Walsh v Minister for Lands

Some statement of the relevant legislation is necessary, and it is proper to observe that some of the provisions of the Crown Lands Consolidation Act to which reference will be made have since been repealed by the Crown Lands (Amendment) Act 1960. It is convenient to begin with the Forestry Act 1916-1951 which by s. 22 authorizes the Governor in the circumstances there set out by notice in the Gazette to reserve temporarily from sale any Crown land as a timber reserve. Crown lands are defined as "lands vested in His Majesty and not permanently dedicated to any public purpose or granted or lawfully contracted to be granted in fee-simple under the Crown Lands Acts". The effect of the reservation under s. 22 upon existing leases is dealt with by s. 25, which provides that "the reservation of land as a timber reserve shall not, except as in this Act provided, affect any lease from the Crown current and in force at the time of such reservation". Among such provisions are that the approval of the Forestry Commission is required for the renewal or extension of such a lease and that the rent payable thereunder should be received by the Commission. Turning now to the Crown Lands Consolidation Act, it is provided in s. 4 that except where the contrary is expressly provided, the Act shall not be construed to affect the operation of any provision of a number of other Acts, including the Forestry Act. Crown lands are defined in the same way as in the Forestry Act. Provision is made for the appointment of Crown land agents, district surveyors and local land boards. The Act contains a number of provisions authorizing the reservation of Crown lands from sale. Coming to Pt. IV dealing with purchases and leases of Crown lands not within classified areas or irrigation areas, s. 38 makes Crown lands, not specifically excepted, available for conditional purchase or conditional lease. One exception is land the subject of an application for a conditional purchase or conditional lease (s. 38 (f)); another, land under any lease not being an annual lease or occupation licence (s. 38 (h)). These provisions recognize that, notwithstanding such application or lease or licence, the land subject thereto remains Crown land. The scheme of Pt. IV, in a very general way, is that any person not subject to disqualification may apply for a conditional purchase of available Crown lands; an applicant for, or holder of, an original conditional purchase may, within limits, apply for either an additional conditional purchase or a conditional lease of adjoining Crown lands. The making of applications for conditional purchases, both original and additional, and conditional leases is governed by s. 44, and the examination, confirmation or disallowance of applications by s. 45. An application is made to the appropriate Crown land agent, who refers it to a district surveyor who has certain duties with respect to unmeasured lands. Section 45 provides: "When the land has been measured, if no sufficient objection exists, and the local land board is satisfied that the application has been made in good faith, it shall, in open court, confirm such application The local land board in open court may for sufficient reason disallow any application, wholly or in part". Section 307 is the section with which we are particularly concerned, sub-s. (1) of which, so far as is relevant, is in the following terms: "The holder of a conditional lease which is not liable to forfeiture may at any time convert the whole or part of the land comprised in such conditional lease into an additional conditional purchase or purchases, and all provisions of this Act relating to the making of ordinary additional conditional purchases and to such additional conditional purchases when made shall apply to an additional conditional purchase made out of a conditional lease". Then follow certain qualifications which it is not necessary to state. The sub-section ends with a proviso, important for present purposes: "Provided always that an additional conditional purchase shall not be made under this section of any land comprised in a conditional lease which is for the time being the subject of a reservation from sale under the Forestry Act "

It is the power to convert given by this section that the appellant claims was exercised by his application made on 8th December 1953, with the consequence, so it was argued, that on 5th April 1957 the lands were no longer Crown lands so that the reservation as a timber reserve then published was ineffectual, and thus at no time had there been any reservation to which the proviso to s. 307 (1) had any application. Alternatively, it was argued that the time for the operation of the proviso is the date of the application to convert, i.e. 8th December 1953; that at that time there was no timber reservation and no reservation made thereafter could prevent the conversion going forward to completion or could bar confirmation. Before examining these contentions, however, it is necessary to return to s. 307 (1) and also to consider s. 150 of the Act, upon which the appellant placed particular reliance in support of the first of his contentions that the land was not Crown land at the time of reservation, inasmuch as title obtained on conversion related back to application.

Section 307 is concerned with making an additional conditional purchase out of land comprised in a conditional lease. That making is not effected merely by an act of the holder of the lease. What is envisaged is that the holder will make an application to convert which will correspond with an application for an ordinary additional conditional purchase and to which the provisions of ss. 44 and 45 will apply mutatis mutandis. This is required by the words "and all provisions of this Act relating to the making of ordinary additional conditional purchases shall apply". It follows, therefore, that an application must be made to a Crown land agent; that application must be referred to a surveyor and the application is subject to confirmation or disallowance by a local land board. In deciding what course to follow, it seems clear that one of the matters that the local land board would have to consider is whether the proviso to s. 307 (1) prevented the conversion. The existence of any matter specified in the proviso to s. 307 (1) would be "sufficient objection" for the purposes of s. 45 to refuse confirmation.

