The Commonwealth of Aust v South East Qld Aboriginal Corp for Legal Services

STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - FUNCTION OF COURT - CONSIDERATION OF EXTRINSIC MATTERS - previous state of law and mischief to be remedied

where property received as result of an ATSIC grant - where property sold by first respondent to second respondent without ATSIC approval - whether interest had to be acquired as a result of a grant - whether legislation intended to repeal relevant section of Act - whether court can "fill gap" in order to implement legislative purpose

CONVEYANCING - RELATIONSHIP OF VENDOR AND PURCHASER - PURCHASER'S LIEN - subrogation

where third respondent asserting an equitable charge over property - whether Act prevents the creation of such a charge

CONSTITUTIONAL LAW - OPERATION AND EFFECT OF THE COMMONWEALTH CONSTITUTION - PEOPLE OF RACE FOR WHOM SPECIAL LAWS NECESSARY (CONSTITUTION s 51 xxiv)

where parliament has power to enact Act - where first respondent asserts section of Act falls outside the incidental power of s51 (xxiv)- whether section adversely discriminates against Aboriginal people

DISCRIMINATION LAW - COMMONWEALTH PROVISIONS - PURSUANT TO STATUTES - Racial Discrimination Act 1975

where grant provided by ATSIC subject to certain conditions - whether these conditions limit the enjoyment of right to alienation of Aboriginal people and are consequently discriminatory

Aboriginal and Torres Strait Islander Commission Act 1989 (Cth), s 15, s 21

Racial Discrimination Act 1975 (Cth) s 10

Aboriginal Legal rights Movement Inc v South Australia (No 2) (1995) 54 SASR 558

ATC v Film Funding and Management Pty Ltd [1989] FCA 188; (1989) 24 FCR 595

Beaumont v Yeomans [1934] NSWStRp 48; (1934) 34 SR (NSW) 562

Bird v John Sharp & Sons Pty Ltd [1942] HCA 27; (1942) 66 CLR 233

Bird v Philpott [1900] 1 Ch 822

Brickworks Ltd v Warringah Shire Council [1963] HCA 18; (1963) 108 CLR 568

City of Brisbane v Commissioner of Stamp Duties (1923) St R Qd 54

Charter Reinsurance Co Ltd v Fagan [1997] AC 313

Combe v Swaythling (1947) 1 Ch 625

Cooper Brooks (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297

Commonwealth v Tasmania [1983] HCA 21; (1983) 158 CLR 1

Coulton v Holcombe (1990) 20 NSWLR 138

DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) (1981-82) 149 CLR 431

Ex Parte Lord [1985] 2 Qd R 198

Federal Commissioner of Taxation v Wade [1951] HCA 66; (1951) 84 CLR 105

Giumelli v Giumelli (1998-1999) 196 CLR 101

Handa v Minister for Immigration and Multicultural Affairs [2000] FCA 1830; (2000) 106 FCR 95

Henty House Pty Ltd (In liq) v Federal Commissioner of Taxation [1953] HCA 54; (1953) 88 CLR 141

In re Leslie; Leslie v French (1883) 23 Ch D 552

Inland Revenue Commissioners v Buchanan [1958] Ch 289

Inland Revenue Commissioners v Littlewoods Mail Order Stores Ltd v [1963] AC 135

Jones v Wrotham Park Settled Estates [1980] AC 74

Kammins Ballrooms Co v Zenith Investments (Torquay) Ltd (1971) AC 850

Kingston v Keprose Pty Ltd (No 3) (1987) 11 NSWLR 404

Koowarta v Bjelke-Petersen [1982] HCA 27; (1982) 153 CLR 168

Massey & Anor v Wales [2003] NSWCA 212; (2003) 57 NSWLR 718

Mathieson v Burton [1971] HCA 4; (1970-1971) 124 CLR 1

Mills v Meeking [1990] HCA 6; (1990) 169 CLR 214

Minister for Immigration & Ethnic Affairs v Kurtovic [1990] FCA 22; (1990) 21 FCR 193

Morris v Morris [1982] 1 NSWLR 61

Nottingham Permanent Benefit Building Society v Thurstan [1903] AC 6

Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 72 ALJR 841

Riches v Hogben [1985] 2 Qd R 292

Roache v Australian Mercantile Land and Finance Co Ltd (No 2) (1966) 1 NSWR 384

Saraswati v The Queen [1991] HCA 21; (1991) 172 CLR 1

Southend-on-Sea Corporation v Hodgson (Wickford) Ltd [1962] 1 QB 416

Stern v McArthur [1988] HCA 51; (1988) 165 CLR 489

Svanosio v McNamara [1956] HCA 55; (1956) 96 CLR 186

Thompson v Palmer [1933] HCA 61; (1933) 49 CLR 507

Thompson v Thompson (1968) NZLR 504

[1] The original applicant in these proceedings was the Aboriginal and Torres Strait Islander Commission ("ATSIC"). In its statement of claim filed 21 January 2005, it claimed a declaration that the purported disposal by the first respondent to the second respondent of the first respondent's interest in a certain parcel of land was of no effect by reason of s 21(5) of the Aboriginal and Torres Strait Islander Commission Act 1989 (Cth) ("the Act").

[2] The first respondent, South East Queensland Aboriginal Corporation for Legal Services, is an Aboriginal Council incorporated pursuant to the Aboriginal Councils Association Act 1976. The second respondent, John Vernon, entered into an agreement with the first respondent for the purchase of the land. The third respondent, Australia and New Zealand Banking Group Limited, financed the second respondent's purchase.

[3] Settlement under the agreement took place on 13 October 2004 but before lodgement by the bank of the memorandum of transfer, the applicant lodged a caveat on the title. The bank and the second defendant counterclaim for removal of the caveat.

[4] ATSIC was abolished by the Aboriginal and Torres Strait Islander Commission Amendment Act 2005 ("the Abolition Act") and its assets and rights were vested in the Commonwealth of Australia.[1] On the hearing of the application, leave was given to substitute the Commonwealth of Australia for ATSIC as the applicant. The second respondent did not appear.

The facts giving rise to the Commonwealth's claim.

