction) Pty Ltd (1970) 92 WN (NSW) 1087). A person in continuous possession of land adverse to the true owner might mention an action for trespass against others except a person who has better title (Newington v Windeyer (1985) 3 NSWLR 555). Here, Qasair has the better title.

Documentary title

1. Ground 9 of the notice of appeal claims:

"THAT the learned trial judge erred in fact in paragraph 30 of her decision in finding that the first Appellant did not hold the belief that the disputed area was within his documentary title boundaries, or alternatively if he held such belief, that belief was held recklessly."

1. This ground, even if upheld, has no bearing on the issue of title.  It is said to be relevant to damages.  The learned primary judge was entitled, on the evidence, to make the finding which she did.  The first appellant had lived on the land since 1981 and knew the fence line not to have been established by survey.  In 2003, he had approached the surveyor and advised that he ought not place marking pegs north of the fence.  That approach was indicative of knowledge that the documentary title differed from the fence line.  It ought to have been obvious to him, at least after the first act of claimed trespass, that ownership of the portion of land was disputed.  This ground, irrespective of the dismissal of the primary grounds, ought be dismissed.

Conclusion

1. The appellants abandoned grounds 11 and 12 of the appeal.  Ground 9 ought be dismissed.  Ground 3 as argued depended on the title argument and was not argued on the basis of the events of trespass.  It was not necessary for the learned trial judge to assess damages (ground 4), nor issue an injunction (ground 5).  Grounds 1, 2, 6, 7, 8 and 10 ought be dismissed for the reasons above.

1. The appeal ought be dismissed.

   File No 593/2007

ALAN QUARMBY & BARBARA JEAN QUARMBY v
JOHN MAJELLA GERRARD KEATING & QASAIR INVESTMENTS PTY LTD

REASONS FOR JUDGMENT  FULL COURT

EVANS J
19 November 2008

1. The proceedings that are the subject of this appeal arise from a dispute as to the parties' respective entitlements to a strip of land along a shared boundary between property owned by Alan Quarmby, of which he is the registered proprietor under the Land Titles Act 1980 ("the Quarmby land") and property owned by Qasair Investments Pty Ltd, of which it is the registered proprietor under that Act ("the Qasair land"). There is no fence along the title boundary between the two properties. For some years the areas occupied by these parties were divided by a post and wire fence that ran roughly parallel to the title boundary four to five metres onto the Qasair land. In result, a strip of the Qasair land, about 215 metres long and four to five metres wide, was fenced into the Quarmby land. This is the land in dispute. What I have said about the title to the disputed land was in contention at trial. The Quarmbys claimed that Alan Quamby, not Qasair Investments Pty Ltd, was the registered proprietor of the disputed land. That claim was rejected by the learned trial judge, who found that Qasair Investments Pty Ltd was its registered proprietor. This finding has not been appealed.

1. The Quarmbys brought two actions against John Keating and Qasair Investments Pty Ltd alleging that on three occasions John Keating trespassed on the disputed land.  By consent, the actions were heard together.  The first basis upon which the claim of trespass was advanced was that Alan Quarmby was the registered proprietor of the disputed land.  As mentioned this claim was rejected by the learned trial judge.  The alternative basis upon which the claim of trespass was advanced was pleaded as follows:

"in the alternative if the land up to and including the boundary fence was not within the title boundaries of [Alan Quarmby's] land, as defined by its documentary title … the boundary fence has at all material times marked the boundary between [Qasair Investments Pty Ltd's] land and the land which, at all material times, [the Quarmbys] were entitled to possess free from any claim by any person claiming to be the holder of the documentary title thereof pursuant to Section 10 (2) of the Limitations Act 1974."

1. Further pleadings in support of this basis for the Quarmbys' claim included:

·"[T]he land up to an including the boundary fence was … possessed by the [Quarmbys] adversely to the rights of the documentary title of [Qasair Investments Pty Ltd] and certain of its predecessors in title."

·"[The Quarmbys] possessed the said land as of right for a period in excess of twelve years;"

·"[The Quarmbys] paid the Council rates on the land that they possessed during the period of their said possession of it."

