FEDERAL COURT OF AUSTRALIA

 

Lansen v Olney [1999] FCA 1745

 

ABORIGINAL LANDS  - traditional land claims – pastoral lease – vested in Northern Territory Land Corporation – whether alienated Crown land – Corporation taking transfer of pastoral lease from Northern Territory – Northern Territory taking transfer of pastoral lease from mortgagee - whether transfer to Northern Territory valid – whether transfer to Northern Territory Land Corporation valid – radical title – doctrine of merger – Torrens Title System – application to transfers of pastoral leases – indefeasibility – motion to amend statement of claim – allegation of improper purposes vitiating title to pastoral lease – appropriate forum – motion to amend dismissed – application dismissed.

 

Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) s 50(1)(a)

Pastoral Land Act 1992 (NT) ss 3(1), 4, 6, 9, 30, 31, 40, 48, 56, 57, 58, 59, 67, 68, 69, 129,130, 132

Real Property Act (NT)ss 47, 49, 60, 67, 68, 69, 70, 91, 93, 94, 95, 96, 113, 150, 151, 220(4)

Crown Lands Act 1992 (NT) ss 3, 4, 9(2), 9(3), 12, 13, 14, 15, 16, 17, 26, 27, 36, 38

Northern Territory Land Corporation Act 1986 (NT) ss 4(2), 15, 16

Judiciary Act 1903(Cth) s 39B(1A)

Real Property Act 1886 (SA) ss 68, 69, 70

Crown Lands Ordinance 1931 (NT)

 

 

R v Kearney; Ex parte Japanangka (1984) 158 CLR 395, cited

Wik Peoples v Queensland (1996) 187 CLR 1, applied

De Britt v Carr (1911) 13 CLR 114, cited

R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327, cited

Attorney-General (NSW) v Brown (1847) 1 Legge 312, cited

Mabo v Queensland (1992) 175 CLR 1, cited

Amodu Tijani v Secretary, Southern Nigeria (1921) 2 AC 399, considered

Nireaha Tamaki v Baker [1901] AC 561, considered

Cudgen Rutile (No 2) Pty Ltd v Chalk [1975] AC 520, cited

Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (1986) 42 NTR 1, cited

English Scottish and Australian Bank Ltd v Phillips (1937) 57 CLR 302, considered

Cooper v Federal Commissioner of Taxation (1958) 100 CLR 131, considered

Shell Co of Australia Ltd v Zanelli (1973) 1 NSWLR 216, considered

Post Investments Pty Ltd v Wilson (1990) 26 NSWLR 598, cited

Sandhurst Trustees Ltd v 72 Seventh Street Nominees Pty Ltd (In Liq) (1948) 45 NSWLR 556, cited

Lansen v The Hon Justice H W Olney [1999] FCA 1026, cited

Arcadi v Whittem (1992) 59 SASR 515, cited

Nield v Whittem (1993) 67 ALJR 514, cited

Public Trustee v Paradiso (1995) 64 SASR 387, cited

Rogers v Resi-Statewide Corporation Ltd (1991) 29 FCR 219, cited

Breskvar v Wall (1971) 126 CLR 376, cited

Wicklow Enterprises Pty Ltd v Doysal Pty Ltd (1986) 45 SASR 247, cited

King v Smail [1958] VR 273, cited

Rasmussen v Rasmussen [1995] 1 VR 613, cited

Valoutin Pty Ltd v Furst (1998) 154 ALR 119, cited

Bogdanovic v Koteff (1988) 12 NSWLR 472, cited

Bahr v Nicolay [No 2] (1988) 164 CLR 604, cited

The South-Eastern Drainage Board (South Australia) v The Savings Bank of South Australia (1939) 62 CLR 603, cited

