PARTIES: NATURAL FORESTS PTY LTD (ACN 009 511 577)

Conveyancing - Land titles under the Torrens system - Indefeasibility of title: certificate as evidence - Exceptions - Adverse possession of others - Tasmania - Period of adverse possession not run against owner who pays rates.

Land Titles Act 1980 (Tas), s138U.

Statutes - Acts of parliament - Operation and effect of statutes - Retrospective operation - In general - Principles of wide operation - The weight to be given to the presumption against retrospectivity considered.

Land Titles Act 1980 (Tas), s138U.

Doro v Victorian Railways Commissioners [1960] VicRp 12; [1960] VR 84, followed.

Judgment Number: [2004] TASSC 34

1 The applicant is the registered proprietor of land at Garden Island Creek described in certificates of title volume 42786, folio 1 and volume 41321, folio 2. Tasmanian Trustees Limited is the registered proprietor of adjoining lands. The respondent is the occupier of those adjoining lands.

2 On or about 22 December 2000, the respondent placed a caveat on the applicant's lands. He claimed an estate or interest as "person in possession (caveator) - an estate in fee simple in possession by virtue of exclusive uninterrupted possession by the caveator through self, servants and agents for a period in excess of twelve (12) years since 1986".

3 Since the lodgement of the caveat, the respondent has taken no proceeding to become the registered proprietor of the applicant's lands or, more accurately, of part of them, as the respondent only asserted entitlement to part of the lands in the two certificates of title.

4 By an application dated 15 May 2001, the applicant seeks an order pursuant to the Land Titles Act 1980 ("the Act"), s135, that the respondent show cause why the caveat should not be removed. The applicant's submission is that there is no doubt that the caveat should be removed. Its counsel submitted that the provisions of the Act, s138U, determine the matter conclusively against the respondent. It provides:

"(1) For the purposes of an application to acquire title to any land by possession, any period during which council rates have been or are paid by or on behalf of the owner is to be disregarded.

(2) This section does not apply to an application if the relevant council has certified in writing that it is unclear who has paid, or is paying, the relevant council rates."

5 The respondent, who was self-represented, submitted that s138U did not determine the matter at all, because that section was inserted in the Act by the Land Titles Amendment (Law Reform) Act No 4 of 2001 ("the amending Act") which did not commence until 26 April 2001 and, accordingly, had no application to events that had occurred before that date. The respondent submitted that, absent the provisions of s138U, he had an arguable case that he had been in adverse possession of part of the applicant's land since 1986, and therefore the caveat should remain to protect his interest until the issue of whether he was entitled to become the registered proprietor could be determined.

6 It was decided that I should determine the following three questions before any other questions, viz:

1 Is the applicant the registered owner of all the land comprised in certificates of title volume 42786, folio 1 and volume 41321, folio 2, being the lands in respect of which the respondent has lodged the caveat that is the subject of this application?

2 If yes, have council rates been paid by or on behalf of the applicant for any period or periods and, if yes, for what period or periods?

3 If yes to question 2, for the purposes of the provisions of the Land Titles Act 1980, s138U, what (if any) period or periods is or are to be disregarded?

7 Affidavit and oral evidence was taken to determine the questions of fact. There was little dispute between the parties with respect to these questions. I resolve them both in the affirmative and I find that the applicant is the registered owner of the land described in the two titles in respect of which the respondent has lodged the caveat, and that the applicant has paid the rates on those lands continuously from 1982 until the present time.

8 The Limitation Act 1974, s10(2) relevantly provides:

"(2) No action, not being an action to which subsection (1) applies, shall be brought by any person to recover any land after the expiration of 12 years from the date on which that right of action accrued to him or, if it accrued to some person through whom he claims, to that person."

9 The applicant has not commenced any proceedings to recover possession of that part of its lands that the respondent claims he has occupied since 1986, nor to restrain the respondent from occupying it, but were it do so, subject to the argument about the extent of the operation of the Act, s138U, it would fail if the respondent showed that he had adversely occupied the land since at least 1992.

