130Even if the Plaintiff had complied with the provisions of the LG Act surrounding the sale of the Jugiong property for unpaid rates and charges, Ms Lane submitted that the Plaintiff did not have an existing right to possession of the property so as to attract the relief sought in its Statement of Claim. Ms Lane submitted that the right of possession is an incident of ownership, and that the Plaintiff was not the owner of the Jugiong property and was therefore not entitled to possession as owner.
131Counsel for the Defendant submitted that Mr Smith is not the owner. Although the Contract of Sale of Land under which he is a purchaser is a contract to sell with vacant possession, the sale has not been completed and Mr Smith has not been registered as proprietor of the Jugiong property. Accordingly, it was submitted that the Defendant is the person with the best right to lawful possession of the property, as well has having actual possession.
132Ms Lane submitted that s.713 LG Act permits a council to transfer the title of property to another party, subject to compliance with the procedural and substantive requirements of the LG Act. However, she submitted that Division 5 of Part 2 of the LG Act does not expressly confer any right on a council to demand possession of a property, nor does it make a council the owner, nor does it authorise the recording of the council as owner where the land is under Torrens title. Counsel pointed to provisions in other parts of the LG Act which permitted council officers to enter upon land to carry out their duties, but submitted that there was no such provision in this part of the legislation which entitled the Plaintiff to take possession of the Defendant's land before registration of a transfer.
133Counsel contrasted provisions such as the compulsory devolution regime in the Bankruptcy Act 1966 (Cth), in which a trustee in bankruptcy is vested with title to land and may be registered as proprietor of the land and may deal with it as owner (s.58).
134Ms Lane relied upon common law principles protecting an owner's right to possession of property, which extends to prevention of entry of persons unless specifically authorised by statute: Plenty v Dillon [1991] HCA 5; 171 CLR 635 at 639-640; Kuru v State of New South Wales [2008] HCA 26; 236 CLR 1 at 14-15 [43].
135Counsel submitted that the Plaintiff's claim amounted to an assertion that, even though the Plaintiff had no title to the land, it is able to disturb the possession of the Defendant merely because his possession of the property prevents it completing the contract it has entered into with Mr Smith. It was submitted that this is a purely private purpose.
136Ms Lane submitted that, where there was no one in actual possession of relevant land, the Plaintiff may well be justified in entering into a contract to sell with vacant possession. However, the terms of sale are not prescribed by statute, and the Plaintiff cannot elevate its power of sale into a right to take possession, merely because it has chosen to enter into a contract under which it promises to give vacant possession to the purchaser.
137Counsel submitted that there is no express statutory right to take possession, nor can any such right be implied. She submitted that the power of sale conferred by s.713 LG Act is a power compulsorily to deprive a person of proprietary rights to land, and must therefore be strictly construed and that a separate and more intrusive power to disturb possession will not be readily implied: Hillebrand v Penrith City Council [2001] NSWSC 200; 51 NSWLR 424 at 430 [22], 432 [30].
138Ms Lane submitted that the legal right of the Plaintiff under the LG Act is as a statutory chargee. The statutory charge on the land is imposed by s.550 LG Act and that section does not authorise a council to take possession of the land, the subject of the charge.
139Counsel referred to s.60 Real Property Act 1900 as making provision for chargees to have certain rights in relation to the property, the subject of the charge. She noted that "charge" and "chargee" are defined in s.3 Real Property Act 1900 in ways which make clear that the Plaintiff is not a chargee for the purpose of s.60 Real Property Act 1900, nor is the Plaintiff a mortgagee of land. Ms Lane submitted that the Plaintiff is not registered as proprietor for any estate or interest in land, and so may not exercise the powers conferred on a registered proprietor by the Real Property Act 1900.
140Ms Lane submitted that the existence of the statutory charge does not assist the Plaintiff in relation to any rights under the general law. She submitted that the primary remedy to enforce a charge under the general law is an order for judicial sale: Sood v Christianos [2008] NSWSC 1087 at [16]-[17].