1. The trial judge found that the post and wire fence referred to had enclosed the disputed land with the Quarmby land since November 1981 and the Quarmbys had, in effect, occupied the disputed land since that date, they having grazed sheep and cattle on it, slashed the grass and other growth on it, and parked vehicles and machinery there on occasions. The learned trial judge rejected the Quarmbys' claim that they had paid council rates on the disputed land. Her Honour found that during the period of the Quarmbys' occupation of the disputed land, rates had been levied on the Quarmby land and Qasair land by reference to the area shown on the registered title to each of those properties, and that the rates had been paid by or on behalf of the registered proprietors of the respective properties. Accordingly, at all relevant times, the rates on the disputed land had been paid by or on behalf of the registered proprietor of the Qasair land. (The Quarmbys abandoned their appeal against this finding.) This finding disposed of any prospect the Quarmbys might have had of successfully applying to become the registered proprietors of the disputed land on the basis of their possession of it. This is because the Land Titles Act 1980, s138U(1), provides that for the purposes of an application to acquire title to any land by possession, any period during which council rates were paid by or on behalf of the owner is to be disregarded. In anticipation of an adverse finding on the rates issue, counsel for the Quarmbys submitted to the learned trial judge that this outcome was of no consequence, as in any event the Quarmbys acquired title to the disputed land pursuant to the Limitations of Actions Act 1974, and that title was sufficient to ground their actions in trespass.  That submission was rejected by the learned trial judge and the actions were dismissed. 

1. By this appeal, the Quarmbys challenge a number of the learned trial judge's findings.  As all the grounds of appeal turn on the interpretation to be given to the applicable legislation, I will not detail them.  They are dealt with by the construction that I give to the legislation.

1. The Quarmbys' claim to be entitled to relief is contingent upon their claim that at all material times they "were entitled to possess [the disputed land] free from any claim by any person claiming to be the holder of the documentary title thereof pursuant to s10(2) of the Limitation Act 1974". That Act, ss10(2) and 21, relevantly provide:

"10 — Adverse possession of land

(2)       No action … shall be brought by any person to recover any land after the expiration of 12 years from the date on which that right of action accrued to him or, if it accrued to some person through whom he claims, to that person."

"21 — Extinction of title after expiration of period

… at the expiration of the period prescribed by this Act for any person to bring an action to recover land … the title of that person to the land shall be extinguished."

1. The validity of the Quarmbys' claim to be entitled to possession of the disputed land turns upon the meaning of the applicable provisions of the Land Titles Act 1980, referable to possessory titles to land. These provisions were significantly amended by the Land Titles Amendment (Law Reform) Act 2001, which came into force on 12 April 2001. As the history of the law on the acquisition of a possessory title to land by adverse possession has some bearing on my understanding of the effect of the applicable provisions, I will traverse that history before dealing with the provisions.

1. In brief summary, a possessory title to land is derived by an extinctive process founded on statutory provisions that have the effect of extinguishing the documentary title of an owner of land in favour of an adverse possessor who has possessed the land for the requisite period.  A possessory title to land is to be distinguished from a prescriptive right to land which is acquired with respect to the title of another without extinguishing that title and some other means of obtaining title to land that I will mention, which involve, as a consideration, possession of the land.

1. The English common law based title to land on sesin; possession being a most important characteristic of a sesin.  Prior to any system of land registration, under English law the means by which a vendor proved ownership of land was by proving a chain of possession from prior owners.  As ownership could not be traced back indefinitely, it became acceptable to prove a good root of title for a specific period.  In this jurisdiction, that period was initially 60 years.  It has since been reduced to 40 years (Vendor and Purchaser Act 1875, s1), 30 years (Conveyancing and Law of Property Act 1966, s2, which amended the Conveyancing and Law of Property Act 1884, s35), and now 20 years (Conveyancing and Law of Property Act (No 2) 1978, s2, which further amended the Conveyancing and Law of Property Act 1984, s35).

1. In England, parallel with the development of the law in relation to a good root of title, statutory limitations were placed on the right of an owner of land to take action to recover the land from an adverse possessor.  These developments are canvassed by the Law Reform Commissioner of Tasmania in Report No 73 of 1995, titled Report on Adverse Possession and Other Possessory Claims to Land.  The first such legislation was during the reign of Henry II (1154 – 1189).  It required that, to recover land from an adverse possessor, the owner had to show sesin of the land at the time of the King's last voyage to Normandy; if not, title went to the adverse possessor.  Later statutes set different limitation dates.  The next stage in the development of this aspect of the statutory law was the establishment of limitation periods similar to those recognised today.  The statutory concept of the extinguishment of the owner's title was first introduced in 1623.  The applicable English law was received into this jurisdiction by the Australian Courts Act 1828 (UK).  Shortly thereafter, the Limitation of Actions Act 1836, introduced into this jurisdiction an Act passed in England in 1833 titled "An Act for the Limitation of Actions and Suits relating to Real Property and for simplifying the Remedies for trying the Rights thereto".  This legislation placed a limitation period of 20 years on an action for the recovery of land and provided that at the determination of that period, the right and title of the dispossessed owner was extinguished.  The limitation period was reduced to 12 years by the Real Property Limitation Act 1875, s1, and that statute preserved the then existing provision in relation to the extinguishment of title.  The Limitation Act 1974 repealed the Limitation of Actions Act 1836, and the Real Property Limitation Act 1875, but re-imposed a limitation period of 12 years and a provision that upon its expiration, the title to the land would be extinguished, see ss10(2) and 21.

