[2003] NSWSC 1072
Chandra v Perpetual Trustees Victoria Ltd [2007] NSWSC 694(2007) 13 BPR 24,675
Chandra v Perpetual Trustees Victoria Ltd [2008] NSWSC 178(2008) 123 BPR 25,259
Coulton v Holcombe (1986) 162 CLR 1[1986] HCA 33
Gould v Vaggelas (1985) 157 CLR 215[1985] HCA 75
Harrison v Melhem (2008) 72 NSWLR 380[2008] NSWCA 67
HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004)217 CLR 640[2004] HCA 54
Kumar v Registrar-General of New South Wales [2021] NSWSC 1103(2021) 20 BPR 41,609
Lincu v Registrar-General [2019] NSWSC 568(2019) 19 BPR 39,351
March v E & MH Stramare Pty Ltd (1991) 171 CLR 506[1991] HCA 12
Moneywood Pty Ltd v Salamon Nominees Pty Ltd (2001) 202 CLR 351[2001] HCA 2
Podrebersek v Australian Iron and Steel Pty Ltd (1985) 59 ALJR 492[1985] HCA 34
Potts v Miller (1940) 64 CLR 282[1940] HCA 43
Sellars v Adelaide Petroleum NLPoseidon Ltd v Adelaide Petroleum NL (1994) 179 CLR 332[1994] HCA 4
Svanosio v McNamara (1956) 98 CLR 186[1956] HCA 55
Sydney Seaplanes Pty Ltd v Page (2021) 106 NSWLR 1
[2021] NSWCA 204
Toteff v Antonas (1952) 87 CLR 647
[1952] HCA 16
Voudouris v Registrar-General (1993) 30 NSWLR 195
Wassell v Ken Carr Bobcat & Tipper Hire Pty Ltd [2021] NSWSC 1415
Mr H Grace (Appellant)
Mr R Lancaster SC
Mr H Altan (Respondent)
Judgment (18 paragraphs)
[1]
Background
The following matters were either common ground or the subject of unchallenged findings by the primary judge.
The Appellant, Ausbao (286 Sussex Street) Pty Ltd, was incorporated for the purpose of acquiring and redeveloping land at 286 Sussex Street in the City of Sydney (the "Land"). [1]
On 26 November 2013, the Appellant purchased the Land for $55 million. The Land was described in the contract for sale by reference to four lots in specified deposited plans (also known as "DPs"). Those deposited plans described the area of each of the four parcels that made up the Land as having a total site area of 1,337.4m2. After the completion of the contract for sale, the Appellant discovered that the total site area of the Land was only 1,255.9m2. The primary judge noted that the Appellant treated small errors in the statement of areas for three of the lots as irrelevant. [2] The Appellant's claim for compensation was based on its discovery that one of the lots, being lot 1 in DP 657427 ("Lot 1"), has a site area of 502.3m2 rather than 588m2 as shown on the plan for Lot 1 (the "Plan"). This is a difference of 85.7m². [3]
The Land was offered for sale on the market via an information memorandum (the "Memorandum") that was circulated to potential buyers, including the Appellant, on the basis that redevelopment for commercial or combined commercial and residential purposes represented its highest and best use. The area of the Land was stated to be 1,337.4m2 in the Memorandum. [4] The Memorandum included a disclaimer "to the effect that potential purchasers must take note that the figures and calculations contained therein were provided from external sources and had not been verified in any way." [5]
The computer folios and the deposited plans for the four lots were included in an electronic data room (the "Data Room") inspected by the Appellant for the purpose of making its bid in response to the Memorandum. They were also annexed to the contract for sale. The primary judge accepted that the Appellant made its bid to purchase the Land based upon its inspection of the deposited plans for the four lots and determined its bid price on the basis that the site area was 1,337.4m2. The primary judge also accepted that the "final estimated floor area of the redevelopment was a critical factor in [the Appellant's] assessment of the market value of the completed development" and, as a consequence, of the price the Appellant was prepared to pay for the land. [6]
The Appellant's statement of claim contended that its loss or damage was the approximate sum of $5 million to $7.5 million, comprising the difference in the amount it paid for the Land (ie, $55 million) on the basis of the misdescribed area of 1,337.4m2 and the amount it would have paid if it had known that the Land only had an area of 1255.9m2. The Appellant also pleaded that it incurred additional stamp duty and costs. However, the primary judge observed that, at the hearing, the Appellant "changed its claim to one based upon the value of the chance that it lost of succeeding in acquiring the Land for a lesser price than $55 million", using the true site area of the Land as 85.7m2 less than 1,337.4m2. [7]
[2]
The Misstatement of the Area of Lot 1
The index of material included in the Data Room listed four title searches in the forms of folios of the Register bearing the date "20.06.13" and five "Plans". The title search for "Folio: 1/657427" (ie, Lot 1) included, under the heading "Land", the following description:
"Lot 1 in Deposited Plan 657427
Local Government Area Sydney
Parish of St Andrew County of Cumberland
Title Diagram DP657427."
According to the index for the Data Room and an expert retained by the Appellant, the "Plan" (ie, the Deposited Plan for Lot 1 in DP657427) consisted of two "sheets". [8] The first sheet ("Sheet 1 of 2 DP657427") was entitled "Vol 13683 Folio 1 Plan Showing Location of Land" and was stamped "Cancelled". It also bore a note which stated "Prepared "2-6-1995" and "[t]his plan has been created to provide a unique identifier to enable the issue of an Automated Torrens Title for the Land comprised in folio of the Register Volume 13683 Folio 1". This sheet also included the following diagram:
It was accepted that the figure of 588m2 in this plan was erroneous. The correct size was 502.3m2.
The second sheet (ie, "Sheet 2 of 2 DP 657427") was a Certificate of Title for "Vol 13683 Fol 1". It was stamped "Cancelled see auto folio". It specified that it was issued on "23 8 1978" and that "Prior Title" was recorded in "Vol 4290 Folio 24". It also bore a note identical to the note on sheet 1, stating "Prepared 2-6-1995" etc. Under the heading "Estate and Land Referred To", it described the land in terms that are not necessary to recount.
As it is of significance to both the grounds of appeal and the Registrar General's notice of contention it is necessary to set out the effect of the evidence which the primary judge received, and appeared to accept, about the origins of these documents and the misstatement of area. [9]
It seems that Lot 1 formed part of the land in Certificate of Title Volume 4290 Folio 24, which was issued on 13 June 1929. (This volume and folio number is referred to in the cancelled Certificate of Title forming sheet 2 as noted above.) The land in Certificate of Title Volume 4290 Folio 24 was stated to be an estate in fee simple in the land shown as Lot A in the plan that accompanied Transfer B816491. The plan that accompanied this Transfer was catalogued as file plan DP 181693. Consequently, the land in Certificate of Title Volume 4290 Folio 24 was Lot A in DP 181693, which was drawn and edged red in the Certificate of Title. This land was described as having an area of 23.25 "perches" which converts to approximately 588m2.
[3]
Statutory Provisions
The relevant provisions of the RP Act dealing with the Register, as established under s 31B, have changed over the period the subject of the above events, especially as a result of the progressive phasing out of Certificates of Title. Despite this, neither party to the appeal suggested that anything of significance turned on the series of legislative amendments that gave effect to that policy and, except as set out below, the issues in dispute on the appeal turned on the current provisions of the RP Act (and the Conveyancing Act 1919 (NSW)). At this point, it suffices to state that, with effect from 11 October 2021, all references to certificates of title were removed from the RP Act (by operation of the Real Property Amendment (Certificates of Title) Act 2021 (NSW)).
Subsection 31B(1) of the RP Act obliges the Registrar General to cause a "Register" to be maintained for the purposes of the RP Act. Subsection 31B(2) provides that it shall be comprised of, inter alia, "folios" and "dealings" registered under the RP Act or any other Act. "Dealing" is defined by s 3(1) as being any "instrument" other than a grant, caveat or priority notice, including an electronic form of that instrument, which is registrable or capable of being made registrable under the RP Act or in respect of which any recording in the Register is, by the RP Act or any other legislation, required or permitted to be made. "Instrument" is defined by s 3(1) of the RP Act as "[a]ny grant, conveyance, assurance, deed, map, plan, will, probate, or exemplification of will, or any other document in writing or in electronic form relating to the disposition, devolution or acquisition of land or evidencing title to land." As at both of 1995 and 2000, that definition was not relevantly different.
Section 32 of the RP Act deals with "folios of the Register". Subsection 32(1) provides:
"(1) The Registrar-General creates a folio of the Register for land by making a record of -
(a) a description of the land and of the estate or interest therein for which it is created,
(b) a description of the proprietor for the time being of the estate or interest and the fact that any such proprietor is a minor if the Registrar-General knows that to be the case, and
(c) such particulars, as the Registrar-General thinks fit, of -
(i) other estates or interests, if any, affecting the land, and
(ii) other information, if any, that relates to the land or any estate or interest therein and is included in that record pursuant to this or any other Act (including an Act of the Parliament of the Commonwealth) or an instrument made under any such Act,
and by allocating a distinctive reference to the record so made." (emphasis added)
[4]
The Primary Judgment
In Lincu v Registrar-General [2019] NSWSC 568; (2019) 19 BPR 39,351, Kunc J observed (at [105]) that the determination of a claim under s 129 involves a "two stage inquiry", namely that the claimant must first establish that it has suffered loss or damage falling within one of the sub-paragraphs of s 129(1) and, if so, then compensation will be paid unless it is shown that it is not payable in whole or in part by reason of any of the provisions of s 129(2) (see also Kumar v Registrar-General [2021] NSWSC 1103 at [61]; (2021) 20 BPR 41,609; "Kumar"). The primary judge adopted that approach. [16]
[5]
First Stage - Section 129(1)
Before the primary judge, the Appellant contended that it was entitled to compensation pursuant to either or both of s 129(1)(a) and s 129(1)(c). With respect to s 129(1)(a), the Appellant contended that the misstatement of the area of Lot 1 arose from an "act … of the Registrar-General in the execution or performance of his or her functions or duties under [the RP Act] in relation to the land", specifically the preparation of the Plan and its use in the creation of the computer folio for Lot 1 in the exercise of the powers and functions referred to in s 31B. [17] With respect to s 129(1)(c), the Appellant contended that the statement of the incorrect area in the Plan was an error or misdescription in the Register in relation to the subject land. [18]
The Registrar General's response to the Appellant's contentions was three-fold. First, the Registrar General contended that any loss or damage suffered by the Appellant was not occasioned "as a result of the operation of [the RP Act] in respect of [the] land" because it was not caused by the automatic operation of some provision of the RP Act that affects title to land such as the guarantee of indefeasibility in s 42. [19]
Second, the Registrar General submitted that the Plan was registered under Division 3 of Part 23 of the Conveyancing Act, specifically s 195G, such that any loss or damage suffered by the Appellant did not arise "as a result of the operation" of the RP Act, but from its registration under the Conveyancing Act. [20] The making of that submission by the Registrar General touched off a significant dispute between the parties about whether or not the Plan was registered in the Register of Plans under s 195G of the Conveyancing Act.