Pratten v Warringah Shire Council [1969] 2 NSWLR 161, cited

Travinto Nominees Pty Ltd v Vlattas (1973) 129 CLR 1, cited

Benmar Properties Pty Ltd v Makucha [1996] 1 Qd R 578, cited

Mercantile Credits Ltd v Shell Co of Australia Ltd (1976) 136 CLR 326,

Waimiha Sawmilling Co Ltd (in liq) v Waione Timber Co Ltd [1926] AC 101, cited

Barrow v Isaacs & Son [1891] 1 QB 417, cited

Frazer v Walker [1967] 1 AC 569, cited

State Bank of New South Wales v Berowra Waters Holdings Pty Ltd (1986) 4 NSWLR 398, cited

 

 

McNeil, Common Law Aboriginal Title (Clarendon 1989)

Gray, Elements of Land Law (Buterworths, 2^nd Edition 1993)

Land Tenures in Australian Law, Res Judicatae vol 3 (1947) 158

Bradbrook, McCallum, Moore, Australian Real Property Law (2^nd Edition LBC 1997)

Sackville and Neave, Property Law Cases and Materials (6th ed 1999)

Kerr, The Principles of the Australian Land Titles (Torrens) System (1927)

Hinde (ed), The New Zealand Torrens System Centennial Essays (1971)

Woodman and Nettle, The Torrens System in NSW

 

 

 

 

HARRY LANSEN, GORDON LANSEN and FREDDY RAGGETT v THE HONOURABLE JUSTICE H W OLNEY acting as Aboriginal Land Commissioner, THE NORTHERN TERRITORY LAND CORPORATION, THE NORTHERN TERRITORY OF AUSTRALIA, THE REGISTRAR-GENERAL FOR THE NORTHERN TERRITORY

DG14 of 1998

 

 

FRENCH, TAMBERLIN, SACKVILLE JJ

17 DECEMBER 1999

PERTH (Heard in Darwin)

 

IN THE FEDERAL COURT OF AUSTRALIA
NORTHERN TERRITORY DISTRICT REGISTRY	DG 14 OF 1998

 

 

BETWEEN:               HARRY LANSEN

                                    First Applicant

 

                                    GORDON LANSEN

                                    Second Applicant

 

                                    FREDDY RAGGETT

                                    Third Applicant

 

AND:                          THE HONOURABLE JUSTICE H W OLNEY

                                    Acting as Aboriginal Land Commissioner

                                    First Respondent

 

                                    THE NORTHERN TERRITORY LAND CORPORATION

                                    Second Respondent

 

                                    THE NORTHERN TERRITORY OF AUSTRALIA

                                    Third Respondent

 

THE REGISTRAR-GENERAL FOR THE NORTHERN TERRITORY

Fourth Respondent

 

 

JUDGES:	FRENCH, TAMBERLIN AND SACKVILLE JJ
DATE OF ORDER:	17 DECEMBER 1999
WHERE MADE:	PERTH (Heard in Darwin)

 

THE COURT ORDERS THAT:

 

1.         The Applicants’ motion to amend the statement of claim is dismissed.

 

2.         The application is dismissed.

 

2.         The Applicants pay the Respondents’ costs of the application.

 

 

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

 

IN THE FEDERAL COURT OF AUSTRALIA
NORTHERN TERRITORY DISTRICT REGISTRY	DG 14 OF 1998

 

BETWEEN:             AND:	HARRY LANSEN First Applicant   GORDON LANSEN Second Applicant   FREDDY RAGGETT Third Applicant     THE HONOURABLE JUSTICE H W OLNEY Acting as Aboriginal Land Commissioner First Respondent   THE NORTHERN TERRITORY LAND CORPORATION Second Respondent   THE NORTHERN TERRITORY OF AUSTRALIA Third Respondent   THE REGISTRAR-GENERAL FOR THE NORTHERN TERRITORY Fourth Respondent

 

JUDGES:	FRENCH,TAMBERLIN AND SACKVILLE JJ
DATE:	17 DECEMBER 1999
PLACE:	PERTH (Heard in Darwin)

REASONS FOR JUDGMENT

FRENCH J:

Introduction

1                     The Aboriginal Land Commissioner, appointed under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (“the Land Rights Act”), is required by that Act to inquire into applications by Aboriginal people claiming to have traditional land claims to areas of land which are unalienated Crown land or Crown land in which all estates and interests are held by or on behalf of Aboriginals.  On 28 September 1998 the Commissioner declined to proceed with an inquiry into a claim over Billengarrah Station on the basis that it was not unalienated Crown land.  This was because a pastoral lease over the land was held by the Northern Territory Land Corporation (“NTLC”), which is not an emanation of the Crown.