141Counsel submitted that the power to sell in s.713 reflects, in a statutory form, the right of a chargee under the general law on default by the chargor to take steps to sell the property. It is the means by which the statutory charge may be enforced. She submitted that the absence of any express ancillary statutory right to take possession to facilitate the sale leads to the conclusion that there is no such right, given that the interference with the right of possession involves serious consequences for the owner of the land, and the presumption in statutory interpretation that the intention of Parliament must be clear before a statute is construed in such a way as to authorise the expropriation of proprietary rights or, as in this case, the abrogation of incidents of the proprietary right of the owner: Bropho v Western Australia [1990] HCA 24; 171 CLR 1 at 17-18.
142Counsel submitted that there is no indication of any legislative intention to authorise the Plaintiff to take possession of property sold for the purpose of realising the charge on the land, arising from the levying of the rates. Nor, it was submitted, was there any basis in the text of the legislation, or in the context or purpose of the statute, for reading the statute as though such a power is implied.
143Ms Lane submitted that s.722 LG Act makes plain that the transfer is the means by which the former owner is divested of the property and the purchaser becomes entitled. At the point of registration, s.725 protects the proprietor, who then acquires a right to possession of the property based on the proprietorship of the fee simple, subject to the express exceptions to indefeasibility contained in the Real Property Act 1900 and the implied exceptions based on the enforcement of rights in personam against the registered proprietor.
144It was submitted that the Plaintiff in this case had sought to terminate the Defendant's occupation as though he were a tenant but that, even if the Defendant was a tenant, the Plaintiff had no right to possession to underpin the issue of a notice under the Residential Tenancies Act 1987, or subsequent residential tenancies legislation (Residential Tenancies Act 2010).
145Ms Lane submitted that the Defendant's construction of s.60 Real Property Act 1900 is consistent with recent authority: King Investment Solutions Pty Limited v Hussain [2005] NSWSC 1076 (reported in part at 64 NSWLR 441) at [125]-[127] (Campbell J) and King Investment Solutions Pty Limited v Hussain [2010] NSWSC 821 at [31]-[34] (Hidden J).
146Further, Ms Lane submitted that, even if s.60 Real Property Act 1900 allows an unregistered chargee to bring proceedings for possession, the Plaintiff may not, in the present circumstances, exercise the power conferred under s.60 because the statutory charge created by s.550 LG Act is not a "charge" for the purpose of s.60.
147Counsel submitted that the statutory charge created by s.550 LG Act is a charge created for the purpose of securing payment of a debt, being the rate or charge levied under the LG Act, and that the fact that a debt is secured takes the statutory charge outside the definition of "charge" in s.3 Real Property Act 1900.
The Plaintiff's Submissions
148Mr Rogers submits that vacant possession is a normal incident of sale, the availability of which is generally necessary for completion of the sale: King Investment Solutions Pty Limited v Hussain [2005] NSWSC 1076 at [133].
149He submitted that the effect of the Defendant's submission as to possession would be to render all sales entered into pursuant to s.713 LG Act as being sales subject to the possession of the owner, rather than sales with vacant possession. He submitted that such a construction would be surprising, and would give rise to certain eccentric effects, including rendering many properties incapable of sale and reducing the purchase price for the remainder.
150Mr Rogers submitted that the legislature should not be considered lightly to have legislated for an effect which prejudices both councils and landholders and appears to defeat the intention of the LG Act.
151Counsel relied upon principles of statutory construction to the effect that the literal or grammatical meaning of a provision is not its "ordinary meaning", if it does not give effect to the underlying purpose of the enactment, particularly if the result would be otherwise absurd or unreasonable: Saraswati v The Queen [1991] HCA 21; 172 CLR 1 at 21-22. While Parliament is empowered to legislate for eccentric, even perverse, results he submitted that, where there are competing constructions available, a common sense result will be favoured over an eccentric consequence: Saraswati v The Queen at 408.
