Minister for Lands (NSW) v Jeremias [1917] HCA 41;

Minister for Lands (NSW) v Jeremias [1917] HCA 41; - HCA 1917 case summary — Zoe

[6]

The Act of 1913 purports merely to consolidate the provisions of the previous Crown Lands Acts, and makes no attempt to remedy defects in the previous legislation on the subject, however obvious. Like its predecessors, therefore, it makes no express provision either enforcing residence upon the mortgagee, or relieving him of the necessity of residence. The right to mortgage was affirmed by the Supreme Court in the case of Hayward v. Smith[1], which case decided that a bonâ fide mortgage by a conditional purchaser during his performance of the condition of residence is a valid security. Of course, if it had been entered into "with the intent or having the effect of enabling any person other than the applicant to acquire by purchase or otherwise the land applied for," it would have been illegal and void (Act of 1884, sec. 121). The right of mortgage, when exercised bonâ fide, has not since been challenged, but it has been hedged round by many provisions, which are now to be found in sec. 272 of the Act of 1913. Thirty years have elapsed since the decision of Hayward v. Smith, and, of course, large numbers of mortgages have since been entered into by conditional purchasers and other classes of holders of Crown lands. It is common knowledge that very many persons and corporations have had a number of such securities running at the same time. Personal residence by the mortgagee on more than one mortgaged property at the same time is obviously out of the question, and if the mortgagee were obliged by law to reside on one of them, leaving the other or others without such residence, the result would be liability to wholesale forfeiture. The present case thus becomes one of extreme moment, not only because of such liability if sustained by the Courts, but because of the very great difficulty which would in consequence be placed in the way of settlers who desire to obtain monetary assistance for the performance of their conditions and the acquisition of final title to their lands.

[9]

Turning to Part IV., we find the term "holder," in the proviso to sec. 38 applied to the person, obviously at that stage neither a mortgagor nor a mortgagee, taking up a conditional purchase and conditional lease, who is allowed, subject to certain provisions, to convert all or part of his conditional lease into an additional conditional purchase or purchases. The word "holder," however, is not defined in the Act. But a person may be the holder without being the applicant, as sec. 41 (2) and (3) show. When we come to sec. 44, which prescribes methods by which original and additional conditional purchases and conditional leases may be acquired from the Crown, we find in sub-sec. 4 a proviso relating to applications for additional conditional purchases and conditional leases by original conditional purchasers or their transferees, apt words to distinguish "the owner subject to mortgage" and a transferee who "holds by way of mortgage," neither of whom is in this section called the "holder." Such an application may be registered in the name of the "transferee" "subject to the conditions of the additional conditional purchase or conditional lease being performed by the aforesaid owner." Now, an additional conditional purchase is held with the original, and with it is subject to the condition of residence, as also is a conditional lease (see sec. 47 (1)). If, then, the conditions in respect of the lands the subject of an application under sec. 44 (4) must be performed by "the aforesaid owner," meaning the owner subject to the mortgage, it seems difficult to suppose, in face of this provision, that the Act, without express requirement, subjects the transferee by way of mortgage also to the conditions. Sub-sec. 5 of the same sec. 44 allows an officer of a corporation or company or member of a partnership to make, on behalf of the corporation, company or firm, application for an additional conditional purchase or conditional lease or any prescribed declaration in respect thereof, where the conditional purchase is held "absolutely" by the corporation, &c. But there is no trace of similar liberty where the body or firm holds by way of mortgage, except under the terms of sub-sec. 4, which exacts the performance of the conditions by the owner who holds subject to mortgage.

[12]

Coming to sec. 47, which was the subject of much argument, it is argued by the appellant that the term in sub-sec. 1 includes the mortgagee. I find myself unable to accede to that contention. Having regard to the distinctions drawn elsewhere in the Act, of which I have given some examples, I cannot think that the "holder" in this section, who is to perform the condition of residence, is other than the applicant or his absolute transferee, or, in other words, the beneficial owner. That impression is strengthened not only by the words but by the whole tenor of sec. 51, which surely does not mean that a mortgagee is to be "the holder" so as to be liable to pay the instalments of purchase money, and may continue to pay them for many years after the date fixed for the repayment of his loan, and sec. 178 (1), which in its entirety is incompatible with the notion that the mortgagee is the person subject to the condition of residence. There too "the holder" can scarcely be a mortgagee. Stress was laid on proviso (a) to sub-sec. 1 of sec. 47. I do not think that this sub-section in any way has the effect of altering, for it would be altering, the meaning of the word "holder" and of including in it the mortgagee. Sometimes in this Act the mortgagee is said to "hold by way of mortgage," but I do not think he is anywhere called "the holder" simpliciter, unless Mr. Knox is right in saying that this section so calls him. Proviso (a) gives liberty to the mortgagor to continue residence, but that I think, as will presently appear, applies only where the mortgagee has not exercised the right of possession upon default. And proviso (b) of the same sub-section, in prescribing waiver of the condition of residence, in case of death or unsoundness of mind, until the conditional purchase or lease has been transferred or conveyed, applies this concession to the "beneficial owner." In so doing, the exception which it makes cannot, in my opinion, be read as an exception upon the liability to reside on the part of the mortgagee supposed to be raised by the body of sub-sec. 1; indeed, the use of the term "beneficial owner" makes it in my view impossible so to read it. On the contrary it goes to exclude the idea that the liability excepted upon is the liability of the mortgagee.