2                     The Commissioner’s decision is challenged in these proceedings on the basis that the NTLC had no valid title to the pastoral lease which it purported to hold.  The applicants seek to impugn the chain of title by contending that the prior holder of the lease, namely the Northern Territory itself, which had taken a transfer of the lease from a mortgagee exercising its power of sale, was not empowered by the Pastoral Land Act 1992 (NT) to do so or to hold such a lease.  Moreover the purported transfer to the NTLC is said to have failed for non-compliance with procedural requirements of the Pastoral Land Act.  The case raises issues of principle in relation to property law in the Northern Territory and questions of statutory construction, including the application of the Real Property Act to transactions involving Crown lands.

The Proceedings

3                     On 23 May 1997, Harry and Gordon Lansen and Freddy Raggett lodged a claim under the Land Rights Act in respect of land comprising Northern Territory Portion 1323, also known as Billengarrah Station.  The land under claim was said to be “unalienated Crown land”.  On 27 May 1998, the Aboriginal Land Commissioner, appointed under the Land Rights Act gave notice of his intention to commence an inquiry in relation to the application and to determine a preliminary question separately from and before all other issues arising in relation to the application.  The preliminary issue as described in the notice issued by the Commissioner was:

“the question whether the claimed area or any part thereof is land which may properly be the subject of an application pursuant to s 50(1)(a).”

4                     Following an inquiry the Commissioner made a determination on 28 September 1998 in the following terms: 

“1.       Northern Territory Land Corporation

a)         is not an emanation of the Crown in the right of the Northern Territory,

b)         has a valid and absolute and indefeasible title to an estate and interest in leasehold in the claimed land.

2.         The claimed land is not, nor was it at 29 May 1997, either “unalienated Crown land” or “alienated Crown land in which all estates and interests not held by the Crown are held by, or on behalf of, Aboriginals”.

3.         The application made to the Aboriginal Land Commissioner on 29 May 1997 is not an application of the type referred to in s 50(1)(a) of the Land Rights Act and the Aboriginal Land Commissioner has no function to perform in relation to it.”

5                     By an application filed in this Court on 26 October 1998 the applicants sought an order for review of the Commissioner’s determination and orders under s 39B of the Judiciary Act 1903 (Cth).  They asserted that the Commissioner had denied them procedural fairness by refusing to adjourn the consideration of the preliminary question.  They also claimed that there were errors of law in the reasoning that led to the determination.

6                     By virtue of s 20(2) of the Federal Court Act the matter has been listed for hearing by a Full Court as the Commissioner is a Judge of this Court, albeit he was acting administratively in this case.

The Aboriginal Land Rights (Northern Territory) Act 1976

            The Commissioner’s decision was made pursuant to the Land Rights Act which defines his functions in s 50(1)(a) thus:

“50(1)  The functions of a Commissioner are:

(a)       on an application being made to the Commissioner by or on behalf of Aboriginals claiming to have a traditional land claim to an area of land, being unalienated Crown land or alienated Crown land in which all estates and interests not held by the Crown are held by, or on behalf of, Aboriginals:

            (i)         to ascertain whether those Aboriginals or any other Aboriginals are the traditional Aboriginal owners of the land; and

            (ii)        to report his findings to the Minister and to the Administrator of the Northern Territory, and, where, he finds that there are Aboriginals who are the traditional Aboriginal owners of the land, to make recommendations to the Minister for the granting of the land or any part of the land in accordance with sections 11 and 12.”

