Roads Corporation v Pearse [2012] VSC 527

Rodney McInnes, Victorian Government Solicitor's Office

1 Richard and Jennifer Pearse are the registered proprietors of the property situated at and known as 26 Kaikoura Avenue, Hawthorn East. They claim to be entitled to be registered as proprietors of part of the property situated at and known as 28-42 Kaikoura Avenue ('the property') by reason of adverse possession for a period in excess of 15 years. The Roads Corporation is and at all material times has been the registered proprietor of the property.

2 When Mr and Mrs Pearse lodged an application under s 60(1) of the Transfer of Land Act 1958 (Vic) for an order vesting ownership of the relevant part of the property in them, the Roads Corporation lodged a caveat pursuant to s 61(1) of that Act protecting its interest in the property. In a proceeding in this court by way of amended statement of claim, the Roads Corporation asserts, and Mr and Mrs Pearse deny, that it is entitled to remain registered as the proprietor and that they have not acquired any interest in the property by adverse possession.

3 A determinative question in the proceeding is whether the Roads Corporation is entitled to claim the immunity of the Crown from adverse possession which is specified in s 7 of the Limitation of Actions Act 1958 (Vic) in these terms:

Notwithstanding any law or enactment now or heretofore in force in Victoria, the right title or interest of the Crown to or in any land shall not be and shall be deemed not to have been in any way affected by reason of any possession of such land adverse to the Crown, whether such possession has or has not exceeded sixty years.

4 Pursuant to r 47.04(a) of the Supreme Court (General Civil Procedure) Rules 2005 (Vic), the Honourable Associate Justice Lansdowne has ordered that the following question be tried before the trial of the proceeding:

At all times, or at any and what time, between 1 July 1994 and 31 March 2011 was the Plaintiff entitled to the immunity of the Crown for the purposes of section 7 of the Limitation of Actions Act 1958?

The date 1 July 1994 is the relevant date in the proceeding for the purposes of the adverse possession claim of Mr and Mrs Pearse. The date 31 March 2011 is a date from which the parties agree that the Roads Corporation was entitled to Crown immunity.

5 The issue between the Roads Corporation and Mr and Mrs Pearse, as raised by the preliminary question, is discrete. The Roads Corporation contends that, by virtue of the provisions of the Transport Act 1983 (Vic), it represented the Crown and was entitled to statutory immunity form adverse possession at all times between 1 July 1994 and 31 March 2011. Mr and Mrs Pearse contend that at no time between those dates did the Roads Corporation represent the Crown such as to be entitled to that immunity. Both the Roads Corporation and Mr and Mrs Pearse agree that, from 31 March 2011 and by virtue of the provisions of the Transport Integration Act 2010 (Vic), the Roads Corporation represented the Crown immunity and was entitled the immunity.

6 The Roads Corporation does not get the benefit of ss 7A, 7AB and 7B of the Limitations of Actions Act. They provide that the right, title or interest of specified entities in any land are not affected by adverse possession. The Roads Corporation is not one of the specified entities. But neither is that a burden, for those provisions operate 'without limiting section 7'. Likewise, in the relevant period, the Roads Corporation does not get the benefit of s 83 of the Transport Integration Act. It provides that, '[i]n performing its functions and exercising its powers, the Roads Corporation represents the Crown'. The Transport Act 1983 contains no such provision. If it did, s 46A(1) of the Interpretation of Legislation Act 1984 (Vic) would have applied to declare that the Roads Corporation had Crown immunity. But that is not a burden either: s 46A(3) provides that the lack of such a provision gives rise to no implication that the entity has or does not have immunities of the Crown.

