Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Sahab Holdings Pty Ltd v Registrar-General (No 2) [2012] NSWCA 42
• Hearing dates: On the papers
• Decision date: 20 March 2012
• Before: McColl JA at 1, Campbell JA at 2, Tobias AJA at 2

Decision

(1) The Notice of Motion filed on behalf of the second respondent dated 13 January 2012 be dismissed with costs.

(2) Reinstate orders (1), (2) and (3) made by the Court on 15 December 2011 subject to the deletion from orders (1) and (2) of the date "3 February 2012" and substituting therefor the date "4pm on 23 March 2012".

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: REAL PROPERTY - Real Property Act 1900, s 12A(3) - Limits of the operation of the prohibition of action against the Registrar-General where Register altered - No effect on other provisions of the Act such as ss 122 and 138 - Meaning of "through or under".; REAL PROPERTY - Real Property Act 1900 s 12(3)(b) - No accrued rights if no indefeasibility; no effect on s 138.
• Legislation Cited: Real Property Act 1900; Real Property (Amendment) Bill 1970; Real Property Amendment (Compensation) Act 2000; Real Property and Conveyancing Legislation Amendment Act 1999
• Cases Cited: Black v Garnock [2007] HCA 31; (2007) 230 CLR 438; Breskvar v Wall [1971] HCA 70; (1971) 126 CLR 376; Eaton v Industrial Relations Commission of New South Wales [2012] NSWCA 30; Sahab Holdings Pty Ltd v Registrar-General [2011] NSWCA 395
• Texts Cited: Woodman & Nettle "The Torrens System in NSW", Thompson Lawbook Co
• Category: Procedural and other rulings
• Parties: SAHAB HOLDINGS PTY LTD (ACN 002 728 216) - Appellant; REGISTRAR-GENERAL - First Respondent; CASTLE CONSTRUCTIONS PTY LTD (ACN 001 602 188) - Second Respondent
• Representation: Counsel: G K Burton SC - Appellant; P B Walsh - First Respondent; M L D Einfeld QC/ J Horowitz - Second Respondent: Solicitors: Kanjian & Co - Appellant; Land and Property Management Authority Legal Services - First Respondent; Domain Legal - Second Respondent
• File Number(s): 2008/281514

Decision under appeal

• Citation: Sahab Holdings Pty Limited v Registrar-General & Anor [2009] NSWSC 1143; Sahab Holdings Pty Ltd v Registrar General and Anor (No 2) [2010] NSWSC 162; Sahab Holdings Pty Ltd v Registered-General and Anor [No 3] [2010] NSWSC 403
• Before: Slattery J
• File Number(s): 5563/08

Judgment

1 McCOLL JA: I agree with Campbell JA and Tobias AJA's reasons and the orders their Honours propose.

2 CAMPBELL JA and TOBIAS AJA: On 15 December 2011 the Court published its reasons in this matter in which it found in favour of the appellant on a number of grounds (the primary judgment). However, the Court did not proceed to make orders, but directed the parties by 3 February 2012 to file and serve agreed short minutes of the orders to be made, to give effect to its reasons for judgment. For the purpose of what follows, we shall use the same terms and references as are defined in the primary judgment.

3 On 30 January 2012 Castle filed a Notice of Motion (the Motion) in which it sought the following relief:

"1. The Court withdraw its reasons for judgment dated 15 December 2011 ("Reasons") .

2. The Court reconsider its Reasons, having regard to the two matters addressed in submissions by the Respondents to the appeal but not dealt with by the Court in its Reasons, namely:

(i) that s l2A(3) of the Real Property Act 1900 ("RP Act") precluded the Appellant from bringing these proceedings [Orange Book pp. 38-39 (paras. 28-34) and transcript pp. 51.11-53.4]; and

(ii) that no order requiring correction of the Register ought be made in favour of the Appellant when, by reason of s l2(3)(b) of the RP Act, any such correction would be of no force or effect [Orange Book p. 37 (para. 19) and p. 49 (para. 17)].