152Mr Rogers submitted that, if a power is conferred upon a body by a statute, there is an implied power to do such things as are necessary to give effect to the power: Re Sterling; ex parte Esanda Limited (1980) 44 FLR 125 at 130.
153Mr Rogers submitted that the Plaintiff is entitled to possession of the Jugiong property by any one of several routes.
154Firstly, he submitted that the right to possession of the Plaintiff is necessarily implied into the power of sale given by s.713 LG Act, or alternatively, the Court has inherent jurisdiction to grant to the Plaintiff such relief as is necessary to give proper effect to the power of sale conferred by s.713.
155Secondly, Mr Rogers submitted that, having regard to the definitions of "charge" and "mortgage" in s.3 Real Property Act 1900, s.60 of that Act authorises the Court to order possession of land in respect of any charge, whether registered or unregistered, or alternatively, having regard to the provisions of s.550(2) LG Act, s.60 Real Property Act 1900 authorises the Court to order possession of land in respect of a charge granted under s.550(1) LG Act.
156Thirdly, he submitted that the Plaintiff is a mortgagee within the meaning of s.109(1)(a) Conveyancing Act 1919, and is entitled to exercise its power of sale under the LG Act, subject to such matters as the Plaintiff considers fit, with such power including the power to sell with vacant possession.
157Mr Rogers submitted that rates due to the Plaintiff are a debt (s.695 LG Act) and represent a "charge" on the land (s.550(1) LG Act).
158As the term "charge" under the Real Property Act 1900 is defined in a way so as to exclude a "debt", Mr Rogers accepted that a charge under the LG Act was not a charge under the Real Property Act 1900. However, he pointed to the definition of the word "mortgage" in the Real Property Act 1900 (see [75] above), so that a charge under s.550 LG Act is a mortgage under the Real Property Act 1900.
159Mr Rogers submitted that a charge under s.550 had priority over all other non-statutory charges, including non-statutory registered charges. It follows, he submitted, that s.550(2) LG Act authorises resort to s.60 Real Property Act 1900 and that this is reinforced by s.550(5) LG Act.
160Independently of s.550(2) LG Act, Mr Rogers submitted that learned writings on s.60 favour the view that an unregistered chargee or mortgagee can invoke s.60 Real Property Act 1900: Woodman and Nettle, "The Torrens System in NSW", 2nd edn, 2003, paragraph [64.140]. Mr Rogers submitted that contrary observations by Hidden J in King Investment Solutions Pty Limited v Hussain [2010] NSWSC 821 are obiter and incorrect. It is noteworthy, he submitted, that the Real Property Act 1900 distinguishes between registered mortgages (s.57(2) Real Property Act 1900) and mortgages in general (such as in s.60) and that it was not clear that this distinction was drawn to the attention of Hidden J.
161With respect to s.109 Conveyancing Act 1919, Mr Rogers submitted that a "mortgage" under that Act includes "a charge on any property for securing money or money's worth" (s.7 Conveyancing Act 1919). He submitted that a s.550 charge is a mortgage under the Conveyancing Act 1919, and that s.109 of that Act may operate to assist the Plaintiff in the circumstances of this case. Vacant possession is a normal incident of sale. A condition of sale that a property be conveyed subject to vacant possession falls fairly within the words of s.109(1)(a) and is therefore authorised by the Conveyancing Act 1919.
162Counsel submitted that the Court is entitled to make orders granting possession so as to give effect to the contract. The Plaintiff entered into the Contract for Sale of Land bona fide, and can take possession.
163Mr Rogers submitted that the effect of the Defendant's technical points in this area would be that one second before registration, the Defendant has possession of the property, but that a second after registration, he must cede possession. This construction of the relevant statutory provisions, it was submitted for the Plaintiff, would be extraordinary. It was said that this position reinforced the correctness of the Plaintiff's approach on these issues.
