Cassegrain v Gerard Cassegrain & Co Pty Ltd [2015] HCA 2

Cassegrain v Gerard Cassegrain & Co Pty Ltd [2015] HCA 2 - HCA 2015 case summary — Zoe

[15]

The respondent company ("GC&Co") was registered under the RPA as proprietor of an estate in fee simple in land described in a number of Folio Identifiers. The land was referred to in the proceedings as the "Dairy Farm". Transfers of the Dairy Farm were registered, first from GC&Co to Claude Cassegrain and his wife, Felicity, as joint tenants, and second from Claude Cassegrain to Felicity. GC&Co sought to recover title as sole registered proprietor of the Dairy Farm from Felicity (the appellant in this Court).
In 1993, GC&Co settled some proceedings it had brought against the Commonwealth Scientific and Industrial Research Organisation ("CSIRO"). In settlement of the claim, CSIRO paid GC&Co $9.5 million. Entries were made in the books of GC&Co to recognise a loan account of $4.25 million on the footing that this part of the money received by GC&Co from CSIRO was owed to Claude Cassegrain, one of the company's two directors. In this Court, it was accepted that Claude Cassegrain was never entitled to any part of the settlement sum and that GC&Co never owed him any part of the amount recorded in the loan account created in the company's books.
On 2 September 1996, Claude Cassegrain and his sister, Anne-Marie Cameron, who were then the directors of GC&Co, resolved to sell the Dairy Farm (and some associated assets) to Claude and Felicity Cassegrain as joint tenants. The directors further resolved, at the same meeting, that GC&Co should "debit the loan account of Claude Cassegrain in the books of the Company for the amount of the consideration payable ... and that the debiting of the ... loan account shall be full satisfaction of the amounts payable to the Company".
In February 1997, Claude Cassegrain instructed a solicitor, Mr Chris McCarron, to register "the transfer as exchanged". The transfer was executed, as transferor, by GC&Co under its common seal, attested by its directors (Claude Cassegrain and Anne-Marie Cameron), and, for Claude and Felicity Cassegrain as transferees, by Mr McCarron as solicitor. There followed some correspondence between Mr McCarron and Claude about the progress of registration. In March 1997, Mr McCarron informed Claude that the transfer had been registered.
Although the transfer (dated 14 September 1996) acknowledged receipt of the agreed consideration of $1 million, the books of account of GC&Co recorded that Claude Cassegrain's loan account was debited with that amount on 30 June 1997.
In 1996 (exactly when does not appear), four of Claude Cassegrain's siblings (Patrick, John, Denis and Catherine) brought oppression proceedings**[1]** in the Federal Court of Australia against Claude, Anne-Marie, their mother, GC&Co, the trustees of the Cassegrain Family Trust and 14 other companies with which members of the family were associated. The plaintiffs alleged that acts by or on behalf of GC&Co (and the other companies) had been oppressive or unfairly prejudicial to them. In July 1998, Davies J declared**[2]** (among other things) that Claude's conduct in treating the $4.25 million loan account as his entitlement to be drawn down at his will and in drawing upon that account was oppressive and unfairly prejudicial to the members of GC&Co.
Nearly two years later, by a transfer dated 24 March 2000, Claude Cassegrain transferred "an estate in fee simple" in the Dairy Farm to Felicity Cassegrain for a consideration of $1. Again, Mr McCarron acted as solicitor. He witnessed Claude Cassegrain's signing of the transfer as transferor and signed it as solicitor for the transferee.

