SHIRE OF KATANNING -v- BRIDE [No 2] [2011] WASC 248 (20 September 2011)

3 The Shire began the first of these proceedings in the Magistrates Court, claiming outstanding rates and charges in respect of the land for the period from 1984 to 2004. Mr Bride counterclaimed for damages in an amount that brought the action within the jurisdiction of the Supreme Court. The action was transferred to this court and was heard with the second action, begun in the Supreme Court, in which the Shire claims rates from 1984 to the present. The hearing of the counterclaim has been deferred until the claim is determined.

4 The Shire claims that Mr Bride is liable to rates on two bases. First, that he has been the owner of the land for the purposes of the Local Government Act since 1995. Alternatively, it pleads that it may recover unpaid rates from Mr Bride under s 6.55(1) of the Local Government Act 1995 because he became the owner of the land while the rates and service charges remained unpaid, and has remained owner to the date of the claim.

5 The Shire also claims interest. Accrued interest is, for the purpose of its recovery, taken to be a rate or service charge: s 6.51(3).

6 The Shire also claims levies raised under the Fire and Emergency Services Authority of Western Australia Act 1998 (WA) (FESA Act) in respect of the land for the financial years 2003 2004 onwards. Under s 36Z of the FESA Act, the levies are recoverable by the local government for the district in which the land is located from the owner of the land on the date the assessment notice was served, or a person who becomes the owner of the land while the levy is unpaid.

7 Mr Bride denies that he is liable to pay the rates. He says that, in 1984, the Australian Bank acted under a mortgage it held over the land and appointed receivers and managers to the property. He says further that in 1987 the bank took possession of the land as mortgagee in possession for the purpose of selling it.

8 In his defence in the first action, Mr Bride asserts that the bank remained in possession until November 2004, when he retook possession, custody and control. In the second action, he pleads that the bank remains in possession. The trial proceeded on the basis that the issues were sufficiently defined without further pleading, and that Mr Bride asserted that the bank remained in possession for the purposes of both actions.

The statutory context Transfer of Land Act 1893 (WA)

9 The land is land under the Transfer of Land Act 1893 (WA). Mr Bride and his wife are the registered proprietors as joint tenants of an estate in fee simple. The Australian Bank holds a mortgage over the property, registered 8 April 1982. The title is subject to three registered caveats and a memorial under the Land Tax Assessment Act 1976 (WA).

10 Under the Transfer of Land Act a mortgage, when registered, has effect as a security but does not operate as a transfer of the land. Under s 106(1), in case of a default in payment of the principal sum or interest, or in the observance of any covenant in the mortgage, the mortgagee may serve a notice on the mortgagee requiring payment or observance or performance of the covenant, as the case may be. If the default shall continue for one month after service of the notice, or such other period as may be fixed in the mortgage, the mortgagee may sell the land mortgaged or any part of it: s 108.

11 Section 111 provides further remedies of a mortgagee in case of default. Relevantly it states:

[T]he mortgagee ... upon default in payment of the principal sum or interest ... or any part thereof ... at the time mentioned in the mortgage or charge may enter into possession of the mortgaged or charged land by receiving the rents and profits thereof ... or may bring an action of ejectment to recover the land either before or after entering into the receipt of the rents and profits thereof ... and either before or after any sale of such land shall be effected under the power of sale aforesaid in the same manner in which he or they might have brought such action if the mortgage money ... had been secured to him or them by an assurance of the legal estate in the land mortgaged or charged.

12 Section 116(1) provides:

In addition to and concurrently with the rights and powers conferred on a mortgagee ... by this Act every present and future mortgagee for the time being of land under this Act ... shall until a discharge from the whole of the money secured or until a transfer upon a sale or an order for foreclosure (as the case may be) shall have been registered have the same rights and remedies at law and in equity (including proceedings before the Magistrates Court) as he would have had or been entitled to if the legal estate in the land or term mortgaged had been actually vested in him with a right in the mortgagor of quiet enjoyment of the mortgaged land until default in payment of the principal and interest money secured ... or until a breach in the performance or observance of some covenant expressed in the mortgage or to be implied therein by the provisions of this Act.