Section 150 is in Div. 1 of Pt. VII of the Act, which deals with applications for holdings. Some of the sections of this Division can apply to applications for conversion, e.g. ss. 148 and 149; some cannot, e.g. ss. 151, 153 and 154. In Walsh v. Alexander [1] it was held that because the requirements of s. 154 could have no application, the provision in s. 45 that the board must be satisfied that the application was made in good faith could not affect an application to convert. Section 150 itself provides: "The title to a conditional purchase not within a classified area shall commence from the date of the application therefor, if valid, and any such application shall withdraw such of the lands therein described as may be available for the purpose from any annual lease or occupation licence under which they may be held". It seems to us a nice question whether the section does apply to an application to convert under s. 307. In the course of his interesting and informative argument, Mr. Loveday explained that, as a matter of history, the section was introduced to prevent squatters who had annual leases or occupation licences of land available for selection from overgrazing land selected between the time when the settler applied for it and the time that his application was granted and he obtained a title. It is clear, of course, that the part of the section withdrawing land the subject of an application from any annual lease or occupation licence can have no application to land being converted pursuant to s. 307. There is, moreover, in s. 184, which relates to the conversion of settlement leases and Crown leases into conditional purchases, a special provision that would not have been necessary had s. 150 applied to such a conversion, i.e. s. 184 (1) (f), which provides: "Upon confirmation by the local land board the conversion shall be deemed to have taken effect as from the date of application for conversion". Another point to be observed is that it seems to be contemplated that, notwithstanding an application for conversion under s. 307 (1), the rent payable under the conditional lease continues payable and s. 307 (2) prevents any refund, so that in a case such as the present where the application for conversion is seven years old, there is some indication that between the application for conversion and confirmation of that application, the applicant's title would remain that of lessee. Finally, the very words of s. 150 suggest that it applies to applications for original titles rather than to applications to convert one title into another. These things taken together incline us to think, with Brereton J., that s. 150 has no relation to an application for conversion under s. 307, but, whether this be so or not, we agree with the other judges of the Supreme Court that s. 150 has no significance in this case, because the reference in s. 150 to an application "if valid" conveys to our minds an application that results in a title, and the purpose of the section is, in the event of a successful application, to date the title back to the date of the application for the purpose which s. 150 indicates. This construction is in keeping with cases such as Wynne v. Green [1] and Cleaver v. Mackinnon [2] , which decide that when an applicant has become the holder of a conditional purchase, his possession following title relates back to the date of the application and entitles him to maintain an action for trespass and recover damages for the period between application and confirmation. If, therefore, s. 150 could apply to a conversion under s. 307, it would apply to a completed valid application, i.e., a confirmed application, and could have no relevance to an application before confirmation, although when it applies it relates title back. It therefore has no bearing upon the question of whether or not an application should be confirmed, and in what follows we disregard s. 150.

1. (1913) 16 C.L.R. 293. 2. (1901) 1 S.R. (N.S.W.) (L.) 40; 18 W.N. 41. 3. (1910) 10 S.R. (N.S.W.) 377; 27 W.N. 93.

We return now to the appellant's first point - that is, that on 5th April 1957, the lands in question were not Crown lands and, therefore, no reservation of them could then be made. The position is that at that date the lands were held by the appellant upon a conditional lease which he had applied to convert. It has been established that land held upon conditional purchase is not Crown land, because a conditional purchase is a lawful contract to grant land in fee simple. It is quite clear that land held merely upon conditional lease is Crown land - this is clearly recognized in s. 25 of the Forestry Act, apart from anything else. Mr. Ellicott, for the appellant, argued that land which had been held upon a conditional lease but in respect of which an application to convert had been made under s. 307, ceased to be Crown land upon the making of the application, because this was, in effect, an acceptance of an offer by the Crown to make a conditional purchase out of a conditional lease which resulted in a binding contract to grant a fee simple Despite the ingenuity with which Mr. Ellicott supported his argument, we consider it cannot succeed. In the first place, even if so much of his contention that the Crown has contracted to make the lease a conditional purchase is correct, that would not carry him far enough: a contract to grant a conditional purchase is not a contract to grant a fee simple, notwithstanding that a conditional purchase itself is such a contract. We consider, however, that the argument breaks down even earlier, because s. 307 cannot be read as creating an option that becomes a contract when an application to convert is made. What the section does is annex to a conditional lease, as one of the rights of the holder, the right, by following a particular course, to turn his conditional lease into a conditional purchase. That particular course, however, has to be completed to effectuate the conversion. This conclusion follows from those terms of s. 307 itself relating to making a conditional purchase out of a conditional lease by following the procedures set out in ss. 44 and 45 in the manner previously described. Therefore, notwithstanding that the appellant had applied to convert the lands in question, they remained Crown lands and accordingly their reservation as a timber reserve on 5th April 1957, was effective.