Third, the Registrar General submitted that it had not engaged in a relevant act or omission unless it was under some duty or obligation, imposed by the RP Act, to include a statement of the area of the relevant land in the Register, and that in the present case there was none. [21]
The primary judge rejected the first of these submissions as unnecessarily restricting the scope of the eligibility for compensation provided for by s 129. Instead, his Honour held that "the operation of the [RP] Act" as referred to in s 129(1) "mean[s] the general administration of the Act in so far as it relates to the issue of official searches". [22] His Honour rejected the third of these submissions for similar reasons. The primary judge found that the inclusion by an officer of the Registrar General of the incorrect area of Lot 1 in the Plan was a "step taken in recording the description of the Lot in the folio of the Torrens Register, as was required by s 32(1)(a)", even though "it was not specifically required by the [RP Act] and was only a step chosen by the officer as the appropriate means for the Registrar-General to comply with the duty imposed by s 32(1)(a)". [23]
[6]
Second Stage - Section 129(2)
The Registrar General relied on various provisions of s 129(2) of the RP Act as excluding the Appellant's claim.
First, the Registrar General contended that any loss or damage suffered by the Appellant arose "because of an error or miscalculation in the measurement of land" (s 129(2)(e)). The primary judge upheld that contention and this conclusion was sufficient to warrant the dismissal of the claim. [29] This conclusion is the subject of ground 2 of the appeal.
Second, the Registrar General contended that the Appellant's loss or damage was a consequence of a "negligent act or omission by [its] solicitor" which was "compensable under an indemnity given by a professional indemnity insurer" (s 129(2)(b)). The Registrar General contended that the Appellant's solicitors were negligent in failing to obtain, or to advise the Appellant to obtain, a survey of the subject land. [30] However, the primary judge found that their failure to do so "was consistent with the solicitors having acted in a manner that was widely accepted in Australia by peer professional opinion" [31] and that it was "not practicable" to determine whether the Appellant's loss or damage was "compensable under an indemnity given by a professional indemnity insurer" (s 129(2)(b)(ii)). [32] This aspect of the primary judgment is not the subject of a ground of appeal or a notice of contention.
Third, the Registrar General contended that the Appellant's loss or damage was a consequence of its own acts or omissions and any entitlement to compensation was excluded by s 129(2)(a). The primary judge found that the material cause of any loss or damage suffered by the Appellant was its failure to "take any effective step to verify the site area of the Land", [33] which was sufficient to deny its claim for compensation entirely. [34] The primary judge's rejection of the claim for compensation on this basis is the subject of ground 1 of the appeal.
[7]
Quantum of Claim
The primary judge also addressed the quantum of the Appellant's claim for compensation. [35] As noted, during the course of the proceedings the Appellant changed the basis of its claim so that it sought damages for the lost opportunity to obtain the Land for a lesser price as opposed to the difference between the price paid and the market value of the Land at the time of acquisition. His Honour addressed that case by reference to the approach of valuing lost commercial opportunities enunciated in Sellars v Adelaide Petroleum NL (1994) 179 CLR 332; [1994] HCA 4 at 355 ("Sellars"), whereby "the applicant must prove on the balance of probabilities that he or she has sustained some loss or damage" (emphasis in original) and, if so proved, the value of that loss or damage is ascertained "by reference to the degree of probabilities or possibilities". His Honour accepted the Appellant's contention that, had it determined its bid price based on the true area of the land, then it would have bid between $47.5m and $50m instead of $55m. [36] The primary judge found that there was a "substantial commercial possibility that the other selected bidders would have offered lower prices" and the vendor would have accepted the lesser bid by the Appellant. [37] His Honour concluded that was sufficient to demonstrate "some loss or damage" as referred to in Sellars and then valued that lost opportunity as worth $2 million. [38]
As explained below, in relation to ground 3 there is a substantial debate between the parties as to whether in doing so his Honour found that the Appellant was precluded from seeking compensation on the "lost opportunity" basis and instead was confined to adopting the approach stated in Potts v Miller (1940) 64 CLR 282 at 289 and 297; [1940] HCA 43 ("Potts v Miller"), where it was held that the proper measure of damages for the tort of deceit in cases where the injured party was induced to acquire property was the difference between the price paid and the fair or real value of the property at the time it was acquired. [39]
[8]
The Notice of Contention: The Register of Plans and "Operation of the Act"
It is appropriate to address the notice of contention first as it concerns the opening words of s 129(1), namely the "operation of [the RP Act]".
The Registrar General's notice of contention seeks to reagitate the second point noted above (at [34]). The Registrar General contended that, based on the primary judge's finding that the Plan, including its erroneous statement of area, was registered under Division 3 of Part 23 of the Conveyancing Act, his Honour should have held that "the act of registering the plan was not an act done in the exercise of the [Registrar General's] functions under the Real Property Act 1900". The notice further contended that this meant that the error as to the area of the Land was not "as a result of the operation of this Act" within the meaning of s 129(1) of the RP Act and that the relevant error was not "in the Register" within the meaning of s 129(1)(c).
As formulated, this notice of contention does not engage with the primary judge's reasoning. His Honour did not find that the "act of registering the plan" under Division 3 of Part 23 of the Conveyancing Act was an act done in the exercise of the Registrar General's functions under the RP Act. Instead, one of the (separate) bases for his Honour's rejection of this part of the Registrar General's case was to identity the relevant "act" of the Registrar General as the use of the Plan to create DP 657427, and in turn using that as the "description" of the land for the purposes of s 32(1)(a) of the RP Act. [40] Subject to what follows, the conduct of the Registrar General in creating a folio of the Register under s 32(1) was undoubtedly an "act … of the Registrar-General" under s 129(1) of the RP Act, which extended to the inclusion of the form of the "description" of Lot 1 that the Registrar General determined to make a record of under s 32(1)(a).
The other (separate) basis for this aspect of the primary judge's reasoning was his Honour's acceptance that "the Plan, when prepared by the Registrar-General [in 1978] for the purpose of identifying the land in certificate of title volume 13683 Folio 1, was an act … of the Registrar-General in the execution or performance of his or her functions or duties under this Act in relation to the land within s 129(1)(a)" of the RP Act. [41] With respect, the basis for this is not entirely clear, however I take it to be a reference to the "act" of the Registrar General in issuing a Certificate of Title. By a combination of ss 32 and 33 of the RP Act (as then in force) and the Real Property Act Regulation 1970 (NSW), the Registrar General was permitted (or authorised) to include a "plan drawing" of the land in or on the Certificate of Title. [42] The conclusion in the previous paragraph applies with equal force to that "act" of the Registrar General.
[9]
Ground 2: Error or Miscalculation in the Measurement of Land (RP Act, s 129(2)(e))
It is convenient to deal with ground 2 of the appeal at this point. Ground 2 contends that the primary judge erred in finding that, by the operation of s 129(2)(e) of the RP Act, the Appellant was not entitled to compensation. Various sub-particulars of ground 2 were included in the notice of appeal, but the essence of the Appellant's complaint is that the primary judge erred in finding that, in the context of s 129(2)(e), the term "measurement" refers to a stated or ascertained size or dimension as well as (or as opposed to) the process of ascertaining a size or dimension.
In addressing s 129(2)(e), the primary judge noted that the dispute between the parties turned on the meaning of "measurement". His Honour correctly noted that the Appellant contended that measurement "refers only to the process of determining the size of the physical attributes of land", which does not include the erroneous transposition of the area of land onto a plan without realising that a portion of the Lot had been resumed. The Registrar General submitted that "a measurement" also includes a statement of the area of land. [43] His Honour accepted that "measurement" was capable of having both meanings. The primary judge considered that the Registrar General's construction [44] was preferable because, while a statement of the "dimensions of land, including its area" [45] may be of potential significance to both the Registrar General's functions and persons with an interest in purchasing land, the process by which land is measured has no "real significance … what is significant is the result not the process". [46] His Honour also noted that there was no apparent reason why an error in one form of "measurement" would be excluded under s 129(2)(e) but not the other. [47] Further, his Honour concluded that, to the extent that there is any ambiguity in the meaning of the word "measurement", recourse to the Second Reading Speech concerning the introduction of s 129(2)(e) strongly supported the Registrar General's suggested construction. [48]
The Appellant's written submissions contended that the primary judge was obliged to determine which of the two meanings (ie, an erroneous process of measurement or an error in stated dimensions) was correct rather than to conclude that the term encompassed both. The Appellant contended that, because s 129(2)(e) refers to an "error or miscalculation", it must be referring to the process of measurement as opposed to the outcome because "it would be incorrect to speak of the miscalculation being in the result rather than the process" whereas it "is syntactically correct to speak of both an 'error' or 'miscalculation' in the process [of] measuring land" (emphasis added).
[10]
Ground 1: Act or Omission by the Claimant (RP Act, s 129(2)(a))
Ground 1 of the appeal contends that the primary judge erred in finding that the Appellant was not entitled to compensation by reason of s 129(2)(a) of the RP Act. The particulars of this ground take issue with each of the two critical findings of the primary judge on this topic as described above, namely that (i) the material cause of any loss or damage suffered by the Appellant was its failure to "take any effective step to verify the site area" of the Land [53] and (ii) that this meant that the claim for compensation failed in its entirety. [54]
[11]
Appellant's failure to verify the site area
The matters that led to the primary judge making the first of these findings were as follows. His Honour noted that the development of the Land proposed by the Appellant involved the aggregation of four separate land titles that bore no relationship to the existing building or the proposed development and it was the Appellant's proposed development that "created the significance of the accuracy of the individual areas". [55] His Honour also noted that the Memorandum disclaimed responsibility for the accuracy of the information contained therein. His Honour found that the relevant officer of the Appellant, Mr Zhang, was aware of that statement and of the fact that the Memorandum did not contain any survey, [56] but believed that there could not be an error given that the Plan was a "government record". [57] His Honour observed that it was reasonably obvious that the Plan was a "sketch plan" and bore no indication that it was prepared by a surveyor. [58]
The primary judge also found that the Appellant "did not instruct any of the consultants that it retained to verify all assumptions made or information relied upon that was critical to the achievement of the development approval that was the basis upon which [the Appellant] determined the bid price" and that the Appellant specified the services "its solicitors were required to provide in a manner that excluded [them from] having professional responsibility for issues concerning the Land other than [the Appellant] obtaining good title". [59] Further, implicit in his Honour's analysis is the very large financial commitment the Appellant entered into by purchasing the land and the sophisticated nature of its commercial objective for the site.