Determination
164The range of technical arguments advanced to the Court on this issue arise in a context where, in my view, clarity and certainty are both desirable and achievable.
165The requirements of ss.713 and 715 LG Act have been met. The Jugiong property was sold by the Plaintiff to Mr Smith at public auction. The Contract for Sale of Land provides (unsurprisingly) for sale with vacant possession. The Plaintiff, on payment of the purchase money by Mr Smith, may convey or transfer the land to him: s.722 LG Act. On lodgment of a transfer of land under the Real Property Act 1900, the Registrar-General is to make any necessary recording in the Register to give effect to the sale under the LG Act: s.726 LG Act.
166I have mentioned earlier (at [83]-[84]) the unusual nature of the provisions of the LG Act involving sale of land by a council for unpaid rates. In circumstances where it is the Plaintiff (as statutory vendor) which enters into a Contract for Sale of Land with Mr Smith (as purchaser), it is entirely consistent with the statutory scheme under the LG Act that the Plaintiff be entitled to obtain possession of the property from the Defendant, for the purpose of giving possession to Mr Smith on completion of the sale.
167I accept that vacant possession is a normal incident of sale, the availability of which is generally necessary for completion of the sale: King Investment Solutions Pty Limited v Hussain [2005] NSWSC 1076 at [133]. The vendor's obligation to give vacant possession to the purchaser should occur concurrently with the payment of the purchase price and the transfer of title: Isaacs v McGuire (1888) 14 VLR 815 at 818. A mortgagee exercising power of sale is obliged to recover physical possession of the property from the mortgagor: Reynolds v Doyle (1919) 19 SR (NSW) 108 at 110; Lang, "NSW Conveyancing Law and Practice", CCH, paragraph [10-130]. Mortgagees normally take possession as a preliminary to sale, so that the property can be sold with vacant possession: Butt, "Land Law", Lawbook Co, 6th edn, 2010, paragraph [18 106].
168It is true that the detailed statutory scheme for sale of land for unpaid rates and charges in the LG Act does not contain an express power for a council to take possession of property as part of the process of sale. However, I accept the submissions of Mr Rogers that a purposive process of construction of various provisions to which reference has been made will bring about a logical and common sense outcome in this case. The construction to be adopted does not, in my view, contradict or offend any relevant statutory provision. Nor does it contradict any applicable principles of statutory construction.
169I do not consider that this conclusion infringes the principles in Plenty v Dillon, Kuru v State of New South Wales and Bropho v Western Australia.
170The provisions to be construed are those contained in Division 5 of Part 2 of the LG Act (ss.713-726). What powers of entry may exist in other parts of the LG Act, conferred for different purposes, does not assist the process of construction of the provisions concerning sale of land for unpaid rates.
171In Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355, McHugh, Gummow, Kirby and Hayne JJ said at 381 [69] (footnotes omitted):
"The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined 'by reference to the language of the instrument viewed as a whole'. In Commissioner for Railways (NSW) v Agalianos [(1955) 92 CLR 390 at 397], Dixon CJ pointed out that 'the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed'. Thus, the process of construction must always begin by examining the context of the provision that is being construed."
172Soon after, their Honours said at 384 [78] (footnotes omitted):
"However, the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning."
173Context, the general purpose and policy of a provision and the mischief to which it is directed are significant to the process of statutory construction, as are the inconvenience or improbability of a particular construction: CIC Insurance Limited v Bankstown Football Club Limited [1997] HCA 2; 187 CLR 384 at 408; Network Ten Pty Limited v TCN Channel Nine Pty Limited [2004] HCA 14; 218 CLR 273 at 280-281 [10]-[12].
174The context in which the power of sale provisions in ss.713-726 LG Act were introduced include the well-established principles of property law where land is ordinarily sold with vacant possession, and the inconvenience and improbability of the result urged by the Defendant in this case if the owner of land could not be required to surrender possession of the land until registration of the transfer under s.726 LG Act: cf Network Ten Pty Limited v TCN Channel Nine Pty Limited at 281 [12].