The appellant's second argument, as we understand it, while conceding the effectiveness of the timber reservation when it was made, treated that as immaterial on the ground that the question whether the appellant's application to convert should be confirmed is one to be decided by reference to the circumstances as they stood when the application was made in December 1953. We do not know just what the consequence of the success of this argument would be in relation to the effectiveness of the timber reservation if the application to convert were to be confirmed, but we do not pursue this question because we consider the argument is unsound. The effect of the proviso to s. 307 (1) (and we keep closely to the language of the section) is that an additional conditional purchase shall not be made under the section of land comprised in a conditional lease which is for the time being the subject of reservation from sale under the Forestry Act. As we have already pointed out, the making of a conditional purchase out of a conditional lease is by following the procedure laid down in ss. 44 and 45 culminating in confirmation by the local land board. It is only when there is confirmation that the making is complete, and it is only when it is considering whether to confirm or disallow, that the local land board is, in a case such as the present, confronted with a timber reservation which the proviso to s. 307 (1) constitutes an absolute bar to conversion. It seems to us that if the local land board were to confirm an application for the conversion of land which is held on a conditional lease subject to a timber reservation, it would disregard the very terms of the proviso to s. 307 (1).

There remains a separate and subsidiary argument to be considered. It was sought by reference to s. 25 (1) of the Forestry Act and the decision in Re Bayliss [1] to escape from the proviso to s. 307 (1) by arguing that the timber reservation could not affect the appellant's right to convert, as it was one of the appellant's rights under his conditional lease. We are satisfied that the right to convert under s. 307 (1) is a right limited by what is contained in the proviso and that there is no escape from the proviso by calling in aid s. 25 of the Forestry Act. Section 307 makes it clear that land subject to a timber reservation cannot be converted thereunder and there is no other right of conversion which s. 25 could protect. Re Bayliss [1] was concerned with an entirely different problem, viz. whether the provisions of the Forestry Act required the approval of the Forestry Commission to a conversion under a section of the Crown Lands Consolidation Act which did not contain a proviso forbidding the conversion of a timber reservation; it affords no support for the appellant's argument.

Up to this point, we have considered the questions of statutory construction to which this appeal gives rise without reference to many of the cases that were cited to us, but before concluding it is desirable to say something about three of those cases - Re Frost [2] ; Hawkins v. Minister for Lands (N.S.W.) [3] (sub nom. Re Hawkins [4] ) and Borserio v. Minister for Lands of N.S.W. [5] (sub nom. Re Application by Borserio [6] ).

1. (1893) 3 L.C.C. (N.S.W.) 137. 2. (1949) 78 C.L.R. 479. 3. (1948) 49 S.R. (N.S.W.) 114; 65 W.N. 270. 4. (1955) 93 C.L.R. 518. 5. (1955) 55 S.R. (N.S.W.) 194; 72 W.N. 119.