3. The orders made by the Court on 15 December 2011 (regarding the filing of Short Minutes of Order and submissions) be stayed pending determination of this motion."

4 The Motion was returnable on 6 February 2012. It was listed on that day before Campbell JA. His Honour made it clear that the Court would not receive further submissions on the substantive matters referred to in Order 2 of the Motion but would rely on the parties' original submissions on those issues which, for the convenience of the Court, the parties were required to identify. However, an issue arose as to whether the Court should embark at all upon the Motion that it re-consider its reasons. The parties were permitted to file written submissions on that issue in accordance with a timetable, to which the parties and his Honour had agreed. His Honour also noted that upon receipt of the parties' submissions, the matters raised by Castle would be dealt with on the papers without any further oral hearing. His Honour then made Order 3 in the Motion.

5 Sahab submitted that the Court should not exercise its discretion to re-consider the reasons in the primary judgment as it was clearly alive to the provisions of s 12(3)(b) and s 12A(3) of the Act which were referred to in its reasons. However, without going into any detail, it is probably fair to say that the Court did not, at least directly, consider Castle's submissions based on s 12A(3), although the same cannot necessarily be said with respect to s 12(3)(b): see the primary judgment at [82] and [83]. In the circumstances, we do not consider it necessary to deal with Sahab's submission that we should not re-visit our reasons but will proceed directly to deal with the two issues which have been raised by Order 2 of the Motion.

Section 12A(3)

6 The provisions of s 12A(3) are recited at [57] of the primary judgment.

7 In its Amended Notice of Contention Castle alleged, first, that the primary judge erred in failing to hold that Sahab was not entitled to the relief it sought having regard to s 12A(3) and, second, that his Honour should have held that by virtue of that provision, no action lay against the Registrar-General for rectification or alteration to the Register in the form that Sahab had sought in its Summons.

8 It is noteworthy that neither in his written submissions to the primary judge (there were no oral submissions: see [14] and [17] of the primary judgment) nor in his written and oral submissions to this Court did the Registrar-General seek to support Castle's argument based upon a prohibition in s 12A(3) to the bringing of an action against the Registrar-General in respect of the 2001 decision. However, in his submissions on the Motion, the Registrar-General appears to have changed his mind and sought to adopt, without further elaboration, Castle's submissions with respect to the effect of s 12A(3). We would not place any weight on this sudden change of stance by the Registrar-General. Given that the Registrar-General made submissions on most, if not all, of the other provisions of the Act upon which Sahab relied, one would have expected him to have called in aid s 12A(3) if he considered there was any substance in the point. The fact that he did not is indicative to us that the Registrar-General did not consider that the provision had any application if otherwise Sahab was entitled to the relief it sought.

9 It is necessary to consider Castle's submission founded on s 12A(3) in the context of our findings at [275] of the primary judgment. The issue which therefore arises is whether in the light of those findings, s 12A(3) is a complete answer to the entitlement of Sahab to rely on ss 12(1)(d) and 122 in combination, s 122 and s 136(1)(b) in combination, and s 138 in isolation. Acceptance of Castle's submission depends, at least in part, upon the assumption that the relief to which we considered Sahab was entitled, based upon the provisions to which we have referred, is dependent upon the necessity to join the Registrar-General as a party to the proceedings in respect of which such relief is sought. That condition is not satisfied with respect to the relief sought pursuant to s 138 which, in our opinion, does not require that the Registrar-General be a party to the proceedings referred to in s 138(1). On that basis alone Castle's submission that Sahab is disentitled to any relief cannot be sustained.

10 The other two bases upon which we concluded that Sahab was entitled to relief related to s 122 of the Act. It may be accepted that the Registrar-General should be a party to proceedings instituted pursuant to that provision. The power of review contained in s 122 is dependant upon s 121(1) being engaged. At [206] of the primary judgment we inclined to the view that the 2001 decision was one which fell within s 121(1)(a) and (b). However, we ultimately determined that it was unnecessary to express a concluded opinion on that issue as Castle and the Registrar-General were estopped from denying that that decision did not fall within one or more of the sub-paragraphs of s 121(1): see [209] of the primary judgment. Accordingly, the 2001 decision, which admittedly involved an alteration to the Register, was one in respect of which the Supreme Court was prima facie entitled to exercise its power of review pursuant to s 122.