[26]

The derivative action was tried by Barrett J. No oral evidence was called. GC&Co tendered a number of documents and alleged that the determination of the oppression proceedings in the Federal Court yielded a number of relevant issue estoppels. It is not necessary to describe in any detail what was said or decided about issue estoppels.
The primary judge held**[6]** that the financial impact of Claude's conduct "was recorded within (and suffered by)" GC&Co only at 30 June 1997. The primary judge concluded**[7]** that it was only then that GC&Co acted upon and gave effect to the directors' resolution of September 1996 requiring satisfaction of the purchase price by debiting the loan account. The primary judge found**[8]** that the establishment of the loan account in the books of GC&Co did not represent the recording of genuine indebtedness of GC&Co to Claude in the amount recorded or at all. Accordingly, the primary judge concluded**[9]** that Claude acted not only in breach of fiduciary duty but also fraudulently. As noted earlier in these reasons, these findings are not challenged in this Court.
The primary judge found**[10]** that there was no basis in the evidence for finding that "in any aspect of the events concerning the preparation of either [the first or second] transfer [relating to the Dairy Farm], its execution and the processes culminating in its registration, Claude had or exercised any actual or implied authority of Felicity". The primary judge held**[11]** that s 42(1) of the RPA applied with the consequence that Felicity held her interest in the land "free from any interest of GC&Co sourced in Claude's fraudulent breach of fiduciary duty and that the 'fraud' exception to [s 42(1)] does not operate to detract from Felicity's [then] current registered title".
The primary judge found**[12]** that Felicity derived her title as sole registered proprietor through Claude, by registration of the second transfer, and was not a transferee of his interest for valuable consideration. But the primary judge held**[13]** that the general rule stated in s 118(1) of the RPA (that proceedings for the possession or recovery of land do not lie against the registered proprietor of the land) was engaged and that the exception to that rule provided by s 118(1)(d) did not apply. That is, the primary judge held that the proceedings were not

[35]