[5] On 27 June 1994, ATSIC made a grant to the corporation of $480,000 to enable it to purchase the land. The grant was made pursuant to s 15 of the Act which then provided:

"15. The Commission may, on such terms and conditions as it determines, make grants of money to Aboriginal or Torres Strait Islander corporations for the acquisition of interests in:

(a) has acquired an interest in land under subsection 14(1) or as a result of a grant under section 15; or

(2) The body shall not dispose of the interest without the written consent of the Commission.

(3) If the body purports to dispose of the interest without the written consent of the Commission, the purported disposition is of no effect."

[7] The grant was made, and accepted, on the basis of "attachment B - standard terms and conditions". Clause 3 of those conditions provided:

"3.1 Title to assets acquired by the Grantee for the Approved Project will vest in the Grantee or such other organisation as determined in writing by the Commission. The asset acquired may be transferred to the Commission on any breach.

3.4 The Grantee acknowledges that written approval by the Commission must be obtained prior to the disposal of any interest in land or other real property."

[8] The corporation had contracted to purchase the land prior to receiving the grant moneys but the contract was conditional on its receiving sufficient moneys from ATSIC to enable it to complete. Settlement under the contract took place in early July 1994 after ATSIC paid the corporation grant moneys of $480,000.

[9] On 13 August 2004, the corporation, without obtaining ATSIC's written consent, entered into an agreement in writing with the second respondent for the sale and purchase of the land. Settlement under that agreement took place on 13 October 1994.

Facts relevant to the bank's estoppel agreement.

[10] On 28 May 2004, Mr Cosgrove, a solicitor employed by the Australian Government Solicitor, sent a letter to the corporation by express post, seeking its consent to the execution of a caveat over the land. He received no response. On 8 June 2004, he sent a further letter to the corporation with a copy to each of its directors again requesting that a consent caveat be signed and drawing attention to the terms and conditions of the grant which prevented the corporation's dealing with "grant assets" without ATSIC's approval. The letter commenced:

"We are instructed by ATSIS with respect to reports that have been received by it that assets of (the corporation) have been offered for sale, in particular the motor vehicles owned by (the corporation)."

[11] ATSIS is an executive agency established pursuant to an order by the Administrator of the Commonwealth of Australia dated and gazetted 30 May 2003. It is authorised as agent of ATSIC to administer past grants and loans made by ATSIC.

[12] A person in the office of the Australian Government Solicitor conducted a title search of the land on 31 August 2004. It revealed the existence of two mortgages on the title. Mr Powrie, a solicitor employed by the Australian Government Solicitor and on contract to the Aboriginal and Torres Strait Islander Services ("ATSIS") in its Canberra office, became aware in September 2004 of concerns about a possible disposition by the corporation of the land.

[13] On 27 September 2004, Mr Powrie heard that a real estate agent was making an inquiry in respect of the land. He correctly assumed that the inquiry was related to the "marketing" of the land and commenced his attempts to locate the files and security documents relating to the corporation.

[14] On 6 October 2004, Mr Powrie attempted, without success, to contact the real estate agent who had made the inquiries. He also attempted to speak to an officer or officers of the corporation, again without success. At 9.56am on 6 October, Mr Powrie sent to the agent an email in which he advised that the land was purchased "from ATSIC grant funds" and drew attention to the provisions of s 21(2) of the Act. He asked for information in relation to "the purported sale" and sought an assurance that no further steps to sell the property be taken without ATSIC's written consent. He also threatened an application for injunctive relief in the absence of a satisfactory response.

[15] Mr Park, a solicitor representing the agent, requested information in an email he sent to Mr Powrie on 7 October. The email was also sent to a colleague of Mr Powrie, a Ms Buddle, another solicitor then employed by ATSIS, as her email address had been provided in Mr Powrie's email of 6 October. For a variety of reasons Mr Powrie was unaware of the contents of Mr Park's email until 11 October. He then spoke to an uncooperative Mr Park on the telephone without obtaining any useful information.

[16] Mr Powrie ascertained in the week commencing Monday, 11 October 2004 that the title deed for the land was held in ATSIS's Canberra office but he was unable to locate documentation establishing that the land was acquired as a result of an ATSIC grant. The documents relevant to this question were located in Roma and steps were taken to obtain copies of them.

[17] On 12 October 2004, he caused a title search of the land to be conducted. The search disclosed the existence of a settlement notice which showed the corporation as transferor, the second respondent as transferee, the bank as mortgagee and releases of the two existing mortgages. The notice was executed on 14 September 2004 and signed by a person described in it as a solicitor on behalf of the transferee.

[18] On perusing a copy of the settlement notice, Mr Powrie telephoned the solicitor identified on it as solicitor for the transferee and ascertained the identity of the solicitors acting for the corporation. He rang those solicitors but was unable to speak to the solicitor handling the matter. He obtained the solicitor's email address and sent him an email which attached a copy of a letter of 8 October 2004 to the corporation. It noted that the property had been listed for sale, drew attention to the requirements of s 21 of the Act and sought information and confirmation that the corporation would take no further steps to sell the property without ATSIC's consent. At this time, Mr Powrie, although strongly suspecting that the purchase of the land was funded by a grant from ATSIC, lacked proof, and in its absence was reluctant to speak to the purchasers' solicitors.

[19] On 12 October Mr Powrie also spoke to a solicitor in the Brisbane Office of the Australian Government Solicitor in order to discuss the matter. He formed the view that any settlement under the sale agreement entered into by the corporation was likely to take place on 14 October, 30 days after the date of the settlement notice. Late in the afternoon of 12 October, he gave instructions by email to a solicitor in the Brisbane Office of the Australian Government Solicitor to lodge a caveat over the property as a matter of urgency.

[20] Ms Lipski, a solicitor in the employ of the Australian Government Solicitor, saw the email the following morning, had a fresh real property search conducted, prepared a caveat and instructed that it be lodged. The Titles Office, however, refused lodgement on the basis that the lodging fees tendered were inadequate. Ms Lipski did not find out about the rejection until the morning of 14 October. It seems that the lodging agents did not make up the deficiency in fees because the clerk in the Title's Office with whom they were dealing refused to state its amount.