11 However, we see no reason why s 12A(3) should be construed in such a manner as to deny the application of s 122 in an appropriate case. Such a contention, if correct, would eliminate the Supreme Court's power of review under s 122 where a decision of the Registrar-General referred to in s 121(1) involves an alteration to the Register. Sections 12A(3) and 122 can and should be read together on the basis that the prohibition contained in s 12A(3) is not inconsistent with the Court's powers under s 122.

12 The same reasoning applies to the combined operation of ss 122 and 136(1)(b). Clearly, an erroneous recording by the Registrar-General in the Register involves an alteration to the Register. At [200] of the primary judgment we found that there was such an error, which the Registrar-General was empowered to correct pursuant to s 12(1)(d). His refusal to do so gave rise to the 2008 decision, which was the subject of review pursuant to s 122. For the reasons referred to in the preceding paragraph, it follows that the Court was entitled to exercise that power of review notwithstanding the provisions of s 12A(3). The fact that the Registrar-General complied with the requirements of s 12A(1) before he made the 2001 decision, cannot, in our opinion, trump the jurisdiction of the Court if s 122 is otherwise engaged.

13 In any event the 2008 decision did not involve an alteration to the Register by the Registrar-General: in fact the opposite is the case. Accordingly, s 12A(3) could have no application to the review of that decision under s 122.

14 Woodman & Nettle at [12A.20] and [12A.40] provide a commentary on the history and operation of s 12A. It is apparent that s 12A(3) operates to prohibit an action against the Registrar-General for altering the Register, where otherwise he might be liable for doing so in circumstances which might expose him to an action for damages. There is no justification that we can divine for construing the section as prohibiting the obtaining of relief against the Registrar-General, where other provisions of the Act such as ss 122 and 138 specifically empower the Supreme Court to require him to correct an erroneous alteration to the Register. The scope of the prohibition in s 12A(3) against bringing an "action" against the Registrar-General must be ascertained in the context of the Act as a whole. An " action " in s 12A(3) does not extend to proceedings against the Registrar-General permitted by other sections of the Act, either alone or in combination.

15 During the course of argument, Castle provided the Court with extracts from the second reading speeches in the Parliament relating to the Real Property (Amendment) Bill 1970 which introduced s 12A into the Act. In the Legislative Assembly, the relevant Minister observed that the objective of s 12A was to place any dispute as to whether a particular dealing should be registered by the Registrar-General upon the parties whose interests might be affected, thereby enabling the Registrar-General to " assume the role of disinterested spectator ".

16 In the Legislative Council the relevant Minister was more specific. He relevantly said this:

Honourable members will note that the bill contains provisions to authorize the Registrar-General temporarily to delay registration of a dealing while he notifies a person whom he considers may contest the dealing that he proposes to register the dealing after the expiration of a specified period and to absolve him from liability for registering the dealing if he is not, before the expiration of that period, restrained by the court from so doing. This deals with the embarrassing position which, when it occasionally arises, places the Registrar-General in a dilemma. He has been presented with a dealing for registration, and he knows that registration of that dealing may over-reach the rights of somebody who is not a party to the deal. His alternatives are to register the dealing, in which case the assurance fund would have to compensate any person deprived of an interest in land by reason of that registration, or to withhold registration, in which case the person seeking registration can require the Registrar-General to justify before the Supreme Court his grounds for withholding registration.

It will be obvious to honourable members that in each case the Registrar-General is the meat in the sandwich. If he registers he risks a claim on the assurance fund, and if he refuses to register he bears the brunt of an action which should properly be defended by the person whom he is seeking to protect. The new section 12A proposed by the bill seeks to resolve this problem by enabling the Registrar-General, in such circumstances, to notify any person that his interests in particular land are likely to be over-reached by some proposed registration. This will enable the addressee to approach a court for protection of these rights. Should the addressee not do so, section 12A deprives him of any right to be compensated from the assurance fund. In effect, the proposed section is designed to put a contest where it properly belongs- that is, between the interested parties-and to absolve the Registrar-General and the assurance fund from liability if a person deprived of an interest in land has been afforded, and ignored, an opportunity to safeguard that interest.