In the present case, Beazley P found**[25]** that there was sufficient evidence to infer that "Claude was Felicity's agent for the purposes of directing Mr McCarron [the solicitor] to register the first transfer". And her Honour held**[26]** that the consequence of that conclusion was that "the title that Felicity took as registered proprietor jointly with Claude was defeasible as a result of the fraud of her agent". Likewise, her Honour found**[27]** that "the probabilities are that Claude acted as [Felicity's] agent in respect of the second transfer" and that her title as sole registered proprietor was affected by his fraud.
Macfarlan JA agreed**[28]** with Beazley P that Claude acted as Felicity's agent with respect to the first transfer. But Macfarlan JA rested**[29]** his conclusion that Felicity's subsequently acquired interest as sole registered proprietor was defeasible on the footing that, having been registered as a joint tenant through fraud, she "did not shed her (imputed) fraudulent knowledge and character by taking a transfer from her co-tenant in whose fraud she was deemed to have participated".
By contrast, Basten JA held**[30]** that it should not be inferred that Claude acted as Felicity's agent for the purposes of the transaction which led to their registration as joint tenants. But his Honour held**[31]** that Claude obtained his title as joint tenant through fraud and that, because Felicity was not a transferee of Claude's interest bona fide for valuable consideration, GC&Co was entitled to an order that she transfer a half share in the Dairy Farm to it.
It has long been recognised**[32]** that "[n]o word is more commonly and constantly abused than the word 'agent'". Close attention, therefore, must be given to what is meant when it is said that Claude Cassegrain was Felicity's "agent".
At least for the most part, the word "agent" appears to have been used in the Court of Appeal as a term explaining how events happened rather than as a term attributing legal responsibility for those events. The relevant question was treated as one of fact. That is, what inference should be drawn about how and why the registration of a transfer to Claude and Felicity as joint tenants came about? Or, can it be inferred that Felicity knew that Claude was arranging for the transfer of the Dairy Farm to them both as joint tenants? And because the question seems to have been treated as one of fact, reference was made to Blatch v Archer[33] and the proposition that "all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted".
It is important, however, to keep at the forefront of consideration that GC&Co did not allege, and the courts below did not find, that Felicity knew of Claude's fraudulent conduct. Yet the conclusion that Claude was Felicity's "agent" was treated by the majority in the Court of Appeal as a sufficient basis for concluding that the fraud exception provided by s 42(1) of the RPA applied and that her title as registered proprietor was defeasible. That is, what was seen as a factual inquiry about whether Claude brought about the transfer to Claude and Felicity as joint tenants with her knowledge (but without her knowing of the fraud) was treated as concluding the legal issue presented by s 42(1). But why that step should be taken was not explained. Rather, the word "agent" was used as a statement of conclusion. And, as has been said**[34]** in a closely related context, using a word like "agent" is to begin, not end, the relevant inquiry.
In Clements v Ellis, Dixon J examined**[35]** the decision in Assets Company in great detail. But what Lord Lindley meant by his reference to "agents" was not explored then or in later decisions of this Court. It may be thought that the reference to "agents" was intended to do no more than refer to those natural persons through whom the corporation, Assets Company Limited, had acted in acquiring the registered title that it did. That understanding of the reference would be consistent with the discussion of the issue in the Court of Appeal of New Zealand in one of the several cases**[36]** which were the subject of the consolidated appeals to the Privy Council, but it is not an understanding that would exhaust the meaning given to the dictum, at least inferentially, in later cases. It may also be thought that the reference reflected a view of "deferred" indefeasibility consistent with Gibbs v Messer[37], but that understanding would not sit easily with what was later said in Frazer v Walker[38] about Assets Company.
Instead, the reference to fraud "brought home to the person whose registered title is impeached or to his agents" should be understood, as it was by Street J in Schultz v Corwill Properties Pty Ltd[39], as posing, in the case of an agent, questions about scope of authority and whether the agent's knowledge of the fraud is to be imputed to the principal.
In the present case, those questions required consideration of why Claude's knowledge of his fraud should be imputed to Felicity. Concluding that Claude had taken the steps necessary to procure registration of the transfer from the company to Felicity and him as joint tenants showed no more than that Claude had performed tasks that were of advantage to Felicity**[40]. It was neither alleged nor found that Claude had acted as Felicity's agent in any other way, whether by negotiating[41]** the transaction with GC&Co or by representing**[42]** that the price for the land could be met by debiting the loan account. So far as the evidence and argument went, Felicity was no more than the passive recipient of an interest in land which her husband had agreed to buy, but which he wanted (with her acquiescence) put into their joint names.
Without more, the conclusion that Claude had taken the steps necessary to procure registration of the transfer from the company to Felicity and him as joint tenants did not show that his fraud was within the scope of any authority she had, or appeared to have, given to him. Without more, it did not show that knowledge of his fraud was to be imputed (in the sense of "brought home") to her. And in this case, there was nothing more identified, whether in argument or in the reasons of the Court of Appeal.
Did her registration as joint tenant bridge that gap?

[36]

In the Court of Appeal, Beazley P held**[43]** that, even if the title which Felicity had held jointly with Claude was defeasible, it did not follow that the title she took on registration of the transfer of Claude's interest to her was. There was, in her Honour's view**[44], "no relevant fraud of which Felicity had knowledge such as to impugn her indefeasible title as the sole joint tenant". By contrast, as already noted, Macfarlan JA held[45]** that "Felicity was infected with Claude's fraud because she and Claude took title from [GC&Co] as joint tenants ... [and] joint tenants are treated by the law as in effect one person only" (emphasis added). Basten JA held**[46]** that it was "preferable in principle to treat the shares of the joint tenants, holding title under the [RPA], prior to any severance, as differentially affected by the fraud of one, to which the other was not party".
The conclusion reached by Basten JA is right. As his Honour said**[47]**, "[t]he contrary view would impute fraud to a party who was not herself fraudulent". That observation is reason enough to reject the contrary view. But it is important to demonstrate that the contrary view cannot be supported by general assertions that "the law" treats joint tenants as "in effect" one person. That demonstration must begin in the text of the RPA.
Section 100 of the RPA provides for registration as co-tenants. Sub-sections (2) and (3) deal with proprietors of a life estate and an estate in remainder, and with tenants in common. Their detail need not be noticed. Section 100(1) provides that two or more persons registered as joint proprietors of an estate or interest in land "shall be deemed to be entitled to the same as joint tenants". What is the effect of the deeming? That question requires reference to some aspects of the general law of real property.
In Wright v Gibbons[48], Dixon J described joint tenancy as "a form of ownership bearing many traces of the scholasticism of the times in which its principles were developed". And as his Honour's discussion**[49]** of the writers shows, the "pedantic, needlessly subtle"[50] thinking of that time was often compressed into maxims: especially "nihil tenet et totum tenet" (he holds nothing and he holds the whole) and "per my et per tout" (for nothing and for everything). But, as Wright v Gibbons demonstrates, those maxims cannot and must not be treated as constituting a complete or wholly accurate description of the legal nature of a joint tenancy.
The hinge about which the reasoning of Dixon J turned in Wright v Gibbons was that the maxims (and similar statements by later writers to the effect that joint tenants are "considered by the law as one person for most purposes"[51]) cannot be taken as the premise for deductive reasoning about the effect of a joint tenancy. As Dixon J pointed out**[52], by reference to Coke on Littleton, "[f]or purposes of alienation each [joint tenant] is conceived as entitled to dispose of an aliquot share". That is because, as Dixon J also said[53]**:

[39]

Once qualifications of the principle that joint tenants are "considered by the law as one person for most purposes"[55] are admitted to be necessary, bare statement of the principle cannot stand as a premise for deductive argument. It certainly provides no sufficient premise from which a deduction can be drawn about the operation of relevant provisions of the RPA with respect to "[t]wo or more persons who may be registered as joint proprietors of an estate or interest in land under the provisions of [that] Act". Even under the general law of real property, the deeming which is worked by s 100(1) would not entail that those registered as joint tenants are to be treated for all purposes as though they were the one person.
Like so many maxims, great care must be used lest "nihil tenet et totum tenet" or "per my et per tout" be used only as slogans stating an asserted conclusion. But in the present case, particular care must be exercised in applying maxims of the kind described. The issue in this case arises, and can only arise, in the context of a statutory system for title by registration. Questions of indefeasibility of registered title simply do not arise in the general law of real property. And no analogy can usefully be drawn between the issue that must be decided in this case and any issue that can arise in the general law of real property.
It is wrong, therefore, to begin the inquiry about the application of the fraud exceptions to ss 42(1) and 118(1) by asking what would follow from the "captivating appearance of symmetry and exactness"[56] of the four unities (of interest, title, time and possession) necessary for the creation of a joint tenancy under the general law of real property. An inquiry of that kind, adverted**[57]** to by Macfarlan JA, is directed to the nature of the title which a joint tenant would acquire under the general law.
It is also wrong to begin by asking only what consequences can be said to follow from s 100(1) of the RPA and its provision that persons registered as joint proprietors "shall be deemed to be entitled to the [relevant estate or interest] as joint tenants". Instead, the question is how that provision intersects with the provisions of s 42. More particularly, does the deeming effected by s 100(1) require that the fraud of one of the persons registered as joint proprietors denies all those persons the protection otherwise given by s 42(1)?
To hold that the deeming effected by s 100(1) denies all persons registered as joint proprietors the protection otherwise given by s 42(1) when one of their number has been guilty of fraud would constitute a significant departure from the accepted principle that actual fraud must be brought home to the person whose title is impeached. Both s 100(1) and s 42(1) take their place in an Act providing for title by registration, not registration of title. Both sections are directed to the consequences of registration and focus upon the position of the registered proprietor, not title in the abstract. Section 42(1) provides that the registered proprietor "shall, except in case of fraud, hold the [relevant estate or interest]" subject to registered interests but otherwise absolutely free from all other interests except those identified in s 42(1)(a)-(d). Section 100(1) provides that persons registered as joint proprietors "shall be deemed to be entitled to the same as joint tenants". The question here is whether a title acquired by registration is defeasible.
No light is shed on that issue by asking what title GC&Co lost as a result of the fraud. The relevant question is whether the title of a registered proprietor is defeasible, not what loss the company suffered as a result of the fraud. Thus, observing that GC&Co was deprived of the whole of its interest in the land by Claude's fraud is right but irrelevant. And no light is shed on the issue by asking what would have happened if Claude had died before he transferred his interest in the land to Felicity. In particular, noting that, if Claude had died before the second transfer, Felicity would have been entitled to registration under s 101 of the RPA as the surviving joint tenant says nothing about whether, before registration of a survivorship application, her title as joint tenant was defeasible on account of Claude's fraud.
Felicity's title as joint tenant of the Dairy Farm was not defeasible by showing that Claude had acted fraudulently to deprive GC&Co of its land. His fraud was not brought home to Felicity. Because his fraud was not brought home to her, her title as joint tenant was indefeasible.
In light of these conclusions, there is no need to consider GC&Co's notice of contention. The grounds advanced in that notice were premised on Claude being found to have been Felicity's agent.
There remains for consideration the operation of s 118.