13 The mortgagor may not commence in his own name any action at law for or in respect of any cause of action for which a mortgagee may sue under s 116 without obtaining the consent in writing of the mortgagee: s 117.

Local Government Act 1995

14 Part 6 of the Local Government Act deals with financial management, and pt 6 div 6 with rates and service charges.

15 Except as provided in s 6.26, all land within a district is rateable land. When adopting its annual budget, a local government is to impose a general rate on rateable land within its district, and may impose a service charge: s 6.32. As soon as practicable after a local government has resolved to impose rates in a financial year, it is to ensure that a record is compiled for that financial year of all rateable land, and all land on which a service charge is imposed: s 6.39. A local government is required to give the owner of rateable land and the owner or occupier, as the case requires, of land on which a service charge is imposed a rate notice stating the date it was issued and incorporating, or accompanied by, prescribed details: s 6.41. The owner for the time being of land on which a rate or service charge has been imposed is liable to pay the rate or service charge to the local government: s 6.44. If there are two or more owners they are jointly and severally liable to pay the rate or service charge: s 6.44(2).

16 By s 6.55, rates and service charges on land are recoverable by a local government from the owner at the time of the compilation of the rate record, or a person who 'whilst the rates or service charges are unpaid becomes the owner of the land'. If a rate or service charge remains unpaid after it becomes due and payable, the local government may recover it in a court of competent jurisdiction: s 6.56.

17 The Act also makes particular provision for evidence in legal proceedings. Under s 9.40, evidence of a matter recorded in a document purporting to be a certified copy of all or any part of the rate record may be given by tendering the document. If evidence of the imposition of rates is given under s 9.40(1) it is to be presumed, unless the contrary is proved, that the rates were properly imposed and that the person charged with the amount payable in respect of the rate is obliged to pay it.

18 Section 9.41 provides for proving that a person is owner of land. Section 9.42 provides that a person may be alleged to be, or at a stated time to have been, the owner or occupier of land and, unless the contrary is proved, the person is presumed to be or have been the owner or occupier of the land, as alleged.

19 The levies under the FESA Act are recoverable in the same manner as rates: FESA Act s 36 Z.

20 The question of who is the owner of land is thus central to the scheme for imposing and recovering rates, and is critical to the result of these proceedings. Under s 6.25, other than in relation to a retirement village, owner has the meaning given in s 1.4, which states:

Owner, where used in relation to land

(a) means a person who is in possession as

(i) the holder of an estate of freehold in possession in the land, including an estate or interest under a contract or an arrangement with the Crown or a person, by virtue of which contract or arrangement the land is held or occupied with a right to acquire by purchase or otherwise the fee simple;

(ii) a Crown lessee or a lessee or tenant under a lease or tenancy agreement of the land which in the hands of the lessor is not rateable land under this Act, but which in the hands of the lessee or tenant is by reason of the lease or tenancy rateable land under this or another Act for the purposes of this Act;

(iii) a mortgagee of the land; or

(iv) a trustee, executor, administrator, attorney, or agent of a holder, lessee, tenant, or mortgagee, mentioned in this paragraph;

(b) where there is not a person in possession, means the person who is entitled to possession of the land in any of the capacities mentioned in paragraph (a), except that of mortgagee;

(c) where, under a licence or concession there is a right to take profit of Crown land specified in the licence or concession, means the person having that right;

(d) where a person is lawfully entitled to occupy land which is vested in the Crown, and which has no other owner according to paragraph (a), (b), or (c), means the person so entitled;

(e) means a person who

(i) under the Mining Act 1978, holds in respect of the land a mining tenement within the meaning given to that expression by that Act;

(ii) in accordance with the Mining Act 1978 holds, occupies, uses, or enjoys in respect of the land a mining tenement within the meaning given to that expression by the Mining Act 1904 ; or

(iii) under the Petroleum and Geothermal Energy Resources Act 1967 holds in respect of the land a permit, drilling reservation, lease or licence within the meaning given to each of those expressions by that Act;

or

(f) where a person is in the unauthorised occupation of Crown land, means the person so in occupation.

