Supreme Court of WA|2009-06-05|Before: Martin CJ

WATER CORPORATION -v- HUGHES [2009] WASC 152 (5 June 2009)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : WATER CORPORATION -v- HUGHES [2009] WASC 152

Property - Adverse possession - Limitation Act 1935 (WA) applies - Agent of the Crown - Whether Water Authority of Western Australia enjoyed privileges and immunities of the Crown - Whether there is a distinction between unalienated and alienated Crown land for the purposes of s 36 Limitation Act 1935 (WA)

Water Agencies Restructure (Transitional and Consequential Provisions) Act 1995 (WA), s 190, s 192

Preliminary question answered in favour of the plaintiffs

Bank of New South Wales v Commonwealth [1948] HCA 7; (1948) 76 CLR 1

Bradken Consolidated v Broken Hill Pty Co Ltd [1979] HCA 15; (1979) 145 CLR 107

Commercial Oil Refiners Pty Ltd v State of South Australia (1974) 9 SASR 88

State of New South Wales v Commonwealth Bank of Australia [2001] NSWSC 1067

Wynyard Investments Pty Ltd v Commissioner for Railways (NSW) [1955] HCA 72; (1955) 93 CLR 376

1 The plaintiff, the Water Corporation, is the registered proprietor of an estate in fee simple in the land being Lot 62 on Diagram 55618 and being the whole of the land comprised in Certificate of Title Volume 1639 Folio 684 (Lot 62).

2 The defendants, James Lawson Hughes and Patricia Anne Hughes (Mr and Ms Hughes) are the registered proprietors of Lot 34 on Plan 2754 and being the whole of the land comprised in Certificate of Title Volume 1639 Folio 688 (Lot 34).

3 Lot 62 adjoins Lot 34. A survey of the relevant parcels of land is attached to these reasons.

4 In these proceedings the Water Corporation claims that Mr and Ms Hughes are unlawfully entering upon, and have constructed works which encroach upon Lot 62. In defence of that claim, Mr and Ms Hughes assert that they and their predecessors in title have acquired the right to such portion of Lot 62 as they use and occupy by adverse possession.

5 There is potential factual controversy as to the time and extent of the adverse possession relied upon by Mr and Ms Hughes. However, the Water Corporation asserts that even if Mr and Ms Hughes were able to establish possession of its land, that would provide no defence to its claim. If that contention is correct, it obviates the need for a trial of the factual issues relating to possession of the Water Corporation's land. I therefore directed, by consent, that there be a trial of a preliminary issue, being the issue of whether the defendants can rely on adverse possession in order to resist the plaintiff's claim.

6 These are my reasons for concluding that the defendants cannot rely on adverse possession in order to resist the plaintiff's claim. There being no other defence, it follows that judgment should be entered for the Water Corporation.

7 The facts relevant to the preliminary issue are not controversial, and were established by affidavit evidence. They can be briefly stated.

8 Each of Lots 34 and 62 were part of Canning Location 15, which was alienated from the Crown by Crown Grant dated 13 July 1839. The first Certificate of Title issued under the Transfer of Land Act 1893 (WA) (the TLA) for the portion of Canning Location 15 which includes the land now comprising Lots 34 and 62, was issued in 1905. That Certificate of Title records that George Henry Cargeeg was the proprietor of an estate in fee simple in that land.

9 As a result of various transactions between 1905 and 1982 which it is unnecessary to recount, by March 1982 Dorothy Jean Hughes had become the registered proprietor of a parcel of land then known as Lot 34, being a parcel which comprises the land now known (and shown on the survey plan attached to these reasons) as Lots 62, 63 and 34.

10 In March 1982 Dorothy Jean Hughes, as registered proprietor, applied for and obtained the subdivision of that land into Lots 62, 63 and 34. Separate Certificates of Title were issued in relation to each of those Lots, and Dorothy Jean Hughes was shown as the registered proprietor of each Lot.

11 On 23 March 1983, transfers were registered transferring each of Lot 62 and Lot 63 to the Metropolitan Water Authority. As a result of those transfers, Lot 34 was, for a time, land-locked, in the sense that there was no direct access from Lot 34 to any public road. However, that problem was solved on 26 November 1987, when the land comprised in Lot 63 was resumed and dedicated as a public thoroughfare, which is known as Bygum Lane. The Certificate of Title relating to that land was cancelled. The land formerly known as Lot 63 now provides Lot 34 with direct access to a public road.