1. A system for the registration of titles to land was introduced in Tasmania by the Real Property Act 1862.  As initially enacted, that legislation did not recognise a possessory title to registered land, save insofar as s135 provided that any certificate of title issued upon the first bringing of land under that Act would be void as against the title of any person adversely in actual occupation of, and rightfully entitled to, the land in question.  Sections 33 and 40 were to the effect that a certificate of title was conclusive evidence of the title of the registered proprietor, which title was paramount to any other estate or interest.  Whilst these provisions may have suggested that subject to s135, the title of a registered proprietor was indefeasible as against a claimant to a possessory title, the court held otherwise.  In Featherstone v Hanlon (1886), Hore's Digest of Tasmanian Cases, column 107, it was held by Giblin, ACJ and Wrenfordsley J, that statutes of limitation applied to land held under the Real Property Act 1862.  In Burke v Lock (1910) 6 Tas LR 73 at 74, Nicholls J cited and adopted the following passage from the decision in Featherstone v Hanlon:

"We are of opinion that the Statutes of Limitation do apply to land held under The Real Property Act, but that in each case the Statutes commence to run against the registered proprietor from the date of his Certificate of Title.  If there is a previous adverse possession, or outstanding unregistered interest (except in cases falling within the 135th Section), the new certificate, to again adopt the graphic language of Justice Gwynne in Hunter v Player 'acts like a wet sponge and wipes the slate clean,' or, as Chief Justice Hanson says in the same case, 'it causes all other interests to cease and determine'."

1. The citation for Hunter v Player is (1875) 9 SALR 100. In that decision at 102 Gwynne J said:

"That is the immorality of the Real Property Act.  It is the law, however, and it must be administered.  The certificate acts like a wet sponge, and wipes the slate clean."

and Hanson CJ said:

"There is only one construction to be put on the Act, and that is that the obtainment of the certificate destroys all prior interest."

1. Additional decisions recognising that a possessory title could be obtained to registered land are Re Cherry (1906) 2 Tas LR 68 and Re Bartlett (1908) 4 Tas LR 26. Against this background, amendments made to the Real Property Act 1862 by the Real Property Act 1932, gave statutory recognition to a possessory title to registered land and provided a means by which a claimant to a possessory title could become a registered proprietor.  The provisions then added to the Real Property Act 1862 included the following:

   "146 — (1)  Any person who claims that he has acquired a title by possession to land registered under this Act may apply to the Recorder for an order vesting the land to him for an estate in fee simple or other the estate claimed.

   (2)    …

   (3)    Every such application shall be accompanied by a plan of survey (with field notes) of the land certified by a Government surveyor."

   "156 The title of any person to any land of which he is registered proprietor shall not be affected by the adverse possession of such land by any person until such person or some other person claiming through him shall have lodged an application under this Act for a vesting order in respect of such land."

2. As to a claim for the possessory title of land that was not registered land, the Real Property Act 1862, ss15(1) and 17, as amended by the Real Property Act 1966, detailed the means by which an adverse possessor could apply to bring the land under that Act and become its registered proprietor.

1. Whilst the provisions introduced by the Real Property Act 1932 enabled a claimant to a possessory title of registered land to become the registered proprietor of the land, they did not abrogate the doctrine of "wiping the slate clean".  In In Re Ford's Application [1953] Tas SR 21, it was held that this doctrine applied so as to protect a registered proprietor where the Recorder had issued a balance title to land as a matter of internal administration. The doctrine was effectively abrogated by the Real Property Act 1974, which inserted s156A(1) into the Real Property Act 1862.  That provision is as follows:

   "156A — (1)  The right of a person to acquire a title by possession to any land is not affected —

   (a)    by the registration of any dealing by, or the registration of the transmission of the title of, the registered proprietor thereof; or

   (b)    by the recertification by the Recorder of the fee simple estate in the land in the course of the administration of this Act."

2. Similar provisions were carried forward into the Land Titles Act 1980, s117(3), and are now contained in that Act, s138W(4).

1. A different difficulty that resulted from the then applicable legislation in relation to a possessory title was that insofar as s156 laid down that the title of a registered proprietor was not affected by adverse possession until the claimant had lodged an application pursuant to s146 for a vesting order in respect of the land, it was open to the registered proprietor to take steps to protect the title at any time prior to the lodgement of that application. The annotations to the Land Titles Act 1980, s117, as in force on 1 January 1990, explain this difficulty in the following terms:

"[A] person might be in adverse possession for a hundred years, but still be liable to eviction if an action for ejectment were to be commenced before he lodged his application, contemporaneously with his supporting survey. [This could result in] a race between the registered proprietor's action for ejectment and the adverse possessor's lodgment of his claim under section 146 …".