21 The definition in s 6 of the Local Government Act 1960 was, in substance, identical as to paragraphs (a) to (d), and paragraph (f). The differences in other parts of the definition are immaterial to the questions before the court.

22 It is convenient at this stage in these reasons to consider the correct construction of s 1.4. I do so heartened by Martin CJ's description of the definition as 'almost unfathomable': Shire of Katanning v Bride [2011] WASC 89 [5].

23 The proper approach to the task of statutory construction was summarised in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 [69] [71]. Three aspects of this approach are of particular relevance in the present case. First, construction requires close consideration of the text and structure of a provision, in the context of the Act as a whole, the general purpose and policy of the provision, and its consistency and fairness: [69]; see also Stevens v Kabushiki Kaisha Sony Computer Entertainment [2005] HCA 58; (2005) 224 CLR 193 [30]. Second, if conflict appears to arise from the language of the provisions, 'the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions': [70]. Third, the court must strive to give meaning to every word, so that 'no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent': [71]; The Commonwealth v Baume [1905] HCA 11; (1905) 2 CLR 405, 414.

24 In general terms, the definition of owner in s 1.4, together with s 6.25, identifies the person liable to pay the rate or service charge to the local government. It does so in par (a) by reference to the person 'in possession', either as the holder of a specified estate or interest, or as the trustee, executor, administrator, attorney, or agent of the holder of such an interest. Paragraph (b) recognises that the person entitled to possession may not be in possession. Further, the Act also recognises that an occupier, including a lessee with a right of continuous occupation under a lease, tenancy agreement or other legal instrument, may not be the owner of rateable land: s 4.30, s 4.31.

25 The construction of the definition of owner in s 1.4 was considered in the State Administrative Tribunal in Trecap Pty Ltd and City of Swan [2006] WASAT 142 (referred to with apparent approval by Judge Pritchard, as her Honour then was, in Retirees WA (Inc) and City of Belmont [2010] WASAT 56 [46] [48]). Trecap Pty Ltd was the registered proprietor of a piece of land. It leased the land to another company which, in turn, subleased it to another. Trecap argued that it was not in possession for the purposes of par (a) of the definition, and that as the land was not vacant, it was not the owner within par (b). Senior Member Parry, as his Honour then was, rejected the argument. He found that on both a purposive and a literal construction of s 1.4, Trecap was the owner of the land.

26 The learned Senior Member first considered the purpose of the provisions, concluding 'that an important purpose or object of the [Act] is to facilitate the effective levying of rates by local government on rateable land in its district, so as to ensure the efficient and effective operation of local government': [21] [23]. That purpose was not consistent with a construction that would deny local government rates in respect of rateable land which is leased out by a registered proprietor other than the Crown. I agree.

27 The learned Senior Member then considered the literal construction of the definition. He said:

The words 'in possession', where they appear both in the introductory words to par (a) of the definition of 'owner' and in subpar (i), bear their technical or legal meaning, not their popular meaning. The words in possession' do not relevantly mean 'in actual possession'.

Glenn v Federal Commissioner of Land Tax [1915] HCA 57; (1915) 20 CLR 490 is a decision of the High Court of Australia which concerned the interpretation and application of the term 'owner in s 3 of the Land Tax Assessment Act 1910 (Cth), which included 'every person who jointly or severally is entitled to the land or any estate of freehold in possession'. At 496 and 498, Griffith CJ held as follows:

'The term "estate in possession" is sometimes used in real property law merely to denote the first of two or more successive estates, the others being called "estates in remainder" or "estates in expectancy". It is also used to denote an estate of which some person has the present right of enjoyment ...

The essential element of an "estate in possession" is, in my opinion, that the owner of it has a present right of beneficial enjoyment, whether accompanied by physical possession of the land or not.' (His Honour's discussion of the expression "estate in possession" was referred to with approval by the High Court of Australia in CPT Custodian Pty Ltd (previously t/a Sandhurst Nominees (Vic) Ltd) v Commissioner of State Revenue [2005] HCA 53; (2005) 221 ALR 196 at [25] [26]).'