7 Counsel for the parties were in virtual agreement as to the principles which are to be applied in determining whether or not the Roads Corporation is 'the Crown' for the purposes of s 7 of the Limitation of Actions Act. According to those principles, the starting point is that all persons are equal before the law and therefore statutory corporations are prima facie treated as being distinct from the Crown.[1] The central consideration in determining whether that presumption has been displaced such that the corporation is to be regarded as the Crown for the purpose of an immunity is 'the intention to be derived from the statute under which the body in question is constituted'.[2]

8 In ascertaining that intention, it is relevant to take into account the functions which the corporation performs and whether they are governmental in character, while noting that many functions are now carried out on behalf of the government which were not previously considered to be governmental.[3] It is especially relevant to take into account whether the Crown is able to control, directly or indirectly, the activities of the corporation.[4] However, these considerations are no more than guides in resolving the central question of statutory interpretation by reference to which the intention of Parliament is to be ascertained.[5] Further, because a corporation can be the Crown for one purpose and not for another, the important question is whether Parliament intended the corporation to be regarded as the Crown for the purpose in question.[6]

9 There was a significant difference of emphasis in the submissions of counsel about the control consideration. Counsel for Mr and Mrs Pearse submitted that, by reason of the judgment of the High Court in SGH Ltd v Federal Commissioner of Taxation,[7] the question was whether the control exercised by the Crown over the corporation was, in the words of Gleeson CJ, Gaudron, McHugh and Hayne JJ, 'not absolute'.[8] In the submission of counsel, it followed from this judgment that, if the control was less than absolute, the relevant corporation would not be regarded as the Crown.

10 While I accept that the kind and degree of control which is exercised by the Crown must be examined, it is not the case that only absolute control will suffice. I do not think that the decision in SGH Ltd was intended to alter the law stated in Townsville Hospitals Board v Townsville City Council[9] and Superannuation Fund Investment Trust v Commissioner of Stamps (SA).[10] So, in McNamara v Consumer Trader and Tenancy Tribunal,[11] which was decided after SGH Ltd, McHugh, Gummow and Heydon JJ said:

the decision whether a statutory corporation is entitled to the privileges and immunities of the Crown requires ... close attention to the functions of that body and the degree of control exercisable over it by the executive government.[12]

Their Honours also said that by 'control' was meant the 'control and direction of activities'.[13]

11 This is not the first occasion on which this court has been required to determine whether, under the Transport Act 1983, the Roads Corporation qualifies for a Crown immunity. The issue arose in Roads Corporation v Gerkens & Ors[14] in the context of Crown immunity from criminal liability. Applying the same principles, Eames J decided that the Road Traffic Authority and the Roads Corporation were both 'an instrument of the Crown, at least for some purposes'.[15] His Honour gave this main reason for reaching that conclusion:

[Section] 31 of the Transport Act, not only provides ... general direction and control but also makes the RTA subject to any 'specific directions' given by the Minister. That factor is a significant indicator of a degree of Executive control generally consistent with the body being an agency of the Crown.[16]

With respect, I agree with his Honour's analysis and conclusions.

12 As I pointed out, Gerkens was a case involving the immunity of the Roads Corporation from criminal liability. It does not automatically follow from the decision in that case that the Roads Corporation is to be regarded as the Crown for the purposes of the immunity in s 7 of the Limitation of Actions Act. That will depend on the functions it was performing and the control to which it was subject by the government generally and in the relevant respects or, more strictly, whether those considerations show that it was intended by Parliament that it was to be so regarded. This subject is best discussed in the context of a general analysis of the functions of the Roads Corporation and the control to which it is subject under the Transport Act 1983.

13 In regard to the functions of the Roads Corporation and the control to which it is subject under the Transport Act 1983, I accept the submissions which were made by counsel on its behalf. Counsel particularly relied on s 31(1) of the Transport Act 1983 (as amended up to 1989), which is expressed in these terms:

Each Corporation must exercise its powers and discharge its duties subject to the general direction and control of the Minister, and to any specific directions given by the Minister.

As was decided by Eames J in Gerkens, s 31(1) gives the responsible minister very considerable power of direction over the activities of the Roads Corporation. As his Honour also pointed out,[17] that control extends to the close supervision of the budgetary and financial affairs of the Roads Corporation through a carefully designed network of provisions (see ss 58-60, 66, 77).