[21] The caveat was accepted for lodgement on the morning of 14 October. Settlement, however, had taken place at approximately 3pm on 13 October at the offices of the corporation's solicitors. At settlement, the bank handed over cheques totalling $466,734.24 in exchange for a duly executed transfer and releases of the existing mortgages. Prior to settlement, the bank was given a title search conducted that morning by the second respondent's solicitors. It revealed no encumbrance over the property apart from the two mortgages which were released on settlement.

[22] The Commonwealth relies on s 21 of the Act. The evidence establishes that the land was acquired by the corporation as the result of a grant made by ATSIC pursuant to s 15 of the Act. It is contended that: s 21(1)(a) of the Act thus applies; the written consent of ATSIC to the sale was not obtained and that, by operation of s 21(3), any purported disposition of the land is of no effect. This admirably simple case, however, was spoilt by the respondents' reliance on amendments made to the Act which took effect on 1 July 1994.

Do the provisions upon which the Commonwealth relies continue in effect?

[23] By Act No 1 of 1994 sections 14 to 19 inclusive of the Act were repealed and other provisions substituted for them. For convenience this Act will be referred to as the "Amending Act" and the act as amended will be referred to as the "Amended Act". The new s 15 gave ATSIC power to guarantee the repayment of moneys borrowed by corporate or unincorporated bodies if the borrowing was for a purpose for which ATSIC could, in the performance of its functions, make a loan to the borrower. Section 21(1) was also amended to provide:

(i) an individual or body has acquired an interest in land; and

(A)

the interest was acquired using money granted to the individual or body by the Commission under paragraph 14(1)(a);

(B)

the interest was acquired from the Commission under paragraph 14(1)(b);

(C)

the acquisition of the interest was financed by a loan that was guaranteed by the Commission under section 15; or

[24] Unlike the original s 21, the new section did not apply where "a body" has acquired an interest in land as a result of a grant under s 15. The corporation and the bank contend that, as s 21 in its original form was repealed on 1 July 1994, and as the corporation did not acquire the absolute interest in the land until after that date, no obligation on the corporation to obtain ATSIC's consent ever arose.

[25] The Commonwealth's first response to this contention is that by operation of s 8 of the Acts Interpretation Act 1901 (Cth), the original s 21 enures to prevent a disposal of an interest acquired as a result of a grant under s 15. Section 8 relevantly provides:

"Effect of repeal Where an Act repeals in the whole or in part a former Act, then unless the contrary intention appears the repeal shall not:

(c) affect any right privilege obligation or liability acquired accrued or incurred under any Act so repealed; or

(e) affect any investigation legal proceeding or remedy in respect of any such right privilege obligation liability penalty forfeiture or punishment as aforesaid;

and any such investigation legal proceeding or remedy may be instituted continued or enforced, and any such penalty forfeiture or punishment may be imposed, as if the repealing Act had not been passed."

[26] The respondents argue that the legislature, by making specific provision in s 49 for the circumstances in which the section continues to apply, by implication, disclosed an intention that the section not continue to apply in other circumstances.

"Despite the amendments of section 21 of the Principal Act made by this Part, that section continues to apply, in relation to a disposal of an interest that was acquired before the commencement of this section, as if those amendments had not been made." (emphasis added)

[28] The grant was made on 27 June 1994 and the land was acquired pursuant to a contract for sale and purchase dated 21 April 1994. It was a term of the contract that the corporation receive approval for a loan from ATSIC in an amount sufficient to complete the contract by 18 April 1994. It may be inferred that the time for completion was extended. The transfer from the vendor to the corporation is dated 5 July 1994 and it may be inferred also that settlement under the contract took place on or after that date.

[29] Section 8 of the Acts Interpretation Act can assist the Commonwealth only if the rights, liabilities and obligations upon which reliance is placed accrued or existed at the time of the repeal of s 15. Section 21 applies only where a body "has acquired an interest in land ... as a result of a grant under section 15" (emphasis added). Where the section has been repealed prior to a relevant acquisition, arguably, there is no scope for its application. That probably explains the wording of s 49 which refers to the disposal of an interest "that was" acquired.

[30] Regrettably, the evidence surrounding the corporation's acquisition of the land and the making by ATSIC of a grant for that purpose is sketchy.

[31] On the balance of probabilities, by 1 July 1994, the contract under which the corporation purchased the land was unconditional and the vendor had an obligation, in consideration of payment by the corporation of the purchase price, to convey unencumbered title. The corporation had thus "acquired an [equitable] interest in (the) land".[2] This, however, was not sufficient, of itself, to bring the transaction within section 21. In order to achieve that, it was necessary for the interest to be acquired "as a result of a grant under section 15".

[32] But the corporation had already acquired an equitable interest in the land upon the entering into of the contract on 21 April 1994, provided that a court, at the time, would have decreed specific performance in its favour. The decree need not have been that the contract be performed in accordance with its terms. A decree which would have protected the rights acquired by the corporation under the contract would have sufficed.[3] It is thus arguable that any interest in the land acquired by the corporation prior to 1 July 1994 was not acquired as a result of the subject grant but was acquired as a result of the entering into of the contract.

[33] Once the grant was made on 27 June 1994 it became possible to conclude that the corporation had acquired an interest in the land as a result of the grant. The contract was entered into in expectation of the grant and was conditional upon it being made. In ascertaining the application of s 21, it is appropriate in my view that regard be had to the substance of the subject transaction[4] and the separate steps involved in it should not be analysed in isolation. By the date of the repeal of s 15 and the amendment of s 21, an equitable interest in the land had been obtained. That interest, by virtue of the fact that the contract was conditional upon ATSIC's provision of the purchase price, was not identical to the equitable interest in the land held by the corporation at the date of the contract of purchase and prior to the time when the contract became unconditional.

[34] The corporation's interest in the land changed again when it obtained a registered title to the land and its equitable interest merged into the legal estate to comprise a single absolute interest in the land.[5] The respondents contend that it is this interest which is being disposed of by the corporation, not the equitable interest acquired as a result of the grant. That interest, the respondents point out, ceased to exist in July 1994.

[35] Section 21(2) prohibits a grantee in prescribed circumstances from disposing of "the interest". The interest referred to is "the interest in land [acquired]...as a result of a grant under section 15". Section 21 thus requires conformity between that which is acquired and that which is disposed of.