175The entitlement of the Plaintiff to obtain possession of the Jugiong property from the Defendant may be implied in the scheme in the LG Act because it is necessary (that is, reasonably required or legally ancillary) to the Plaintiff's statutory power to sell the property to Mr Smith, and to give vacant possession to him on completion as an incident of the sale: cf Pelechowski v Registrar, Court of Appeal (NSW) [1999] HCA 19; 198 CLR 435 at 451-452 [50]-[51].
176It is a principle of construction that "Whoever grants a thing is deemed also to grant that without which the grant itself would be of no effect": Troncone v Aliperti (Court of Appeal, 20 April 1994, BC9402483, page 2). Although this principle relates to construction of contracts, it sheds light here upon the appropriateness of an implied entitlement to be found in the relevant statutory scheme, which will necessarily involve a contract for sale to give effect to the statutory power of sale.
177The statutory power of sale in the LG Act carries with it the entitlement of the Plaintiff to take possession of the land so that it may give vacant possession to Mr Smith on payment of the balance of the purchase price.
178It is entirely clear that the process of sale of land by a council for unpaid rates and charges is intended to give rise to a change in title to the land. Section 716 LG Act requires sale to be attempted, in the first instance, by way of public auction.
179As Brereton J observed in Anderson v Lismore City Council, at 251 [28], a council's power to sell under s.713 LG Act is akin to a mortgagee's power of sale, given to a council as a creditor to enforce a debt due to the council, that is charged by statute on the land.
180It is necessary to keep in mind the statutory scheme. The Defendant's property has been lawfully sold by the Plaintiff at auction to Mr Smith. The Defendant's statutory entitlements are contained in ss.718-720 LG Act. The Defendant is not the vendor. He has no control or say concerning the selection of the date when he is required to surrender possession of the property. His position is quite different to that of an ordinary vendor who enters into a Contract for Sale of Land and then executes a transfer. The existence of a transitional process which sees a council take possession of the land for the purpose of giving vacant possession to the purchaser on completion is entirely consistent with the statutory scheme contained in ss.713-726 LG Act and ordinary conveyancing practice. The Plaintiff has an implied statutory entitlement to obtain possession of the property from the Defendant for the purpose of giving vacant possession to Mr Smith on completion. All of this arises from the unusual statutory scheme where the Plaintiff can sell the Defendant's land without the Defendant being a party to the contract or the transferor.
181The position is broadly analogous to that of a trustee, not in possession of a property, who desires to obtain possession of a property so that it may be sold under a power given in a will, where the Court will give judgment for possession and give leave for the issue of a writ of possession: NSW Trustee and Guardian v Schneider [2011] NSWSC 424 at [21]ff.
182I am satisfied that the first route relied upon by the Plaintiff (see [154] above) permits the Court to give judgment for possession against the Defendant. In these circumstances, it is not strictly necessary to determine the availability of the second and third routes. However, as the matters have been fully argued, I will proceed to determine these claims as well.
183The Plaintiff's second submission requires consideration of s.60 Real Property Act 1900. I accept the Plaintiff's submission that a charge under s.550 LG Act is a "mortgage" for the purposes of the Real Property Act 1900. It is a charge on land created to secure the payment of a debt. The ordinary meaning of a "charge" is an act in the law by which an item of property is made available as a source from which some legal obligation can be met: Residential Housing Corporation Pty Limited v Esber [2011] NSWCA 25; 15 BPR 29, 213 at 29, 223 [51].
184In my opinion, s.550(2) LG Act authorises resort to s.60 Real Property Act 1900, a view which is reinforced by s.550(5) LG Act.