Similarly, Isaacs J held, at 500 and 501, as follows:

'The appellants contended that the words "in possession" in the definition mean "in actual possession", and are not used in contradistinction to "in reversion or remainder'.

I consider that contention erroneous. The expression "estate in possession" is a well-known technical expression of property law with a certain connotation, and there being no context to the contrary, it should receive its technical meaning ...

[T]he expression is contrasted with estates in expectancy, as in remainder or reversion. "An estate in possession", says Preston (page 89), "gives a present right of present enjoyment." But, it is the right of present enjoyment, and not necessarily the right of actual possession of the land, for there may be a tenant for years, and still less the fact of actual possession, which is of the essence of the definition.'

Where used in the expression 'an estate of freehold in possession in the land' in subpar (i) of the definition of 'owner', the words 'in possession' both denote an estate of freehold which is not 'in remainder' or 'in reversion', and which gives a present right of enjoyment. The word 'freehold' is used in contradistinction to 'leasehold': see Professor Peter Butt, Land Law (Lawbook Company, 5th Edition, 2006) at [615]. Where the words 'in possession' are used in the introductory words to par (a), they denote an estate of which some person has the present right of enjoyment. In neither place do the words 'in possession' mean 'in actual possession' [26] [29].

28 The Shire relies upon the construction of s 1.4 set out in Trecap. The difficulty with this construction, however, is in reconciling par (a) with par (b).

29 In construing s 1.4, it may be misleading to focus on the words 'in possession' rather than on the provision as a whole: see Griffiths v Tang [2005] HCA 7; (2005) 221 CLR 99 [60]; Collector of Customs v AgfaGevaert Ltd [1996] HCA 36; (1996) 186 CLR 389, 396 397, citing Lord Hoffman in R v Brown [1996] 1 AC 543, 561:

The fallacy in the Crown's argument is, I think, one common among lawyers, namely to treat the words of an English sentence as building blocks whose meaning cannot be affected by the rest of the sentence ... This is not the way language works. The unit of communication by means of language is the sentence and not the parts of which it is composed. The significance of individual words is affected by other words and the syntax of the whole.

30 In my opinion, it is wrong to approach construction of the definition on the basis that 'in possession' occurs twice in par (a). In the introductory words to par (a) and in par (b), the section refers to 'a person [who is] in possession'. But in subparagraph (a)(i) it refers to 'an estate of freehold in possession'. That, as the passages from Glenn v Federal Commissioner of Land Tax [1915] HCA 57; (1915) 20 CLR 490 cited in Trecap demonstrate, is a composite expression with an established meaning.

31 Paragraph (b) of the definition contemplates a holder of 'an estate of freehold in possession' who is not 'in possession'. The distinction between possession and entitlement to possession suggests that in par (b) the reference to a person 'in possession' is not a reference to a right of possession. It is a reference to actual possession or possession as a relationship of fact the relationship that 'exists when a person is, as a matter of observable fact, actually enjoying the rights and incidents of an estate in land': Wonnacott M, Possession of Land (2006) 3; and see Georgeski v Owners Corporation SP49833 [2004] NSWSC 1096; (2005) 62 NSWLR 534 [102] [106]. Physical possession may not be necessary. For example, a mortgagee can be in possession if it has exercised the remedy in s 111 of the Transfer of Land Act and, although not in physical possession, is collecting the rents and profits in a way that effectively deprives the mortgagor of the control and management of the property. But a present right of enjoyment, without actual enjoyment, is not sufficient.

32 The definition operates consistently if the introductory words to par (a) are also read as referring to a person with actual possession in this sense.

33 What then is the intended operation of par (b). It cannot be intended to apply only when land is vacant, so that no person is liable to pay rates on leased land unless there is a right to acquire the fee simple. In my opinion, par (b) is intended to apply when there is no person in possession in one of the capacities mentioned in par (a). That construction is within the range of possible meanings of the text, produces a consistent reading of the definition as a whole, and best carries into effect the parliamentary intention of identifying an owner, liable for rates, on all rateable land in private ownership: see R v Young [1999] NSWCCA 166; (1999) 46 NSWLR 681 [15].