The Appellant's written submissions in effect made six points in support of its contention that its failure to verify the area of the site in the Plan did not involve any "fault" on its part or was not a relevant "act or omission" for the purposes of s 129(2)(a).
First, each of the relevant officers of the Appellant cross-checked the Deposited Plans against the areas stated in the Memorandum and it was submitted that it was never put to them that they ought to have been cognisant of the risk that the areas on the plans were wrong.
Second, it was contended that none of its consultants ever advised the Appellant of the risk that the stated areas might be wrong or that it should obtain a survey, in circumstances where the Appellant was entitled to rely on its consultants to advise it of possible risks.
[12]
Construction of s 129(2)(a): Failure to Apportion
The Appellant contended that, even if it was found that its failure to verify the area of the Land was a material cause of its loss, the primary judge erred in finding that it followed that it was precluded from recovering any of its loss as opposed to undertaking an apportionment exercise to reduce its claim proportionately.
Having made the above finding, the primary judge followed a number of first instance decisions to the effect that s 129(2)(a) of the RP Act should be interpreted in a way that requires some "fault" on the part of the claimant and, if that is established, then the right to compensation will be lost when the "faulty" act or omission of the claimant is a material cause of the loss or damage that has been suffered (Kumar at [107]-[108]; [119]; Chandra v Perpetual Trustees Victoria Ltd [2007] NSWSC 694; (2007) 13 BPR 24,675 at [52] per Bryson AJ; ("Chandra"); Wassell v Ken Carr Bobcat & Tipper Hire Pty Ltd [2021] NSWSC 1415 at [245]-[253]; ("Ken Carr Bobcat")). [67] The primary judge also followed those decisions in concluding that s 129(2)(a) did not allow for an "apportionment of responsibility regime".
In Kumar at [107]-[109], Darke J explained the position as follows:
"In Chandra v Perpetual Trustees Victoria Ltd (2007) 13 BPR 24,675; [2007] NSWSC 694 at [52] Bryson AJ said that s 129(2)(a) operates where the act or omission to which it refers 'arises through fault in some sense' … At [59], his Honour considered the words 'to the extent to which' which appear in s 129(2)(a) (and also in sub-paragraphs (b) to (d)) and the question whether they require an apportionment of responsibility. Bryson AJ stated:
I do not favour the view that s 129(2)(a) requires apportionment based on deciding the extent to which the loss or damage was a consequence of any act or omission by the person claiming compensation and the extent to which the loss or damage was a consequence of any act or omission by some other person or a consequence of something else: loss or damage is a consequence of an act or omission either wholly or not at all, whether or not other causes also operate, and it is unlikely that the legislature set about creating a new apportionment regime without in some way stating the principle or basis to be applied, as other apportionment legislation does.
I was not referred to any authority which casts doubt upon the correctness of the views expressed by Bryson AJ, but it was suggested by the plaintiff, and not clearly disputed by the Registrar-General, that s 129(2)(a) would allow the Court to reduce an amount of compensation otherwise payable, on the basis of an apportionment of responsibility to the claimant. However, no case where this had occurred was cited, and I am not aware of any such case.
For the reasons that follow I think that I should follow the view expressed by Bryson AJ that s 129(2)(a) does not establish an apportionment of responsibility regime. The words 'to the extent to which' are apt to allow a reduction in an amount of compensation otherwise payable, but a reduction is only permitted to the extent the loss or damage is 'a consequence' of relevant 'conduct of the claimant. The language of the provision seems directed to a question of causation of the relevant loss or damage, not to an attribution, on some basis, of responsibility for the loss or damage (cf s 5(2) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) and s 9(1)(b) of the Law Reform (Miscellaneous Provisions) Act 1965 (NSW)). I appreciate that the legislature has employed the expression 'to the extent to which' in s 129(2)(a) (and also in sub-paragraphs (b) to (d)) rather than the word 'where' that is found in sub-paragraphs (e) to (p). However, the expression when used in s 129(2) does not seem to me to be suggestive of anything more than a reduction in compensation (or preclusion of compensation) if the specified circumstances exist. So, s 129(2)(a) would operate to reduce the compensation to nil (or entirely preclude compensation) if the whole loss or damage is a consequence of relevant conduct of the claimant. If only an identified part of the loss or damage is a consequence of relevant conduct of the claimant, s 129(2)(a) would operate to reduce the compensation (or preclude compensation) to that extent." (emphasis added)
[13]
Nature of the "Act or Omission"
One part of the Appellant's submissions complained that, although the primary judge construed s 129(2)(a) as requiring "some fault on the part of the claimant before the right to compensation is excluded", [68] his Honour did not specify what constitutes "fault". The Appellant submitted that the appropriate test threshold should require conduct that amounts to "contributory negligence or … want [of] reasonable care" in the protection of the claimant's own interests.
As noted, numerous first instance decisions have proceeded on the basis that s 129(2)(a) is only engaged in the event of some "fault" on the part of the claimant; i.e. it is not sufficient simply to point to any act or omission of the claimant that contributed to the loss being suffered (Chandra at [52] per Bryson J; Chandra v Perpetual Trustees Victoria Ltd [2008] NSWSC 178; (2008) 13 BPR 25,259 at [11] per Bryson AJ; Kumar at [107]; Ken Carr Bobcat at [248]). These decisions have also held that negligence, in the sense of a failure by a claimant, or those for whom it is legally responsible, to take reasonable care to protect his, her or its own interests is sufficient to satisfy s 129(2)(a) (Kumar at [119]; Ken Carr Bobcat at [253]; Chandra at [54]). This is consistent with the extract from the Second Reading Speech to the Amendment Act set out above. However, it is unnecessary to determine whether a finding of negligence is necessary to engage s 129(2)(a) or whether some other form of fault suffices. Although the primary judge did not express it in such terms, his Honour appeared to treat the finding that the Appellant's failure to "take any effective step to verify the site area" of the Land was a material cause of any loss or damage it suffered as synonymous with a failure on its part to take reasonable care for the protection of its own interests. [69] In any event, in upholding that finding I regard it as such.
[14]
Relative Responsibility and Effective Cause
Finally, in relation to this ground, the Appellant's submissions took issue with the following analysis by the primary judge: [70]
"As a result of this analysis of the relative responsibility for the error in the Plan and the failure by [the Appellant] to take any effective step to verify the site area of the Land, I find that the material cause of any loss or damage suffered by [the Appellant] was an act or omission of [the Appellant] for the purposes of s 129(2)(a), and that [the Appellant's] responsibility for the loss or damage extends to the whole of that loss or damage.
This conclusion recognises that the inadvertent transposition error made by an officer of the Registrar-General, when the original sketch plan was prepared on 2 June 1995, was as a matter of fact a material cause of [the Appellant's] loss or damage, but proceeds upon the basis that, having regard to the relative responsibility for the loss or damage as between the two separate causes, the proper interpretation of s 129(2)(a) requires that the Court treat [the Appellant's] act or omission as the effective cause of its loss or damage." (emphasis added)
The Appellant contended that the primary judge's attribution of its conduct as the "effective cause" of its loss or damage was inconsistent with the language of s 129(2)(a). It also contended that his Honour erred in inquiring into the parties' "relative responsibility" for the loss or damage because, according to the Appellant, it would be inconsistent with the RP Act if "the effect of s 129(2)(a) were that an entitlement to compensation could be lost because, relatively speaking, the applicant was more at fault for the loss and damage suffered than the Registrar General when the Act does not require that there be any fault on the Registrar General's part in order [for] there to be [an] entitlement to compensation under s 129(1) in the first place."
I have already upheld the second of these contentions, although I consider that it warrants a rejection of the proposition that there must be any apportionment exercise by reference to fault. That said, I agree that s 129(2)(a) does not require or permit a comparison between the "relative [causal] responsibility" for the matter that invokes s 129(1), and any fault of the claimant, to establish some "effective cause" if that is what the primary judge meant. The concept of "effective cause" has no role to play in this context (cf, Moneywood Pty Ltd v Salamon Nominees Pty Ltd (2001) 202 CLR 351; [2001] HCA 2 at [81]-[83] per Gummow J). Instead, s 129(2)(a) simply requires a determination of whether some (faulty) act or omission of the claimant was a material cause of the relevant loss or damage. If it was, then compensation cannot be awarded for that loss or damage. On the primary judge's findings, which I have upheld, the Registrar General's reliance on s 129(2)(a) succeeds.
[15]
Conclusion in relation to Ground 1
It follows that I would reject ground 1.
[16]
Ground 3: Loss or Damage
Ground 3 of the notice of appeal contends that "[t]he primary judge erred in finding, if he so found, that [the Appellant's] damages should have been assessed by reference to the difference between the price paid for the land and its market value at the date of acquisition."
Aspects of the reasoning of the primary judge in relation to the determination of the quantum of the Appellant's claim are summarised above. As formulated, this ground reveals some uncertainty about the status of a finding made by the primary judge about the proper approach to quantifying the Appellant's loss or damage. This uncertainty arises from the change in the Appellant's approach to the formulation of its case as to quantum, which in turn led to the Registrar General submitting that its earlier submissions "which address the Potts v Miller … basis of assessment can therefore be disregarded in circumstances where the plaintiff has now eschewed it" [71] as a basis for its claim. His Honour found that the Registrar General had therefore abandoned a contention that the proper approach to assessing the Appellant's pleaded compensation was by reference to the principle supposedly stated in Potts v Miller. Even so, his Honour addressed the significance of Potts v Miller as follows: [72]
"As a result of the course taken by the parties, the Court finds itself in the position that it is required to consider [the Appellant's] entitlement to compensation on a different legal basis than the one the Court considers is truly applicable. Consequently, the reasoning that follows is not only obiter by reason of the fact that I have found that [the Appellant] is not entitled to compensation, but it also should not be taken to reflect my own considered view of what the applicable legal principles would have been if I had found otherwise on the issue of entitlement to compensation.
