Refina Pty Ltd v Binnie

[2009] NSWSC 914

CITATION:	Refina Pty Ltd v Binnie [2009] NSWSC 914
HEARING DATE(S):	19 & 20 March 2009
JUDGMENT DATE :	3 September 2009
JURISDICTION:	Equity Division
JUDGMENT OF:	Brereton J
DECISION:	Proceedings dismissed with costs
CATCHWORDS:	REAL PROPERTY – Torrens title – possessory title - whether plaintiff had adversely possessed strip of defendant’s land so as to be entitled to make application for possessory title – held: plaintiff had been entitled to make application for possessory title – Whether plaintiff acknowledged defendant’s title so as to lose entitlement to apply for possessory title – where negotiations between parties contemplated offer by plaintiff to purchase strip – held: at highest an offer of compromise rather than acknowledgement of title – Whether possessory claim destroyed by registration of plan of subdivision incorporating strip into larger lot – held: claim for possessory title no longer available – Whether plaintiff had personal equity against defendant in respect of disputed strip arising from possession – held: adverse possession gives possessor no legal or equitable claim as against registered proprietor – Whether plaintiff entitled to order requiring Registrar-General to “correct error” by omitting strip from plan – where disputed strip not expressly referred to in Council consent to subdivision but subsequently included in registered plan of subdivision – held: no error, registered plan accorded with Council’s intent notwithstanding that not expressly referred to in it
LEGISLATION CITED:	(NSW) Conveyancing Act 1919, s 7A , s 195H (NSW) Environmental Planning and Assessment Act 1979, s 4(2)(d)(ii) (NSW) Real Property Act 1900, s42, s 45D, s 45(2), 45B, s 45D, s 45D(1)(a), s 45D(1)(c)
CATEGORY:	Principal judgment
CASES CITED:	Bahr v Nicolay (No 2) [1988] HCA 16, (1988) 164 CLR 604 Baiada Pty Ltd v Registrar-General (1994) 6 BPR 13,704 Baiada Pty Ltd v Registrar-General (1994) 6 BPR 13,704 Bartlett v Ryan [2000] NSWSC 807 Breskvar v Wall (1971) 126 CLR 376 Cawthorne v Thomas (NSWSC, Bryson J, 15 December 1993, BC9302312) Doe d Curzon v Edmonds (1840) 6 M&W 295 Edginton v Clark [1963] 3 All ER 468 Frazer v Walker [1967] 1 AC 569 Garofano v Reliance Finance Corporation Pty Ltd (1992) NSWConvR 55-640 Grgic v Australian & New Zealand Banking Group Ltd (1994) 33 NSWLR 202 Harris v Smith [2008] NSWSC 545 In Trieste Investments Pty Ltd v Watson (1963) 64 SR (NSW) 98 Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd [1998] 3 VR 133 Minister for Education & Training v Canham [2004] NSWSC 274 MJ Davis Industrial Pty Ltd v Fairfield City Council [2000] NSWCA 287, (2000) 10 BPR 18,495, BC200006275 Newington v Windeyer (1985) 3 NSWLR 555 Oh Hiam v Tham Kong (1980) 2 BPR 9451 Oxford Meat Co Pty Ltd v McDonald [1963] SR (NSW) 423 Shanahan v Strathfield Municipal Council [1973] 2 NSWLR 740, (1973) 28 LGRA 218 Shaw v Garbutt [1996] NSWSC 400 Somerville v Dalby (1990) 69 LGRA 422 Spark v Whale Three Minute Car Wash (Cremorne Junction) Pty Ltd (1970) 92 WN (NSW) 1087 Tutt v Doyle (1997) 42 NSWLR 10 Winn v Director General of National Parks and Wildlife [2001] NSWCA 17
TEXTS CITED:	F Ticehurst, Land Titles Office Practice (NSW) P Butt, Land Law, 5th ed (2006) Baalman’s Commentary on the Torrens System in New South Wales (1953)
PARTIES:	Refina Pty Ltd (plaintiff) Kevin Douglas Binnie (first defendant) Registrar General of NSW, Dept of Lands (second defendant)
FILE NUMBER(S):	SC 1437/08
COUNSEL:	Mr P Tomasetti SC w Mr J Atkin (plaintiff) Mr M K Meek w Ms R Kako (first defendant)
SOLICITORS:	Gregory J Halpin (plaintiff) Diamond Conway (first defendant) Registrar General of NSW, Dept of Lands (second defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EXPEDITION LIST

BRERETON J

Thursday 3 September 2009

1437/08 Refina Pty Limited v Kevin Douglas Binnie & Anor

JUDGMENT

1 HIS HONOUR: The plaintiff Refina Pty Limited, whose principal is Mr Gregory Halpin, a solicitor, is the registered proprietor of a farming property known as “Henkley”, at Central Tilba in the local government area of the Shire of Eurobodalla, which it acquired in April 2005. “Henkley” adjoins another property known as “Tiverton”, of which the first defendant Kevin Douglas Binnie is the registered proprietor, having acquired it in 1989. Adjacent to part of the common boundary between the two properties is a strip of land of approximately 8093m2 – formerly Lot 2 in DP125769 – which is the subject matter of the present dispute. The strip is registered in the name of Mr Binnie, but appears to have been fenced into “Henkley” for at least the last 50 years, and used for grazing purposes by the owners of “Henkley”. The evidence suggests that the value of the disputed strip could not exceed about $6,000. Refina claims that in 2006 – at a time when, by adverse possession, it had become entitled to acquire the strip – Mr Binnie procured the registration a plan of resubdivision calculated to defeat a possessory application by including the disputed strip in a larger lot, and that Refina is entitled to have the plan “corrected” by removal from it of the disputed strip, by reason of having a “personal equity” in it that binds Mr Binnie, and by reason that the plan erroneously included the strip. I conclude that Refina has no such personal equity, and that there was no error in the plan.