34 It follows that, in my opinion, the result in Trecap was correct, but for a different reason. Paragraph (b) does not apply only when land is vacant, as argued by the applicant in that matter. Where there is a lessee in physical possession of the land, but the lessee is not entitled to possession in any of the capacities mentioned in par (a), the question of who is owner is governed by par (b). But a person is only an owner within par (a) when that person is in possession in fact, and is in possession as the holder of one of the estates or interests set out in (a)(i) (iv).

35 The land is within the district of the Shire of Katanning. The land description on the certificate of title is lot 29 on diagram 62969, being the whole of the land in certificate of title volume 1682 folio 357. It has area of 1.4542 ha. The land is adjacent to lot 30 which was also formerly owned by Mr Bride and since about 2005 has been owned by a company which he controls. Lot 30 is 2.4742 ha. The two lots are in a 'battleaxe' configuration, with access from Creek Street to lot 30 by a driveway running along the western boundary of lot 29.

36 There are two buildings on lot 29. The larger building was formerly used in a wine making business conducted by Mr Bride and contained the winery equipment as well as a sales area. The other building is a toilet block. Both buildings are in the southwestern corner. They are close to substantial buildings in the northwestern corner of lot 30. Apart from the two buildings, a few items of equipment including a truck body, and some rubble, lot 29 is vacant.

37 The land is mortgaged to the Australian Bank Ltd. The mortgage is dated 26 March 1982, and is in respect of six parcels of land. It was registered on 8 April 1982.

38 The title particulars appearing on the mortgage differ from the present particulars, but it is common ground that it is the same land. The mortgagors are Mr Bride and his wife, Mrs Wendy Margaret Bride.

39 The mortgage provides in cl 9 for powers of the mortgagee. In particular, cl 9(a)(i) incorporates the covenants and powers set out in pt III of the third schedule to the Property Law Act 1969, and in pt VI of that Act, and provides that all such powers shall arise upon the Bank becoming entitled to demand payment of the balance of the principal moneys remaining outstanding without further notice. The covenants and powers so incorporated include (under the Third Schedule):

[I]f default, is made in payment of the money intended to be secured by the conveyance, or any interest thereon, or any part of that money or interest, contrary to any provision in the conveyance, it shall be lawful for the person to whom the conveyance is expressed to be made ... to enter into and upon, or receive, and thence forth quietly hold, occupy and enjoy or take and have, the subject-matter expressed to be conveyed, or any part thereof, without any lawful interruption or disturbance by the person who so conveys, or any person conveying by his direction, or any other person (not being a person claiming in respect of an estate or interest subject whereto the conveyance is expressly made).

40 The powers conferred by pt VI of the Property Law Act include the power to appoint a receiver, who is deemed to be the agent of the mortgagor: s 65. A similar power is expressly conferred under cl 9(b) of the mortgage.

41 A mortgagee with the legal estate in the land vested in it is, subject to contracting out of that right, entitled to possession of the land: Ex Parte Jackson; Re Australasian Catholic Assurance Co Ltd (1941) 41 SR (NSW) 285, 289; Figgins Holdings Pty Ltd v SEAA Enterprises Pty Ltd [1996] HCA 20; (1999) 196 CLR 245 [21]; Butt P, Land Law (6th ed, 2010) 634 [1893]. The present case, however, is governed by the Transfer of Land Act. A mortgage under the Transfer of Land Act is a statutory charge, and involves no ownership of the land the subject of the security: English Scottish and Australian Bank Ltd v Phillips [1937] HCA 6; (1937) 57 CLR 302, 321. It contains no immediate right to possession: Partridge v MacIntosh & Sons Ltd [1933] HCA 38; (1933) 49 CLR 453, 468.

42 On the Bride's default under the mortgage, the bank was entitled to a range of remedies under the Transfer of Land Act. These included the specific remedies under s 111. Further, under s 116 of the Transfer of Land Act, subject to the right of the mortgagor of quiet enjoyment of the mortgaged land until default, the Bank was entitled to the same rights and remedies at law and in equity as it would have had, or been entitled to, if the legal estate in the land mortgaged had actually vested in it. That section does not, however, alter the position that the mortgage operates as a charge and the registered owner remains entitled to possession. As McHugh J said in Figgins Holdings ([71], see also Kirby J [108]), in relation to the Victorian equivalent of s 116:

While [the section] confers rights and consequential remedies on the mortgagee, it does not affect the content or quantum of the mortgagor's estate in the land after the execution of the mortgage.