…
In my view, even though the law may theoretically allow a choice between these two alternative means of quantifying [the Appellant's] loss, in the usual case where the claimant acquires the property, and so has not lost an opportunity to acquire, the proper approach to quantifying the loss is on the basis of the Potts v Miller principle. Simply put, [the Appellant's] loss, as recognised by the law, is the difference between the price that it paid and the objectively determinable true value of the Land." (emphasis added)
[17]
Conclusion and Proposed Orders
It follows from my rejection of each of grounds 1 and 2 of the Appeal that I would dismiss the appeal.
I propose the following orders:
(1) Appeal dismissed.
(2) The Appellant pay the Respondent's costs of the Appeal.
MITCHELMORE JA: I agree with Beech-Jones JA.
[18]
Endnotes
Ausbao (286 Sussex St) Pty Ltd v The Registrar-General of New South Wales [2021] NSWSC 1651 at [4] ("Ausbao").
Ausbao at [5].
Ausbao at [5].
Ausbao at [6].
Ausbao at [278].
Ausbao at [6].
Ausbao at [7].
Ausbao at [169].
Ausbao at [136]-[137].
Ausbao at [136(4)].
See footnote 42.
Ausbao at [136(9)].
Ausbao at [136(10)-(11)].
Ausbao at [136(12)].
Ausbao at [154].
Ausbao at [8].
Ausbao at [12].
Ausbao at [12].
Ausbao at [55]-[56].
Ausbao at [191].
Ausbao at [103].
Ausbao at [80]-[96].
Ausbao at [113].
Ausbao at [192].
Ausbao at [199].
Ausbao at [202].
Ausbao at [206].
Ausbao at [116] and [206].
Ausbao at [208]-[227].
Ausbao at [282].
Ausbao at [297].
Ausbao at [308].
Ausbao at [331].
Ausbao at [332].
Ausbao at [339]-[404].
Ausbao at [385].
Ausbao at [388].
Ausbao at [404].
Ausbao at [344] and [352].
Ausbao at [202].
Ausbao at [199].
As at 23 August 1978, s 32(1) of the RP Act provided that a Certificate of Title shall be in the prescribed form and the Registrar General shall record, inter alia, "particulars of all subsisting encumbrances affecting the land" (s 32(1)(a)(i)). Subsection 32(1)(b) provided that the Registrar General may record on the Certificate of Title such other matters as he or she was "authorised to record" under the RP Act or any other State or Commonwealth Act. Subsection 32(2)(c) empowered the Registrar General to record in the Register, "in such manner as he shall determine, such particulars of the grant or certificate of title as he thinks fit". Regulation 4 of the Real Property Act Regulation 1970 (NSW) required that a Certificate of Title be in or to the effect of Form 1. Form 1 provided for a Schedule 2 to the Certificate of Title with space for the inclusion of a "plan drawing". With effect from 14 December 1979, s 32 was amended so that it required a folio of the Register to record a "description of the land" (s 32(1)(a); Real Property (Computer Register) Amendment Act 1979 (NSW)).
Parties
Applicant/Plaintiff:
Ausbao (286 Sussex Street) Pty Ltd
Respondent/Defendant:
The Registrar General of New South Wales
Legislation Cited (14)
Main Roads Act 1924(NSW)
Real Property (Computer Register) Amendment Act 1979(NSW)
Real Property Amendment (Certificates of Title) Act 2021(NSW)
Real Property Amendment (Compensation) Act 2000(NSW)
Real Property and Conveyancing Legislation Amendment Act 2009(NSW)
ct 2002 (NSW)
Cases Cited: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27; [2009] HCA 41
Ausbao (286 Sussex St) Pty Ltd v The Registrar-General of New South Wales [2021] NSWSC 1651
Challenger Managed Investments Ltd v Direct Money Corporation Pty Ltd (2003) 59 NSWLR 452; [2003] NSWSC 1072
Chandra v Perpetual Trustees Victoria Ltd [2007] NSWSC 694; (2007) 13 BPR 24,675
Chandra v Perpetual Trustees Victoria Ltd [2008] NSWSC 178; (2008) 123 BPR 25,259
Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33
Gould v Vaggelas (1985) 157 CLR 215; [1985] HCA 75
Harrison v Melhem (2008) 72 NSWLR 380; [2008] NSWCA 67
HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004)217 CLR 640; [2004] HCA 54
Kumar v Registrar-General of New South Wales [2021] NSWSC 1103; (2021) 20 BPR 41,609
Lincu v Registrar-General [2019] NSWSC 568; (2019) 19 BPR 39,351
March v E & MH Stramare Pty Ltd (1991) 171 CLR 506; [1991] HCA 12
Moneywood Pty Ltd v Salamon Nominees Pty Ltd (2001) 202 CLR 351; [2001] HCA 2
Podrebersek v Australian Iron and Steel Pty Ltd (1985) 59 ALJR 492; [1985] HCA 34
Potts v Miller (1940) 64 CLR 282; [1940] HCA 43
Sellars v Adelaide Petroleum NL; Poseidon Ltd v Adelaide Petroleum NL (1994) 179 CLR 332; [1994] HCA 4
Svanosio v McNamara (1956) 98 CLR 186; [1956] HCA 55
Sydney Seaplanes Pty Ltd v Page (2021) 106 NSWLR 1; [2021] NSWCA 204
Toteff v Antonas (1952) 87 CLR 647; [1952] HCA 16
Voudouris v Registrar-General (1993) 30 NSWLR 195
Wassell v Ken Carr Bobcat & Tipper Hire Pty Ltd [2021] NSWSC 1415; (2021) 159 ACSR 473
Texts Cited: New South Wales Legislative Council, Parliamentary Debates (Hansard), 31 May 2000, Real Property Amendment (Compensation) Bill
Category: Principal judgment
Parties: Ausbao (286 Sussex Street) Pty Ltd (Appellant)
The Registrar General of New South Wales (Respondent)
Representation: Counsel:
Mr G Sirtes SC; Mr H Grace (Appellant)
Mr R Lancaster SC; Mr H Altan (Respondent)
Solicitors:
Aequitas Lawyers (Appellant)
Office of the Registrar General of New South Wales (Respondent)
File Number(s): 2021/363148
Decision under appeal Court or tribunal: Supreme Court
Jurisdiction: Equity
Citation: Ausbao (286 Sussex St) Pty Ltd v The Registrar-General of New South Wales [2021] NSWSC 1651
Date of Decision: 15 December 2021
Before: Robb J
File Number(s): 2018/200732
On 3 September 1974, plan of acquisition DP 571666 was registered. It noted the Commissioner for Main Roads' proposal to acquire part of Lot A in DP 181693 for the purposes of the Main Roads Act 1924 (NSW), which in due course was effected by Transfer P251398. [10] The part of Lot A in DP 181693 that was transferred to the Commissioner for Main Roads had an area of 91.1m². At the time of this transfer, a new Certificate of Title for the transferred land was not issued.
On 23 December 1975, Transfer P357129 was registered, which had the effect of recording the original registered proprietor of the whole of Lot A in DP 181693 as the registered proprietor of part of that lot, being the residue of the land after the transfer of the other part to the Commissioner for Main Roads.
As indicated on the cancelled Certificate of Title described above at [12], on 23 August 1978, the Registrar General issued a new Certificate of Title for the residue of the original lot, being volume 13683 folio 1. A copy of this Certificate of Title was tendered before the primary judge. It consisted of four pages. Page 1 was the same as Sheet 2 of DP 657427 save for the absence of the note indicating that it was "Prepared 2-6-1995" etc. Page 2 was the same as Sheet 1 and thus included the diagram of Lot 1 with the misleading statement that its area was 588m2. The third and fourth pages were the standard form schedules that allowed for the handwritten inclusion of the details of the registered proprietor and dealings in the land. The legislative basis for a Certificate of Title in this form is noted below. [11]
The primary judge observed that, although the area of 588m2 was the correct area of the land comprised in the original Certificate of Title Volume 4290 Folio 24, the officer of the Registrar General who prepared the sketch that was included in Certificate of Title Volume 13683 Folio 1 made a transposition error by stating the area of the residue lot as being the same as the original lot. This did not allow for the fact that an area of 91.1m2 (including 85.7m2 of Lot 1) had been transferred to the Commissioner for Main Roads. [12]
On 2 June 1995, the Registrar General prepared DP 657427, which recorded the same diagram and area for Lot 1 as was contained in the Certificate of Title. Thus, this plan shows the Lot as being Lot 1 in DP 657427 which is depicted with an area of 588m2. The primary judge accepted that the "purpose for preparing the departmental plan DP 657427 was stated to be for providing a unique identifier to the land illustrated so as to create a computer folio of the Torrens Register". His Honour found that "the Registrar-General perpetuated in DP 657427 the error that had originally been made at the time of the preparation of certificate of title volume 13683 folio 1". [13]
The primary judge also observed that, "[a]lthough on 2 June 1995 a computer folio of the Torrens Register for the Lot was issued, Certificate of Title Volume 13683 Folio 1 remained the current edition of the certificate of title for that land". [14] Later in the judgment, his Honour referred to evidence from an expert called by the Registrar General, to the effect that on 2 June 1995 a computer folio of the Torrens Register was issued, namely folio identifier 1/657427. The expert also stated that on 12 October 2000, the Certificate of Title for that land was lodged with the Registrar General for the purpose of registering a particular transfer and mortgage. Upon that registration, the Registrar General cancelled Certificate of Title Volume 13683 Folio 1 and "issued the new certificate of title for the land in the computer folio". [15] Leaving aside whether this accurately describes the effect of s 33 of the RP Act as in force on 12 October 2000, this aspect of the Registrar General's expert evidence, as described by the primary judge, appears to have been accepted by the Appellant's expert.
There is no provision of the RP Act nor of the Real Property Regulation 2019 (NSW) which specifies the form of "description of the land" that the Registrar General must or may record in a folio. However, various provisions of the RP Act deal with the registration of a "plan" or a "plan of survey" as part of the process of bringing land under the RP Act (eg, RP Act, ss 12AA(1)(b), 28C(2), 28V(1), 32(3)) and thus contemplate that the description will be by reference to a plan. In particular, s 43B of the RP Act specifically contemplates that a folio of the Register can be created for a lot in a deposited plan registered under Division 3 of Part 23 of the Conveyancing Act. Part 3 of the Conveyancing (General) Regulation 2018 (NSW) regulates the "Register of Plans", being the plans registered under Division 3 of Part 23 of the Conveyancing Act. Any such deposited plan must include the "complete dimensions (including area) of each parcel" of land (cl 11(4)).