In Public Trustee v Scott (an unreported decision of Crawford J dated 4 March 1959), it was held that the requirements of s146 had to be strictly complied with and that an application for a vesting order had not been made for the purposes of s146(1) when it was not accompanied by a plan of the land as required by s146(3). This difficulty was overcome by s117(2) of the Land Titles Act 1980. That Act repealed and replaced the Real Property Act 1862.  Subject to some significant changes, the Real Property Act 1862, ss146 to 156A, were reflected in the Land Titles Act 1980, ss117 to 119. Those sections were contained in that Act, PtVI, Div12, and were relevantly as follows:

"Division 12 — Acquisition by possession, statute, &c

117 — Acquisition of title by possession

(1)    Subject to this section, the Limitation Act 1974 applies to the title of a registered proprietor of an estate in registered land in the same manner and to the same extent as that Act applies to the title of a proprietor of land which is not registered land.

(2)    The estate of a registered proprietor of registered land is not extinguished by the Limitation Act 1974, but where the estate would have been extinguished had the land not been registered land, the registered proprietor of the estate shall be deemed to hold that estate in trust for the person who, by virtue of that Act, would have acquired title to that estate had that land not been registered land, but without prejudice to the estate or interest of any other person in the land which would not have been extinguished by that person's possession, had that land not been registered land.

(3)    A person who claims that the registered proprietor of an estate in registered land holds that estate in trust for him by virtue of subsection (2) may apply to the Recorder in an approved form for an order vesting in him the legal estate which he would have acquired had the land not been registered land.

…

119 — Vesting order and its effect

(1)    Subject to sections 117 and 118, after the expiration of the time appointed, the Recorder may make an order vesting in the applicant under section 117 the legal estate which the applicant would have acquired had the land not been registered land, free from —

(a)all estates and interests recorded on the folio of the Register or registered dealing evidencing title to the land which would have been determined or extinguished by the applicant's possession of the land;

…"

1. As can be seen, s117(1) expressly recognised the application of the Limitation Act 1974 to registered land that was adversely possessed, and in substitution for the extinguishment of the title, s117(2) deemed it to be held on trust by the registered proprietor in favour of the adverse possessor. Another provision introduced by the Land Titles Act 1980 that expressly recognises a possessory title to registered land is s40(3)(a), the effect of which is that the title of a registered proprietor is not indefeasible "subject to section 117, so far as rights acquired or in the course of being acquired under a statute of limitations".

1. With reference to a claim for a possessory title to land that is not registered land, the Land Titles Act 1980, ss11(1) and 13, are to the same effect as the Real Property Act, ss15(1) and 17. 

1. The provisions of the Land Titles Act 1980 referable to a possessory title, as initially enacted, were dealt with in Woodward v Wesley Hazell Pty Ltd B8/1994, an unreported decision of Underwood J (as he then was).  In that case it was held that the plaintiff, the registered proprietor of about 14 acres of land, had lost his title to the land because it had been adversely possessed for more than 12 years.  In the course of his decision, Underwood J commented:

"One cannot escape some feeling of sympathy for the plaintiff in the position in which he found himself. Ignorant of the law of adverse possession, he believed that the land was his in accordance with the certificate of title and available for him to sell when the time was ripe."

1. The outcome in this case was apparently the impetus for the Attorney-General to request the Law Reform Commissioner to review the law in relation to obtaining title to land by adverse possession.  This referral resulted in Report No 73/1995, which is mentioned in par38.  Then followed the Land Titles Amendment (Law Reform) Act 2001 which substantially amended the provisions in the Land Titles Act 1980 that related to the acquisition of a possessory title by repealing PtVI, Div12 and inserting PtIXB, Divs5 and 6.