The functions referred to in par (b), (c), (d) and (e) are not material for present purposes.  Relevant, however, to an issue raised in connection with an adjourned motion by the applicant to amend the statement of claim in these proceedings are subs 50(2A) and 50(2B).  Section 50(2A) is the so called “sunset” clause which provides:

“(2A)  A Commissioner shall not perform a function under paragraph 1(a) in respect of an application made after the expiration of 10 years after the commencement of this subsection.”

Subsection (2B) prohibits the Commissioner from performing a function under par 1(a) in relation to an application over land which is, in whole or in part, the same as land to which an earlier application related where the report in respect of that application made no recommendation.  This is subject to a proviso which would authorise the Commissioner to perform the functions notwithstanding that the application is a repeat application where he finds:

“(d)     that the basis on which the applicants contend that the applicants, or specified Aboriginals, are the traditional Aboriginal owners of the common land is substantially different from the basis on which the like contention was made in relation to the previous claim;

(e)        that information, documents or records that are likely to be relevant to the performance by the Commissioner of that function, being information, records or documents that were not available to the Commissioner to whom the previous application was made, will be available to the Commissioner in connection with the performance of that function; or

(f)        any other ground upon which it appears to the Commissioner appropriate to perform, or continues to perform, that function;

 and that it is likely that the Commissioner will find that the applicants or specified Aboriginals are the traditional Aboriginal owners of the common land.”

7                     In the present case, the Commissioner made no report and no recommendation.  Apart from deciding he lacked power to proceed with any inquiry into the application the Commissioner made no dispositive decision in relation to it.  Nor does the Act explicitly provide for such a disposition.

 

History of Dealings with the Land

8                     Before turning to the statutory framework and the Commissioner’s reasons for making the determination he did, it is necessary to refer to the history of dealings or purported dealings in respect of the land under claim.

9                     The point of departure in that history is 13 January 1965 which saw the grant of Pastoral Lease 694 to Ross and Francis Berry over Northern Territory Portion 816.  That lease which was granted under the Crown Lands Ordinance 1931 (NT) and covered 1,582 square miles, was surrendered on 12 September 1972.  In the meantime on 25 January 1972 a new lease, PL759, was granted to the Berrys.  It was one of two new leases, 758 and 759, which evidently together covered land comprised in PL694.  It is the land covered by PL759, some 820 square miles and comprising NT portion 1323, that is the Billengarrah Station and is the subject of the application under the Land Rights Act.  The Pastoral Lease 759 was granted under the Crown Lands Ordinance for a term of forty three years commencing 1 July 1971.  It was bound in the Register Book of Crown Leases as Volume 111 Folio 76 under  provisions of the Real Property Act which are no longer applicable.  Between 25 January 1972 and 12 September 1972, it appears there were two pastoral leases in effect over the same land.  There were in 1973, 1975 and 1984 successive transfers of PL759 to other entities, the last of those transfers being to Sydney Galvin and Heather Josephine Galvin on 16 January 1984. 

10                  On 2 March 1993, acting pursuant to ss 130(2) and 131(1) of the Pastoral Land Act, the Minister for Lands Housing and Local Government, by notice, declared Pastoral Lease PL759, less certain excised areas, to be a Perpetual Pastoral Lease, PPL 1069, on and from 1 April 1993.  The declaration was expressed to be subject to reservations and conditions applicable to Perpetual Pastoral Leases by virtue of the Act.  On 23 March 1993, the Galvins lodged, at the office of the Registrar-General, an “Application to Register Statutory Vesting”, being the declaration of the PPL 1069.  The registration, under the Real Property Act, took effect on 21 July 1993 at 9.10am.