14 No doubt mindful of the importance of s 31(1), counsel for Mr and Mrs Pearce argued that the provision was of less significance because it conferred a power to give directions in respect of the exercise of the powers of the Roads Corporation but not its functions. The language of s 31(1) compels me to reject that submission. It confers a general power of direction in relation to the powers and duties of the Roads Corporation in all respects, as well as a specific power of direction in relation to particular matters. For the purpose of determining whether Parliament intended the Roads Corporation to be regarded as the Crown for present purposes, the degree of control which may be exercised pursuant to s 31(1) must be placed at the very high end of the spectrum.

15 Counsel for the Roads Corporation pointed to many other activities in respect of which it was subject to statutory control by the minister. All of those particular instances of control are relevant. However, the control which is exercised by the Minister in relation to dealing with land is especially relevant. In that regard, s 47(1) and (2) materially provides as follows:

(1) In this section surplus land means land which is vested in a Corporation but which is no longer required by the Corporation for or in connexion with the performance of its functions.

(2) A Corporation may with the approval of the Minister -

(a) sell any surplus land; ...

As counsel for Mr and Mrs Pearse submitted, this provision only applies to land which is no longer required by the Roads Corporation for the specified purposes. However, it positively prevents the Roads Corporation from selling any such land, including the property at issue in the present case, without the approval of the Minister. This is one indication that, in respect of the management of land belonging to the Roads Corporation, Parliament intended that it would be regarded as the Crown. Among other such indications, I would note the ministerial control on the purchase of land by the Roads Corporation (s 42(1)) and the capacity of the minister to transfer assets (including land - and including the property) between the corporations (s 81(1)).

16 The establishment and appointment provisions also point in the direction that the Roads Corporation is to be regarded as the Crown. The Roads Corporation was established by s 15(1) of the Transport Act 1983, not incorporated under the companies legislation. The Chief Executive is appointed by the Governor in Council (s 15(2)). The Chief Executive has responsibility for the management of the affairs of the Roads Corporation (s 30(1)), but is subject to ministerial direction (s 31). The Minister must appoint an advisory board (s 30(2)), determine its terms of reference (s 30(7)) and also the allowances and other conditions of the appointment of its members (s 30(8)). These are further instances of close governmental control which indicate Parliament's intention that the Roads Corporations represents the Crown.

17 Turning to the functions of the Roads Corporation under the Transport Act 1983, these are specified in s 16(1) in broad terms. Its principle function, which is specified in s 16(1)(a), is to 'maintain, upgrade, vary and extend the State's declared road network'. By s 16(1)(b), it can assist in the 'maintenance, upgrading and construction of other [ie non-declared] roads'. These and other specified functions are almost all traditionally governmental and public in nature. The functions clearly have that character even by comparison with the functions of the Roads Corporation under the Transport Integration Act which are more developed and extended in that direction. Of course, this is not determinative. But to the extent to which this consideration is relevant, the provisions of the Transport Act 1983 in relation to the functions of the Roads Corporation suggest that it was intended to have the privileges and immunities of the Crown, including statutory immunity from adverse possession. As Martin CJ said in Water Corporation v Hughes, [18] that is 'one of the long-standing immunities of the Crown', reflecting 'the practical difficulty faced by the Crown in monitoring all land in which it has an interest'.[19]

In the exercise of it functions, the Roads Corporation must have regard to the achievement of the following objects:

(a) To make use of available transport resources in ways which are most beneficial to the community and with due regard to the enhancement of the environment;

(b) To operate within Government policy and other parameters determined by the Victorian Transport Directorate; ...

This provision is important because it links the functions of the Roads Corporation with the interests of the community and government policy. This is an indication that Parliament intended the Roads Corporation to be regarded as the Crown, and in the relevant respect. Management of land and other property is fundamental to the discharge of the functions of the Roads Community in the interests of the community and in accordance with government policy. Again, this is an important consideration even though the mechanism for ensuring that the Roads Corporation acts consistently with government policy is stronger under the Transport Integration Act.

19 Counsel for Mr and Mrs Pearse pointed to the modest beginnings of the Roads Corporation and its predecessors in the former legislation[20] and its maturation into a fully-fledged Crown instrumentality under the latest legislation. In counsel's submission, that comparison shows Parliament did not intend the Roads Corporation to be regarded as the Crown until the Transport Integration Act was enacted.