17 The section as originally enacted was confined to the situation where a dealing was lodged for registration. In 1996 its application was broadened so that it applied to any action taken by the Registrar-General that alters the Register. However, that amendment does not affect the present issue.

18 The point made in the second reading speeches was that the objective of s 12A(3) was to relieve the Registrar-General of any liability at the suit of a person deprived of an interest in land who had been afforded, but ignored, an opportunity to protect that interest. Such an objective is not inconsistent with the right of such a person, or subsequent holder of the relevant interest, proceeding to call in aid the provisions of ss 122 and 138 to have the Register corrected by the Registrar-General. Such a proceeding does not involve any claim on the Registrar-General which would attract any form of compensation for which he might otherwise be held liable.

19 Further, such a proceeding would not require any active participation by the Registrar-General who would remain " a disinterested spectator " as s 12A is said to envisage. Rather, it would depend upon the resolution of the dispute between the competing parties, as has occurred in the present case. Thus in the present proceedings no question arises, or could arise, as to any liability of the Registrar-General to any party in respect of the 2001 decision. Section 12A(3) ensure that that is so.

20 Finally, and without detailing the legislative history of ss 121 and 122, it is sufficient to note that those provisions in their present form were inserted into the Act by the Real Property Amendment (Compensation) Act 2000. Their insertion was, therefore, later in point of time than s 12A which was inserted into the Act by Amending Acts of 1970 and 1996. To the extent of any inconsistency, the provisions of ss 121 and 122, as they were inserted into the Act by a later Amending Act, should prevail.

21 The principles attending the repeal of an earlier statute by a later statute were recently referred to by this Court in Eaton v Industrial Relations Commission of New South Wales [2012] NSWCA 30 at [8]-[10], [97] and [132]-[134]. In a case such as the present, those principles require the competing provisions to be properly construed in their context in order to determine whether there is an explicit or implicit contradiction between them sufficient to displace the presumption that the provisions of a statute made by the same legislature are intended to work together.

22 For the reasons referred to above at [10] et seq (and especially [17] - [18]), we consider that s 12A(3) and s 122 are not repugnant to each other as they operate in different ways and thus harmoniously. The same considerations apply to s 138 which was inserted into the Act generally in its current form by the Real Property and Conveyancing Legislation Amendment Act 1999.

23 Before leaving this aspect of the matter, we should call attention to Sahab's submission that in any event s 12A(3) has no application to the present case as it is not a person claiming " through or under " the Howards. Rather, it claimed a distinct and separate source of title upon registration of the transfer to it by the Howards in April 2007 of 69 Strathallen. Sahab thus submitted that it obtained its title by registration which was in no way derived from that of the Howards. The well-known statement of Barwick CJ in Breskvar v Wall [1971] HCA 70; (1971) 126 CLR 376 at 385-386 that the Torrens system is one of " title by registration " as distinct from a system of " registration of title " was relied upon. In this context we draw attention to the passage from the seminal work of Professor Butt which we recited at [241] of the primary judgment: see also Black v Garnock [2007] HCA 31; (2007) 230 CLR 438 at [72] per Callinan J.

24 Reliance was also placed by Sahab in this context on the provisions of s 118(1)(d) which are relevantly in the following terms:

"(1) Proceedings for the repossession or recovery of land do not lie against the registered proprietor of the land, except as follows:

...

(d) proceedings brought by a person deprived of land by fraud against:

(i) a person who has been registered as proprietor of the land through fraud, or

(ii) a person deriving (otherwise than as a transferee bona fide for valuable consideration) from or through a person registered as proprietor of the land through fraud."