12 On 11 December 1987 a transfer of Lot 34 was registered, transferring that land to Mr and Ms Hughes.

Ownership by the Water Corporation and its predecessors

13 As I have noted, Lot 62 was registered in the name of the Metropolitan Water Authority in March 1983. That Authority was a statutory body corporate preserved and continued by s 8 of the Metropolitan Water Authority Act 1982 (WA). Section 10 of that Act provided that:

... the function of the Authority is to implement the provisions of this Act and of the Metropolitan Water Supply, Sewerage, and Drainage Act 1909 as an agent of the Crown in right of the State.

14 The Water Authority Act 1984 (WA) created a new statutory body corporate to be known as the Water Authority of Western Australia (the Water Authority). It should be noted that the short title of this Act was later changed to the Water Agencies (Powers) Act 1984 (WA). By s 7 of the Water Authority Act, the Water Authority was:

... hereby charged, as the agent of the Crown in right of the State, with the duty of administering the rights and interests of the Crown in and in relation to water in the State.

15 Pursuant to s 8 of the Water Authority Act, on 21 June 1985 a notice was published in the Government Gazette declaring that the Metropolitan Water Authority ceased to be responsible for the various functions specified in that notice. By virtue of s 8(1)(b) and (c) of the Water Authority Act, the effect of publication of the notice was to continue the Metropolitan Water Authority in existence 'only in so far that its corporate identity shall thereafter be a component of the corporate identity of the (Water) Authority', and any land vested in the Metropolitan Water Authority could be utilised by, and for any of the purposes of the Water Authority. In other words, Lot 62, along with other land registered in the name of the Metropolitan Water Authority, became available for use by the Water Authority.

16 Section 4 of the Water Corporation Act 1995 (WA) created the Water Corporation. Section 5 of that Act provides:

The corporation is not an agent of the Crown and does not have the status, immunities and privileges of the Crown.

17 Pursuant to s 190(1) of the Water Agencies Restructure (Transitional and Consequential Provisions) Act 1995 (WA), on 27 December 1995 a Transfer Order made by the Minister was published in the Government Gazette, allocating, amongst other things, the rights of the Water Authority in respect of Lot 62 to the Water Corporation. By reason of that allocation, and pursuant to s 192 of the Water Agencies Restructure (Transitional and Consequential) Provisions Act, Lot 62 vested in the Water Corporation upon the commencement of that provision on 1 January 1996. The Water Corporation therefore became the beneficial owner of Lot 62 on that date. The Water Corporation became the registered proprietor of Lot 62 on 30 April 1996 and the Certificate of Title issued in respect of Lot 62 shows the Water Corporation to be the proprietor of an estate in fee simple in that land.

18 The Water Corporation commenced these proceedings by writ filed and issued on 12 December 2007 - a little less than 12 years after it became the beneficial owner of Lot 62.

19 Mr and Ms Hughes wish to contend that they have been in possession of Lot 62 adverse to the rights of the registered proprietor since at least 1987. For reasons which I will shortly explain, this means that, even though these proceedings were commenced after the repeal of the Limitation Act 1935 (WA) (the 1935 Act), and the commencement of the Limitation Act 2005 (WA), the preliminary question is to be resolved primarily by reference to the provisions of the 1935 Act, to which I will now turn.

The Limitation Act 1935 (WA)

20 The provisions of the 1935 Act which are relevant to the preliminary question are as follows:

No land or rent to be recovered but within 12 years after the right of action accrued

No person shall make an entry or distress, or bring an action to recover any land or rent, but within 12 years next after the time at which the right to make such entry or distress, or to bring such action, shall have first accrued to some person through whom he claims; or if such right shall not have accrued to any person through whom he claims, then within 12 years next after the time at which the right to make such entry or distress, or to bring such action, shall have first accrued to the person making or bringing the same.

When the right shall be deemed to have accrued

In the construction of this Act, the right to make an entry or distress, or bring an action to recover land or rent, shall be deemed to have first accrued at such time as hereinafter is mentioned, that is to say: -

(a) When the person claiming such land or rent, or some person through whom he claims, has, in respect of the estate or interest claimed, been in possession or in receipt of the profits of such land, or in receipt of such rent, and while entitled thereto has been dispossessed, or has discontinued such possession or receipt, then such right shall be deemed to have first accrued at the time of such dispossession or discontinuance of possession, or at the last time at which any such profits or rent were or was so received.

(b) When the person claiming such land or on rent claims the estate or interest of some deceased person who has continued in such possession or receipt in respect of the same estate or interest until the time of his death, and has been the last person entitled to such estate or interest who has been in such possession or receipt, then such right shall be deemed to have first accrued at the time of such death.