11                  On 20 July 1993 a number of related events occurred which led to the purported transfer of PPL 1069 from the Galvins to the Northern Territory under a power of sale exercised by the Commonwealth Development Bank.  In the same sequence of events, the Northern Territory transferred PPL 1069 to the Northern Territory Land Corporation (NTLC).  It is the holding of that interest by the NTLC which led the Commissioner to his conclusion that the land under claim was alienated Crown land and that he was therefore not empowered to deal further with the application.  The sequence of events on 20 July was as follows:

1.         A Discharge of Mortgage from the Northern Territory of Australia to the Galvins, executed on 22 June, was lodged at the Registrar-General’s office for registration at 12:17:25.  The lodgment date recorded on the discharge was shown incorrectly as 30 July 1993.  Registration was effected on 21 July 1993 at 9.20am.

2.         A Discharge of Mortgage from Westpac Banking Corporation to the Galvins, executed on 5 July 1993, was lodged at the Registrar-General’s office for registration  at 12:17:27.  Registration was effected on 21 July 1993 at 9.20am.

3.         The Commonwealth Development Bank of Australia lodged a transfer in the exercise of a power of sale at 12:17:29.  The transfer showed the buyer as the Northern Territory of Australia.  Registration was effected on 21 July 1993 at 9.20am.

4.         With the transfer lodged pursuant to the power of sale by the Commonwealth Development Bank of Australia was a letter signed by a delegate of the Minister of Lands Housing and Local Government consenting to the transfer of the lease (now designated Perpetual Pastoral Lease No 1069-Billengarrah) from the Commonwealth Development Bank of Australia to the Northern Territory of Australia.

5.         A further transfer was lodged for registration at 12:19:37 from the Northern Territory of Australia to the NTLC.  This transfer had been executed on 6 July 1993 by the Northern Territory of Australia but was not executed by the NTLC.  It was also accompanied by a letter of consent signed by the delegate of the Minister for Lands Housing and Local Government.  It was expressed as a consent “…to the transfer of Perpetual Pastoral Lease No 1069 - Billengarrah from the Northern Territory of Australia to the Northern Territory Land Corporation.”  It was also registered on 21 July at 9.20am.

12                  The transfer from the Galvins to the Northern Territory under the Power of Sale exercised by the Commonwealth Development Bank was expressed thus:

“The lender being the proprietor of the mortgage listed below in exercise of the power of sale conferred by the Real Property Act and in consideration of an agreement with the buyer transfers to the buyer the land described and valued below subject to all estates, interests and rights referred to in Section 136(1)(b) of the Real Property Act affecting the lands including all leases registered subsequent to the mortgage and to which the lender has consented and the buyer accepts this transfer.”

The mortgage under which the Power of Sale was exercised was then identified and the land description then followed in these terms:

“Register         Volume/Folio  Location          Parcel              Tenure

CUCL             111     76         Billengarrah    NT Portion      Pastoral

                                                                        1323                Lease 759”

The value of the interest transferred was expressed to be $250,000.  The description of the interest transferred was arguably inaccurate in so far as it referred to PL 729.  It is to be noted that at the time the transfer was executed by the Bank and the Northern Territory, ie 6 and 8 July respectively, the registration of the statutory vesting of PL1069 had not taken place.

13                  The description of the land referred, Portion 1323, was correct albeit it had been reduced by 100 metre strips defined in the Ministerial Declaration.  The volume and folio number of PL 1069 was the same as that for PL 759.  In the event there was no ambiguity as to the interest in the land transferred and the description of the land transferred.

The Commissioner’s Reasoning

14                  The first element of the Commissioner’s determination related to the status of the NTLC which he held was not an emanation of the Crown in the right of the Northern Territory.  In so doing he applied the decision of the High Court in R v Kearney; Ex parte Japanangka (1984) 158 CLR 395.  That aspect of his determination was not and could not be in dispute before him or in this Court.