25 Sahab submitted that any question of derivative title " from or through " any previous registered proprietor stopped with a bona fide transferee for value which would describe itself. In other words, s 118(1)(d) recognised that such a transferee had an original title by virtue of registration and not a derivative title from his or her predecessor in title. Thus, in Breskvar v Wall (at 385-386) Barwick CJ observed:

"The Torrens system of registered title of which the Act is referring is not a system of registration of title but a system of title by registration. That which the certificate of title describes is not the title which the registered proprietor formerly had, or which but for registration would have had. The title it certifies is not historical or derivative. It is the title which registration itself has vested in the proprietor ." [emphasis added]

26 Accordingly, it was submitted that Sahab did not derive its title from the Howards as a consequence whereof it was not claiming " through or under " them when it instituted the present proceedings against the Registrar-General. For that further reason s 12A(3) has no application to a case such as the present.

27 We do not accept that that argument provides an additional reason why s 12A(3) does not apply in the present case. Of course it is now elementary that, subject to some very limited exceptions, the title of a registered proprietor is not dependent for its validity on whether a predecessor in title had a good title. But we doubt that that aspect of the Act affects the scope of operation of s 12A(3).

28 There is a clear difference between the expression " through or under " in s 12A(3) and " from or through " in s 118(1)(d)(ii), although the same idea is involved. It is that A claims " through " B if A has acquired title or rights from B, or from someone who has acquired rights from B, and so on through howsoever many intermediary titleholders or holders of rights there might be between A and B. One is looking at the history through which A's rights have been acquired, but it does not involve any question of whether the title that B has is dependent for its validity upon the title of A.

29 The expression " through or under " occurs in several other provisions in Act. Thus s 3(1)(e) provides that "[a] reference to a caveator includes a reference to any person who claims through or under the caveator ..."

30 Section 23A(3), which concerns primary applications, provides:

"Subject to subsection (4), upon creating a folio of the Register under this Part, the Registrar-General:

(a) shall retain in the Registrar-General's office every instrument relating to the primary application pursuant to which the folio was created until it is delivered or destroyed pursuant to this section, and no person shall be entitled to the production of an instrument so retained except upon the written order of the primary applicant, or of some person claiming through or under the primary applicant, or upon the order of the Supreme Court"

31 Again s 62(3), which concerns foreclosure, provides a further example:

"Every order for foreclosure issued by the Registrar-General and recorded in the Register has the effect of vesting in the mortgagee or covenant chargee who applied for it all the estate and interest of the mortgagor or covenant charger in the land mentioned in the order:

(a) in every case, free from any right of a mortgagee, chargee or covenant chargee under a registered mortgage, charge or covenant charge which has less priority than that of the applicant, and

(b) in the case of mortgaged land, free from any right and equity of redemption of the mortgagor or any person claiming through or under the mortgagor."

32 In accordance with that understanding of " through ", s 118(1)(d)(ii) permits an action for repossession or recovery of land to be brought against a registered proprietor to whom someone, who themselves became registered through fraud, has transferred the land (not being a transferee bona fide for valuable consideration) and whether by way of testamentary devise or by a gift inter vivos. The action for repossession or recovery can be brought even though the donee from the fraudster acquires his or her own title by registration. Section 118(1)(d)(ii) thus has the effect that the title that the donee acquired by registration is subject to attack by reason of the fraud.

33 Similarly, s 12A(3) prevents anyone who is the successor of a person to whom a notice under s 12A(1) has been given from bringing an " action " against the Registrar-General in which they assert rights arising from the action taken by the Registrar-General after service of the notice foreshadowing the alteration of the Register. But the " action " that s 12A(3) prohibits from being brought is an " action " in the sense we have explained above. It does not extend to every conceivable form of litigation to which the Registrar-General is or may be a party. Thus, Sahab could not sue the Registrar-General for damages, or make a claim against the Torrens Assurance Fund under Part 14 of the Act, because of the Registrar-General having taken the action to alter the Register foreshadowed in the notice that he served on the Howards. The second reading speech, relevantly quoted at [15] above, supports the conclusion that that is its intended effect. Sahab would be prevented from instituting an action claiming damages or compensation notwithstanding that its title was not dependent on that of the Howards. The reason why s 12A(3) does not prevent Sahab from bringing the present proceedings lies elsewhere than in the validity of its title not being dependent upon the validity of the title of the Howards.