[36] But to construe the legislation as restrictively as the respondents would wish would produce a result which does not conform to Parliament's intention. For example, if the respondents' arguments are correct, sub-sections (2) and (3) of s 21 would not apply where a grantee acquired real property as a result of a grant and effectively disposed of it by entering into a 100 year lease at a nominal rent or by transferring the beneficial interest whilst remaining the registered proprietor. Where an equitable interest was acquired as a result of a grant under s 15, s 21 would cease to apply by some minor change in that interest, such as is described earlier.

[37] In Mills v Meeking,[6] McHugh J explored the circumstances in which it was appropriate to depart from the literal meaning of statutory provisions. After referring to a passage from the reasons of Gibbs CJ in Cooper Brooks (Wollongong) Pty Ltd v Federal Commissioner of Taxation,[7] he said:

"But this does not mean that a court is bound by the literal or grammatical meaning of a statutory provision unless that meaning produces an irrational result. This was made plain by Mason and Wilson JJ in Cooper Brookes (Wollongong) Pty. Ltd. where their Honours said (at p 321):

'On the other hand, when the judge labels the operation of the statute as 'absurd', 'extraordinary', 'capricious', 'irrational' or 'obscure' he assigns a ground for concluding that the legislature could not have intended such an operation and that an alternative interpretation must be preferred. But the propriety of departing from the literal interpretation is not confined to situations described by these labels. It extends to any situation in which for good reason the operation of the statute on a literal reading does not conform to the legislative intent as ascertained from the provisions of the statute, including the policy which may be discerned from those provisions.'

Moreover, once it is apparent that the literal or grammatical meaning of a provision does not conform to the legislative purpose as ascertained from the statute as a whole, the court is entitled to give effect to that purpose by addition to, omission from, or clarification of the particular provision: Kammins Co. v. Zenith Investments (1971) AC 850 at pp 880-882; Jones v. Wrotham Park Estates (1980)

AC 74 at p 105; Cooper Brookes (Wollongong) Pty. Ltd., at pp 321-323."

[38] The following observations in the majority judgment in Project Blue Sky Inc v Australian Broadcasting Authority[8] make the point that statutory interpretation is not merely a linguistic or semantic exercise and that the context of the words used and the purpose of the statutory provisions must be borne in mind:[9]

"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] HCA 27; (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 that 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." (References not provided)

Some of these principles are given legislative force by s 15AA of the Acts Interpretation Act which provides:

"In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object."

[39] It is difficult to escape the conclusion that in enacting s 21, the Parliament's concern was to fetter grantees' rights to dispose of property acquired with granted moneys and that the precise nature of the interest concerned was of no particular relevance. Nor does it seem likely that the restrictions in s 21 were intended not to apply where there was, in substance, a disposition of a grant acquired interest, but as a matter of legal theory or principle, there was no precise legal correspondence between that which was acquired and that which was disposed of.

[40] The expression "interest in land" in s 21(1)(a) plainly encompasses an absolute estate in fee simple as well as lesser estates or interests. In my view, for the purposes of the section, the corporation acquired the land prior to 1 July 1994 and it is the land which is the subject of its purported disposition. That is the substance of the transactions in which the corporation is and was engaged. That conclusion is sufficient to decide this point in favour of the Commonwealth but there are other ways of considering the problem which suggest the same conclusion.

[41] In my view, the likelihood is that, in the drafting of s 21, the definition of "land" in s 22(1) of the Acts Interpretation Act 1901 (Cth) was overlooked. "Land" is there defined so as to include "messuages tenements and hereditaments ... of any tenure or description, and whatever may be the estate or interest therein". The legislative purpose could thus have been achieved by referring in s 21(1) to "land" rather than "interest in land" and by using the word "land" instead of "interest" in sub-sections (2) and (3).

[42] So construed, s 21 would operate to proscribe the disposition without consent of the corporation's absolute estate in the land even though the legal title was not acquired until after 1 July 1994.

[43] There is also a question, if the respondents' arguments are to be accepted, whether there is a gap in the legislation arising from inadvertence. Section 49 of the 1994 Act provides that despite the amendments to s 21 of the Act, that section continues to apply to "a disposal of an interest that was acquired before the commencement of this section, as if those amendments had not been made". The obvious intent of s 49 is to preserve the operation of s 21 in respect of land acquired as a result of a grant under s 15 of the Act.

[44] Section 21 was to continue to apply to land acquired as a result of such grants, but, after the coming into force of the 1994 Act, they would be made under s 14 of the Act as amended. Section 15 of the Act enabled the Commission to make grants of money to Aboriginal or Torres Strait Islander corporations for the acquisition of interests in land or "such personal property as the Commission considers appropriate". The new s 14, insofar as grants for the acquisition of interests in land were concerned, required that the grant be "for the purpose of furthering the social, economic or cultural development of Aboriginal persons or Torres Strait Islanders". Such a purpose is implicit in s 15 of the Act, although not expressly stated.

[45] The legislation thus contemplated that there be no change to the restrictions on the disposition of grant acquired interests. And there could be no rational explanation, in my view, for exempting from the application of s 21 land acquired as a result of a grant under s 15 of the Act or s 14(a) of the Act as amended merely because the grant had been made under s 15 but the acquisition had not been finalised prior to 1 July 1994.

[46] If there is a gap in the legislation it has arisen as a result of inadvertence and it is appropriate to fill it in order to implement the legislative purpose_._[10]

[47] In Saraswati v The Queen[11] McHugh J, after referring to the passage from the reasons of Mason and Wilson JJ in Cooper Brooks (Wollongong) Pty Ltd v Federal Commissioner of Taxation,[12] quoted above, said:

"Moreover, once a court concludes that the literal or grammatical meaning of a provision does not conform to the legislative purpose as ascertained from the statute as a whole including the policy which may be discerned from its provisions, it is entitled to give effect to that purpose by addition to, omission from, or clarification of, the particular provision: ...".