43 It is convenient to consider the facts by reference to three periods: first, from about August 1984 until the appointment of Mr Fear as agent of the Australian Bank in February 1987; second, from Mr Fear's appointment until about October 2005; and finally, from October 2005, when Mr Bride fenced and again occupied the land, to the present.

44 In about 1979 or 1980, Mr Bride and his wife purchased a business in Katanning and relocated that business to lot 30 Creek Street, Katanning. At that time he already owned both lots 30 and lot 29. At all relevant times from 1984 Mr Bride and his wife have been registered proprietors as joint tenants of an estate in fee simple in the land. The estate held by Mr and Mrs Bride was subject only to the registered mortgage held by the bank.

45 Mr Bride describes the property as it was in 1984 in this way:

[It] was a winery. It was properly secured. It was surrounded by a boundary fence which surrounded lot 29 and lot 30 and it had a common entrance to the property. The property in that time was used as a winery. It was in good condition. It was used as a point of manufacture and sale of wine and wine products and it was also used as a saleroom for those things, so it was in good condition. It was a historic property (ts 284).

46 In about 1984 the Australian Bank took proceedings following default on the mortgage. The Bank appointed Mr David Young and Mr John Anderson of Peat Marwick Mitchell & Co as receiver managers of the business and properties of Mr and Mrs Bride.

47 Mr Bride said that when the receivers entered the property, 'they demanded all the keys and took possession of all the properties and changed the locks'. Mr Bride and his wife went into bankruptcy. They left the property at lot 29 Creek Street. Mr Bride's unchallenged evidence is that from about January 1985 until late 2005, he did not go onto the property.

48 The Bank sold other properties owned by the Brides to realise its securities, but lot 29 remained unsold.

[O]n or about the 9 August 1984 the Defendant was removed and barred from Lot 29 Creek Street, Katanning in the State of Western Australia, by way of notice of Receivers and Managers to the property, the Receivers and Managers being Peat Marwick Mitchell. The Receivers and Managers had been appointed by The Australian Bank Ltd, now the Commonwealth Bank of Australia.

50 The Shire submits that Mr Bride cannot maintain this plea due to the previous judgment of Parker J in Bride v The Australian Bank [2000] WASC 116. In that action, Mr and Mrs Bride's claims included that they were wrongly deprived of land (including lot 29), and suffered loss and damage 'from the date of the purported appointment of the receivers and managers and the taking of possession of the land and the business in August 1984': [15] Parker J concluded that Mr and Mrs Bride had failed to establish the allegation that the bank had entered into possession of lot 29 in August 1984, and dismissed their claim arising from that allegation: see Bride v Shire of Katanning [2008] WASC 131 [45], [59]. On 2 February 2011 Martin CJ (while case manager in the current action) directed that certain matters could not be asserted by Mr Bride by way of defence. Specifically, with regard to the period from August 1984 to about February 1987, it is not open for Mr Bride to contend that the bank was in possession as mortgagee.

51 On 12 February 1987, following the sale of its business to the Commonwealth Bank, the Australian Bank appointed Mr Charles Fear and Mr David Young as its agents. Mr Fear said that there were certain accounts that the Commonwealth Bank did not take on in the sale. The Australian Bank appointed Mr Fear and Mr Young to deal with those accounts, and to collect a number of amounts owing to it in Western Australia. Mr Bride's account was one of those administered by Mr Fear.

52 Mr Fear was a chartered accountant and a registered liquidator, and a partner at Peat Marwick Hungerfords (formerly known as Peat Marwick Mitchell & Co, and later as KPMG I will refer to it as KPMG).