1. I should say that an application by an adverse possessor to become the registered proprietor of land is not the sole means by which possession or the like may assist a person in acquiring any interest in registered land.  An interest in registered land may be obtained by prescription.  The law in this regard is now contained in PtIXB, Divs1 to 4.  For many years, there has been legislation intended to assist in resolving difficulties that arise when people do not register dealings with registered land.  These dealings are known colloquially as "pub sales" and have commonly occurred on the west coast of Tasmania.  The first legislative attempt to deal with this problem was the Real Property Act 1893, s14. This was followed by the Real Property (Special Vesting Orders) Act 1973, the key features of which were continued in the Land Titles Act 1980, s123. That section was repealed by the Land Titles Amendment (Law Reform) Act 2001 and the relevant provision is now s138D. The process of obtaining title by adverse possession is substantially different to that provided for by s138D. Whilst the applicant under that section must be in possession of registered land, the application cannot succeed unless the applicant establishes an entitlement to the land in consequence of a sale. The Land Titles Act 1980, s142 deals with applications to rectify the boundaries of registered land where they differ from the land "actually and bona fide occupied".  The clause notes to the Land Titles Bill 1980 explain s142 as being needed in order that corrections may be made to the Register arising from the: "Failure of owners to erect their fences in the proper positions. They are then often prepared to treat the fence as being the correct boundary, rather than go to the cost of shifting the fence". Where the Recorder makes an order rectifying a boundary, s142(7) authorises the making of an order for compensation to be paid to any person adversely affected by the rectification.

1. I turn to the provisions of the Land Titles Act 1980, that currently govern the acquisition of a possessory title. As mentioned, they were substantially amended by the Land Titles Amendment (Law Reform) Act 2001. That Act repealed PtVI, Div12 which had contained ss117 to 124, and inserted PtIXB which deals with, amongst other things, title by possession. It relevantly provides as follows:

"PART IXB - POSSESSORY TITLE

Division 1 — Preliminary

138G   Interpretation            …

138H     Application to unregistered land

The application of this Part extends to land which is not registered land.

Division 2 — Right to acquire easements

…

Division 3 — Procedure for vesting of easements

…

Division 4 — Caveat by owner

…

Division 5 — Title by possession

138T      Title by possession

A person who has been in possession of land owned by another person may acquire title to that land in accordance with this Division but not otherwise.

138U     Restriction on title by possession

(1)    For the purposes of an application to acquire title to any land by possession, any period during which council rates have been or are paid by or on behalf of the owner is to be disregarded.

(2)    This section does not apply to an application if the relevant council has certified in writing that it is unclear who has paid, or is paying, the relevant council rates.

138V     Requirements for title by possession

In determining an application for title based on possession, the Recorder must consider all the circumstances of the claim, the conduct of the parties and in particular —

(a)  whether, during the relevant period, the applicant enjoyed possession of the land as of right; and

(b)  whether there is any reason to suppose that during the relevant period that enjoyment was by force or secretly or that that enjoyment was by virtue of a written or oral agreement made before or during that period unless the applicant can show that any such agreement terminated before that period; and

(c)  the nature and period of the possession; and

(d)  the improvements on the land and in particular —

(i)when they were made; and

(ii)by whom they were made; and

(e)  whether or not the land has been enclosed by the applicant; and

(f)   whether during the relevant period the applicant acknowledged ownership, paid rent or made any other payment in respect of the land –

and the applicant must produce evidence from at least one other person in support of the application.

138W     Registered proprietor to hold land on trust

(1)    Subject to this section, the Limitation Act 1974 applies to the title of a registered proprietor of an estate in registered land in the same manner and to the same extent as that Act applies to the title of a proprietor of land which is not registered land.

(2)    The estate of a registered proprietor of registered land is not extinguished by the Limitation Act 1974, but where the estate would have been extinguished if the land had not been registered land, the registered proprietor of the estate is taken to hold that estate in trust for the person who, under that Act, would have acquired title to that estate if that land had not been registered land.

(3)    Nothing in subsection (2) affects the estate or interest of any other person in the land which would not have been extinguished by that person's possession if that land had not been registered land.

(4)    A person who claims that the registered proprietor of an estate in registered land holds that estate in trust for him or her under subsection (2) may apply to the Recorder in an approved form for an order vesting in him or her the legal estate which he or she would have acquired if the land had not been registered land.

…

138X     Power of recorder to make vesting order

(1) Subject to section 138W, the Recorder may make an order vesting in the applicant under this Division the legal estate which the applicant would have acquired, if the land had not been registered land, free from —

(a)all estates and interests recorded on the folio of the Register or registered dealing evidencing title to the land which would have been determined or extinguished by the applicant's possession of the land; and

…

138Y     Avoidance of sub-minimum lots

…

Division 6 — Caveats against easements and title by possession

138Z      Caveat forbidding granting of application under this Part

...

138ZA    Restriction on renewal of caveats

..."

1. The repeal of PtVI, Div12 removed ss117 – 124, and sections bearing those numbers have not since been inserted in the Act. I mention this as throughout the Act no effort has been made to amend sections that refer to the now repealed sections that were in PtVI, Div12. For example, s25(3) refers to ss117(4) and 119(4); s40(3)(h) refers to s117; s46 refers to ss117(3), 119, and 123; ss51(2) and 137(3) refer to ss119, 120, 121 and 123; s142(2) and (9) refers to s117; and ss153, 154 and 158 refer to ss119 and 123.