[41]

It will be recalled that the primary judge held that, although Felicity derived her title as sole registered proprietor through Claude, and not as a transferee of his interest for valuable consideration, s 118(1)(d) did not apply because Claude was not registered as proprietor of the land through fraud. It will further be recalled that the primary judge treated s 118(1)(d)(ii) as dealing only with "the process by which registration as proprietor"[58] is achieved, a subject said to be narrower and more specific than the fraud exception to s 42(1).
All members of the Court of Appeal rightly rejected**[59]** this interpretation of s 118(1)(d)(ii). Neither s 118 generally nor s 118(1)(d)(ii) in particular should be read as directed only to fraud in the process of registration. Exactly what would fall within fraud "in the process" of registration may be open to debate. But it is not a debate that need be had, because s 118 should be construed in a way which is consonant with the operation of s 42(1). In particular, s 118 must not be read in a way which would preclude action to recover the land in a case where the fraud exception to s 42(1) applies. Hence, the reference in s 118(1)(d)(i) to proceedings brought by a person deprived of land by fraud against a person who has been registered as proprietor of the land through fraud must be read as embracing every kind of fraud which falls within the relevant exception to s 42(1). If actual fraud is brought home to the registered proprietor, s 118(1)(d)(i) is engaged and the general bar to proceedings for the possession or recovery of land against that registered proprietor is lifted.
Conversely, but equally importantly, if the fraud exception to s 42(1) does not apply to the person who is registered as proprietor, the general bar to proceedings for the possession or recovery of land against the registered proprietor will apply and the exception provided by s 118(1)(d)(i) will not be engaged. That is, the exception for which s 118(1)(d)(i) provides does not diminish the protection given by s 42(1). It does not enlarge the rights which a person deprived of land by fraud has against the registered proprietor.
By contrast, the exception provided by s 118(1)(d)(ii) does enlarge the rights which a person deprived of land by fraud has against a registered proprietor. Unless the registered proprietor is a transferee bona fide for valuable consideration, a person deprived of land by fraud may bring proceedings for the possession or recovery of the land against a person deriving from or through a person registered as proprietor of the land through fraud. But as with s 118(1)(d)(i), the expression "registered as proprietor of the land through fraud" must be read in a manner consonant with s 42(1).
Hence, in the present case, Claude, but not Felicity, was registered as proprietor of (an interest in) the land (as joint tenant) through fraud. By the second transfer, Felicity derived from or through Claude an interest as tenant in common as to half. Felicity derived that interest from or through a person registered as proprietor of (an interest in) the land (as joint tenant) through fraud. Felicity was not a transferee of the interest for valuable consideration. Section 118(1)(d)(ii) is thus engaged. Proceedings brought by GC&Co (as a person deprived of the land by fraud) for the recovery of that interest in the land (as tenant in common as to half) lie against Felicity.