(c) When the person claiming such land or rent on claims in respect of an estate or interest in possession granted, appointed, or otherwise assured by any instrument (other than a will) to him or some person through whom he claims, by a person being in respect of the same estate or interest in the possession or receipt of the profits of the land, or in the receipt of the rent, and no person entitled under such instrument has been in such possession or receipt, then such right shall be deemed to have first accrued at the time at which the person claiming as aforesaid, or the person through whom he claims, became entitled to such possession or receipt by virtue of such instrument.

(d) When the estate or interest claimed has been an estate or interest in reversion or remainder, or other future estate or interest, and no person has obtained the possession or receipt of the profits of such land, or the receipt of such rent in respect of such estate or interest, then such right shall be deemed to have first accrued at the time at which such estate or interest became an estate or interest in possession.

(e) When the person claiming such land or rent, or the person through whom he claims, has become entitled by reason of any forfeiture or breach of condition, then such right shall be deemed to have first accrued when such forfeiture was incurred or such condition was broken.

For the purposes of this section, the right to make an entry, or bring an action to recover any land, has not and shall not be deemed to have first accrued to any person in any case, whether or not such person has been in possession or receipt of the rents and profits of such land, until such land is in the actual possession of some person not entitled to such possession, and any land not in the actual possession of any person shall be deemed to be in the possession of the person entitled to such possession.

At the end of the period of limitation the right of the party out of possession to be extinguished

At the determination of the period limited by this Act to any person for making an entry or distress, or bringing any action or suit, the right and title of such person to the land or rent, for the recovery whereof such entry, distress, action, or suit respectively might have been made or brought within such period, shall be extinguished.

No title by adverse possession against Crown

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

21 Applying the facts of this case to those provisions, Mr and Ms Hughes wish to contend that a right of action to recover Lot 62 accrued to the Water Authority not later than 1987. They contend that because the Water Corporation claims its title to Lot 62 through the Water Authority pursuant to s 5 of the 1935 Act, its right of action to recover Lot 62 is to be deemed to have first accrued at the time Mr and Ms Hughes went into possession - that is, in 1987. If this is so, the period within which such proceedings could be brought expired in 1999, with the result that, pursuant to s 30 of the 1935 Act, the right of the Water Corporation to bring proceedings to recover possession of Lot 62 was extinguished in 1999.

22 However, the Water Corporation relies on s 36 of the 1935 Act. It asserts that by reason of that section, and because the Water Authority was an agent of the Crown, its cause of action to recover Lot 62 did not first accrue until the Water Corporation became the beneficial owner of that land on 1 January 1996. As I have noted, these proceedings were commenced within 12 years of that date, which is within the limitation period of 12 years specified by s 19 of the Limitation Act 2005, being the provision in force at the time these proceedings were commenced.

23 The written submissions filed on behalf of Mr and Ms Hughes are not easy to comprehend. However, doing the best I can to construe those submissions in the light of the oral argument, it seems to me that Mr and Ms Hughes assert two reasons why s 36 of 1935 Act does not have the consequence that the cause of action to recover Lot 62 is to be taken to have first accrued on 1 January 1996. They are:

(a) s 36 only applies to land held by the Crown, and not to land held by a statutory body corporate as agent of the Crown; and

(b) s 36 has no application to land which has been alienated and which is held by the Crown, or an agency of the Crown as the proprietor of an estate in fee simple.

24 Perhaps surprisingly, neither the researches of the parties or the court have been able to identify an authority bearing directly upon the question of whether an agent of the Crown is to be equated with the Crown for the purposes of immunity from adverse possession.

25 It is not uncommon for statutes creating entities which are to be agents of the Crown to expressly provide that those entities are entitled to the immunities of the Crown. However, there is no provision to this effect in the Water Authority Act.

26 Further, Young CJ in Eq has pointed out the confusion which may arise from the use of the word 'agent' in a public law context, given its established meaning in private law (see State of New South Wales v Commonwealth Bank of Australia [2001] NSWSC 1067 at [83]). As he points out, in the context of public law, the description of a person or entity as a Crown agent is not apt to describe someone with authority from the Crown to, for example, enter into contracts which bind the Crown. Where s 7 of the Water Authority Act charges the Water Authority with the duty of administering the rights and interests of the Crown in relation to water in the State, as agent of the Crown in right of the State, it is not using language apt to refer to a relationship between principal and agent of the kind understood in private law, whereby the principal is bound by the acts of, and contracts entered into by the agent. That proposition draws support not only from the language used, but also from the other parts of s 7 of the Act, which specifically confer powers and rights upon the Water Authority, including the capacity to acquire land.