The significance of a folio of the Register is sufficiently described by ss 40-42 of the RP Act. Subsections 40(1) and (1A) make manual and computer folio certificates conclusive evidence, inter alia, that "any person recorded in the folio as the registered proprietor of an estate or interest in the land comprised in the folio is the registered proprietor of that estate or interest and that the land comprised in that folio has been duly brought under the provisions of the [RP Act]." Section 41 precludes any dealing in the land from being effective until recorded in the Register under the RP Act. Section 42 contains the guarantee of indefeasibility proffered to any registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register.
Part 14 of the RP Act deals with the establishment and maintenance of, and the making of claims against, the Fund. Section 131 provides a means of making an administrative claim on the Fund against the Registrar General. Section 132 regulates the bringing of court proceedings against the Registrar General (as nominal defendant) for compensation out of the Fund. For example, s 132(2) provides that such proceedings may only be commenced if administrative proceedings have been commenced and determined beforehand or, failing that, with the leave of the Court or the consent of the Registrar General.
Section 129 specifies the circumstances in which compensation is payable from the Fund. Subsections 129(1) and 129(2) relevantly provide:
"129 Circumstances in which compensation payable
(1) Any person who suffers loss or damage as a result of the operation of this Act in respect of any land, where the loss or damage arises from -
(a) any act or omission of the Registrar-General in the execution or performance of his or her functions or duties under this Act in relation to the land (including any such act or omission of the authorised operator), or
(b) the registration (otherwise than under section 45E) of some other person as proprietor of the land, or of any estate or interest in the land, or
(c) any error, misdescription or omission in the Register in relation to the land, or
(d) the land having been brought under the provisions of this Act, or
(e) the person having been deprived of the land, or of any estate or interest in the land, as a consequence of fraud, or
(f) an error or omission in an official search in relation to the land, or
(g) any error of the Registrar-General in recording details supplied in the notice referred to in section 39 (1B),
is entitled to payment of compensation from the Torrens Assurance Fund.
(2) Compensation is not payable in relation to any loss or damage suffered by any person -
(a) to the extent to which the loss or damage is a consequence of any act or omission by that person, or
(b) to the extent to which the loss or damage -
(i) is a consequence of any fraudulent, wilful or negligent act or omission by any solicitor, licensed conveyancer, real estate agent or information broker, and
(ii) is compensable under an indemnity given by a professional indemnity insurer, or
(c) to the extent to which that person has failed to mitigate the loss or damage, or
(d) to the extent to which the loss or damage has been offset by some other benefit to that person that has arisen from substantially the same circumstances as those from which the loss or damage has arisen, or
(e) where the loss or damage arises because of an error or miscalculation in the measurement of land, or
…
(i) where the loss or damage arises from an error contained in a plan lodged in accordance with Division 3C of Part 2 of the Conveyancing Act 1919, or
…
(l) where the loss or damage arises from the execution of an instrument by an attorney (under a power of attorney) acting contrary to, our outside of, the authority conferred on him or her by the power of attorney, or
(m) where the loss or damage is the result of an easement not being recorded in the Register (except where the easement is not recorded in the Register due to an error of the Registrar-General)." (emphasis added)
Subsection 129(5) provides that "any entitlement to compensation under subsection (1) does not confer any entitlement to compensation for personal injury." Section 129A qualifies any entitlement to compensation under s 129(1) so that the total compensation payable for "being deprived of land or any estate or interest in land, is limited to the market value of the land at the date on which compensation is awarded" plus any legal, valuation or other professional costs reasonably incurred in making the claim. Section 129B imposes a limit on the compensation recoverable for the registration and execution of a mortgage obtained by fraud. Leaving aside interest and costs which are also limited (ss 129B(5) and 129B(6)), the compensation payable to a mortgagee is "limited to the market value of the land at the date on which compensation is awarded to the mortgagee less the amount secured by any other mortgage affecting the same land … that has, or would have had, more priority" (s 129B(3)).
Part 13 of the RP Act is entitled "Civil rights and remedies." It includes s 120 which authorises proceedings for the recovery of damages to be brought in the Supreme Court by any person "who suffers loss or damage as a result of the operation of the Act in respect of any land", where the loss or damage arises from various specified circumstances that are in many respects similar to those specified in s 129(1). Subsections (2) and (3) provide that where such proceedings are brought against the Registrar General, they are to be taken in accordance with Part 14 of the RP Act. In Challenger Managed Investments Ltd v Direct Money Corporation Pty Ltd (2003) 59 NSWLR 452; [2003] NSWSC 1072 ("Challenger"), Bryson J observed that "[i]n my understanding s 120 does not create a cause of action or an entitlement to the recovery of damages" and that the "operation of s 120 which is significant is its direction of proceedings against the Registrar General into proceedings in accordance with Part 14" (at [69]). The parties to this appeal appear to have proceeded on the same basis and it is not necessary to consider the provision further.
Parts 13 and 14 (including s 129, but excluding ss 129(5), 129A and 129B), were introduced into the RP Act, largely in their present form, with effect from 15 September 2000 by the Real Property Amendment (Compensation) Act 2000 (NSW) (the "Amending Act"). In Challenger, Bryson J reviewed the then recent introduction of Parts 13 and 14. His Honour observed that "[t]he amendments enacted in 2000 were intended to be and operate as a wide ranging reform, a new beginning of statute law relating to compensation from the Torrens Assurance Fund", with the result that "a regime is established in which loss or damage as a result of the operation of the Act is compensated for as part of the ordinary workings of the Torrens System", whereby "[c]ompensation is not an extraordinary remedy, and is not reserved for faults, blunders or enormities" (at [76]). His Honour also described "[t]he overall control mechanism in s 129(1) … that the plaintiff must have suffered loss or damage as a result of the operation of the Act; and the workings of indefeasibility will usually have a part in the plaintiffs' rights' being in a worse situation than he was entitled to have them but for the operation of the Act" (at [74]; emphasis added).
With respect to the second of these submissions, the primary judge accepted that "DP 657427 was registered in the Register of Plans maintained under the Conveyancing Act". [24] However, his Honour found that the original preparation of a plan in 1978 for the purpose of identifying the land in Certificate of Title Volume 13683 Folio 1, was an "act … of the Registrar-General in the execution or performance of his or her functions or duties under this Act in relation to the land" within s 129(1)(a) of the RP Act. [25] Further, and in the alternative, his Honour found that "the act of the Registrar-General in using that plan on 2 June 1995 to create the plan that was registered as DP 657427 was also an act of the Registrar-General in the execution or performance of his or her functions or duties under the Act within s 129(1)(a)" and that it did "not matter that the completed deposited plan containing the Plan may only have physically been registered in the Register of Plans". [26] His Honour's rejection of the Registrar General's submission on this topic is the subject of a notice of contention.
It followed from these findings that the primary judge held that "[t]he creation by the Registrar-General of the Plan containing the error as to the area of the Lot was an act of the Registrar-General in the execution or performance of his or her functions or duties under the Act in relation to the land within s 129(1)(a)". [27] His Honour was also satisfied that the inclusion of the incorrect area in the Plan was an "error, misdescription or omission in the Register in relation to the land" within the meaning of s 129(1)(c) (citing Hodgson J, as his Honour than was, in Voudouris v Registrar-General (1993) 30 NSWLR 195 at 200; "Voudouris"). [28]
The Registrar General's written submissions in support of the notice of contention did not proceed on the misapprehension that his Honour found that the registration of a plan under Division 3 of Part 23 of the Conveyancing Act was an act undertaken in the exercise of the Registrar General's functions under the RP Act. Instead, the Registrar General submitted that, in circumstances where he or she was not required to determine the dimensions of the land accurately and was not obliged to take responsibility for the statements of areas in lots the subject of the folios of the Register, then it followed that the Plan (and all of its contents) did not form part of "the Register" and was thus not capable of giving rise to any loss "as a result of the operation of [the RP Act]". To similar effect, the Registrar General contended that the RP Act does not guarantee the accuracy of information relating to measurements or dimensions so that "even if 'as a result of the operation of this Act' was capable of applying to losses beyond those relating to indefeasibility, it was not so capable if the loss related to information relating to a measurement or dimension". It was submitted that the reference to the Plan in the Folio merely "identified" the Land and did not certify that the Land had all the dimensions and characteristics attributed to it in the Plan.
To an extent, these contentions seek to resurrect the first and third submissions made to the primary judge and rejected by his Honour (see [33] and [35]). Thus, the Registrar General seeks to confine the reference to "act or omission" in s 129(1)(a) of the RP Act so that it only refers to the discharge of specific obligations imposed by the RP Act on the Registrar General. The Registrar General also seeks to confine the phrase "as a result of the operation of this Act" so that it only refers to those provisions of the RP Act that in and of themselves affect or interfere with substantive rights, such as the guarantee of indefeasibility in s 42.
There is nothing in either the text or the legislative history of s 129 of the RP Act that warrants it being so narrowly construed or reading down its plain terms. As noted, in Challenger, Bryson J referred to the phrase "operation of the Act" in s 129(1) as an overall "control mechanism" (at [74]). Implicit in his Honour's observation that the "workings of indefeasibility will usually have a part in the plaintiffs' rights being in a worse situation than he was entitled to have them but for the operation of the Act" is the proposition that that will not always be the case (at [74]). Otherwise, the Registrar General was obliged by s 32(1)(a) of the RP Act to include a "description of the land" in the Register although, as noted, the form of that "description" is a matter for him or her. As a matter of ordinary English usage, a statement of the total area of a parcel of land is as much a part of its "description" as is an identification of its boundaries. Any concern about whether this construction amounts to the provision of some form of "guarantee" beyond that proffered by the RP Act (ie, as to indefeasibility) is (largely) addressed by s 129(2), including s 129(2)(e) which is considered below. Similarly, part of the RP Act's "operation" is the establishment and maintenance of the Register, especially bearing in mind that the legislation gives effect to a system of title by registration as opposed to registration of title.
I would reject the notice of contention.