10 The amending Act also enacted s138W(1). It provides that the Limitation Act applies to the title of the registered proprietor but subs(2) modifies its effect so that instead of the registered proprietor's title being extinguished by the Limitation Act, the registered proprietor is taken to be holding the land in trust for the person entitled by virtue of 12 or more years' adverse possession. Subsection (4) provides that a person who claims that the registered proprietor so holds the land in trust for him or her may apply to the Recorder for a vesting order, thus conferring the legal estate upon the applicant. Before the commencement of the amending Act, those provisions were enacted in substantially the same form in the Act, Div12, s117(1) and (2) . The amending Act, s10, repealed the whole of the Act, Div12, and replaced it with a new regime dealing with title by adverse possession to easements and fee simple.

11 Prior to the amending Act, repealed Div12 contained the same right to become the registered proprietor upon application to the Recorder as is enacted in s138W(4). However, the amending Act additionally enacted s138T which provides:

"A person who has been in possession of land owned by another person may acquire title to that land in accordance with this Division but not otherwise." [Emphasis added.]

12 The relevant Division in the amending Act is PtIXB, Div6, which comprises s138T - 138Y. The applicant's contentions are:

1 The respondent can only become the registered proprietor of any part of the applicant's land by an application to the Recorder of Titles in accordance with the provisions of the Act, s138W.

2 For the purposes of answering the three questions outlined above, it may be assumed that the respondent has adversely possessed part of the applicant's lands for more than 12 years.

3 By virtue of s138U, the whole of that period must be disregarded in the event of the respondent making an application to become the registered proprietor in accordance with s138W.

4 Consequently, the respondent cannot succeed in such an application to the Recorder and therefore the caveat must be removed.

13 With respect to the meaning of s138U, I was referred to the Second Reading Speech when the amending Act was before the House of Assembly. It appears that the motivation for the enactment of s138U was a decision of mine, Woodward v Wesley Hazell Pty Ltd (B8/1994, 21 February 1994). In his Second Reading Speech on 23 November 2000, the Minister said:

"The Government has approved an amendment to the law to safeguard an owner paying rates from being dispossessed. The onus of proving acquisition of title by adverse possession lies on the possessor. However, with the introduction of the bill, prior to making an application to the Recorder of Titles, an adverse possessor will have to have made requisite searches for the registered proprietor, determined who has been paying the rates and advertised of the intention of making such application. If the registered proprietor is paying rates and has been for the statutory period, the adverse possessor is precluded from making an application to the Recorder. This amendment will prevent circumstances similar to that of the Hazell case occurring again. If it is uncertain who is and has been paying rates, for example, because of imperfect council records, then an application will be at the discretion of the Recorder."

14 In Hazell's case, Wesley Hazell Pty Ltd claimed that it had been openly occupying portion of Mr Woodward's lands for more than 12 years. Mr Woodward disputed this and sought a declaration from the Court that Wesley Hazell Pty Ltd had not obtained a beneficial interest in the land by adverse possession. That application was dismissed. The issues for determination were what degree of exclusive physical control over the disputed land had been exercised by Wesley Hazell Pty Ltd and whether the company had an intention to possess that land to the exclusion of all others, including the true owner. I infer from the Minister's Second Reading Speech that Mr Woodward, who lost his land, had been paying rates on it throughout the whole period. Hence the amendment. However, so far as I can recollect, the payment of rates was not mentioned during the course of the hearing.

15 In the present case, the third question is whether or not s138U operates so that the whole of the period since 1986 cannot be relied upon by the applicant, or whether the only period upon which he cannot rely is from the date that Act commenced, namely 26 April 2001, to date?