Title history

2 Prior to 1933, a number of unformed roads vested in the Crown crossed the lands now comprised in “Henkley” and “Tiverton”. These roads were closed on 24 March 1933. Certificate of Title Volume 4594 Folio 23, registered on 27 September 1933, recorded the grant to John McFaul on 22 September 1933, for a consideration of 97 pounds and 8 shillings, of a total area of 11 acres 1 rood and 28 perches. The closed roads so granted included the disputed strip, which separated Portion 65 (part of Tiverton) from Portion 435 (part of Henkley).

3 On 28 May 1948, Frederick Greig McFaul (the son of John McFaul) transferred part of the land in Certificate of Title Vol 4594 folio 23 – the disputed strip and two other closed roads – to the then owner of “Tiverton”. Certificate of Title Volume 6453 folio 166, issued on 27 February 1952 to Harry Newman Brice, the then owner of “Tiverton”, included six portions of land – Portions 365, 46, 47, 65, 81 and 221), together with an area of 7 acres 3 roods 28 perches granted to John McFaul on 22 September 1933; that area comprised the land that had been transferred by Frederick Greig McFaul: the total area of the closed roads had been 11 acres 1 rood and 28 perches, and the balance, after the transfer of the 7 acres 3 roods 28 perches, remained part of “Henkley”.

4 Mr Binnie became registered proprietor of the land comprised in Certificate of Title Volume 6453 Folio 166 on 1 November 1989. On 2 June 1992, the Land Titles Office created Lots 1, 2 and 3 in DP125769, comprising all of the closed roads transferred by Frederick Greig McFaul to the then owners of “Tiverton” in 1948 (“the Closed Road lots”); Lot 2 was the disputed strip. On 10 February 1993, the Land Titles Office issued a computer folio of the Register in place of Certificate of Title Vol 6453 folio 166, denoted “Certificate of Title Auto Consol 6453 – 166”, the land comprised in which included Portions 46, 47, 65, 81, 221 and 365 in DP752155, and the Closed Road lots then described as Lots 1-3 in DP125769.

5 These lands were all zoned Rural 1(a) under the Eurobodalla Rural Local Environmental Plan 1987, and subdivision of the land required the consent of the Eurobodalla Shire Council. On 6 September 1995, Mr Binnie, by his surveyor Mr John Healey, made an application for consent to subdivide “Portions 46, 47, 65, 81, 221, 365” in DP752155, for the purpose of consolidating and creating, in place of the existing six lots, two new lots. The application did not refer, in terms, to the Closed Road lots. It was accompanied by a two page plan, which became designated Plan 95/235, and which depicted the proposed new lots – one of which was to be a 1 hectare “concessional” allotment, and the other a residual allotment of approximately 99 hectares. The Council granted consent to the proposed resubdivision on 14 November 1995 and notified Mr Healey by notice of determination dated 16 November 1995; the determination did not, in terms, refer to the Closed Road lots.

6 As the conditions of the consent required, Mr Healey on 11 January 1996 prepared a survey plan, for endorsement with the Council’s certificate (“the 1996 plan”). The 1996 plan was entitled (emphasis added):
PLAN OF SUBDIVISION OF LOTS 46, 47, 65, 81, 221 AND 365 IN DP 752155 AND LOTS 1, 2 AND 3 IN DP 125769 .

7 This was the first explicit reference in the subdivision process to the Closed Road lots. On 26 July 1996, the Council by its authorised officer certified on the plan of subdivision that the relevant requirements of the Local Government Act had been complied with. Refina contends that the 1996 plan erroneously purported to include land that was not the subject of the consent granted by the Council on 14 November 1995.

8 The 1996 plan, once certified by Council, was posted to Mr Binnie on about 8 August 1996. Mr Binnie did not then take any step to lodge it for registration; he says because he intended to register the plan only when he had a buyer for the concessional lot.

9 Prior to 5 August 2002, Mr Neuber, the owner of “Kent Farm” – an adjoining property to the north of “Tiverton” – offered to purchase Lot 1 DP125769 – one of the Closed Road lots, which separated “Tiverton” and “Kent Farm”. Mr Binnie transferred Lot 1 to Mr Neuber on 16 December 2002. Having agreed to sell Lot 1, Mr Binnie instructed his surveyor, on about 5 August 2002, to request the Council to modify the 1996 plan, which remained unregistered, by excluding Lot 1 DP125769 from the residue lot (Lot 2) of the proposed resubdivision. Mr Healey amended the 1996 plan by deleting from it all reference to Lot 1 DP125769, and the plan as so amended was then signed on behalf of the Council by Mr Pritchett, an employee in the Planning and Environment Department, between 5 August 2002 and 16 December 2002. Mr Binnie did not at that stage proceed to register the amended plan (“the 2002 plan”), which remained unregistered.

Occupation

10 In about 2000, the former owner of “Henkley”, Wallundry Investments Pty Limited, had planted a line of trees along the boundary on the eastern (Tiverton) side of the disputed strip; this necessarily involved labour and expenditure on the part of Wallundry.

11 On 21 February 2005, Refina contracted to purchase “Henkley”; the purchase was completed on 14 April 2005. The boundaries of “Henkley” had been fenced, and the disputed strip was fenced into “Henkley”, by an old fence which, in 2005, appeared to have been in place for about 50 years. The strip had been grazed and maintained as part of “Henkley” for at least that time.

12 In about November 2005, Mr Binnie caused new fencing to be constructed along part of the eastern boundary of the strip, and the old post, rail and wire fence that stood there was removed without prior notice to Refina. Mr Binnie caused a local fencing contractor to re-erect the fence, in the same location as the old fence – that is, so as practically to fence the strip into Henkley and out of Tiverton – again without prior discussion with Refina. On 21 November 2005, the fencing contractor sent a bill to Mr Binnie for a “half share” of this fence; a bill for the other half was sent to and paid by Refina.