1. For present purposes it is only necessary to deal with the ongoing reference to s117 in s40(3)(h). The relevant portions of s40 are as follows:

"40      Estate of registered proprietor indefeasible

(1)      For the purposes of this section 'indefeasible', in relation to the title of a registered proprietor of land, means subject only to such estates and interests as are recorded on the folio of the Register or registered dealing evidencing title to the land.

(2)      Subject to subsections (3) and (4), the title of a registered proprietor of land is indefeasible.

(3)      The title of a registered proprietor of land is not indefeasible —

…

(h)subject to section 117, so far as regards rights acquired, or in the course of being acquired, under a statute of limitations."

1. The parties argued this matter at trial and before this Court on the assumption that pursuant to the Acts Interpretation Act 1931, s17, the reference in the Land Titles Act 1980, s40(3)(h) to s117, should now be read as a reference to s138W. That assumption is not correct. The Acts Interpretation Act, s17 provides:

"17      References to repealed provisions

Where an Act repeals and re-enacts, with or without modification, any provisions of a former Act, references in any other Act to the provisions so repealed shall be construed as references to the provisions so re-enacted."

1. As can be seen, the application of s17 is confined to "references in any other Act to the provision so repealed". The Land Titles Act 1980 is not "any other Act", it is the same Act. Nevertheless, I am satisfied that the reference in the Land Titles Act, s40(3)(h) to s117 should now be read as a reference to s138W. This conclusion accords with common sense and it is consistent with the objective that emerges from the Acts Interpretation Act, ss17 and 13(5) and (6), as well as the principle that some statutory provisions are always speaking. The Acts Interpretation Act, s13(5) and (6), are as follows:

"13      Citation of Acts

(5)       In any Act any reference to or citation of an Act shall be deemed to include a reference to or citation of all subsequent enactments passed in amendment or substitution of the Act so referred to or cited, whether those subsequent enactments are, or any of them is, passed before or after the passing of the Act in which the reference or citation occurs.

(6)       In any Act, a reference to or citation of an Imperial Act, a Commonwealth Act or an Act or Ordinance of another State or Territory shall be deemed to include a reference to or citation of all subsequent enactments passed in amendment or substitution of the Imperial Act, Commonwealth Act or Act or Ordinance of the State or Territory so referred to or cited, whether those subsequent enactments are, or any of them is, passed before or after the passing of the Act in which the reference occurs."

1. With reference to the principle that some statutory provisions are construed as always speaking, Campbell J said in Hore v Albury Radio Taxis Co-op Society Ltd (2002) 56 NSWLR 210, pars40 – 43:

"40The fourth strand of principle is that, for some statutes, the way of giving effect to Parliament's intention in enacting them is to regard those statutes as 'always speaking'.

41D C Pearce and R S Geddes, Statutory Interpretation in Australia, 5th ed (2001) Sydney, Butterworths, at 94 [4.7], explain one reason behind this approach to statutory construction:

'A problem that is more germane to legislation than to other documents is that of changes that occur in the meaning and scope of words with the passage of time. Most documents are read within a relatively short period after they have been written. The reader can assume that the writer has used words in accordance with their current meaning. But Acts continue to operate for many years after they are passed and while it might be considered desirable for them to be amended to bring them up to date all the time, this simply cannot be done. Consequently, courts find that they are frequently asked to determine whether things or activities not known when the legislation was passed fall within the scope of the Act. The assumption which is adopted by the courts in dealing with these problems is summarised in the expression "an Act is to be deemed to be always speaking", that is to say, words in an Act are to be interpreted in accordance with their current meaning. The alternative approach that can be adopted is to hold that each word in an Act retains the meaning that it had at the time when it was enacted. This can obviously lead to considerable difficulties when circumstances occur that clearly fall within the necessary intendment of the Act but which could not have been contemplated at the time when the Act was passed.'

42The principle is also explained in J Bell and G Engle, eds, Cross: Statutory Interpretation, 3rd ed (1995) London, Butterworths, at 51–52, in a passage quoted by Lord Steyn in McCartan Turkington Breen (a firm) v Times Newspapers Ltd[2000] UKHL 57; [2001] 2 AC 277 at 296:

'The somewhat quaint statement that a statute is "always speaking" appears to have originated in Lord Thring's exhortations to drafters concerning the use of the word "shall": "An Act of Parliament should be deemed to be always speaking and therefore the present or past tense should be adopted, and 'shall' should be sued as an imperative only, not as a future." But the proposition that an Act is always speaking is often taken to mean that a statutory provision has to be considered first and foremost as a norm of the current legal system, whence it takes its force, rather than just as a product of an historically defined Parliamentary assembly. It has a legal existence independently of the historical contingencies of its promulgation, and accordingly should be interpreted in the light of its place within the system of legal norms currently in force. Such an approach takes account of the viewpoint of the ordinary legal interpreter of today, who expects to apply ordinary current meanings to legal texts, rather than to embark on research into linguistic, cultural and political history, unless he is specifically put on notice that the latter approach is required.'