20 As counsel submitted, the Transport Integration Act is more developed than the Transport Act 1983 in relation to the functions and powers of the Roads Corporation and the control of government over its activities. It contains a vision statement (s 6), transport system objectives (ss 7-13), decision-making principles (ss 14-21), ministerial policy principles (s 22) and interpretation and guidance provisions (ss 23-28). The powers of the Minister are general and emphatic[21], as are his or her powers to direct the Roads Corporation.[22] The objects and functions of the Roads Corporation are more refined in a governmental direction (ss 86 and 87). The budgetary and financial control of the Minister over the Roads Corporation is enhanced (ss 99-109). It is in that context that the Roads Corporation is, as we have seen, expressly declared to represent the Crown (s 83).

21 I accept the submission of counsel for Mr and Mrs Pearse that the indications in the Transport Act 1983 are not as strong as in the Transport Integration Act that Parliament intended the Roads Corporation to represent the Crown and thus have immunity from adverse possession of its land. Nonetheless, the indications to that effect in the Transport Act 1983 are still strong. When the provisions of that Act are examined in terms of the functions which the Roads Corporation is to perform and the control which the Minister has over the performance of those functions and the exercise of its powers, the conclusion must be reached that Parliament intended the Roads Corporation to represent the Crown and have that immunity.

22 The order of the court will be that that the preliminary question is answered as follows:

Question: At all times, or at any and what time, between 1 July 1994 and 31 March 2011 was the Plaintiff entitled to the immunity of the Crown for the purposes of section 7 of the Limitation of Actions Act 1958?

Answer: At all times between 1 July 1994 and 31 March 2011 the Plaintiff was entitled to the immunity of the Crown for the purposes of section 7 of the Limitation of Actions Act 1958.

[1] Townsville Hospitals Board v Townsville City Council [1982] HCA 48; (1982) 149 CLR 282, 291 (Gibbs CJ, Murphy, Wilson and Brennan JJ agreeing) ('Townsville Hospitals Board').

[4] McNamara v Consumer Trader and Tenancy Tribunal [2005] HCA 55; (2005) 221 CLR 646, 665 [53] (McHugh, Gummow and Heydon JJ) ('McNamara'); Superannuation Fund Investment Trust v Commissioner of Stamps (SA) [1979] HCA 34; (1979) 145 CLR 330, 348-49 (Stephen J) and 365-66 (Aickin J) ('Superannuation Fund Investment Trust').

[5] Superannuation Fund Investment Trust [1979] HCA 34; (1979) 145 CLR 330, 349 (Stephen J).

[6] Townsville Hospitals Board [1982] HCA 48; (1982) 149 CLR 282, 288 (Gibbs CJ, Murphy, Wilson and Brennan JJ agreeing); Superannuation Fund Investment Trust [1979] HCA 34; (1979) 145 CLR 330, 340 (Stephen J); Roads Corporation v Gerkens & Ors (Unreported, Supreme Court of Victoria, Eames J, 28 May 1993) 18 ('Gerkens').

[7] [2002] HCA 18; (2002) 210 CLR 51 ('SGH Ltd').

[9] Townsville Hospitals Board [1982] HCA 48; (1982) 149 CLR 282, 289 (Gibbs CJ, Murphy, Wilson and Brennan JJ agreeing).

[10] Superannuation Fund Investment Trust [1979] HCA 34; (1979) 145 CLR 330, 348-49 (Stephen J), 367 (Aickin J).

[11] [2005] HCA 55; (2005) 221 CLR 646.

[14] Gerkens (Unreported, Supreme Court of Victoria, Eames J, 28 May 1993).

[18] Water Corporation v Hughes [2009] WASC 152 (5 June 2009) (Martin CJ).

[20] See the Country Roads Act 1928 (Vic) and the Transport Act 1983 (Vic) as originally enacted. The Roads Corporation was established under the Transport (Amendment) Act 1989 (Vic) before the relevant date for the purposes of this proceeding.

The Minister has power to do anything that is specified in this Act or that is necessary or convenient to the be done for or in connection with, or as [sic] incidental to, the functions of the Minister under this or any other Act.

(a) the general direction and control of the Minister; and