13 In February 2006, Mr Halpin had a boundary survey of “Henkley” undertaken, and as a result learnt that the strip, although fenced within “Henkley”, was in fact a separate parcel registered in Mr Binnie’s name. At a casual meeting two days later, on 3 February 2006, with Mr Binnie’s manager, Mr Whiffen, Mr Halpin mentioned that he believed that he may be entitled to make a possessory title application over the strip.

14 Mr Binnie telephoned Mr Halpin in November 2006 on another matter but reference was made to the strip in the course of the conversation. There is a dispute as to the date and terms of this conversation. Mr Halpin – who originally stated that this telephone call occurred on about 24 November 2006, but after further investigation by him of his telephone records, revised this to 3 November 2006 – says that in the course of the conversation Mr Binnie offered to sell him the strip for $32,000 (based on it being 8 hectares); that Mr Halpin suggested that it was only 0.8 hectare and Mr Binnie should check that out and come back to him; and that Mr Halpin said that he’d like to research whether Refina was entitled to a possessory title. Mr Binnie admits that he asserted that the strip comprised 8 hectares and that Mr Halpin said that it was 0.8 hectare; says that he invited Mr Halpin to make an offer for it; denies that Mr Halpin said anything about researching a possessory title; but accepts that he acknowledged that Mr Whiffen had told him that a recent survey revealed a discrepancy, in that part of the boundary fence was not on the boundary and that a parcel of land in his name was fenced within “Henkley”.

15 Sometime in November 2006, Mr Binnie instructed his solicitor, Mr Bryan Neilson, to register the 2002 plan. The Plan required Mr Binnie’s signature prior to registration, and was sent to him by Mr Neilson on 13 November 2006 for that purpose. Mr Binnie signed and returned it to Mr Neilson on 23 November 2006. The Plan was lodged for registration on 27 November 2006, and it was registered as DP1106180 on 9 January 2007. The disputed strip thereupon became part of Lot 2 in DP1106180.

16 Refina was entirely unaware of the preparation, existence or registration of any plan of subdivision until June 2007, when Mr Halpin had a conversation with Mr Whiffen. Refina contends that Mr Binnie procured registration of the plan, having been informed of its intention to apply for possessory title, in order to defeat its application.

17 Mr Binnie says that his decision to register the 2002 plan was motivated by his intention, formed in October 2006, to retain the concessional allotment and market the residual lot. His solicitor Mr Neilson says that Mr Binnie told him in November 2006 that he intended to sell the farm, and the plan was registered with a view to arranging an early sale. Refina points out that, apart from the placing of an advertisement in a local newspaper in or about March 2007, calling for tenders closing on 31 March 2007, and possibly internet advertising, there is no evidence that Mr Binnie took any other steps to sell the property, and the property has not been sold. Mr Binnie appears to have placed the advertisement himself and invited interested parties to contact him at his business address. There is no evidence of any real estate agent having been retained to market the property.

18 Ultimately, as will become apparent, I do not think that anything turns on the dispute in respect of the November 2006 conversation, or as to Mr Binnie’s motive: even if Mr Binnie was on notice of Refina’s intention to apply for possessory title and procured registration of the plan in order to defeat it, he was entitled to do so; Refina had acquired no legal or equitable interest as against him, and he deprived Refina of no such interest by pre-empting any possessory application. However, I am on balance unpersuaded that Mr Halpin referred to making an application for possessory title, or that Mr Binnie set about procuring registration of the 2002 plan in order to circumvent it. While Mr Binnie was sometimes at cross-purposes with the cross-examiner, this was in the circumstances understandable; I do not accept that he was combative; to the contrary, he seemed to me to be doing his best to tell the truth. The more sinister explanation of his conduct, advanced on behalf of Refina, attributes to Mr Binnie considerable knowledge and understanding of the workings of the Local Environmental Plan and possessory title, which he is unlikely to have had, and Mr Neilson’s evidence, which provided substantial though not complete corroboration for Mr Binnie’s version, was unchallenged. Although Mr Halpin’s version is to some extent supported by an apparently contemporaneous file note, it does not establish that Mr Halpin referred to researching possessory title ; the reference to “research” could equally have been to research of the area or the price. Moreover, Mr Halpin’s change of position about the date of the conversation, which he originally suggested was on 24 November, was necessary if his case were to accommodate what were established by documentary evidence to be the dates on which Mr Binnie had received and signed the 2002 plan – 13 and 23 November. I do not suggest that he was tailoring his evidence to suit his case, and it is probable that the date initially suggested by him was indeed incorrect, but the initial error casts some doubt on reliability of his recollection of these events. In any event, even taking Mr Halpin’s version at its highest, the most he told Mr Binnie was that he was going to investigate whether he could apply for possessory title. If it were necessary to decide the matter, I would not accept that Mr Binnie was on notice of Refina’s intention to apply for possessory title when he procured registration of the 2002 plan, nor that he did so in order to defeat any such application.

19 Against that background, the issues are:

(1) Did the owners of Henkley adversely possess the strip so as to qualify to make an application for possessory title?

(2) Did Refina so acknowledge Mr Binnie’s title to the strip as to defeat any claim for possessory title?

(3) Is Refina’s claim for possessory title destroyed by the registration of the plan of resubdivision of Tiverton incorporating the disputed strip into a larger lot? (4) If so, is Refina nonetheless entitled to relief by way of an order requiring the Registrar-General to “correct” the plan by omitting Lot 2 DP125769 from it, by reason of error in the plan and/or a personal equity arising from the circumstances in which the 2002 plan was registered?

Did the owners of Henkley adversely possess the strip so as to qualify to apply for possessory title?