43Examples of the application of this principle of statutory construction are given in the Appendix to this judgment. However, some caution must be applied in the exercise of this principle. There is still a question of construction which needs to be decided, about whether a particular expression ought to be construed, in the context of the particular legislation in which it occurs, as actually extending to some new state of affairs to which it might arguably extend. Thus, an exemption from stamp duty of a hiring arrangement relating to 'a motion picture film' did not extend to exempt from stamp duty a hiring arrangement relating to a video cassette: Wilson v Commissioner of Stamp Duties (1988) 13 NSWLR 77."

1. Consistent with this principle, a reference in a section (the referring section) to another section in the same statute would almost invariably be construed as a reference to that section as amended from time to time, as distinct from the form it took on the date when the referring section was enacted.  This approach reflects the intention of Parliament as manifested in the Acts Interpretation Act in ss13(5) and (6) and 17 and, consistent with it, is an intention that in appropriate circumstances a reference in an enactment to another section in the same Act should be construed as a reference to that section as repealed and substantially re-enacted, regardless of the number given to the new section. In the context of the Land Titles Act 1980, I am satisfied that this is how s40(3)(h) should be construed, that is, the reference to s117 should be construed as a reference to s138W.

1. One of the changes made to the law of possessory title by the Land Titles Amendment (Law Reform) Act 2001 is s138U(1) which provides that for the purposes of an application to acquire title to any land by possession, any period during which council rates are paid by or on behalf of the owner, is to be disregarded. This section is significant, as previously the fact that the registered proprietor had paid the rates during any period of asserted adverse possession was not treated as fatal to the claim. Some authorities went so far as to hold that the payment of rates by the true owner of a property was very slight evidence against a claim of adverse possession; see Bree v Scott (1904) 29 VLR 692 at 701; Public Trustee v Scott (supra) at 10; and Shaw v Garbutt [1996] NSWSC 400.

1. In the absence of the Land Titles Act 1980, the law governing the acquisition of a possessory title to land would be governed by a combination of the relevant provisions of the Limitation Act  and the common law, the latter determining the nature of the requisite possession, and the former specifying the period of possession following which the owner's title would be extinguished.  What then is the impact of the currently applicable provisions of the Land Titles Act 1980 on the law as to obtaining a possessory title? Two important provisions are s138H which provides that the application of PtIXB extends to land that is not registered land, and s138T, which provides that a possessory title to land may be acquired in accordance with Div5 "but not otherwise". Consistent with these provisions, the body of law as to obtaining a possessory title, comprised by the relevant provisions of the Limitation Act and the common law, now apply to the acquisition of a possessory title subject to the precondition that that body of law is not paramount to Div5, but subject to it.  Put another way, except where otherwise provided, the Limitation Act and the common law must yield to the provisions contained in Div5. In terms of the common law as to possession, the key change made by Div5 is that spelt out in s138U(1), that is, that for the purposes of an application for possessory title, any period during which rates have been paid in the interests of the owner is to be disregarded. On behalf of the Quarmbys it is contended that by reason of the opening words to s138U(1): "For the purposes of an application to acquire title to any land by possession", that provision only applies when an adverse possessor of land chooses to apply for a vesting order in relation to that land. Such an application is authorised by s138W(4), in relation to registered land and is authorised by s11(1) in relation to land that is not registered. This contention would confine the application of s138U(1) solely to the consideration of such applications. The difficulty with this contention is that, as in this case, a person may be in possession of land consistent with the common law of adverse possession for 12 or more years, but not be in possession of the land for that period for the purposes of an application to become its registered proprietor, because s138U(1) requires that any period of possession during which rates were paid in the interests of the owner is to be disregarded. If the Quarmbys' contention is correct, upon the expiration of a period of 12 years of adverse possession of land, that satisfied the common law possession requirements, but not those of s138U(1):

·     as to land that was not registered, the provisions of the Limitation Act would extinguish the title of the documentary owner; and

·     as to land that was registered, the registered proprietor would hold the estate on trust for the adverse possessor, pursuant to the Land Titles Act 1980, s138W(2).

In both of these situations, the adverse possessor would obtain a form of possessory title to the land that could not be converted into a registered title. 