[77]

It is not in dispute that Claude acted fraudulently in relation to both the first and second transfers, as he deliberately sought to cheat the respondent out of its title to the Dairy Farm. Nor is there any question that the respondent was deprived of its title to the land through the fraud perpetrated by the first transfer.
If Claude had procured the registration of the transfer from the respondent to himself as sole registered proprietor of the land, and then transferred the land to the appellant for one dollar, there could be no doubt that the respondent would be entitled to recover the land from the appellant under s 118(1)(d)(ii) of the Real Property Act. The question for decision is whether the respondent is to be denied recovery of the entirety or one-half of its land because Claude adopted the expedient of a fraudulent transfer to himself and the appellant before effecting the second transfer**[94]**.
The issue may be analysed in this way. By virtue of s 100(1) of the Real Property Act, the estate acquired by the appellant and Claude as a result of the registration of the first transfer was but one estate held by them jointly. That title was acquired through the fraud of the registered proprietor, the title of Claude and the appellant being one and indistinguishable. On that basis, s 118(1)(d)(i) was engaged in favour of the respondent. For the purposes of s 118(1)(d)(i), the appellant and Claude were jointly registered proprietors of the single title created by the registration of the first transfer. After the registration of the second transfer, the appellant's title to the then severed half share thereby acquired by her from Claude was defeasible under s 118(1)(d)(ii). That is because the appellant was a person who derived that title from Claude, and he was a person who had been registered as a proprietor of his (then severed) aliquot share through fraud.
According to the authoritative exposition of ss 42 and 118(1)(d) of the Real Property Act (and their Torrens title analogues), an indefeasible title is acquired by a registered proprietor by the fact of registration; and the fraud exception to indefeasibility operates only where the registration of a proprietor is obtained by the fraud of the registered proprietor or its agents**[95]. Thus, in Registrar of Titles (WA) v Franzon[96]**, Mason J, with whom Barwick CJ and Jacobs J agreed, said of the Western Australian analogue of the Real Property Act:

[79]

This exposition was not directed to a case of acquisition by joint tenants. Accordingly, it does not foreclose the analysis summarised above.
There was only one registered title in the land which was obtained by the registration of the first transfer, and that was acquired by Claude and the appellant, "as joint proprietors"[97]. Because there was no separate title acquired by the appellant upon registration of the first transfer, the issue is not so much, as Basten JA put it, whether it is appropriate to "impute fraud to a party who was not herself fraudulent"[98], but whether the respondent was deprived of land by the registration of a title to the land obtained through the fraud of the registered proprietor.
In this regard, s 118(1)(d)(ii) renders defeasible the title of a non-fraudulent registered proprietor who, not being a transferee bona fide for valuable consideration, derives his or her title from or through a person who had been registered as proprietor of the land through fraud. That being so, it is difficult to ascribe to s 118(1)(d)(i) an intention to render indefeasible a jointly held registered title acquired through the fraud of one of two joint registered proprietors in circumstances where the other joint proprietor was not a transferee bona fide for valuable consideration.
It was the registration of the appellant and Claude as joint proprietors which, in a system of title by registration**[99]**, effected that deprivation in this case. The appellant and Claude, as joint proprietors, acquired a single estate in the Dairy Farm. The respondent was deprived of its title by the registration of their title to that estate or interest. That title was acquired by fraud "sheeted home" to the appellant, not because the appellant claimed her title through Claude as her agent, but by virtue of the nature of the joint tenancy of the single estate to which they were entitled.
In Wright v Gibbons[100], Dixon J reflected upon the basal proposition that "in contemplation of law joint tenants are jointly seised for the whole estate they take in land and no one of them has a distinct or separate title, interest or possession." Dixon J surveyed the authorities which support that proposition, his survey culminating in the statement of Mr Joshua Williams in his lectures on The Seisin of the Freehold[101] that joint tenants were considered by the law as one person for most purposes.
Dixon J went on to observe that, for some purposes, the law has departed from the rigorous application of that basic proposition, instancing the ability of one joint tenant to alienate an aliquot share of the title formerly held in common, and then said**[102]**:

[81]

The examples given by Dixon J are cases of alienation, whether voluntary or not, of the severable interest of a joint tenant. These examples do not deny the truth of the proposition that, at least so far as the acquisition of a joint title is concerned, "in contemplation of law joint tenants are jointly seised for the whole estate they take ... and no one of them has a distinct or separate title".
The proposition that the title obtained by the appellant and Claude upon the registration of the first transfer was, "for the purpose of tenure"[103], the single estate held by them in common may be, as Dixon J described it, one of the "many traces of the scholasticism of the times in which [the] principles of [joint tenancy (as a form of ownership)] were developed."[104] Nevertheless, modern authority confirms that the historical understanding of the nature of the title acquired by joint tenants remains an accurate statement of the legal status thereby acquired as against the outside world. Thus, in Hammersmith and Fulham London Borough Council v Monk[105], Lord Browne-Wilkinson said that a transfer of land to two or more joint tenants "operates so as to make them, vis à vis the outside world, one single owner." And, in Peldan v Anderson[106], Gummow ACJ, Kirby, Hayne, Callinan and Crennan JJ were not dismissing a mere historical curiosity of no current legal relevance when they referred to joint tenants as "together composing one single owner, each being seised per my et per tout".
Importantly, s 100 of the Real Property Act confirms that, for the purposes of that Act, the joint proprietorship of a registered title is in the nature of a joint tenancy, at least until it is severed. Upon the registration of the first transfer, in conformity with s 100, the appellant acquired title to one estate jointly with Claude. The registered proprietors of that title acquired it through fraud; and that is no less true because the appellant herself did not actually participate in Claude's fraudulent intent.
That a joint tenancy is readily severable, as indeed s 97 of the Real Property Act[107] contemplates, does not lead to a different conclusion: it is not suggested by any party that the joint tenancy of Claude and the appellant was severed at any time before the registration of the second transfer. To recognise the ease of severance and an effective alienation of an aliquot share by one joint tenant to another is not to deny that until the alienation occurs joint tenants are seised of their joint estate or interest as one single owner of that estate or interest.
If the second transfer had not occurred, and the respondent had brought proceedings against both Claude and the appellant under s 118(1)(d)(i), no stretch of language would have been involved in accepting that they were persons who, viewed together, were "registered as proprietor of the land through fraud". No decided case precludes the application of that description to them; indeed, given that s 118(1)(d) "restricts, in the interests of indefeasibility of title, rights which would exist otherwise at law or in equity"[108], the judicial gloss on the fraud exception should not be extended to defeat the respondent's claim.
As to the second transfer, and s 118(1)(d)(ii) of the Real Property Act, the judges of the Court of Appeal were right to hold that there is no good reason to construe the phrase "registered ... through fraud" as being confined narrowly to the administrative process of registration. The words "through fraud" naturally mean "accomplished by means of fraud"; they are wide enough to capture Claude's fraudulent conduct in effecting the transfer of the Dairy Farm with the intention of taking the land without any payment to the respondent.
It is wrong to read s 118(1)(d)(ii) as narrower in scope than the fraud exception to indefeasibility in s 42(1) of the Act, and as concerned only with the "administrative process of registration". That is so for two reasons: first, it is to narrow, in an uncertain way not warranted by the text, the scope of a provision intended to permit the vindication of rights which would otherwise exist at law or in equity**[109]; and secondly, it is to fail to appreciate the role of s 118(1)(d) as working out the practical operation of the fraud exception to the general rule stated in s 42(1) of the Act[110]. As was rightly said by Basten JA in the Court of Appeal[111]**:

At a glance

Court

Decision date

Before

Source

Judgment (189 paragraphs)

Cassegrain v Gerard Cassegrain & Co Pty Ltd [2015] HCA 2 (4 February 2015)

Parties

Cases Cited (22)