20 (NSW) Real Property Act 1900, s 45D, provides:


45D Application for title by possession

(1) Where, at any time after the commencement of this Part, a person is in possession of land under the provisions of this Act and:

(a) the land is a whole parcel of land,


(b) the title of the registered proprietor of an estate or interest in the land would, at or before that time, have been extinguished as against the person so in possession had the statutes of limitation in force at that time and any earlier time applied, while in force, in respect of that land, and

(c) the land is comprised in an ordinary folio of the Register or is comprised in a qualified or limited folio of the Register and the possession by virtue of which the title to that estate or interest would have been extinguished as provided in paragraph (b) commenced after the land was brought under the provisions of this Act by the creation of the qualified or limited folio of the Register,

that person in possession may, subject to this section, apply to the Registrar-General to be recorded in the Register as the proprietor of that estate or interest in the land.

21 Section 45B relevantly provides:


45B Definitions

(1) In this Part, except in so far as the context or subject-matter otherwise indicates or requires:

current plan has the same meaning as it has in the Conveyancing Act 1919.

ordinary folio of the Register has the same meaning as it has in Part 4A.

whole parcel of land means:

(a) …,
(b) …,
(c) the whole of a lot or portion in a current plan , or
(d) ….

(2) Nothing in this Part affects the operation of section 170 of the Crown Lands Act 1989 in respect of land to which that section relates that has been brought under the provisions of this Act.

22 (NSW) Conveyancing Act 1919, s 7A, relevantly provides:


7A Current plan

(1) In this Act, current plan means … a registered plan, but does not include so much of a … registered plan as is taken not to form part of a current plan because of subsection (2), (3) or (4).

(2) …

(3) ....

(4) So much of a … registered plan as relates to land the subject of a later current plan (that is, a current plan that was filed or lodged at the office of the Registrar-General after the Crown plan or registered plan was so lodged) is taken not to form part of a current plan.

23 Prior to the registration of the 2002 plan, the strip was unquestionably the whole of a lot in a current plan, namely Lot 2 in DP125769, and thus a “whole parcel of land” for the purposes of s 45D(1)(a), and was comprised in an ordinary folio of the register for the purposes of s 45D(1)(c). Would the title of the registered proprietor Mr Binnie, at or before that time, have been extinguished as against the owners of Henkley had the statutes of limitation in force at that time and any earlier time applied?

24 The evidence establishes that, for well in excess of twelve years – indeed for upwards of fifty years – the strip had been enclosed into Henkley by a fence, and had been grazed by the stock running on Henkley; that, in 2000, the owners of Henkley had planted a row of trees just inside the boundary between the strip and Tiverton; and that in 2005 Refina had contributed to the cost of erection of a new dividing fence along the boundary between the strip and Tiverton. Taken together, these acts make a strong case of adverse possession.

25 Against them, it is pointed out that Mr Binnie continued to pay the rates in respect of the strip. While payment of rates may be evidence on a claim for adverse possession, it is far from determinative, and is often of slight significance where, as here, the rates continue to be paid by the owner of the legal title as distinct from the adverse possessor [ Shaw v Garbutt [1996] NSWSC 400]. The other matters raised in opposition to the claim – including discharge of the mortgage affecting the entirety of Tiverton, and determining to proceed with the resubdivision and sale of one of the lots – are entirely equivocal as to possession of the strip; they do not manifest any assertion of title in respect of the strip.

26 In my view, it is manifest that, prior to registration of the plan of resubdivision, Refina was entitled to make an application for possessory title under s 45D – unless it had acknowledged Mr Binnie’s title.

Did Refina so acknowledge Mr Binnie’s title to the strip as to defeat any claim for possessory title?

27 As has been mentioned, in November 2006, Mr Halpin and Mr Binnie discussed the possible sale of the strip to Refina. Although there was some contemplation of the possibility of a sale of the strip, on neither version was there a distinct offer; at the highest, according to the version given by Mr Binnie in his affidavit he said that he would sell the strip for $32,000; Mr Halpin queried the price and was otherwise equivocal, and made no distinct offer to purchase. In cross-examination, Mr Binnie attributed to Mr Halpin: “I’m interested in buying it. How much do you want for it?”, to which Mr Binnie responded “I don’t know, I’ll get back to you”.

28 In a letter to Mr Binnie dated 2 April 2007, Refina “reserved its rights to apply for a possessory title”. By letter dated 17 April 2007, Mr Binnie’s solicitors asserted that he had been waiting for Refina to make an offer, and offered to sell the strip for $32,000. Mr Halpin responded on 18 April, maintaining Refina’s entitlement to a possessory title, and also, in a “without prejudice” letter of the same date, disavowing any interest in purchasing the strip, but indicating a willingness to agree – “without any obligation to do so” – to the relocation of the existing fence to the legal boundary at Mr Binnie’s expense. On the same day, Mr Binnie agreed to this proposal, but the agreement ultimately broke down and was not implemented.

29 A possessory claim will be defeated if the possessor acknowledges the title of the legal owner, and an offer by an occupant to purchase freehold property will often be a plain form of acknowledgement of the superiority of the legal owner’s title, although it is not possible to lay down any general rule as it will depend upon the construction of the particular offer in all the surrounding circumstances; thus a letter challenging the ownership of the true owner but offering by way of compromise to accept a tenancy is not an acknowledgment [ Edginton v Clark [1963] 3 All ER 468, distinguishing Doe d Curzon v Edmonds (1840) 6 M&W 295]. Accordingly, there is no absolute rule that an offer to purchase freehold property is an acknowledgement that the offeree has a better title than the offeror; consideration must be given to the whole of the terms of the supposed acknowledgment in its circumstances [ Cawthorne v Thomas (NSWSC, Bryson J, 15 December 1993, BC9302312), p19]. Negotiations for the compromise of a bona fide claim for possessory title do not of themselves amount to an acknowledgement of title, at least if they do not result in a final bargain [ Doe d Curzon v Edmonds ; Edginton v Clark ].