[48] As authority for that proposition his Honour also cited Kammins Ballrooms Co Ltd v. Zenith Investments (Torquay) Ltd. [13]

[49] McHugh JA, in Kingston v Keprose Pty Ltd (No 3),[14] referred with approval to the observations of Lord Diplock in Jones v Wrotham Park Settled Estates[15] in which his Lordship said that if the application of the literal or grammatical meaning would lead to results which would defeat the purpose of a statute the court could read words into it. His Honour noted the three preconditions to such an exercise:

"First, the court must know the mischief with which the Act was dealing. Secondly, the court must be satisfied that by inadvertence Parliament has overlooked an eventuality which must be dealt with if the purpose of the Act is to be achieved. Thirdly, the court must be able to state with certainty what words Parliament would have used to overcome the omission if its attention had been drawn to the defect."

[51] An additional argument advanced by the Commonwealth is as follows:

"The new section 21 of the Act prohibits the disposal of an interest in land where the interest was acquired using money granted to the individual or body by [ATSIC] under the new section 14(1)(a) of the Act. Section 15 of the old Act was repealed by the Amendment Act but replaced with the new section 14 of the Act. Under these circumstances, section 21 of the Act continues to apply to interests which were acquired with money granted under the old section 15."

[52] It is submitted that it is appropriate to go behind the form of the amending Act to determine if s 15 was repealed or amended[16] and that an Act which repeals and re-enacts a section to make its meaning clearer should not be regarded as a repealing Act.[17] In this case, it is contended, that the language and purpose of s 15 is re-embodied in s 14. Section 15 should therefore not be regarded as having been repealed and s 21 thus applies to interests acquired after the amendments were made to it, even if the grant was made pursuant to the earlier version of s 15.

[53] In Bird v John Sharp & Sons Pty Ltd,[18] Williams J, observed:

"The general principle is plain that when a statute or part of a statute is repealed it must be considered, except as to transactions past and closed, as if it had never existed ...".

[54] An observation to like effect is to be found in the reasons of Latham CJ.[19] But some support may be found in the authorities for the proposition that a categorisation in the subsequent legislation of its character as repealing or amending the earlier provision is not conclusive.

[55] In Mathieson v Burton,[20] Windeyer J said:

"What counts in determining whether an enactment involves a repeal of earlier legislation is the substantial effect it produces, not the linguistic method by which it produces it."

This observation, however, was made in respect of a legislative provision which spoke in terms of amendment rather than repeal.

[56] In the following passage from his reasons in Beaumont v Yeomans,[21] cited by Gibbs J in Mathieson v Burton,[22] Jordan CJ appears to assert implicitly that a provision expressly repealed should nevertheless be regarded as an amendment if that is its true effect:

"Whether an Act has been repealed or amended is a matter of substance and not one of form only. One Act may purport to amend another by repealing part of it. On the other hand, an amendment may be effected either by the addition to a section of a particular phrase, or by the repeal of the section and the substitution of the same words with the phrase added. ... And where a provision of an Act is repealed and re-enacted in a form which enlarges its scope, this has been construed as amounting in substance to an amendment, because the new provision has been regarded as intended to be retrospective so far as it is mere repetition, and prospective so far as it is new: Ex parte Todd; In Re Ashcroft (1887) 19 QBD 186."

[57] Gibbs J, in Mathieson v Burton, pointed out that the case of Ex parte Todd[23] did not hold expressly that a section which re-enacted with additions the provisions of a section of a repealed Act amounted in substance to an amendment rather than a repeal. In subsequent discussion, he left open the question whether the omission of a statutory provision and its re-enactment in altered form may amount in substance to an amendment rather than a repeal.

[58] A related principle is that where a section in an Act has been replaced by a substantially identical provision the later Act is to be read with the earlier and is retrospective, except insofar as it varies the earlier provision.[24]

[59] In the light of the conclusions expressed above however, it is unnecessary for me to determine this additional argument and the related question of whether the grant could be regarded as having been made under s 14(a) of the Amended Act.

Does the bank have an equitable charge over the land?

[60] The bank argued that it and the second respondent were entitled to an equitable charge over the land arising from their acting to their detriment in lending and paying the purchase price respectively in reliance on an implied representation by the corporation that it could give title to the land to the second respondent. In support of this contention the bank relied on Giumelli v Giumelli,[25] Riches v Hogben[26] and Morris v Morris.[27]

[61] In Giumelli, the equitable relief granted was as a result of an estoppel arising from a representation as to future ownership of property upon which the plaintiff acted to his detriment. Riches v Hogben and Morris v Morris were cases in which generally similar principles were applied. It is, however, unnecessary for me to consider whether application of those principles to the facts under consideration justify the imposition of a charge over the land.

[62] It is well established that a purchaser of land who has paid part of the purchase price to the vendor has a lien on the land for repayment of such moneys and interest if the agreement for sale and purchase is terminated through no fault of the purchaser. The lien extends to interest paid on the unpaid balance of the purchase money and the costs of an action for specific performance.[28] The lien is independent of possession of the land or title deeds and is in fact an equitable charge on the land.[29] A lender who has advanced the purchase price is entitled to a lien by subrogation.[30]

Does the creation of such a lien infringe s 21(2)?

[63] The words "dispose" and "disposition" are words of extremely wide meaning capable of encompassing a great variety of dealings with property.[31] For s 21(2) to apply, however, it is the grantee which must make the disposition; its language is not apt to catch a disposition which arises by involuntary operation of law. Nor would one readily conclude that s 21(2) manifests an intention to prohibit grantees from mortgaging or charging subject property without consent. Elsewhere in the Act, where it is intended to prohibit the charging of an asset, the prohibition is expressed.[32] I find that s 21(2) does not prevent the coming into existence and operation of an equitable lien in the circumstances under consideration.

Is the Commonwealth estopped from asserting that no written consent has been given to the Corporation's disposal of its interest in the land and that its purported disposal has no effect?

[64] In order to support its estoppel argument, the bank relies on these alleged facts:

(a) ATSIC's knowledge by about June 2004 that the corporation had failed to respond to requests for lodgement of a consent caveat over the title and that it had failed to acknowledge that it was not permitted to dispose of assets without ATSIC's consent in writing;

(b) on or about 27 September 2004, ATSIC had reason to believe that the corporation was planning to sell the land;

(c) by on or about 6 October 2004, ATSIC knew that the corporation had listed the land for sale;

(d) prior to 14 October 2004, ATSIC had failed to require the corporation to provide it with security, had failed to obtain possession of the title documents for the land; and had failed to caveat despite having the knowledge referred to above;

(e) ATSIC, by its conduct, represented the land as being free from any equity or interest in favour of ATSIC and allowed the corporation to represent that to the world in general;

(f) The bank acted to its detriment in reliance on ATSIC's conduct.