185Section 60(a) Real Property Act 1900 does not assist the Plaintiff. The right to enter into possession by s.60(a) Real Property Act 1900 is expressly confined to a right to enter possession by receiving the rents and profits from the land: Starceavich v Swart & Associates Pty Limited [2006] NSWSC 960 at [35]-[37]; Perpetual Trustee Company Limited v Agusta Pty Limited [2008] NSWSC 646; 72 NSWLR 148 at 156 [47]. It has been described as a right of constructive possession: Butt, "Land Law", Lawbook Co, 6th edn, 2010, paragraph [18 95].
186Here, the Plaintiff seeks to obtain actual possession of the property. It does so by bringing proceedings in this Court for possession of the land, an avenue available under s.60(c) Real Property Act 1900.
187I do not consider that Sood v Christianos assists the resolution of the present case, which involves the exercise of the statutory power of sale under the LG Act without the need to apply for judicial sale.
188I am satisfied that the pathways to achieve this result may be found in s.60 Real Property Act 1900, with the acceptance that a charge under s.550 LG Act is a mortgage.
189I accept the submission of Mr Rogers that Campbell J and Hidden J in their separate decisions in King Investment Solutions Pty Limited v Hussain, were not called upon to consider the issues which are presently before me. Those cases did not involve the exercise of a statutory power of sale, nor were the provisions of the LG Act pertinent to them.
190In the 2010 decision in King Investment Solutions Pty Limited v Hussain, Hidden J concluded (at [31]-[34]) that s.60 did not apply to a mortgage unless it was registered. I agree with Mr Rogers' submission that this observation of his Honour was obiter. Nevertheless, I have regard to the principle of judicial comity in determining whether I should follow his Honour's decision: Segal v Waverley Council [2005] NSWCA 310; 64 NSWLR 177 at 193 [57].
191I have given careful consideration to his Honour's decision, but have reached a different view. Firstly, the definition of "mortgage" in s.3 Real Property Act 1900 can include unregistered mortgages: Residential Housing Corporation Pty Limited v Esber at 29, 223 [52]. Secondly, I note that the Real Property Act 1900 refers at different points to a "registered mortgagee" (s.57(2)) and a "mortgagee" (s.60). It has been noted that s.60 makes no distinction between registered and unregistered mortgagees: Butt, "Land Law", Lawbook Co, 6th edn, 2010, paragraph [18 95]. Thirdly, the present question is to be determined by reference to a "mortgage" derived from s.550 LG Act, a provision which refers to priority (s.550(2)) and the inter-relationship with the Real Property Act 1900 (s.550(5)). The present case is distinguishable from that considered by Hidden J, and his Honour did not have the assistance of the submissions made to me in this case.
192I am persuaded that s.60 Real Property Act 1900 may be relied upon by the Plaintiff to seek an order for possession, even though there is no registered instrument in this case. I have reached this conclusion having considered the statutory scheme under the LG Act (including s.550(2) and (5)) and noting that s.60 has not been said to be confined solely to registered mortgages: Butt and Others, "The Torrens System in NSW", 2nd edn, paragraph [64,160].
193I uphold the Plaintiff's second submission (at [155] above) that its entitlement to possession arises under s.60 Real Property Act 1900.
194The Plaintiff's third submission in support of the claim for possession was based upon s.109 Conveyancing Act 1919 (see [156] above).
195I am satisfied that the Plaintiff is a mortgagee within s.109(1)(a) by reference to a charge (under s.550 LG Act) and the definition of "mortgage" in s.7 Conveyancing Act 1919. As vacant possession is a normal incident of sale (see [167] above), I accept that a condition of sale that a property be conveyed subject to vacant possession falls within the words in s.109(1)(a) Conveyancing Act 1919.
196I would uphold the Plaintiff's entitlement to possession of the Jugiong property on this basis as well.
197In my view, the outcome in this case will see a coherent pathway where the exercise of the statutory power of sale by public auction by the Plaintiff to Mr Smith, followed by the entry into a Contract for Sale of Land between the Plaintiff and Mr Smith, may be given effect to by the Plaintiff taking possession of the land for the sole purpose of giving vacant possession to Mr Smith upon completion of the sale.