27 So, if in a context such as s 7 of the Water Authority Act, the term 'agent' does not bear its private law meaning, what does it mean? In State of New South Wales v Commonwealth Bank of Australia, Young CJ in Eq suggests that the expression 'Crown agent' will ordinarily connote that the relevant person or entity 'has Crown immunity and Crown indemnity' [83]. This is consistent with the observation of Dixon J, in Bank of New South Wales v Commonwealth [1948] HCA 7; (1948) 76 CLR 1, that:

... the characterization of the Commonwealth Bank as an agency of the Crown enjoying, as such, the Crown's privileges and immunities. (358)

28 Similar views were expressed by the Full Court of South Australia in Commercial Oil Refiners Pty Ltd v State of South Australia (1974) 9 SASR 88. That case concerned the question of whether a particular statutory entity was an 'instrumentality or agency of the Crown' for the purposes of the Crown Proceedings Act 1972 (SA). The Full Court rejected the proposition that, in that context, the word 'agency' should be taken to be a reference to a relationship in which one is empowered to do business for another. The Court said:

We therefore regard an instrumentality of the Crown and an agency of the Crown as entities (usually corporations and occasionally corporations sole) whose function it is to carry on or carry out pursuant to some form of grant an activity which is properly to be regarded as an activity of the State. (93)

29 The language of s 7 of the Water Authority Act supports the application of that view to the Water Authority created by that Act. It expressly provides that the Water Authority is charged with the duty of administering the rights and interests of the Crown in relation to water in the State, 'as the agent of the Crown'.

30 In Wynyard Investments Pty Ltd v Commissioner for Railways (NSW) [1955] HCA 72; (1955) 93 CLR 376, the High Court held that legislation describing a Commissioner for Railways as 'a statutory body representing the Crown' was decisive to show that the Commissioner was entitled to the immunities of the Crown. This decision was cited with approval by Gibbs ACJ in Bradken Consolidated v Broken Hill Pty Co Ltd [1979] HCA 15; (1979) 145 CLR 107 (114).

31 Consistently with these authorities I conclude that the proper construction of s 7 of the Water Authority Act is to create the Water Authority as an emanation of the Crown in right of the State, to serve the purposes of the State and to enjoy the various privileges and immunities of the Crown in right of the State.

32 Immunity from loss of title by adverse possession is one of the long-standing immunities of the Crown. No doubt it reflects the practical difficulty faced by the Crown in monitoring all land in which it has an interest, for the purpose of bringing actions for recovery of possession within 12 years of the commencement of adverse possession and thereby avoiding 'squatter's title'. There may be a case for distinguishing between unalienated land of the Crown and land which the Crown holds through an agency, on the basis that in the latter case it might be more practical for the relevant agency to monitor its land. However, that is not a distinction which is evident in the language used in s 36 of the 1935 Act. That section applies to 'the right, title, or interest of the Crown to or in any land'. The breadth of this language is inconsistent with any legislative intention to differentiate between an interest which the Crown holds as such, and an interest which it holds through an agent, using the word 'agent' in the public law sense to which I have referred.

33 For these reasons, I conclude that the fact that Lot 62 was beneficially held by the Water Authority as agent of the Crown prior to 1 January 1996 does not preclude the application of s 36 of the 1935 Act prior to that date.

34 Mr and Ms Hughes contend that land which has been alienated from the Crown, in the sense it has been the subject of a Crown Grant, and is a freehold estate, cannot be land falling within the scope of s 36 of the 1935 Act, even if registered in the name of the Crown or an agency of the Crown. They rely on a number of provisions, which are said to be inter-connected, in the TLA and the Land Administration Act 1997 (WA) (the LAA).

35 Section 4 of the TLA provides that the expression Crown land is, within that Act, to have the same meaning as it has in the LAA. In s 3 of the LAA, the expression is defined (subject to some provisions not presently relevant) to mean 'all land, except for alienated land'. The expression 'alienated land' is defined by s 3 of the LAA to mean 'land held in freehold'. As Lot 62 is held by the Water Corporation as proprietor of an estate in fee simple, it is alienated land, and therefore falls outside the definition of 'Crown land' in the LAA, and therefore outside the scope of the same expression for the purposes of the TLA.