[65] The evidence reveals that the title documents in relation to the land were in fact held by ATSIC.

[66] The bank, by reference to principles stated by Dixon J in Thompson v Palmer[33] contended that:

(a) ATSIC knowing the mistake that the bank laboured under, refrained from correcting it when it was its duty to do so; or

(b) because ATSIC's imprudence, where care was required of it, was the proximate cause of the bank's adopting and acting on the faith of the assumption,

ATSIC is estopped from asserting the non existence of a consent under s 21.

[67] The "mistake" and "assumption" were not identified in the course of submissions. Recourse to the pleadings suggests that the "assumption" is the bank's understanding that it would obtain an unencumbered registrable title on settlement. It is not contended that the bank was of the understanding that any consent required under the Act had been obtained. Indeed, it was not suggested that the bank, at any relevant time, turned its mind either to the existence of the Act or its requirements.

[68] There is some difficulty with the notion that ATSIC knew of the "mistake" or "assumption" and that it had a duty to correct the "mistake" or "assumption". ATSIC played no role in the conduct engaged in by the corporation in breach of contract. It was entitled to assume, initially, that the corporation would honour both its contractual and statutory obligations. It is true that there were some grounds for an apprehension on the part of ATSIC that the corporation may not honour its obligations once it received reports that motor vehicles had been offered for sale by the corporation. But, generally, the lack of response by the corporation to ATSIC's enquiries could as readily be put down to inefficiency as evasiveness.

[69] On 27 September, ATSIC became aware that the corporation appeared to be purporting to sell the land and the title search of 12 October 2004 confirmed that it was purporting to sell. But ATSIC, acting through Mr Powrie, had the predicament that it was uncertain of whether the land was obtained by grant under the Act. Mr Powrie acted with reasonable diligence in attempting to ascertain that fact, but until he ascertained it he was understandably reticent about taking steps which might reflect adversely on the corporation, imperil the contract, or for that matter, provoke allegations of mistrust and highhanded conduct. In this regard, however, it must be acknowledged that Mr Powrie was prepared to assert in an email sent on 6 October 2004 that the land had been purchased with ATSIC grant funds.

[70] I find it unnecessary, however, to go into the factual basis for the bank's estoppel case in any great length because of my conclusion that estoppel cannot be relied on by the bank to prevent the operation of s 21 of the Act. The applicable principle is that there can be no estoppel against the operation of a statute.[34] The bank's argument acknowledged the existence of the principle but sought to circumvent it by contending that the case was one in which, by its conduct, ATSIC must be deemed to have given its consent. The argument places considerable reliance on the reasons of Windeyer J in Brickworks Ltd v Warringah Shire Council[35] and on the discussion by Gummow J in Minister for Immigration & Ethnic Affairs v Kurtovic.[36]

[71] In Brickworks, a local authority defendant had stated to the plaintiff that it had given "land use consent". Both parties then proceeded to conduct their respective affairs on the basis of that assumption. Subsequently, the defendant sought to restrain the plaintiff from conduct on the basis that no lawful consent had been given. Windeyer J said:[37]

"It seems to me that, in the circumstances of this case, the Council was estopped from denying that it had exercised its discretion in the manner it had said it had done. The case is not, as I see it, one in which a consent once given could be withdrawn. That could only, I think, be so if the consent was expressly given upon a condition that it might be withdrawn in specified events. And, moreover, it is not now said that consent was given and later withdrawn. The allegation now is that it was never given."

[72] The assertion by the defendant in Brickworks that it had given consent distinguishes the facts of that case from those under consideration. In Southend-on-Sea Corporation v Hodgson (Wickford) Ltd,[38] the corporation had informed the defendant, mistakenly, that its permission for the use of land as a builder's yard was not required. That mistaken view was held incapable of creating an estoppel preventing the corporation from exercising its statutory discretion to forbid the land being used as a builder's yard.

[73] In Minister for Immigration & Ethnic Affairs v Kurtovic, Gummow J concluded that Windeyer J's decision in Brickworks was based on statutory construction rather than estoppel. The points of construction, it would seem, were whether the relevant power was spent once exercised and whether it could be said to have been exercised.

[74] In this case, no representation was made as to the giving of consent by ATSIC, whether written or otherwise. The bank did not turn its mind to such a consent and ATSIC did nothing from which it could be inferred that it had given its consent. If there is an exception to the general principle such as the bank contends, it has no application to the facts of this case. The corporation put forward a number of other arguments which I will now discuss in turn.

Did the lodgement of the caveat prevent any purported disposition of the corporation's relevant interest in the land?

[75] The corporation's argument is that the caveat, by preventing registration of the transfer in favour of the second respondent, had the result that the corporation as registered proprietor holds its interests in the land in trust for the second respondent. The corporation's legal interest and the second respondent's beneficial interest would have merged upon registration of the transfer[39] but the caveat prevents that from happening. Consequently, it is said that the corporation has not disposed of the interest "acquired by it in 1994".

[76] The authorities to which reference is made above establish that the term "dispose" is sufficiently wide to encompass the delivery of the transfer executed pursuant to a contract for sale. I have found also that, in substance, the land was relevantly acquired and is being disposed of. The point, in any event, does not appear to lead anywhere. If it had substance, it would not prevent the making of a declaration as to the application of s 21 and the consequences which flow from that. Nor would it prevent the granting of injunctive relief. Additionally, if there was substance in the point it may not assist the corporation. It, as registered proprietor, holds the beneficial interest in trust for the second defendant. It has therefore disposed of the beneficial interest and that beneficial interest would appear to be commensurate with the beneficial interest acquired by it prior to 1 July 1994. Section 49 may thus render void any disposition effected by the contract and transfer.

ATSIC did not give authority for the proceedings to be commenced in its name.