30 In my view, the negotiations that took place between Mr Halpin on behalf of Refina, and Mr Binnie, involved on Mr Halpin’s part an attempt to settle a bona fide claim for possessory title. Viewed in that context, any suggestion that he might make an offer to acquire the strip, or agree to the strip being re-fenced into “Tiverton” at Mr Binnie’s expense, was not inconsistent with his maintaining a possessory claim if the negotiations did not result in a binding compromise. Properly construed and in their factual context, these were not acknowledgments of Mr Binnie’s title such as to defeat Refina’s possessory claim, but, at the highest, offers to compromise that claim which did not result in a final bargain.

Is Refina’s claim for possessory title defeated by registration of the 2002 plan?

31 It was uncontroversial that the answer to this question must be in the affirmative. Upon registration of the 2002 plan, the disputed strip became part of a larger lot – Lot 2 in DP1106180 – and ceased to be the whole of a lot in a current plan, and thus the whole of a parcel of land. It follows that upon registration of the 2002 plan, it was no longer open to Refina to make a possessory application in respect of the strip.

32 Counsel for Refina correctly abandoned a contention that application could have been made under s 45(2), which authorises a possessory application in respect of part only of a whole parcel, but only where an occupational boundary replaces or represents the boundary of the whole parcel, and the part possessed by the applicant does not lie between the occupational boundary and the legal boundary: here, the relevant whole parcel of which Refina is in possession of part is Lot 2 in DP1106180, the occupational boundary is the fence line along the former eastern boundary of the disputed strip, which is located within that whole parcel, and the part occupied by Refina lies between that occupational boundary and the legal boundary, formed by the western boundary of the strip which coincides with the western boundary of Lot 2 DP1106180.

33 However, Refina contends that Mr Binnie’s title is not indefeasible, by reason that Mr Binnie is bound by a personal equity pursuant to which Refina may nonetheless pursue a claim to be entitled to the strip, and/or that the plan contained an error amenable to “correction” under Conveyancing Act , s 195H – the error being the inclusion of former Lot 2 DP125769 in the plan, and the appropriate “correction” being the removal of that land (the disputed strip) from the plan.

Does Refina have a personal equity?

34 The indefeasible title of a registered proprietor of land is subject not only to the exceptions contained in Real Property Act , s 42, but also to in personam claims against the registered proprietor [ Frazer v Walker [1967] 1 AC 569, 585; Breskvar v Wall (1971) 126 CLR 376, 384-5]. A personal equity arises where there is a recognised legal or equitable cause of action enforceable against the registered proprietor [ Grgic v Australian & New Zealand Banking Group Ltd (1994) 33 NSWLR 202, 222]. In such a case, a plaintiff is entitled to bring a claim in personam against a registered proprietor for such relief as a court acting in personam may grant [ Frazer v Walker ; Breskvar v Wall , 384-5; Bahr v Nicolay (No 2) [1988] HCA 16, (1988) 164 CLR 604]. This includes, for example, the equity to obtain rectification and retransfer for mistake [ Oh Hiam v Tham Kong (1980) 2 BPR 9451; Tutt v Doyle (1997) 42 NSWLR 10, 14; Minister for Education & Training v Canham [2004] NSWSC 274, [47]; Harris v Smith [2008] NSWSC 545, [43]-[44]].

35 However, the expressions “personal equity” and “right in personam ” encompass only known legal and equitable causes of action [ Grgic v Australian & New Zealand Banking Group and Garofano v Reliance Finance Corporation Pty Ltd (1992) NSWConvR ¶55-640]. In Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd [1998] 3 VR 133, Ashley AJA said (at 162):
The principle extends to known legal and equitable causes of action. It focuses upon the conduct of the registered proprietor and also those for whose conduct he is responsible. That conduct might ante date or post date registration of the pertinent dealing. Further, it can probably be said that the conduct must be such as should be described as unconscionable or unconscientious, as those words are now understood in the law. But that is not to say that conduct which merits such a description will give rise to an in personam right in the absence of a known legal or equitable cause of action. There is substantial authority to the contrary.

36 Refina contends that its inchoate claim to a possessory title was such a legal or equitable claim: that by 2006 it had a legal interest in the disputed strip arising from its adverse possession; that Mr Binnie could not have obtained ejectment against it; and that as he was not a bona fide purchaser for value without notice, Mr Binnie acquired his interest in Lot 2 DP1106180 “subject to the equities”, and in particular to Refina’s legal interest in the disputed strip.

37 At the centre of this argument was the proposition that upon expiry of the applicable limitation period, the adverse occupier acquires a legal interest in the land, even as against the registered proprietor of land held under the Real Property Act – for which Refina invokes the judgment of the Court of Appeal in Newington v Windeyer (1985) 3 NSWLR 555. In that case, McHugh JA, as he then was, referred (at 563) to the doctrine that possession (even for less than twelve years) was prima facie evidence of seisin in fee, so that a person in possession had a legal interest which entitled him or her to exclude anyone who did not have a better title, and accepted as correct the proposition, stated by Slattery J in Spark v Whale Three Minute Car Wash (Cremorne Junction) Pty Ltd (1970) 92 WN (NSW) 1087, that those principles applied to land held under the Real Property Act :
Counsel for the parties accepted that the common law principles concerning adverse possession apply to land under the Torrens System. In my opinion the agreement of counsel was correct. Spark v Whale Three Minute Car Wash was correctly decided. Indeed, since 1979 it has become possible for adverse possession of land for twelve years to bring about the extinguishment of the title of the registered proprietor: Real Property Act 1900, s 45D .

38 The principles with which McHugh JA was there concerned were those which entitle a person in adverse possession to maintain an action in trespass against every person except one who has a superior title, even though the limitation period has not expired. His Honour was not concerned with acquisition of title by adverse possession, nor with the position between a person in possession and the registered proprietor.