There is some force in the Appellant's contention but I do not accept that the inclusion of the phrase "error or miscalculation" compels the conclusion that the reference to "measurement" in s 129(2)(e) can only be a reference to the process of measurement and not the measurement itself. There is nothing syntactically incorrect in the phrase "error … in the measurement of land" being treated as synonymous with, or including, an erroneous measurement of land. The inclusion of the words "or miscalculation" is explicable, or at least potentially explicable, on the basis that it merely puts beyond doubt that any erroneous measurement of land included in the Register, regardless of its cause and including those that arise from an arithmetic miscalculation, fall within the provision. Put another way, the phrase "error or miscalculation" may simply be a compendious reference to all possible forms of mistake that have resulted in an incorrect measurement. Thus, the primary judge concluded that "error or miscalculation" extends to "any process of reasoning that commenced with a starting position and deduced a final result by making or failing to make necessary logical adjustments to determine the true relationship between the start and end positions". His Honour added that, if it was necessary to characterise the process by which the officer of the Registrar General deduced that the Lot had the area stated in the Plan, then it "was a process of miscalculation". [49]
The Appellant disputed that part of the primary judge's reasoning that relied on the "ascertained dimensions", including the area of the land, as having potential significance to the Registrar General and purchasers, but attributed no significance to the "process of measurement." In relation to the position of the Registrar General, the Appellant contended that the necessity of including a statement of the area of the land was only applicable to those deposited plans which are "formal land survey plan[s]" prepared by or on behalf of a registered land surveyor (see Conveyancing (General) Regulation, cll 3, 9, 10 and 11(4); Surveying and Spatial Information Act 2002 (NSW), s 3). In relation to the position of the purchasers, the Appellant contended that the primary judge's reasoning on this topic was inconsistent with his Honour's finding in relation to s 129(2)(a) which was, supposedly, to the effect that "persons" could not rely on a statement of the area and are disentitled to compensation unless they obtain a survey.
These submissions misstate the primary judge's reasoning. His Honour considered that both the Registrar General and potential purchasers were more likely to be concerned with the fact, rather than the cause, of errors in the "dimensions of land, including its area". [50] I regard this proposition as self-evident in that the Registrar General can be taken to have an interest in the accuracy of the Register, which includes a description of land, and purchasers can generally be assumed to be concerned with ascertaining what, and in some cases how much, land they are buying. As explained below, in addressing s129(2)(a) his Honour did not conclude that "persons" could not rely on statements of areas on a plan referred to in the Register. Instead, his Honour found that a specific purchaser who outlayed $55 million on the basis that it will commercially develop land of a particular size should independently verify the area of the land being purchased.
The Appellant further contended that focussing upon how the error arose as the relevant discrimen "allows legal responsibility for errors in the Register to be assigned to whoever is responsible for the error". Hence, the Appellant submitted that, if the right to compensation is excluded where the error is caused by the process of measuring the dimensions or area of land, then that "would mean the Torrens Assurance Fund would not be liable to pay compensation in circumstances where other people (eg, surveyors) were responsible for the relevant error or miscalculation".
This submission overlooks that s 129(2)(e) does not differentiate between errors or miscalculations committed by, or on behalf of, the Registrar General and others, including surveyors. By contrast, s 129(2)(m) differentiates between errors of the Registrar General and errors of others in not recording an easement in the Register. It follows that identifying the person or entity who committed the error or miscalculation will not assist in determining whether compensation is payable. This leaves the point raised by the primary judge, namely that there is no apparent rationale for adopting a discrimen for making compensation payable that is dependent upon whether or not there was an error in the process of measurement as opposed to an erroneous measurement. Moreover, the Appellant's construction requires the undertaking of what may be a detailed and intensive inquiry into the historical cause of an erroneous measurement to determine whether it was caused by a process of measurement or something else, where there is no apparent rationale for that distinction.
This leads to a consideration of the secondary materials surrounding the introduction of s 129(2)(e). As noted, that subsection was introduced into the current version of s 129 on its enactment in 2000 by the Amending Act, save that it commenced with the words "to the extent to which loss or damage arises because of an error". (The word "where" replaced "to the extent to which" by item 13 of Schedule 1 to the Real Property and Conveyancing Legislation Amendment Act 2009 (NSW)). In the Second Reading Speech to the Amending Act in the Legislative Council, the relevant Minister stated as follows in relation to the form of s 129(2)(e) that was enacted in 2000: [51]
"The exception provided in proposed section 129 (2) (e) relates to errors or miscalculations in the 'measurement' of land. In other words, it relates to errors in the dimensions or areas of parcels of land. In regard to dimensions, the proposed section 129 (2) (e) merely restates the existing common law. There is a line of legal cases which recognise that dimensions shown in title diagrams may not be conclusive and that extrinsic evidence is admissible to identify the land comprised in a Certificate of Title. In regard to areas of parcels, mention must be made of the case of Voudouris v Registrar General (1993) 30 NSWLR 195. In this case, a surveyor overstated the area of a lot in a plan of subdivision. The relevant portion of the plan was reproduced on the Certificate of Title for the land and the court found that the plaintiffs had relied on the statement of the area on the title when they purchased the land.
While the court decided that there was 'no responsibility or fault in the Registrar-General', the Torrens Assurance Fund was held liable for the error by the surveyor in calculating the area of the parcel of land. Prior to the Voudouris decision it was not thought, nor was it ever intended, that the State guarantee of title extended to the area of a parcel of land. It is a matter of great concern that, as New South Wales has a less than perfect State survey system, the decision in the Voudouris case may expose the Torrens Assurance Fund to a multitude of claims for compensation for errors made in plans of such age that the surveyor could not be called to account. Furthermore, it was never the role of the Torrens Assurance Fund to underwrite the negligence of private surveyors. Accordingly, the bill excludes liability arising from errors in the measurement of the area of land." (emphasis added)
The Minister also stated that if a purchaser was concerned about the area of land they were purchasing then "a check can be made as part of the identification survey process or they can have a surveyor calculate the area of the property from existing plans, as a check on the accuracy of the stated area."
The Appellant contended that no reliance could be placed on this Second Reading speech because s 129(2)(e) is neither ambiguous nor obscure (cf Interpretation Act 1987 (NSW), s 34(1)(b)(i)) and only conveys the meaning it contends for. However, it follows from the above that, at the very least, I consider that s 129(2)(e) is reasonably capable of being construed as describing an erroneous measurement. The Appellant also contended that, even if the Second Reading Speech was relevant, it is of little assistance in attempting to elucidate the meaning of a statutory phrase as opposed to identifying the mischief which the relevant provision is designed to address (citing Harrison v Melhem (2008) 72 NSWLR 380; [2008] NSWCA 67 at [12] and [162]). However, the Second Reading Speech unequivocally confirms that one of the purposes of inserting s 129(2)(e) was to overcome the perceived effect of Voudouris; i.e. that was the object of the provision and Voudouris was the "mischief" it was intended to overcome. This understanding of its purpose informs the proper construction of the provision as a whole (Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27; [2009] HCA 41 at [47]; Sydney Seaplanes Pty Ltd v Page (2021) 106 NSWLR 1; [2021] NSWCA 204 at [37]-[39]).
The Appellant submitted that the object of s 129(2)(e) identified in the Second Reading Speech was the prevention of claims being made on the Fund resulting from errors by surveyors, as opposed to errors by the Registrar General, and that this was consistent with the facts of Voudouris, where the source of the incorrect statement of area was a surveyor's error. However, that submission suffers the difficulty noted above, namely that s 129(2)(e) is not capable of being read down to exclude errors by the Registrar General. The Second Reading Speech may have instanced errors by surveyors and the facts of Voudouris as a type of case that was sought to be excluded, but the statute confirms that the mischief being addressed was wider than simply errors by surveyors.
Thus, I consider that the primary judge was correct to conclude that the legislative history of the provision overwhelmingly supports the construction of s 129(2)(e) of the RP Act contended for by the Registrar General.
The Appellant's submissions also took issue with the primary judge's conclusion that "the established historical view of the limits on the extent to which the Torrens Register should be accepted as being reliable in respect of dimensions and areas has survived into the exclusion from the right to compensation that is found in s 129(2)(e)". [52] The Appellant accepted that indefeasibility does not attach to the boundaries or areas shown on a plan, but contended that "does not mean that it was ever the common law position that compensation was not available from the Torrens Assurance Fund arising from the inclusion of the erroneous area on the plan".
It makes little sense to speak of the "common law position" in this context when at all times the question of compensation has been resolved by the construction and application of s 129 and its predecessors. It can be accepted that a construction of s 129(2)(e) which excludes compensation for loss or damage arising from the inclusion of an erroneous measurement on a Certificate of Title or plan, which has no statutory guarantee of indefeasibility, is consistent with enabling compensation to be claimed in various circumstances where loss arises from the guarantee of indefeasibility as contemplated by s 129(1) (eg, s 129(1)(b)). However, as s 129(1) is not confined to that circumstance, this does not advance the inquiry into the proper construction of s 129(2)(e). For the reasons set out above, I consider that the primary judge's construction of s 129(2)(e) was correct.
I would reject ground 2.
Third, the Appellant contended that the parties' legal experts agreed that the probability of a deposited plan containing a material error in area was "extremely rare" and "would be unlikely to arise in the course of a solicitor's career".
Fourth, it was submitted that it was contradictory for the primary judge to find that the conduct of the Appellant's solicitors, in failing to advise of the risk that the area depicted on the plan might be wrong and that it would be prudent for the Appellant to obtain a survey, was consistent with what is widely accepted as competent professional practice in Australia while also finding the Appellant to be at fault for not appreciating that risk and taking that step in mitigation. A related submission concerned the evidence of the Appellant's expert solicitor, to the effect that a reasonably competent solicitor would not expect the office of the Registrar General to make the transposition error that it did in this case.
Fifth, the Appellant submitted that the amount of the purchase price and the commercial significance of an area of land were likely to be features of almost all commercial property transactions.
Sixth, it was submitted that all of the information made available by the vendor, including the Memorandum, was consistent with the Land having a total area of 1,337.4m2 "and all the other bidders appear to have assumed that this was the area of Land because [it was submitted that it was] highly improbable that any of them would have been prepared to allow the Expression of Interest process to proceed unless the true position was known to all the parties". To the extent that this submission imputes certain conduct to the other bidders, it is inconsistent with the (unchallenged) finding of the primary judge that: [60]
"The Court cannot know how the other bidders would have reacted to knowledge of the true site area of the Lot. The difficulty is compounded because the Court has no basis for determining on the evidence whether the other bidders were misled by the error in the site area of the Lot, or even whether they made their bids using the same approach to the determination of the value of the Land as a development site as did [the Appellant]."
The Registrar General submitted that there was no proper basis for the assumption, made by the Appellant's officers, that there could not be an error in the Plan because it was a government record. The Registrar General also relied on the observation of Dixon CJ and Fullagar J in Svanosio v McNamara (1956) 96 CLR 186 at p 200; [1956] HCA 55, that "[t]he making of a survey is an ordinary precaution for a purchaser to take", although, as noted by the Appellant and the primary judge, that observation concerned an identification survey which was not directed to establishing the dimensions or area of the land. [61] Ultimately, it was submitted by the Registrar General that the primary judge's finding as to the Appellant's "fault" should be upheld, having regard to the sophistication, experience and resources of the Appellant, the size of the transaction, the disclaimer by its solicitor of responsibility for verifying the area of the land, and the importance that was attached by its financial analysis to the accuracy of the statement of the area of the Land in the Plan.