[77] This is a sterile point. Even if, which I doubt, the proceedings were commenced without authority of ATSIC, the Commonwealth now stands in ATSIC's shoes and is entitled to continue the proceedings. The Commonwealth, as it is entitled to do, ratified, by necessary implication, the Acts of the Australian Government Solicitors and that ratification has retrospective effect.[40]

[78] Another obvious problem with the corporation's argument is that, on any view of the matter, the Commonwealth has standing to seek the relief sought in the proceedings. If the contentions had substance, there is no reason why leave would not be granted for the joinder of the Commonwealth as a party with a direction that the matter proceed on the existing pleadings, substituting the Commonwealth as the claimant wherever appropriate.

Section 21(5) of the Act is not within constitutional power.

[79] The corporation's argument is as follows. Although s 51(xxvi) of the Constitution confers sufficient power on the Commonwealth Parliament to enact the Act,[41] s 21(5) of the Act is not within the incidental power, s 51(xxxix).

[80] Section 51(xxvi) of the Constitution empowers the Commonwealth Parliament to make special laws which it deems necessary to make for the benefit of people of the Aboriginal race which do not adversely and detrimentally discriminate against people on the ground of their race.[42] Section 21(5), however, "effects an immunity of a kind that infringes the implied constitutional limitation of the s 51(xxvi) power, which is a power to make special laws for the benefit of Aboriginal people or at least not to adversely discriminate against Aboriginal people". There is adverse discrimination because "Aboriginal persons and Torres Strait Islanders would be disadvantaged by being deprived, either directly or indirectly, of the benefits that are afforded people of another race".

[81] It is said that aspects of s 21(5) which assist in showing that it falls outside s 21(xxvi) are that it "purportedly invalidates a disposal of land in perpetuity" and adds "a further exception to the well established principles of indefeasibility of title".

[82] Section 21 relevantly invalidates a disposition of property acquired by the disposer with a grant from ATSIC which, when made, was subject to a statutory restraint on the disposition of the land without ATSIC's consent. There is no temporal limit on the duration of the restraint but no support was offered for the proposition that such a restraint on alienation was beyond the power of the Commonwealth Parliament. I am satisfied that it is not.

[83] I am unable to accept the proposition that persons of Aboriginal and/or Torres Strait Islander extraction are disadvantaged or discriminated against by legislation which provides for their advancement but which, in the case of a grant under s 15 of the Act, arguably, limits the value of the benefits conferred by imposing a restriction on the grantee's right to dispose of grant acquired property. The relevant statutory provisions and their effect cannot be considered separately from one another.[43] When a grant under s 15 was made, it was made subject to the requirements of s 21. The fact that s 21 applies does not directly or indirectly deprive the grantee of anything, let alone a right enjoyed by "persons of another race, colour or nationality or ethnic origin". The restriction is a characteristic of the grant.

[84] No authority was cited for the proposition that discrimination could arise merely as a result of benefits being conferred pursuant to legislative provisions which qualified or limited the rights of the beneficiary in relation to those benefits. Nor was there any evidence directed to making good the proposition that by s 21 persons of Aboriginal and Torres Strait Islander extraction were deprived of "benefits ... afforded people of another race". If the power conferred by s 51 (xxvi) is limited to laws which are beneficial to people of a race,[44] the sections under consideration, read as part of the Act or the Act as amended, would qualify comfortably.

[85] Section 25 makes no exception to the principle of indefeasibility of title. The Torrens system is one of title by registration and the proprietary rights of the registered proprietor derive from the fact of registration. Section 21 does not interfere with those rights. But, even if it did, it would not follow that the section was beyond power.

The Racial Discrimination Act.

[86] It was argued that the obligation to obtain a consent under s 21 of the Act was abrogated by the provisions of s 10(1) of the Racial Discrimination Act 1975 (Cth). Section 10(1) provides:

"If, by reason of, or of a provision of, a law of the Commonwealth or of a State or Territory, persons of a particular race, colour or national or ethnic origin do not enjoy a right that is enjoyed by persons of another race, colour or national or ethnic origin, or enjoy a right to a more limited extent than persons of another race, colour or national or ethnic origin, then, notwithstanding anything in that law, persons of the first-mentioned race, colour or national or ethnic origin shall, by force of this section, enjoy that right to the same extent as persons of that other race, colour or national or ethnic origin."

[87] It was contended that by operation of s 10(1) "the Aboriginal people will enjoy the right to the transfer and registration of the their interest in land to the same extent as persons of that other race, colour or national or ethnic origin". The point seems to be that citizens generally have a right to dispose of property and the Act by imposing a fetter on that right causes "Aboriginal people" to enjoy a right to alienation "to a more limited extent" than such other persons. But the restriction imposed by s 21 applies only in the limited circumstances there prescribed. It is not based on the race of the person who has title to the property but is based simply on the fact that the property was acquired with public moneys provided by ATSIC. As with the previous point, the corporation's argument seeks to focus on one aspect of the legislation to the exclusion of other relevant aspects. That approach is impermissible.[45]

Did ATSIC give its consent under s 21 of the Act?

[88] The argument is that at meetings on 17 or 18 February 2005 ATSIC made decisions No 3691 and No 3693 which "removed any requirement to obtain ATSIC's consent before the disposal of the subject property and granted all its interests, whether legal or equitable in the subject property to the [corporation]".

[89] The Commonwealth contends that the two resolutions are invalid if they purport to effect a dispersal of assets as being inconsistent with a direction made by the Minister for Immigration and Multicultural and Indigenous Affairs under sub-section 12(1) of the Act on 28 January 2005.

[90] That direction provides that: "The Commission may sell, exchange, barter, or otherwise dispose of, any of its assets if, and only if, the condition set out in clause 5 is satisfied". The condition is that ATSIC give the Minister 30 days notice in writing of its intention to dispose of the property. In the direction, "asset" is defined as meaning "property of any kind". It is unnecessary, in view of my conclusion as to the merits of the corporation's argument, to decide this point.

"Agreed that any charge by the Commission over any interest in land granted by the Commission ... be removed and that any condition, prohibition or restriction imposed by the Commission or the ATSIC Act, on an Aboriginal or Torres Strait Islander person or body to deal with or dispose of any interest in land granted by the Commission be lifted forthwith."