53 Mr Fear did not recall ever going to Katanning himself, or whether any KPMG staff went to Katanning. He did not recall instructing anyone to physically attend the property. Indeed, on his understanding that was not a necessary step. Mr Fear explained his understanding of what was required to take possession as a mortgagee in the following question and answer in crossexamination by counsel for the Shire:

And any physical entry which is in fact undertaken is only undertaken as a practical measure where required. Would that be correct?Well it depends upon the type of property. For example, I was at the same time administering a hotel as mortgagee in possession and in that case we actually physically took control of the property because it was an operating hotel and we changed the keys and did everything that you would expect to do in those circumstances. In respect of a piece of vacant land you typically wouldn't walk on and put a sign up which says, 'we're taking control of the property'.

54 In about May 1988, the Shire served a summons for unpaid rates on Mr Bride. Mr Bernard Putnin, as his trustee in bankruptcy, wrote to KPMG asking whether they were still receivers and managers, and liable to pay the rates. On 27 May 1988 Mr Fear replied. He told Mr Putnin that that he and Mr Young had been appointed as agents for the Australian Bank on 12 February 1987, that he had taken control of the property at lot 29 as mortgagee in possession and as agent of the bank, and that he was arranging for its sale.

55 On 3 November 1988 Mr Fear advised Mr Putnin that the bank was progressing to the appointment of selling agents and sought confirmation that Mr Putnin would lift a caveat that he had lodged against the title as trustee in bankruptcy. Mr Fear continued correspondence with Mr Putnin into 1989. He determined to sell the property and take such action as was necessary to permit the sale to proceed. By July 1989 the property had been listed for sale with a Katanning based real estate agency, Estatewide Real Estate. On 7 August 1989, Mr Putnin withdrew the caveat. The agency which held the listing for sale valued the property in the range of $5,000 to $10,000. There was a potential buyer prepared to offer $6,000.

56 A further search of title in September 1989, however, revealed that Mr and Mrs Bride had also lodged a caveat over the property in December 1988. It was then decided, having regard to the costs involved, not to proceed with the sale.

57 There is no evidence of any activity by the Australian Bank in relation to the land after 1989. Mr Fear did not remember when he ceased to be an agent of the bank, but could put an outer limit on the term of his agency, as he had retired from KPMG by 1992.

58 Mr Bride said in evidence that until he left the land in 1984, the buildings were maintained in good repair and the land was fenced. During the period he was not on the land (to put it neutrally) the main building fell into disrepair and suffered some damage, the fences were neglected, and a fire hazard developed. In 1991, the Shire sent notice to the Commonwealth Bank regarding the dangerous condition of the building on the land. In May 1994, the Shire issued a notice to Mr Bride with regard to the poor appearance of the building on the land.

59 In 1994, the Shire issued a second summons against Mr Bride in the Local Court of Western Australia at Katanning (the earlier summons was withdrawn on 13 May 1988). Mr Bride issued a notice against the Commonwealth Bank as third party. For the purpose of those proceedings, an employee of the Shire (Mr Frank McRobb) contacted the Australian Bank and the Commonwealth Bank in 1994, and was told by both banks that they had not taken possession, and were not prepared to carry out repairs on the property. The Commonwealth Bank, as a third party, filed evidence asserting that it neither was nor had been a mortgagee in possession. On 14 December 1995, the proceedings against the Commonwealth Bank were struck out.

60 Over the following years, the Australian Bank and the Commonwealth Bank maintained the position that they were not, and had not been, in possession. For example, in proceedings in this court, the banks denied that they were mortgagees in possession of the land: Edward James Bride and Wendy Margaret Bride as Trustees of the Pinwernying Family Trust v The Australian Bank Ltd [2000] WASC 310 [79]. Neither bank has made any claim to possession since 1989.

61 On 5 December 2001, the Shire sent a further notice to Mr Bride regarding the condition of the premises, and the potential hazard created by the state of disrepair.

62 In about 2005, a company with which Mr Bride was associated, Baywin Enterprises Pty Ltd, purchased lot 30. At that time the buildings were in substantial disrepair. The boundary fence around lots 29 and 30 had been pushed down.