Mr Zhang did not set out the basis for his understanding that there could not be an error in the Deposited Plans because they were "government records" and none is apparent. Neither he nor any other officer of the Appellant ever sought advice concerning the legal or factual accuracy of measurements, including areas, recorded on the Deposited Plans. If they had sought such advice then they would have been apprised that the Torrens system does not guarantee the accuracy of boundaries or dimensions. In terms of the likelihood that there may be such errors, the evidence of the expert solicitors adduced before the primary judge in relation to the Registrar General's reliance on s 129(2)(b) (ie, excluding compensation for loss or damage caused by, inter alia, a negligent act or omission by a solicitor etc) was not quite to the effect stated by the Appellant. The Appellant's expert solicitor, Mr Boyce, stated that "whilst in my opinion and from my own experience errors as to area of lots in deposited plans do occur, it is in my further experience an extremely rare occurrence in the ordinary practice of a solicitor to the extent that it may never occur during the career of a solicitor". The expert solicitor retained by the Registrar General, Ms Skapinker, characterised this evidence as involving "recogni[tion] that errors as to area of lots in deposited plans do occur, although rarely" and then agreed with that proposition.
Thus, the risk of an erroneous statement of area was real, albeit rare. Whether a precaution had to be taken against such a remote risk depends at least in part on the magnitude of the potential consequences that may result from it materialising and the costs of the precaution. It was accepted that the cost of the relevant precaution, namely, an independent survey, was likely to be modest. It may be, as the Appellant submitted, that for most property transactions the purchase price paid and the area being purchased will be important features. However, these are matters of degree. In this case, the primary judge found that the Appellant formulated its bid price of $55 million by reference to the area of the land it believed it was purchasing and, as already noted, the "site area of the Land was a critical determinant under the relevant planning instruments of the maximum floor area of the completed redevelopment, having regard to floor space ratio limitations." [62] In those circumstances, the potential adverse consequences of the risk of an error in the statement of area on the Plan materialising were severe.
The balance of the points made by the Appellant concern the role of its advisers, being two sets of town planners and its solicitors. The Appellant sought to rely on the findings of the primary judge in rejecting the Registrar General's reliance on s 129(2)(b) and the supposed inconsistency between his Honour's conclusion in relation to the conduct of the Appellant's solicitors and the finding that the Appellant was at fault. However, there is no such inconsistency when regard is had to two of the primary judge's (unchallenged) findings. The first is his Honour's finding that the Appellant's "due diligence work list" did not "convey to the solicitors that they were expected to confirm the site area of the Land or give to [the Appellant] any advice concerning the steps that it should take in order to protect itself from issues that were important to the feasibility of the redevelopment project". [63] The second is his Honour's finding, as noted above, that the Appellant "did not ask the solicitors to take professional responsibility for confirming the physical attributes of the Land that were critical for the determination of the feasibility of the project and the determination of the appropriate bid price for [the Appellant] to offer". [64]
Further, in relation to all of the Appellant's consultants, his Honour found: [65]
"So far as the evidence discloses, [the Appellant] did not instruct any of the consultants that it retained to verify all assumptions made or information relied upon that was critical to the achievement of the development approval that was the basis upon which [the Appellant] determined the bid price that it should offer for the Land. As I have explained above, [the Appellant] specified the legal services that its solicitors were required to provide in a manner that excluded the solicitors having professional responsibility for issues concerning the Land other than [the Appellant] obtaining good title. The evidence did not contain any detail of [the Appellant's] relationship with its other consultants, who should have been responsible for town planning and design issues in relation to the proposed development."
Again, these findings were not challenged.
In the end result, a sophisticated investor embarked upon the multi‑million‑dollar purchase of a site for a proposed commercial development. As a result of its own internal analysis, the amount it offered was critically dependent on the accuracy of the statements of area in the Deposited Plans referred to in the Register. The Appellant wrongly assumed that those statements of area were infallible, whereas there was a real, albeit remote, risk that at least one of them was incorrect. Despite the significance of the statements of area, the Appellant framed the scope of the due diligence inquires that it expected of its solicitors such that it never asked them to verify its assumption about their accuracy. There was insufficient evidence to determine if the town planners were instructed in terms that would have justified the Appellant's satisfaction of its assumption about the accuracy of the stated areas. Given the significance of those statements to the Appellant's eventual bid price, the primary judge did not err in concluding that the, or at least a, material cause of any loss or damage suffered by the Appellant was its failure to "take any effective step to verify the site area" of the Land. [66]
The Appellant's written submissions contended that these cases were wrongly decided and that s 129(2)(a) permits apportionment so as to allow a proportionate reduction in the amount of compensation payable where some faulty act or omission of a claimant has contributed to their own loss. The Registrar General submitted that this contention was inconsistent with the manner in which the Appellant conducted the hearing at first instance, such that it should not be permitted to maintain a case based on apportionment for the first time on appeal (citing Coulton v Holcombe (1986) 162 CLR 1); [1986] HCA 33). At first instance, the Appellant's written submissions invited the primary judge to consider "the application of apportionment principles" but did not elaborate on what that entailed by, for example, comparing any failure of the Appellant to properly protect its own interests with the conduct of the Registrar General. However, it is unnecessary to determine whether the Appellant is precluded from raising this point as I accept the correctness of the approach stated in Kumar.
The Appellant contended that the approach stated in Kumar is inconsistent with the text of s 129(2)(a) in that it is prefaced by the words "to the extent to which". According to the Appellant, that phrase reflects a necessity to undertake an apportionment exercise, in contrast to provisions such as s 129(2)(e), which excludes compensation "where" the relevant circumstance is established. The Appellant sought to draw support for its proposed construction from the following extract from the Second Reading Speech to the Amending Act:
"… [p]roposed section 129(2)(a) is new. It will allow contributory negligence of a claimant to be considered when determining the liability of the Torrens Assurance Fund. Under the new provision, compensation is not payable in relation to any loss or damage suffered by any person to the extent to which the loss or damage is a consequence of any act or omission by that person.
This provision acknowledges the fact that claimants can, by their own actions or inactivity, be responsible to some degree for any loss they may suffer. Accordingly, the Torrens Assurance Fund is not liable to pay compensation where the loss is attributable to the conduct or negligence of the claimant." (emphasis in Appellant's submissions)
The Appellant contended that the primary judge's construction would lead to absurd results as in "almost every conceivable case, some act or omission of an applicant will have been a necessary condition of the loss". Further, the Appellant contended that other "apportionment legislation" does not "prescribe how responsibility should be apportioned" and that the primary judge's approach gave inadequate weight to the principle that "legal questions of causation are asked and answered with a view to allocating legal responsibility, very often on the basis of fault" (citing March v E & MH Stramare Pty Ltd (1991) 171 CLR 506; [1991] HCA 12).
The principal difficulty with the Appellant's suggested construction of s 129(2)(a) is the lack of any standards enabling the Court to undertake an apportionment exercise. Contrary to the Appellant's submissions, "apportionment legislation" ordinarily specifies how responsibility should be apportioned. Thus, for example, s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) is predicated on each of the wrongdoers being liable in tort with the apportionment exercise then undertaken by reference to what is "just and equitable" in the circumstances (s 5(2)). A significant feature of any apportionment exercise is the undertaking of a comparison of the degree of departure from the respective standard owed by each tortfeasor or wrongdoer as well as the extent of the respective contributions of their breaches to the loss that ensued (Podrebersek v Australian Iron and Steel Pty Ltd (1985) 59 ALJR 492 at 494; [1985] HCA 34). However, in Challenger, Bryson AJ observed that, while an entitlement to compensation from the Fund under s 129(1) can arise in circumstances that involve negligence or fault on the part of the Registrar General, it can also arise in other circumstances which may not include any element of fault on the Registrar General's part or anyone else's part (at [71]). In the latter type of case there is no relevant comparator to the claimant whose act or omission may have contributed to their loss or damage and no apportionment exercise can be undertaken.
It can be accepted that the phrase "to the extent to which" supports the suggestion that s 129(2)(a) involves an apportionment exercise. However, as noted by Darke J in Kumar supra, it also capable of application to achieve a reduction in a claimant's compensation, as opposed to its wholesale exclusion, if the claimant's (faulty) act or omission is only causative of an "identified part of [its] loss or damage". The limitations on recovery in s 129A only apply where the claimant is "deprived of land or any estate or interest in land". Section 129B only concerns mortgages. This case (and no doubt others) is not caught by either provision. It is conceivable that a claimant could recover separate components of loss or damage, such as a reduction in market value as well as legal costs and expenses. It may be that a claimant's act or omission may have materially contributed to the causation of one component of their loss or damage but not another. In such cases, the application of s 129(2)(a) will result in a reduction of the amount of compensation awarded but not a wholesale denial of the right to compensation.
Otherwise, it is neither necessary nor appropriate to analyse all the differences between the wording of all of the provisions in s 129(2) as there will be a multitude of circumstances where those provisions will be engaged. That said, it seems that the phrase "to the extent to which" as used in ss 129(2)(c) and (d) allows for a reduction in a component of a claimant's loss because the application of those provisions does not require a comparison of the kind that must be undertaken to apply "apportionment legislation." Otherwise, the distinction between ss 129(2)(a)-(d) on the one hand and the balance of the provisions in s 129(2) on the other is that the former concern conduct that is attributable to the claimant whereas that is not necessarily the case for the conduct the subject of the balance of the provisions.
Lastly, as noted, the Appellant sought to rely on that part of the Second Reading Speech to the Amending Act which concerned s 129(2)(a), set out above (at [90]), as supporting its contention that the provision contemplates an apportionment regime. However, that extract does not provide any real support for the Appellant's construction. The reference to "contributory negligence of a claimant" is explicable as a reference to an element of fault attaching to the relevant act or omission of the claimant before the provision is engaged, a matter addressed next. It does not necessarily convey that there must be some negligence on the part of another to which the claimant must have contributed. As noted, clearly s 129(1) can be engaged without negligence. Otherwise, the last sentence of the extract is more consistent with the approach stated in Kumar.
These passages are the source of the uncertainty reflected in the third ground of appeal. I do not take his Honour as having concluded that the Appellant's damages should only have been assessed by reference to the difference between the price paid for the land and its market value at the date of acquisition. Instead, his Honour indicated a preference for that approach but did not reach a "considered view", bearing in mind that his Honour otherwise rejected the Appellant's claim and concluded that the Registrar General had not pursued the point (a matter that the Registrar General strongly disputes).