[92] The first limb of the resolution applies only to charges and is irrelevant. The second limb applies only to interests in land granted by the Commission. It is therefore equally irrelevant. Furthermore, it was not within the power of ATSIC to "lift" any condition, prohibition or restriction imposed by the Act.

"1. Pursuant to the objectives of the ATSIC Act, the Commission in accordance with its power pursuant to Section 14(1)(b) grants all of the Commission's interest, whether legal or equitable and including any reversionary estate or interests, in each building and each piece of land to the Aboriginal Organisation, which has responsibility for the physical area or region in which the land or buildings is situated.

2. The Commission requests the Minister responsible for the administration of the Lands Acquisition Act 1989 (Cwealth) to do all things and acts and sign all documents necessary to give effect to the above grant."

[94] There is a preamble to the resolution which explains that ATSIC has entered into an agreement with ATSIS under which the latter has been granted exclusive use of ATSIC's assets but that, under the agreement, ATSIC retains ownership "of all ATSIC owned buildings and other tangible assets". There is an interpretation provision in which "land and buildings" is defined to include, without limitation, "any land or buildings in any asset register or schedule of assets created by or on behalf of [ATSIC]". By the resolutions ATSIC purports to dispose of its land and buildings. The resolutions are not directed to the question of any consents which may or may not be required under the Act. It would, in any event, have been beyond the power of ATSIC to abrogate its statutory duties.

[95] For the above reasons I propose to make declarations and orders to the following effect:

1. A declaration in terms of paragraph 1 of the prayer for relief in the statement of claim.

2. A declaration that the second defendant has a lien over the land described in paragraph 4 of the statement of claim securing the payment to him of purchase moneys of $466,734, together with the amount of interest at the rate of 7.5 per cent per annum paid or payable on the balance outstanding from time to time of that sum under the mortgage over the land granted by the second defendant in favour of the third defendant.

3. A declaration that the third defendant is entitled by subrogation to the rights and benefits of the second defendant under his lien.

[96] I will hear submissions on the precise form of the declarations and on costs.

[2] Stern v McArthur [1988] HCA 51; (1988) 165 CLR 489 at 521-523.

[4] Cf City of Brisbane v Commissioner of Stamp Duties (1923) St R Qd 54 at 58 and IRC v Littlewoods Mail Order Stores Ltd [1963] AC 135.

[5] DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) (1981-82) 149 CLR 431 at 463.

[6] [1990] HCA 6; (1990) 169 CLR 214 at 242-3.

[8] [1998] HCA 28; (1998) 72 ALJR 841.

[9] See also the observations of Steyn LJ in Arbuthnott v Fagan (unreported) 30 July 1993 CA quoted in Charter Reinsurance Co Ltd v Fagan [1997] AC 313 at 326.

[10] Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd (1971) AC 850; Saraswati v The Queen [1991] HCA 21; (1991) 172 CLR 1; and Handa v Minister for Immigration and Multicultural Affairs [2000] FCA 1830; (2000) 106 FCR 95.

[13] [1971] AC 850.

[14] (1987) 11 NSWLR 404 at 422, 423.

[15] [1980] AC 74.

[16] Bird v John Sharp & Sons Pty Ltd [1942] HCA 27; (1942) 66 CLR 233.

[17] Coulton v Holcombe (1990) 20 NSWLR 138.

[20] [1971] HCA 4; (1970-1971) 124 CLR 1 at 11.

[21] [1934] NSWStRp 48; (1934) 34 SR (NSW) 562 at 569-70.

[23] (1887) 19 QBD 186.

[24] Bird v John Sharp & Sons Pty Ltd at 247 per McTiernan J, referring to In Re Player (1885) 54 LJ QB 553.

[25] 196 CLR 101 at [5] and [34-48].

[26] [1985] 2 Qd R 292.

[27] [1982] 1 NSWLR 61 at 64.

[28] Combe v Swaythling (1947) 1 Ch 625 at 627- 628; 28 Halsbury's Laws of England 4th ed para 560 and The Law of Vendor and Purchaser by Stonham.

[29] Ex Parte Lord [1985] 2 Qd R 198 at 201.

[30] 28 Halsbury's Laws of England 4th ed para 570; In re Leslie; Leslie v French (1883) 23 Ch D 552 at 560-561; Nottingham Permanent Benefit Building Society v Thurstan [1903] AC 6 at 10; Bird v Philpott [1900] 1 Ch 822.

[31] Inland Revenue Commissioners v Buchanan [1958] Ch 289; Roache v Australian Mercantile Land and Finance Co Ltd (No 2) (1966) 1 NSWLR 384; Thompson v Thompson (1968) NZLR 504; Henty House Pty Ltd (In liq) v Federal Commissioner of Taxation [1953] HCA 54; (1953) 88 CLR 141; Federal Commissioner of Taxation v Wade [1951] HCA 66; (1951) 84 CLR 105; ATC v Film Funding and Management Pty Ltd [1989] FCA 188; (1989) 24 FCR 595 at 613

[33] [1933] HCA 61; (1933) 49 CLR 507 at 547.

[34] Federal Commissioner of Taxation v Wade [1951] HCA 66; (1951) 84 CLR 105 at 117.

[35] [1963] HCA 18; (1963) 108 CLR 568 at 577.

[36] [1990] FCA 22; (1990) 21 FCR 193 at 211, 212.

[38] [1962] 1 QB 416.

[39] Svanosio v McNamara [1956] HCA 55; (1956) 96 CLR 186 at 206.

[40] Massey & Anor v Wales [2003] NSWCA 212; (2003) 57 NSWLR 718

[41] Presumably, s 21(5) is excluded from this concession.

[42] The qualification of the s 51(xxvi) powers appears to be derived from s 10(1) of the Racial Discrimination Act 1975 (Cth).

[43] Cf Aboriginal Legal rights Movement Inc v South Australia (No 2) (1995) 54 SASR 558 at 560-561.

[44] Cf Koowarta v Bjelke-Petersen [1982] HCA 27; (1982) 153 CLR 168 at 242 and Commonwealth v Tasmania [1983] HCA 21; (1983) 158 CLR 1 at 242, 273.

[45] Aboriginal Legal Rights Movement Inc v South Australia (No 2) (1995) 54 SASR 558 at 560, 561.