63 Mr Bride enclosed the whole of lots 29 and 30, as well as a small area at the northwestern corner of lot 29 but not part of that lot, with star picket and ringlock fencing. He cleared the land against fire hazards. He repaired the old winery building on lot 29, although not for use as a winery. His family currently stores some property on lot 29, and a friend carries on an electrical contracting business, with Mr Bride's permission, from the building.

64 At about the time Mr Bride reentered the land, he wrote to the solicitors for the Shire, advising them that he had retaken possession and would be responsible for rates into the future. He now says that he was unaware of the legal position when he sent that letter. He says that he actually occupies the land as a squatter or trespasser, and not as an owner.

65 The Shire has presented a certified copy of the rate record, which records Mr Bride as the person charged with the rates. It has also alleged that Mr Bride was the owner of the land at all times since 1984. Under both s 9.40 and s 9.41 of the Local Government Act, Mr Bride is presumed to be the owner of the land and the person obliged to pay the rates unless the contrary is proved.

66 At all relevant times from 1984 Mr Bride and his wife have been registered proprietors as joint tenants of an estate in fee simple in the land. Before 1984, they were in actual possession as holders of that estate in possession.

67 During the period from about August 1987 to late 1989, the Australian Bank asserted that it was a mortgagee in possession. The question posed by the definition of owner in s 1.4(a), however, is whether the bank was 'in possession as a mortgagee of the land'. For the reasons set out earlier in this judgment, the question is whether the bank was in actual possession. Paragraph (b) of the definition of owner does not include a person entitled to possession in the capacity of a mortgagee, but not 'in possession'. Accordingly, a mortgagee is only an owner for the purposes of the Act when it is, in fact, in possession in that capacity.

68 The evidence required to establish actual possession has been considered frequently in claims to title by possession. In Powell v McFarlane (1979) 38 P & Cr 452, 470 - 472, Slade J set out the principles in a judgment that has been frequently cited and applied: see Whittlesea City Council v Abbatangelo [2009] VSCA 188 [5]; Davidson v Elkington [2011] WASC 29 [142]; Petkov v Lucerne Nominees Pty Ltd (1992) 7 WAR 163, 167. In my opinion, his Honour's discussion of factual possession is an appropriate guide to what is required to prove a person is 'in possession' for the purposes of the Local Government Act:

(3) Factual possession signifies an appropriate degree of physical control. It must be a single and conclusive possession ... The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed ... It is impossible to generalise with any precision as to what acts will or will not suffice to evidence factual possession ... Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that noone else has done so.

69 On the facts, the bank did not enter into possession. The evidence does not support a finding that the bank exercised any degree of physical control, exclusive or otherwise, even during the period when it said (in correspondence) that it was in possession. The bank did not exercise any of the remedies under s 111 of the Transfer of Land Act. It did not enter the property. It did not maintain the building, the land, or the fences. Indeed, no representative of the bank or its agent, KPMG, ever went to Katanning. It did not pay rates.

70 Mr Bride's trustee in bankruptcy was not aware that the bank was asserting possession as mortgagee until the letter from Mr Fear in May 1988, over 12 months after Mr Fear and Mr Young were appointed as the bank's agents. Mr Bride said that he was not aware of Mr Fear's appointment until he came across the letters to Mr Putnin in Mr Putnin's files. Mr Fear had the intention to possess the land on behalf of the bank, and declared that intention to at least some interested parties. Up to the end of 1989, he pursued the sale of the property on behalf of the bank. Those facts are not, in my judgment, sufficient to establish possession.

71 During the period from about 1985 to 2005, when Mr Bride reentered lot 29, he also was not in possession. But throughout that period, he was entitled to possession as the registered proprietor of an estate in fee simple. There was no person in possession of the land. Within the meaning of par (b) of the definition of owner in the Act, Mr Bride was the owner.

72 Since 2005, Mr Bride has been in possession and entitled to possession. It is not material whether he has been in possession as the holder of the freehold estate. While he is in possession, and entitled to possession, he cannot establish that he is not the owner.

73 For these reasons I find that Mr Bride was the owner of the land throughout the period for which rates are claimed. I uphold both actions by the Shire. I will ask the Shire to bring in an updated calculation of the amount due, including interest to the date of judgment.