It follows that ground 3 is premised on an understandable but incorrect reading of the primary judgment and must be rejected. Further, I do not consider it appropriate to embark upon a consideration of the substance of the dispute between the parties in relation to this ground, which concerned the application of the approach stated in Potts v Miller to the Appellant's otherwise unsuccessful claim for compensation. As I consider that the appeal must be otherwise dismissed, any such discussion would be obiter. Further, the parties' submissions did not appear to raise any question of statutory construction in that, even on the approach contended for by the Registrar General, a determination of whether a claim for compensation on the basis of a lost opportunity is permissible is a fact‑dependent inquiry. Thus, the Registrar General did not contend that the approach stated in Potts v Miller should be applied in all cases under s 129(1), but instead submitted that compensation for a lost opportunity should not be awarded under s 129 where the circumstances that gave rise to the claim did not involve, or were not analogous to, a failure to comply with a promise to provide an opportunity or chance. In addition, much of the debate in the submissions appears to have overstated the effect of Potts v Miller by treating it as a rule, whereas subsequent authority confirms that it is only to be regarded as the approach that is "usually applicable", and that it is otherwise only a special application of the general principle that "[i]n an action of deceit a plaintiff is entitled to recover as damages a sum representing the prejudice or disadvantage he has suffered in consequence of his altering his position under the inducement of the fraudulent misrepresentations made by the defendant" (Toteff v Antonas (1952) 87 CLR 647 at 650; [1952] HCA 16; Gould v Vaggelas (1985) 157 CLR 215 at 220; [1985] HCA 75; HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640; [2004] HCA 54 at [35]).
For the reasons noted above, I would reject ground 3.
Ausbao at [211].
Ausbao at [215].
Ausbao at [215].
Ausbao at [215].
Ausbao at [225].
Ausbao at [218]-[222].
Ausbao at [217].
Ausbao at [215].
New South Wales Legislative Council, Parliamentary Debates (Hansard), 31 May 2000, Real Property Amendment (Compensation) Bill.
Ausbao at [222].
Ausbao at [331].
Ausbao at [331].
Ausbao at [323]-[324].
Ausbao at [325].
Ausbao at [324]-[327].
Ausbao at [329].
Ausbao at [330].
Ausbao at [402].
Ausbao at [281]-[283].
Ausbao at [6].
Ausbao at [257].
Ausbao at [295].
Ausbao at [330].
Ausbao at [331].
Ausbao at [315]-[316].
Ausbao at [315].
Ausbao at [331].
Ausbao at [331]-[332].
Ausbao at [352].
Ausbao at [355]-[357].
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 17 February 2023
HEADNOTE
[This headnote is not to be read as part of the judgment]
Ausbao (286 Sussex Street) Pty Ltd (the Appellant) is a special purpose vehicle incorporated in order to acquire and redevelop land at 286 Sussex Street, Sydney NSW (the Land). On 26 November 2013, the Appellant purchased the Land for $55 million. The Appellant formulated the value of its successful bid in reliance upon Deposited Plans referred to in four folios of the Torrens Register which together recorded a total site area of 1337.4m2. That area was also recorded on the Information Memorandum (the Memorandum) provided to the Appellant by the vendor, accompanied by a disclaimer informing prospective purchasers that the figures and calculations contained in the Memorandum had not been verified in any way. The Appellant did not take any step to verify the total area of the Land independently, believing that there could be no error in the statements of area in the Deposited Plans as they were government records.
Having purchased the Land, the Appellant discovered that the area recorded on one of the plans, DP 657427 (which related to Lot 1), was 85.7m2 smaller than as stated in the plan. That inaccuracy was the result of successive transposition errors by officers of the Respondent, the Registrar General of New South Wales (the Registrar General). They had failed to account for the excise and transfer of a 91.1m2 portion of the Land to the Commissioner for Main Roads when issuing an updated Certificate of Title in August 1978 that incorporated a plan of the land that included an erroneous statement of area. This erroneous statement of area was included in a Deposited Plan that was registered under Division 3 of Part 23 of the Conveyancing Act 1919 (NSW) in June 1995 which was used as the description of the land in the folio for Lot 1.
The Appellant commenced proceedings against the Registrar General claiming compensation from the Torrens Assurance Fund (the Fund), which is established by s 134 of the Real Property Act 1900 (NSW) (the RP Act). The Appellant alleged that it had suffered "loss or damage as a result of the operation of the Act in respect of the Land" (RP Act, s 129(1)). The Appellant contended that its loss or damage arose from "an act or omission of the Registrar General in the execution or performance or his or her functions or duties under [the RP] Act in relation to the Land" (s 129(1)(a)). Further, and in the alternative, the Appellant argued that its loss or damage arose from an "error, misdescription or omission in the [Torrens] Register in relation to the land" (s 129(1)(c)).
The primary judge accepted both bases for the Appellant's claim under s 129(1) of the RP Act. However, his Honour dismissed the claim by applying s 129(2)(a) which excludes compensation from the Fund "to the extent to which the loss or damage is a consequence of any act or omission by [the claimant]", and by applying s 129(2)(e), which excludes compensation "where the loss or damage arises because of an error or miscalculation in the measurement of land" (s 129(2)(e)). In respect of s 129(2)(a), the primary judge found that the material cause of the Appellant's loss or damage was its failure to take any effective step to verify the site area of the land.
On appeal, the Appellant challenged the primary judge's application of s 129(2)(a) and s 129(2)(e) of the RP Act, whilst the Registrar General filed a Notice of Contention with respect to his Honour's findings in respect of s 129(1).
The principal issues on appeal were:
whether the Appellant's loss or damage was a consequence of its own act(s) or omission(s) (the s 129(2)(a) issue);
whether s 129(2)(a) establishes a regime for the apportionment of liability (the apportionment issue);
whether the Appellant's loss or damage arose because of an error or miscalculation in the measurement of the Land (the s 129(2)(e) issue);
whether the registration of DP 657427 occurred in the execution or performance of the Registrar General's functions or duties under, and in the operation of, the RP Act (the Notice of Contention); and
whether the primary judge found that the Appellant's compensation should have been assessed by reference to the difference between the price paid for the land and its market value at the date of acquisition, and if so, whether his Honour erred in so finding (the damages issue).
The Court held (Beech-Jones JA, Bell CJ and Mitchelmore JA agreeing), dismissing the appeal with costs:
As to the s 129(2)(a) issue
The Appellant's failure to take any effective step to verify the site area of the Land was a material cause of its loss or damage. Given the Appellant is a sophisticated developer of commercial property, the considerable value of the Land, the significance attributed to DP 657427's statement of area in formulating the purchase price and the severity of the potential adverse consequences of an erroneous statement of area, compared to the relatively modest cost of obtaining an independent survey of the Land, the failure to verify the area constituted a failure to take reasonable care to protect its own interests: [81], [85], [97] (Beech-Jones JA); [1] (Bell CJ); [109] (Mitchelmore JA).
As to the apportionment issue
Section 129(2)(a) does not establish a regime for the apportionment of liability as between the claimant and the Registrar General. The statutory provisions do not specify any standards or criteria which would enable the Court to undertake an apportionment exercise, for example, by comparing the degree of departure from the standard of care owed by each party said to have contributed to the loss and the extent of their respective contributions to the claimant's loss: [89], [92] (Beech-Jones JA); [1] (Bell CJ); [109] (Mitchelmore JA).
The words "to the extent to which" at the outset of s 129(2)(a) are capable of being applied to reduce a claimant's compensation, as opposed to its wholesale extinguishment, if the relevant act or omission is only causative of a discrete part of its loss or damage: [93]-[94] (Beech-Jones JA); [1] (Bell CJ); [109] (Mitchelmore JA).
Kumar v Registrar-General of New South Wales [2021] NSWSC 1103; (2021) 20 BPR 41,609; Challenger Managed Investments Ltd v Direct Money Corporation Pty Ltd (2003) 59 NSWLR 452; [2003] NSWSC 1072 approved; Podrebersek v Australian Iron and Steel Pty Ltd (1985) 59 ALJR 492; [1985] HCA 34, considered.
As to the s 129(2)(e) issue
The Appellant's loss or damage arose because of an "error or miscalculation in the measurement" of the Land by an officer of the Registrar General (RP Act, s 129(2)(e). On its proper construction, s 129(2)(e) is engaged by an erroneous statement of the dimensions of land, such as the area stated on DP 657427, as opposed merely to an error in the process of determining those dimensions: [60]-[67] (Beech-Jones JA); [1] (Bell CJ); [109] (Mitchelmore JA).
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27; [2009] HCA 41; Sydney Seaplanes Pty Ltd v Page (2021) 106 NSWLR 1; [2021] NSWCA 204, applied.
Voudouris v Registrar-General (1993) 30 NSWLR 195; Harrison v Melhem (2008) 72 NSWLR 380; [2008] NSWCA 67, considered.
As to the Notice of Contention
The inclusion of DP 657427 by the Registrar-General as the description of the land in the folio of the Register for Lot 1, pursuant to s 32(1)(a) of the RP Act, was an act undertaken in the execution or performance of the Registrar General's functions or duties under the RP Act and any loss suffered by the Appellant as a consequence was loss or damage suffered as a result of the operation of the RP Act. The phrase "as a result of the operation of the Act" in s 129(1) is not confined to the effect of those provisions of the RP Act that in and of themselves affect or interfere with substantive rights such as the guarantee of indefeasibility provided for in s 42. The reference to "act" or "omission" in s 129(2)(a) of the RP Act is not confined to the discharge of specific obligations imposed by the RP Act: [47]-[51] (Beech-Jones JA); [1] (Bell CJ); [109] (Mitchelmore JA).
Challenger Managed Investments Ltd v Direct Money Corporation Pty Ltd (2003) 59 NSWLR 452; [2003] NSWSC 1072, approved.
As to the damages issue
The primary judge did not find that the Appellant's compensation should have been assessed by reference to the difference between the price paid for the land and its market value at the date of acquisition. Given that the appeal would be otherwise dismissed, and the approach of the parties, it was not necessary nor appropriate to determine whether that was the measure of the Appellant's compensation: [105] (Beech-Jones JA); [1] (Bell CJ); [109] (Mitchelmore JA).
Potts v Miller (1940) 64 CLR 282; [1940] HCA 43; Toteff v Antonas (1952) 87 CLR 647; [1952] HCA 16; Gould v Vaggelas (1985) 157 CLR 215; [1985] HCA 75; HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640; [2004] HCA 54 considered.