39 Similarly, in Spark v Whale Three Minute Car Wash , Slattery J’s conclusion that there was nothing in the Real Property Act to prevent the plaintiff (who had been in possession) from succeeding in ejectment against the defendant, a wrongdoer – whatever might be the position between the plaintiff and the registered proprietor. Having accepted that, but for the Real Property Act¸ the plaintiff was entitled to eject the defendant by reason of a superior title arising from prior possession – according to the principle stated by Brereton J in Oxford Meat Co Pty Ltd v McDonald [1963] SR (NSW) 423, 427, that the rule was not that a person in possession was entitled to maintain his possession as against all but the true owner, but that he was entitled to maintain it against all but a person having a better right to possession – his Honour then rejected the argument that the Real Property Act (which provided that a certificate of title was an absolute bar and estoppel to any action of ejectment against the registered proprietor) operated as such a bar against a person who was not the registered proprietor – the ius tertii in the owner being irrelevant. His Honour referred to a passage in Baalman’s Commentary on the Torrens System in New South Wales (1953) which distinguished between the position of the registered proprietor and another occupant under (then) s 45, which provided: “No title to land adverse to or in derogation of the title of the registered proprietor shall be acquired by any length of possession by virtue of any statute of limitations relating to real estate, nor shall the title of any such registered proprietor be extinguished by the operation of any such statute” (emphasis added):
It is only the title of the registered proprietor which is protected by s.45. The Statute of Limitations will still apply to any unregistered interest. Thus, if A goes into adverse possession of land under the Act he can pass whatever title he may acquire to B, who can pass it to C, and so on. The holder for the time being will never have a title which would prevail against the registered proprietor ; but he could maintain ownership against the rest of the world.

40 Although s 45 has been amended, substantially the same work is done now by s 45C, which provides as follows:
45C Acquisition of possessory title to land under the Act
(1) Except to the extent that statutes of limitation are taken into consideration for the purposes of this Part, no title to any estate or interest in land adverse to or in derogation of the title of the registered proprietor shall be acquired by any length of possession by virtue of any statute of limitations relating to real estate, nor shall the title of any such registered proprietor be extinguished by the operation of any such statute.
(2) Subsection (1) does not prevent the acquisition of a title, adverse to or in derogation of the title of the registered proprietor thereof, to an estate or interest in land brought under the provisions of this Act by the creation of a qualified or limited folio of the Register by reason of possession of the land for any length of time commencing before the creation of the folio.

41 Thus, as against a registered proprietor, the register remains conclusive unless and until the registered is altered upon an application pursuant to s 45D. Hamilton J explained the position in Bartlett v Ryan [2000] NSWSC 807, (at [15]):
15 Prior to 1833 the statutes of limitations (eg, 21 Jac I c 16) barred only the action which the owner of land could bring and did not of itself affect the title to the land: see Lightwood, The Time Limit on Actions (1909) 6. By the Real Property Limitation Act 1833 (Imp), adopted in New South Wales by the Real Estate (Limitation of Actions) Act 1837, the law was changed, so that not only was the action to recover the land barred, but upon the expiry of the ultimate limitation period, the owner’s title was extinguished: Imperial Act s 34. It was in this context that s 45 of the RPA (since repealed and replaced by s 45C(1)) was enacted. Section 45 provided:
“No title to land adverse to or in derogation of the title of the registered proprietor shall be acquired by any length of possession by virtue of any statute of limitations relating to real estate, nor shall the title of any such registered prorpietor be extinguished by the operation of any such statute.”

Although different views have been expressed as to the meaning of that section, it was held by Else-Mitchell J in Van Den Bosch v Australian Provincial Assurance Association Ltd (1968) 88 WN (Pt 1) (NSW) 357 to mean that a Torrens Title could not be extinguished by adverse possession whatever the effect of the statute of limitations upon actions in respect of the land: see also the decision of Wootten J in Addison v Billion [1983] 1 NSWLR 586. So long as this regime persisted, it was not possible for a Torrens title to be defeated by a statute of limitations (and this is reflected in s 45D(1)(b)). Part 6A in 1979 provided a mechanism whereby the Registrar General could change the register upon appropriate establishment of adverse possession. However, the effect of s 45C(1), by its terms, is to maintain the law as established in Van Den Bosch , save where the title has been transferred to a new registered proprietor pursuant to a determination by the Registrar General pursuant to Part 6A. The Land Titles Office practice in this regard is correct in law: see Baalman & Wells’ Land Titles Office Practice (5th ed, 1998) [397.100].


42 Professor Butt expresses a similar view [P Butt, Land Law , 5th edn (2006), [2244]].

43 None of the cases referred to on behalf of Refina was concerned with a claim against a registered proprietor, and that distinction was fundamental to their outcome. The cases invoked by Refina do not support the proposition that an adverse occupant gains any kind of title or interest against the registered proprietor, except by way of registration pursuant to a successful possessory application. Refina’s argument failed to recognise this, or that – because, unlike those cases, it was asserting a claim against the registered proprietor – it had to confront s 45C.

44 As against Mr Binnie, Refina had acquired no legal or equitable interest in the disputed strip prior to the registration of the 2002 plan. It had no personal equity that bound Mr Binnie as registered proprietor.

Is Refina entitled to an order requiring the Registrar-General to “correct” the plan by omitting Lot 2 DP125769 from it?

45 Refina contends that former Lots 2 and 3 DP 125769 were included in the 2002 plan in error, as they were not included in the Development Consent. Refina claims a declaration that, to the extent that DP1106180 included the land formerly comprised in Lots 2 and 3 in DP125769, the subdivision was not in accordance with the Development Consent, and an order pursuant to Conveyancing Act, s 195H, that the Registrar-General amend DP1106180 by excluding former Lots 2 and 3 from it.