[21]

It may be found, on examination, that a uniform meaning is attached to the word, or a varied sense in different places, or an exceptional sense given to it in the place under consideration. The word "holder" used with reference to a conditional purchase means primarily the person whose application for a conditional purchase has been confirmed under sec. 45. But by sec. 154 the application must be made by the applicant "in order that be may hold and use the land for his own exclusive benefit." There is no section which declares that henceforth he is to be styled the "holder," but, so long as there is no mortgage registered, he is spoken of as the "holder" - for instance, in sec. 38 and sec. 41. There may be a transfer by "way of mortgage" (sec. 272 (2)). And in that case the Act refers to the mortgagor either as the "holder" or the "owner (subject to the mortgage)." The mortgagee - except in one section so far as I have observed. viz., sec. 339, a very special section and not involving a residence condition - is always spoken of either as "mortgagee" or "transferee." The mortgagor is always recognized as the "owner," though "subject to the mortgage." And subject to the mortgagee's rights, it is the "owner" on whom are conferred the rights and privileges and are imposed the responsibilities in connection with the holding. Sec. 44 (4) is a striking instance. Sec. 47 declares that the "holder" shall subject to sec. 178 hold the conditional purchase under a condition of ten years' residence. Whose residence? The Crown contends that in case of a registered mortgage it is the mortgagee's personal residence. But ex facie it is to be subject to sec. 178. That section itself is informative. It speaks of "the holder" and "the owner (subject to mortgage)," and makes provision for a suspension or remission of the residence condition in case of his sickness, or the sickness of his family, other adverse circumstances, &c. Similar suspension of fencing or improvement conditions may be made. See the expression "holder or his family" towards the end of sub-sec. 2, which must include the mortgagor. But is it possible that "holder" in that section means or even includes a mortgagee? The very fact that "owner (subject to mortgage)" is inserted shows that a mortgagee is outside the section, though his existence is recognized. And it demonstrates what is a very important fact in this connection, namely, that the residence of the "owner (subject to mortgage)" is a primary liability and not vicarious for the mortgagee. It would be the very height of nonsense to permit a mortgagor to perform the mortgagee's condition of residence in a neighbouring village or town for the purpose of educating the mortgagor's children. This section, being expressly introduced into sub-sec. 1 of sec. 47 as an exception to the condition of residence affecting the "holder" prescribed by that sub-section, casts direct light on its meaning and shows that the appellant's argument as to par. (a) of the sub-section is not well founded. That sub-section says that where the conditional purchase is transferred bonâ fide, by way of mortgage, the condition of residence may be performed by the "owner subject to such mortgage." That is the provision which is afterwards dealt with by sec. 178. It appears to me to mean that though he has ceased to be the "holder" in the sense that he holds the legal title absolutely, that is, beneficially, the condition will be well performed if he as beneficial, that is, real owner does it. And sec. 178 provides for its possible suspension while he is "owner (subject to mortgage)" just as if he remained "holder." But it does not mean that the transferee by way of mortgage is holder in the sense of "holder absolutely," on whom normally the obligation of residence rests. Par. (b) says that "where the beneficial owner" dies or becomes of unsound mind, the performance of the residence condition "shall be waived" until the conditional purchase is transferred, and no longer. "Beneficial owner" clearly means the true "owner," whether the holding is mortgaged or not. Again, this paragraph is inconsistent with the obligation of residence being placed on the mortgagee. Sec. 179 is extremely strong in support of this view. "Holder" there perhaps more directly than elsewhere in the Act means the absolute owner of an unmortgaged holding, while "if the same has been transferred by way of mortgage," the same person is called the "owner thereof subject to such mortgage."

At a glance

Court

Decision date

Before

Source

Judgment (29 paragraphs)

Minister for Lands (NSW) v Jeremias [1917] HCA 41; (1917) 23 CLR 322 (3 September 1917)

Parties

Cases Cited (1)