34 For the foregoing reasons in our opinion s 12A(3) does not provide an answer to Sahab's entitlement to relief.

Section 12(3)(b)

35 We have set out the relevant provisions of s 12 at [81] of the primary judgment. As noted at [82], it was not suggested that the 2001 decision involved an exercise by the Registrar-General of his power under s 12(1)(d). However, Castle submitted that as a consequence of s 12(3)(b) it was not open to the Court pursuant to s 122(4)(b) to order the Registrar-General to take an action which he could, but for the order, have taken under s 12(1)(d).

36 Castle's submission was, therefore, that an order that the Registrar-General correct the Register pursuant to s 12(1)(d) would not avail Sahab as that direction would be deemed to have no force or effect as it would prejudice or affect a right which accrued to Castle from the 2001 decision to expunge the right-of-way from the Register.

37 At [83] of the primary judgment we noted the contention of Castle, in reliance on s 12(3)(b), that it had an indefeasible title to the servient tenement (34 Sailors Bay) freed from the right-of-way in favour of the dominant tenement (69 Strathallen) and that that was a right that had accrued to it on the making of the 2001 decision of which Castle could not be deprived by further correction to the Register pursuant to s 12(1)(d).

38 However, as observed at [274] of the primary judgment, it was our opinion that Castle did not obtain an indefeasible title to the servient tenement freed from the right-of-way as the latter had been omitted from the Register within the meaning of s 42(1)(a1).

39 Castle did not contend that its title to the servient tenement freed from the right-of-way accrued otherwise than as a consequence of it obtaining an indefeasible title upon registration of the transfer of the servient tenement to it. Once it is established that it did not obtain such an indefeasible title, it follows that the correction of the Register pursuant to s 12(1)(d) could neither prejudice nor affect any right which allegedly accrued to Castle by the recording made in the Register before the correction. There was simply no such accrual.

40 It follows that acceptance of the fact that Castle did not obtain an accrued right to a title freed from the right-of-way has the consequence that s 12(3)(d) has no application to the present case: see [249] of the primary judgment. As Professor Butt notes (at [20 112]):

"There is no retrospectivity bar (and so s 12(3) is unnecessary) where the error or omission sought to be corrected relates to an express exception to indefeasibility under s 42(1). Here, exercising the power to correct merely gives effect to an exception to indefeasibility already provided for in the Act ... the Registrar-General has the power to correct the Register by recording "omitted" easements ... in the folio of the Register for the servient land, despite the intervention of a proprietor who purchased the servient land and became registered on the face of the uncorrected Register."

41 In any event, as we have held that Sahab is entitled to rely on s 138, it also follows that it is entitled to relief pursuant to that provision in respect of which s 12(3)(b) has no application as any correction of the Register is made pursuant to an order under s 138(3) and not to the exercise by the Registrar-General of his power to correct the Register pursuant to s 12(1)(d) which is a condition precedent to the operation of s 12(3).

Conclusion

42 For the foregoing reasons in our opinion Castle has not demonstrated any basis upon which we would be justified in either withdrawing or re-considering the reasons set forth in the primary judgment. Accordingly, the Motion should be dismissed with costs. Furthermore, the directions made by the Court on 15 December 2011 should be reinstated deleting from paragraphs (1) and (2) thereof the date "3 February 2012" and inserting in lieu thereof "4pm on 23 March 2012".

43 The formal orders we propose, therefore, are as follows:

(1)   The Notice of Motion filed on behalf of the second respondent dated 13 January 2012 be dismissed with costs.

(2)    Reinstate orders (1), (2) and (3) made by the Court on 15 December 2011 subject to the deletion from orders (1) and (2) of the date "3 February 2012" and substituting therefor "4pm on 23 March 2012".

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Decision last updated: 22 March 2012