46 Conveyancing Act 1919, s 195H, relevantly provides as follows:

195H Amendment or replacement of plans

(1) The Registrar-General may, on the application of any person with an interest in any land to which a plan registered or recorded under this Division relates, or without any such application, and on such evidence and after such notices (if any) as appear to the Registrar-General to be necessary, amend the plan for the purpose of correcting any error in or supplying any omission from the plan.

47 The section gives a power to the Registrar-General, not to the Court; and while the Registrar-General is expected to act in accordance with law, particularly where it has been declared by the Court, it is not for the Court to order the Registrar-General to make an amendment – at least in the absence of a prior application to the Registrar-General: cf Baiada Pty Ltd v Registrar-General (1994) 6 BPR 13,704 at 13,709, in which Cohen J declared that certain lands had been omitted from a plan, and ordered that the Registrar-General consider the plaintiff’s application to amend the plan on that footing; see also the relief sought in MJ Davis Industrial Pty Ltd v Fairfield City Council [2000] NSWCA 287, (2000) 10 BPR 18,495, BC200006275, [4].

48 As has been mentioned, the application for subdivision approval of 6 September 1995 described the subject land as Lots 46, 47, 65, 81, 221 and 365, and did not mention the Closed Road lots. The ensuing consent, dated 16 November 1995, was in the following terms:
Pursuant to section 92 of the Environmental Planning and Assessment Act 1979 and Section 331 of the Local Government Act 1919, notice is hereby given of the determination by the consent authority of the development application number 235/95 dated 19 September 1995 and described by plan number 95/235 relating to land described as Portions 46, 47, 65, 81, 221 and 365 Parish of Narooma, Haxstead Road, Central Tilba.
…
The development application has been determined by granting of consent subject to the following conditions:
…
62.3 Submission of a plan of survey by a registered surveyor …
Reason : The Plan of Survey required by the Land Titles Office must be certified by the Council Clerk.

49 Refina’s case is that: (1) the Consent did not relate to the Closed Road lots; (2) having given consent and notified its decision, the Council was functus officio and its decision could not be revisited [ Shanahan v Strathfield Municipal Council [1973] 2 NSWLR 740, (1973) 28 LGRA 218, 220-2; Somerville v Dalby (1990) 69 LGRA 422]; (3) having obtained subdivision approval, Mr Healey in drawing the survey plan wrongly included the Closed Road lots in the 1996 plan, in respect of which subdivision approval had not been and never was given; (4) the 1996 survey plan therefore contained an error, in that it included land in respect of which subdivision approval had not been given; (5) the error was perpetuated in the 2002 plan, which while omitting Lot 1 still purported to include Lots 2 and 3 of the Closed Road lots.

50 The essential question is whether it was an “error”, in the relevant sense, for the survey plan to include the Closed Road lots. It has been said that the words “error” and “omission” in s 195H are to be given the same meaning as in s 42 of the Real Property Act ; and that “omission” includes a case where something has been intentionally left out of a plan because of an erroneous belief [ Baiada ]. In Trieste Investments Pty Ltd v Watson (1963) 64 SR (NSW) 98, Herron CJ held that the words “error or omission” in s 127(1) were subjective in application and meant more than simply “not there or absent from”, but apparently covered a want of registration which the Act authorised which occasioned loss; Nagle J with reference to a dictionary definition observed that the concept involved something lacking from the register which would be expected to be in it; Ferguson J, in dissent, referred also to the natural meaning of the words [see also Baiada, 9]. As Cohen J said in Baiada, the section requires attention to what should have been in the plan, to see whether anything has been omitted [ Baiada, 9] – to which might be added, for present purposes, also to see whether anything has been included that ought not be there.

51 There is no error if the plan lodged is that which was approved by the Council [ MJ Davis Industrial Pty Ltd v Fairfield City Council]. This means, a plan that accords with what the Council intended to approve: the source of what “ought” to be in the plan is the Council’s intention, and errors and omissions arise when a plan does not accurately reflect, or comply with, that intention. If the plan does not reflect what the Council intended to approve, even though it apparently accords with the words or drawings in which the Council mistakenly expressed its approval, there will be an error or omission. Conversely, if the plan coincides with what the Council intended to approve – even if its expression of that intention was defective – there will be no error.

52 The application for subdivision approval of 6 September 1995, while describing the subject land as Lots 46, 47, 65, 81, 221 and 365 and not mentioning the Closed Road lots, was accompanied by a two page plan, designated plan 95/235 (the number of the subdivision application) and entitled “Plan of Proposed Subdivision of Portions 46, 47, 65, 81, 221, 365 Cemetary Road Central Tilba”, which depicted a two lot subdivision, producing one “concessional” lot of 1 hectare (Lot 1), and a residual lot of 99 hectares (Lot 2). The residual lot 2 could contain 99 hectares (approximately) only if it included the Closed Road lots; if they were excluded, Lot 2 lot would have comprised only about 96 hectares. The boundary of the land contained in the plan was drawn in a bold line along the closed roads comprised in former lots 1 and 2; but Lot 3 was plainly within the proposed residual lot.

53 These factors firmly favour the view that the intention of the drafter of the plan was to include the Closed Road lots in the plan, and that this was reflected in the intention of the Council in giving consent to the subdivision in accordance with that plan. Refina accepts that plan 95/235 was incorporated into the consent: reference to it was necessary to understand what it was that Council was approving. Contrary to Refina’s submission, however, I do not accept that plan 95/235 merely indentified the dimensions of proposed new (concessional) lot 2; it was a two page plan described in the consent as “relating to the land described as Portions 46, 47, 65, 81, 221 and 365 Parish of Narooma, Haxstead Road, Central Tilba” on which were drawn, as well as the boundaries of the proposed concessional lot, also – albeit somewhat grossly – the boundaries of the proposed residual lot, stating its area to be 99 hectares, apparently including Lot 3 of the Closed Road lots, and at least arguably including also Lots 1 and 2 (if the thickly drawn boundaries are treated as inclusive). The circumstance that the plan is said to contain a total of 100 hectares of which 99 are in the residual lot – a result achievable only if the Closed Road lots were included – and that it depicts Lot 3 as within the residual lot and is at best ambiguous as to former Lots 1 and 2, indicates that the failure to refer expressly to those lots in the application was an oversight, which was then reflected in the terms of the consent. The consent was intended to include the Closed Road lots.