1. When s138U(1) is read in isolation, the construction of it advanced by the Quarmbys is plausible. However, a corollary to their approach would be to take a similar approach to the construction of s138W(1) and (2). As to the inappropriateness of this course, I agree with the learned trial judge who said at [59]:

   "In my view, s138W(1) and (2) do not operate in a vacuum to preserve a right acquired at common law, described by counsel for the plaintiffs as a 'possessory title', independent of any capacity to convert such right to a registered title. It cannot operate to elevate the rights of a claimant above those of a registered proprietor whose registered title, by reference to the provisions of Pt IXB Div 5, cannot be defeated. It must be remembered that we are dealing with a system which relies on registration to establish title. What the plaintiffs effectively seek to do is rely on a form of title independent of the system to defeat the rights of a registered proprietor. Such a concept would only serve to undermine the system of registration."

2. The construction of s138U(1) advanced by the Quarmbys can be seen to be erroneous when that provision is read in the context of the legislation as a whole. It is inconsistent with the requirement in s138T that: "A person in possession of land owned by another person may acquire title to that land in accordance with this Division but not otherwise". In my view the introductory words to s138U(1), "For the purposes of an application to acquire title to any land by possession", should be construed as extending to all the purposes that relate to an application to acquire title to land by possession, and those purposes cover such essential prerequisites to the acquisition of a possessory title as the nature of the possession that must be established in order to substantiate a claim. This means that for the purposes of the acquisition of any title to land by possession, any period during which rates have been paid in the interests of the owner must be disregarded. Accordingly, it is only when an adverse possessor has been in possession of land for 12 years, excluding any period during which rates have been paid in the interests of the owner, that:

·     as to land that is not registered land, the provisions of the Limitation Act apply to extinguish the title of the documentary owner; and

· as to land that is registered land, s138W(2) deems the registered proprietor to hold the land on trust for the adverse possessor.

1. In so concluding, I recognise that, as previously mentioned, the construction of s138U(1) advanced by the Quarmbys is plausible when that provision is read in isolation. Insofar as the meaning of that provision is ambiguous or obscure when read in the context of the legislation as a whole, it is appropriate pursuant to the Acts Interpretation Act, s8B, to look for any assistance that may be found in the speech of Mr Llewellyn MHA, the Minister for Primary Industries, Water and Environment, when he moved that the Bill which became the Land Titles Amendment (Law Reform) Act 2001, be read a second time. He said:

"The Bill contains many issues which are designed to reform the law on adverse possession and the related body of law on prescriptive easements. …

In brief terms, the law of adverse possession states that where a person is in possession of land contrary to the interests of the rightful owner then that person may, after a required length of time acquire title to that land, this being irrespective of the fact that the owner might have been and still is paying rates on the land.

The Government has approved an amendment to the law to safeguard an owner paying rates from being dispossessed.  The onus of proving acquisition of title by adverse possession lies on the possessor.  However, with the introduction of the bill, prior to making an application to the Recorder of Titles, an adverse possessor will have to have made requisite searches for the registered proprietor, determined who has been paying the rates and advertised of the intention of making such application.  If the registered proprietor is paying rates and has been for the statutory period, the adverse possessor is precluded from making an application to the Recorder.  This amendment will prevent circumstances similar to that of the Hazell case occurring again.  If it is uncertain who is and has been paying rates, for example, because of imperfect council records, then an application will be at the discretion of the Recorder."

(Whilst I assume that the Minister's reference to the Hazell case relates to Woodward v Wesley Hazell Pty Ltd (supra), I note that there is no reference to the payment of rates in that decision.)

1. In the above passage, the Minister explains that an objective behind the amendments in question is to safeguard an owner paying rates from being dispossessed by an adverse possessor. That objective is achieved by the construction I have given to s138U(1) and it would be frustrated if s138U(1) was construed as the Quarmbys contend it should be.

1. In the course of the appeal, counsel for the Quarmbys placed considerable emphasis on the distinction between an equitable and a legal title or estate in registered land, the former being the title obtained by an adverse possessor pursuant to s138W(2), and the latter being the title of a registered proprietor. Valid as this distinction is, it does not assist the Quarmbys. In order for them to acquire any title to the disputed land by possession, regardless of whether that title is categorised as legal or equitable, it was necessary for them to establish that they had possessed the disputed land for 12 years, excluding any period during which council rates were paid in the interests of the registered proprietor of the Qasair land. They were unable to do so. An adverse possessor of land is not entitled to the protection of the Limitations Act as against the owner where that possessor has not been in possession for the requisite statutory period, McGuire v Browne (1913) 17 CLR 365 and, for the reasons I have given, consistent with the applicable provisions of the Land Titles Act 1980, this period excludes any periods during which council rates were paid in the interests of the owner.

1. In my view the learned trial judge did not err in dismissing the actions. 

1. I would dismiss the appeal.