By Re Frost [2] , it was decided that a valid conditional purchase application cannot be defeated by a subsequent reservation of land before confirmation. It appears that the contrary was not argued and we consider that the decision that was arrived at cannot be supported. Hawkins' Case [7] is authority for two propositions - that land comprised in a Crown lease in perpetuity is Crown land, and that if land comprised in a Crown lease is reserved from sale, it cannot thereafter be converted into a conditional purchase under s. 184 of the Crown Lands Consolidation Act. The second proposition decided is hardly in point here, because there the reservation preceded the application to convert. Latham C.J. did, however, use language that can be applied to the proviso to s. 307 (1). He said: "The words "is reserved" " - i.e. in s. 188 - "refer to a reservation existing at a particular time, and have no bearing upon the question as to when a reservation can be made. The question whether a Crown lease is convertible into a conditional purchase arises when application is made to the Local Land Board for such conversion under s. 184. It is at that time that the convertibility of the Crown lease has to be determined. If land in the lease is then reserved from sale the prohibition of s. 188 applies." [1] Likewise, in the Supreme Court, Davidson J. said: "The right conferred by the statute is only to call for a conditional purchase and the claim of the statute covering absolute or conditional sales of Crown lands appears definitely to enable the Minister before such an application is made and confirmed to interpose a restriction in the form of a declaration that the land is reserved temporarily for public purposes." [2] Borserio's Case [3] like Hawkins' Case [4] , was concerned with the conversion of a Crown lease into a conditional purchase pursuant to s. 184. There, an application to convert was lodged on 17th July 1951 and there was a temporary reservation from sale on 20th July 1951. Furthermore, after making his application to convert, the applicant transferred the lease to a third party. The question was whether, in these circumstances, the application was capable of confirmation. Both the Full Court of the Supreme Court and the High Court decided that the transfer after application was a fatal objection to the confirmation of the application. The Full Court also decided that the reservation from sale after application and before confirmation made confirmation impossible. In so deciding, it followed the dictum of Latham C.J. already cited from Hawkins' Case [1] and added: "Mr. Stuckey sought to avoid this result by claiming that the Local Land Board has to consider the question of convertibility as at the date of the written application and not at the date of hearing, because conversion, if effected, related back to that date. This would involve ignoring all events after that time and before hearing of the application, including, as he conceded, even actual forfeiture of the lease. The fallacy in this argument is that there is no retrospectivity until there is an actual conversion and until that occurs, that is, until confirmation, the lease continues and there is nothing to prevent forfeiture of the lease or reservation from sale. The occurrence of either event is then a bar to conversion because the lease must be convertible when confirmation is sought." [1] Although the High Court did not in that case decide the point which now arises, in the course of deciding the appeal on the other ground the Court said: "It is true that s. 184 gives a right to convert if in fact the Crown lease is not liable to forfeiture and the land comprised in it is not reserved from sale. But it is a right to convert "upon application as prescribed". Paragraph (f) makes it clear that there is no conversion until the local land board confirms the application, though the conversion which then takes effect is retrospective. Therefore it is not the lodging of the application, but its confirmation, which brings about the conversion: Hawkins v. Minister for Lands (N.S.W.) [2] ; Re Hawkins [3] . From this it seems necessarily to follow that when the section says that the conversion may be made by the holder or owner subject to mortgage "upon application" it means upon an application being made, that is to say completely made, not only initiated but carried through to the point of confirmation." [4] This statement cannot in strictness be applied here because in s. 307 there is no express provision corresponding with s. 184 (1) (f), but the statement does emphasize that it is the completion of an application, not its initiation, that effects a conversion.

1. (1893) 3 L.C.C. (N.S.W.) 137. 2. (1948) 49 S.R. (N.S.W.) 114; 65 W.N. 270; (1949) 78 C.L.R. 479. 3. (1949) 78 C.L.R., at pp. 488, 489. 4. (1948) 49 S.R. (N.S.W.), at pp. 123, 124. 5. (1955) 55 S.R. (N.S.W.) 194; 72 W.N. 119; (1955) 93 C.L.R. 518. 6. (1948) 49 S.R. (N.S.W.) 114; 65 W.N. 270; (1949) 78 C.L.R. 479. 7. (1949) 78 C.L.R., at pp. 488, 489. 8. (1955) 55 S.R. (N.S.W.), at pp. 202, 203; 72 W.N., at pp. 124, 125. 9. (1949) 78 C.L.R., at pp. 487, 488, 492, 499. 10. (1948) 49 S.R. (N.S.W.), at p. 123; 65 W.N. 270. 11. (1955) 93 C.L.R., at pp. 525, 526.

For these reasons, which accord closely with those of Sugerman J. and the members of the Full Court, we consider the order appealed from was right and that this appeal should be dismissed.

I agree. I wish only to add something on one aspect.

Since the events with which this case is concerned the Crown Lands Consolidation Act 1913 has been further and extensively amended. But for present purposes the matter must be considered under the law as it was before the Crown Lands (Amendment) Act 1960.

The appellant contended that at the relevant date the subject land was not Crown land and was thus outside s. 22 of the Forestry Act which provides for the reservation of timber reserves. This, it was said, was the result of the application to convert a conditional lease into a conditional purchase. The statutory right of the lessee to make a conditional purchase of land the subject of his conditional lease was, so the argument ran, equivalent to an option to purchase given by the Crown as lessor to the appellant as lessee. The lessee by applying to convert had, it was said, exercised this option, and thereby the land was contracted to be granted to him in fee simple. Then, it was said, the definition of Crown land in the Forestry Act and Crown Land Consolidation Act picked up the matter; and the land, being lawfully contracted to be granted in fee simple, was no longer Crown land for the purposes of the Forestry Act. The argument is ingenious but erroneous.