54 An additional consideration fortifies this conclusion, although I would have reached it in any event for the reasons already advanced. Under the Eurobodalla Rural LEP, land zoned 1(a) could be subdivided only with the consent of Council [clause 12], and after obtaining the advice of the Director-General of Agriculture – except in respect of an “existing parcel” of more than 20 hectares from which it was proposed to create one allotment of not more than 1 hectare on which a dwelling is erected. It is evident from Council’s internal records that Council considered that it was proceeding under this exception, in cl 13(5) – the “concessional allotment” power. That power involves the notion of an “existing parcel”. For that purpose, “existing parcel” was defined to mean the total area of a parcel of adjoining or adjacent land owned by the same person on 9 August 1963 and still owned by the same person (whether or not the person who owned the land in 1963), including any such parcel to which additional adjoining or adjacent land had been added since 1963. It is not seriously open to doubt that, for relevant purposes, the Closed Road lots were, together with Lots 46, 47, 65, 81, 221 and 365, part of a single parcel of adjoining or adjacent land in the ownership of Mr Binnie. For there to be a valid exercise of the power under cl 13(5), Council must have intended to approve a subdivision of the whole of that “existing parcel” into two lots: the concessional lot of 1 hectare, and the residual lot comprising the remainder of the “existing parcel”, necessarily including the Closed Road lots.

55 I do not agree that reference for this purpose to internal documents of the Council evidencing its decision-making process is contrary to the principle that a development consent should ordinarily be construed without reference to extrinsic material [see Winn v Director General of National Parks and Wildlife [2001] NSWCA 17, [4]-[5] (Spigelman CJ), [198]-[202] (Ipp JA)]. The internal Council records reveal that Council intended to proceed under clause 13(5), on the basis that the whole of Tiverton comprised an “existing parcel”. Use of the internal Council communications in this manner is not for the purposes of construing the consent in order to ascertain whether or not certain development is or would be objectively in accordance with the consent, but rather in order to determine whether there was an error in the subsequent certification of the plan of resubdivision, for which purpose the subjective intent of the Council is relevant.

56 In my view, therefore, the 1996 plan contained no such error as is alleged. The Closed Road lots ought always have been included in it – according to the intent of Mr Binnie, the applicant for consent; and according to the intent of the Council. In particular, the Council intended to approve a subdivision of the whole of the “existing parcel” of 100 hectares comprised by all Mr Binnie’s adjacent and adjoining lands, including the Closed Road lots; the omission of reference to the Closed Road lots on the face of the application and the consent was an oversight. Any error was in the consent, not in the subsequent survey plan.

57 Moreover, even if the consent related only to Portions 46, 47, 65, 81, 221 and 365, and not to the Closed Road lots, Mr Binnie was entitled to consolidate his holdings, without Council’s consent – because a consolidation is not a subdivision within the meaning of the (NSW) Environmental Planning and Assessment Act 1979 (and thus the LEP) [see Environmental Planning and Assessment Act, s 4(2)(d)(ii); F Ticehurst, Land Titles Office Practice (NSW), [130.550]ff]. This is, in substance, what the 1996 plan, and its 2002 successor, did: Mr Binnie required consent to divide Portions 46, 47, 65, 81, 221 and 365 into two new lots; but he did not need consent thereafter to consolidate the Closed Road lots with the residue lot – because that involved no “subdivision” within the definition of that term in the EPA. Accordingly, there would be no utility in granting the relief sought, as Mr Binnie could, without further Council approval, achieve the same result, and Refina has no existing interest, as against him, in the subject land.

Conclusion

58 For the foregoing reasons, I have reached the following conclusions.

59 Prior to registration of the 2002 plan, Refina was, unless it had acknowledged Mr Binnie’s title, entitled to make an application under Real Property Act, s 45D, for possessory title of the disputed strip. The negotiations that took place between Mr Halpin on behalf of Refina, and Mr Binnie, properly construed and in their factual context, were not acknowledgments of Mr Binnie’s title such as to defeat Refina’s possessory claim, but offers to compromise that claim which did not result in a final bargain.

60 However, upon registration of the 2002 plan, it was no longer open to Refina to make a possessory title application in respect of the disputed strip, which was no longer a whole parcel of land. Refina’s entitlement to make an application for possessory title gave it no legal or equitable claim to the disputed strip as against Mr Binnie as registered proprietor, unless and until the register was altered. Accordingly, Refina had no personal equity that bound Mr Binnie.

61 The 1996 plan (and subsequently the 2002 plan) contained no such error as is alleged by Refina. The Closed Road lots ought always have been included – Mr Binnie, the applicant for consent, intended to seek, and the Council intended to give, consent for the subdivision of the whole of the “existing parcel” of 100 hectares comprising all Mr Binnie’s adjacent and adjoining lands, including the Closed Road lots. The omission of reference to those lots on the face of the application and the consent was an oversight. Any error or omission was in the consent, and was rectified by the survey plan, which accorded with the Council’s intent.

62 It follows that Refina’s claim fails, and the proceedings must be dismissed. Prima facie , Refina should pay Mr Binnie’s costs, but the parties sought an opportunity to be heard on that question. Without foreclosing that opportunity, I will make the prima facie appropriate order and reserve leave to the parties to apply for some other order if so advised.

63 My orders are:


(1) Order that the proceedings be dismissed with costs.

(2) Direct that this order not be entered prior to 11 September 2009.

(3) Reserve leave to either party to apply, by arrangement with my associate prior to 11 September 2009, to vary the within costs order.

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