36 Mr and Ms Hughes also point to provisions such as s 29 and s 82 of the LAA. Section 29 of the LAA provides that the Registrar of Titles may, upon the application of the Minister, create and register a 'certificate of Crown land title' in relation to a parcel of Crown land. Plainly enough, the Certificate of Title issued with respect to Lot 62 is not such a certificate. Section 82 of the LAA provides that land held by the Crown in fee simple may be re-vested in the Crown by ministerial order. The section provides that land re-vested in this way is Crown land and may be dealt with accordingly under the LAA. This section, consistently with other provisions in the LAA, draws a distinction between land held by the Crown in fee simple (which is alienated land), and Crown land. Because of my conclusion that the Water Authority is to be regarded as an emanation of the State, prior to 1 January 1996, Lot 62 was, in this vernacular, land held by the Crown in fee simple.

38 Further, Mr and Ms Hughes point to s 81V and s 243 of the TLA. Section 243 provides that upon an order being made by the Minister under s 82 of the LAA, the Registrar of Titles may cancel the Certificate of Title relating to the land which has been re-vested. Like s 82 of the LAA, this section reinforces the distinction between alienated land held by the Crown, and Crown land. Section 81V of the TLA empowers the Registrar to create and register certificates of Crown land title. This provision corresponds with s 29 of the LAA.

40 Accordingly, Mr and Ms Hughes submit, and I accept, that the TLA and the LAA draw a distinction between land which has been alienated, and which is held by the Crown in fee simple, and land which is described as Crown land, and which is unalienated land or land which has been re-vested in the Crown after alienation.

41 However, I have considerable difficulty in seeing how this distinction has any relevance to the resolution of the preliminary issue. If anything, the establishment of this legislative vernacular appears to me to militate against Mr and Ms Hughes' submissions. That is because the establishment of such a vernacular would suggest that if it had been the intention of the Parliament to limit the application of s 36 to unalienated Crown land (in the sense in which that expression is used in either the TLA or the LAA), one would have expected to see that terminology used in s 36 of the 1935 Act.

42 However, it is not. On the contrary, s 36 refers in very broad terms to 'the right, title, or interest of the Crown to or in any land'. That language is, by its plain and ordinary meaning entirely apt to describe the interest of the Crown in land which it holds in fee simple, either itself, or by an agent which is an emanation of the Crown, such as the Water Authority.

43 Counsel for Mr and Ms Hughes referred several times in argument to s 68 of the TLA. That section creates the system of indefeasibility of title which is at the heart of the system of land registration created by the TLA. The section expressly excludes from the operation of the principle of indefeasibility 'any rights subsisting under any adverse possession of ... land'.

44 I am unable to see how this section advances the argument presented on behalf of Mr and Ms Hughes. That is because the section simply acknowledges that the rights of a proprietor of land the subject of a certificate of title issued under the TLA (such as Lot 62) are subject to rights acquired by adverse possession. However, that of course begs the question of whether or not Mr and Ms Hughes have acquired rights by adverse possession. More correctly, in the context of the preliminary issue, the structure of s 68 TLA begs the question of whether or not Mr and Ms Hughes have the capacity to acquire rights by adverse possession at a time when the Crown has an interest in the land over which they would assert such rights. That question is to be resolved by reference to s 36 of the 1935 Act, not s 68 of the TLA.

45 For the reasons I have already developed, it is clear from the breadth of language used in s 36 of the 1935 Act that the immunity from adverse possession created by the section applies to any interest of the Crown in land the subject of such adverse possession, including the interest of the Crown in land which has been alienated and which is the subject of a Certificate of Title issued under the TLA. It follows that the second contention advanced on behalf of Mr and Ms Hughes must also be rejected.

46 On the facts established for the purposes of the resolution of this preliminary issue, by reason of s 36 of the 1935 Act, for the purposes of the limitation regime created by that Act, any cause of action against Mr and Ms Hughes for recovery of Lot 62 is to be taken to have not accrued before the land passed into the beneficial ownership of the Water Corporation on 1 January 1996. As these proceedings were commenced within 12 years of that date, they have been commenced within time, and it is not possible for Mr and Ms Hughes to establish a defence by way of adverse possession. As Mr and Ms Hughes have not asserted any other defence, it follows that judgment should be entered for the Water Corporation. I will invite submissions from counsel as to the appropriate terms of such judgment.

Proceedings Act 1972

Administration Act 1997

Water Authority Act 1982

Agencies (Powers) Act 1984

Agencies Restructure (Transitional and Consequential Provisions) Act 1995

Corporation Act 1995

Water Supply, Sewerage, and Drainage Act 1909

WATER CORPORATION -v- HUGHES [2009] WASC 152 (5 June 2009)

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (81 paragraphs)

WATER CORPORATION -v- HUGHES [2009] WASC 152 (5 June 2009)

Ownership by the Water Corporation and its predecessors

Legislation Cited (9)

Cases Cited (4)