The definition of Crown lands stems from the two historic Acts of 1861; and so do the provisions for conditional purchase which were, and in a sense still are, the corner stone of the whole Crown lands system in New South Wales. These two Acts of 1861 were the Crown Lands Alienation Act (25 Vic. No. 1) and the Crown Lands Occupation Act (25 Vic. No. 2). The former instituted the system by which the lands of the Colony, that were not required for public purposes or already granted or contracted to be granted under the regulations in force before responsible government, could be taken up by selectors by conditional purchase - by selection before survey. The latter Act dealt with the regulation of the occupation of Crown lands in what were then "the unsettled districts" and with the leasing by the Crown of pastoral runs. In the course of time the original system was considerably modified and elaborated to meet changing social needs. But conditional purchase remained an essential part of the structure. The expression "conditional purchase" is used as a description of both a manner of taking up land and acquiring a fee simple and of the type of holding thus acquired pending its ripening into a fee simple. In essence conditional purchase involves a right to have a grant in fee simple of a particular parcel of land upon fulfilment of the prescribed conditions, including payment, ordinarily by instalments, of the purchase money. When all conditions are fulfilled a Crown grant in fee simple issues. Since conditional purchase under the Act involves a contract on the part of the Crown to grant a fee simple, land held by conditional purchase is outside the statutory definition of Crown lands: Hawkins v. Minister for Lands (N.S.W.) [1] . When the system of conditional leases, which could be had by virtue of and as adjuncts to conditional purchases, was first introduced, the lessee of such a conditional lease could not convert his leasehold into a conditional purchase. But later, by the Act of 1889, the holder of a conditional lease could apply for the whole or part of the land the subject of the lease as an additional conditional purchase. It was necessarily "additional", for a conditional lease could only be granted to the holder of a conditional purchase. That is to say the holder of a conditional lease might make a conditional purchase of the land he held under a conditional lease. He could do so. Other persons, however, could not; for conditionally leased land was not open for conditional purchase by selectors - but not because it was not Crown land within the definition. It was, for it was merely leased, not contracted to be granted in fee simple - which was what was necessary to take land out of the definition of Crown land. The reason why it was not open for conditional purchase generally was that, by the provision that was to become s. 38 of the Crown Lands Consolidation Act, leased land was among the lands expressly declared as not so open. As Brereton J. made clear in his judgment, the right described as a right to convert a conditional lease into a conditional purchase of land comprised in the lease is not a special quality "convertibility" of conditionally leased land. The right to convert is really a right given to the lessee to take up the land as a conditional purchase in the ordinary way under the Act. When the Act speaks of making a conditional purchase, what is meant is not really making one tenure into another tenure, but making a purchase of the land - a conditional purchase, in accordance with the Act, of land that is Crown land, although not available for conditional purchase generally. It is a statutory right - in substance the ordinary right to take land as an additional conditional purchase, but exercisable in respect of the particular land only by the lessee thereof. It is thus misleading to regard this statutory right as if it were an option to purchase contained in a lease from subject to subject. It is, therefore, not correct to speak of the appellant having by his application accepted an offer by the Crown to sell land to him. It does not follow that because land held as a conditional purchase is properly described as land that has been "lawfully contracted to be granted in fee-simple under the Crown Lands Acts" that the contract was the result of an acceptance of an offer to sell made by the Crown. The underlying object of Crown lands legislation from 1861 onwards was to control the Crown prerogative of disposing of the waste lands of the Colony at will and to provide the subjects of the Crown with a statutory right, upon the performance of conditions, to have a grant of land from the Crown. The rights that flow from the various forms of holdings under the Act may be said, and are said, to involve contracts between the Crown and the holder. But the language of offer and acceptance is not really appropriate. The appellant's application to convert his conditional lease to a conditional purchase was not the exercise of a contractual option, but an application pursuant to the statute. It was not his application but the confirmation of it by the Local Land Board that would result in the land being lawfully contracted to be granted in fee simple. Therefore not until such confirmation could the land have fallen outside the definition of Crown land (cf. Ricketson v. Barbour [1] ). This conclusion is not affected by the provision that if the application had been confirmed the title of the appellant as conditional purchaser would have dated from the date of his application. The appeal should be dismissed.

1. (1949) 78 C.L.R. 479. 2. (1893) A.C. 194, at 202, 203.