16 There is a presumption against an Act being construed so as to give it retrospective effect. See Maxwell v Murphy [1957] HCA 7; (1957) 96 CLR 261 at 267; Nicholas v Commissioner for Corporate Affairs [1988] VicRp 40; [1988] VR 289 at 297. This presumption is rebuttable if the words of the Act reveal a clear intention to convey retrospective operation. See Worrall v Commercial Banking Co of Sydney Ltd [1917] HCA 67; (1917) 24 CLR 28 at 32. I venture to cite the following passage from the judgment of Adam J in Doro v Victorian Railway Commissioners [1960] VicRp 12; [1960] VR 84, at 86, for it has particular relevance to the circumstances of this case:

"The strength of the presumption against retrospectivity in any particular case, and accordingly the ease or difficulty with which it may be overcome, must, I would think, depend on the nature and degree of the injustice which would result from giving a statute a retrospective operation. Where a palpable injustice would result, the presumption should be given its fullest weight. In such a case it is but common sense to require the clearest indication of legislative intention that such an unjust result was intended. On the other hand, where to give retrospective operation to a statute might be considered to work some injustice to one party, but is clearly required to rectify a manifest injustice to others, there would, on principle, seem little reason for giving much weight to the presumption. In such a case, where the Legislature has used language which is apt to give to its statute retrospective operation, it would appear to be a matter of conjecture to presume that it preferred the interests of the one to the others."

17 The amending Act, s19, enacts a transitional provision. It provides as follows:

"(1) Where an application made under Division 12 of Part VI, as in force immediately before the commencement of the Land Titles Amendment (Law Reform) Act 2001, has not been finally dealt with before that commencement, the Recorder must, on and after that commencement, take whichever of the following courses of action he or she considers to be the more favourable to the applicant:

(a) deal with the application as if that Act had not been enacted;

(b) deal with the application as if it had been made under this Act after that commencement."

18 The enactment of that provision clearly indicates that Parliament intended s138U to have effect with respect to periods of time prior to 26 April 2001. The power conferred on the Recorder to apply the provisions of s138U to an application made before, but not determined until after the amendment, is inconsistent with the respondent's contention that the section only applies to periods after 26 April 2001. This is so, even though it is unlikely that such a course would be followed because it would not be favourable to the applicant.

19 The Minister's Second Reading Speech clearly indicates an intention to rectify a perceived wrong. In the absence of express words, it is unlikely that Parliament intended s138U only to have prospective operation. This would mean that payment of rates would only operate to prevent persons in adverse possession obtaining title if the 12 year period was incomplete at the date the amending Act commenced. That interpretation is completely at odds with the Minister's statement:

"This amendment will prevent circumstances similar to that of the Hazell case occurring again."

20 The amending Act, s138U, did not abolish the right to obtain title by adverse possession. It merely enacted, in effect, that payment of rates by the registered proprietor was conclusive evidence negativing other evidence of adverse possession. Further, s138U refers to "any period", and not to "any period after the commencement of this Act". For all those reasons I am in no doubt that the answer to the third question is that the period from 1982 to date is the period of time that is to be disregarded pursuant to the provisions of the Act, s138U.

21 The respondent submitted that the lodgement of the caveat prior to the enactment of the amending Act meant that he could claim the benefit of the transitional provision subs(1)(a) and will seek to persuade the Recorder to deal with this application as if the amending Act had not been enacted. I reject this submission. The transitional provision expressly refers to "an application made under Division 12 of Part VI, as in force immediately before the commencement of the [amending Act]". This is clearly a reference to an application pursuant to s117(3). That is the only application that requires to be "finally dealt with". A caveat does not have to be finally dealt with. Indeed, a caveat is not an application for anything. It is no more than a notice that someone is claiming an estate or interest in land.

22 For the foregoing reasons, it seems to me that regardless of what evidence the respondent can adduce to establish that he has adversely possessed part of the applicant's lands for more than 12 years, he cannot succeed upon the making of an application to become the registered proprietor of those lands.

23 I will hear the parties before proceeding to finally determine this application.