15                  The question for determination therefore was whether the NTLC had an estate and interest in leasehold in the claimed land, namely PPL 1069.  The Commissioner held that s 69 of the Real Property Act which provides for the indefeasibility of registered title, was decisive of the issue:

“It is the registered proprietor of the land and so long as it so remains it has an absolute and indefeasible title to the leasehold interest identified in the certificate as to title.  To say that does not deny the authority of a court of competent jurisdiction to direct the Registrar-General to give effect to any judgment, decree or order of the court given or made in any proceeding respecting the land (s 64), but so long as the NTLC remains the registered proprietor its title remains absolute and indefeasible.  On that basis therefore the NTLC has an estate or interest in the claimed land and as it is not an authority or emanation of the Crown, it must follow that the claimed land is not Crown land as defined in s 3 of the Land Rights Act.  The land is not capable of being made the subject of an application of the kind referred to in s 50(1)(a) of the Land Rights Act and accordingly the application made to the Aboriginal Land Commissioner on 29 May 1997 is not an application that can give rise to the exercise by the Commissioner of the functions referred to in that section.”

According to the Commissioner’s reasoning, this conclusion rendered it unnecessary for him to deal with the issues raised by the applicants attacking the validity of PPL 1069 and the effect of any native title rights and interests in relation to the land which may have existed at 21 July 1993.  The contentions put before him on behalf of the applicants included the propositions that:

1.         At the time the Northern Territory became the registered proprietor of the Lease its estate and interest as lessee merged with its radical title whereupon the land became unalienated Crown land as defined in s 3 of the Land Rights Act.

2.         Assuming the existence of native title rights and interests in the land the transfer could not validly convey an estate or interest to the NTLC because it would have involved the acquisition of the native title rights and interests otherwise than on just terms and inconsistently with the Racial Discrimination Act 1993 (Cth).  But if there were any invalidity in the Commissioner’s view it was cured by the provisions of the Validation (Native Title) Act (NT).

3.         A further attack on the validity of the transfer in favour of the NTLC was based on the absence of any declaration by the Minister in relation to the land as required by s 16 of the Northern Territory Land Corporation Act 1986 (NT) and because the Minister administering the Crown Lands Act had not granted an estate or interest in the land in conformity with the requirements of that Act.  The Commissioner found that s 15 and 16 of the Northern Territory Land Corporation Act and the Crown Lands Act had no relevance to the validity issue. 

In the event he found that the Perpetual Pastoral Lease in question had been validly granted to the NTLC.

The Applicants’ Contentions

16                  The argument advanced for the applicants focussed exclusively upon the question whether the land the subject of the application to the Commissioner was unalienated Crown land.  It was sought to demonstrate by a variety of submissions that, contrary to the Commissioner’s conclusions, there was, at the time of the application, no estate or interest held by the NTLC.  In pursuit of that goal the applicants attacked upon the chain of title leading to the transfer of PPL 1069 to the NTLC on 20 July 1993. 

17                  The applicants’ essential propositions were as follows:

1.         (a)        The Pastoral Land Act authorises the grant of pastoral leases by the Crown.  It does not authorise the Crown to itself hold a pastoral lease nor to transfer a pastoral lease to another.

(b)        The proposition that, as a matter of statutory implication, the Crown cannot itself hold a pastoral lease is supported by logical principles analogous to those underpinning the doctrine of merger at common law.

(c)        For these reasons PPL 1069 was either extinguished upon transfer to the Northern Territory  or the transfer to the Northern Territory was ineffective.

2.         Procedures mandated by s 16 of the Northern Territory Land Corporation Act for the acquisition by the NTLC of an estate or interest in real property were not followed.  PPL 1069 was therefore never validly transferred to the NTLC.

3.         (a)        The indefeasibility provisions of the Real Property Act are ineffective to vest in a person an estate or interest in unalienated Crown land.  That is because such vesting is inconsistent with the Land Rights Act which prevails as a law of the Commonwealth.

(b)        The Real Property Act, by virtue of s 95, cannot improve the title of a person taking a lease from the Crown beyond that which would otherwise have resulted.

(c)        In any event, indefeasibility does not operate to protect a transfer by a person under a legal disability.  Given the Northern Territory’s lack of authority to hold or transfer PPL 1069, it was a person under a legal disability for the purpose of the statutory qualifications on the indefeasibility principle.

 

Validity of the Transfer of PPL 1069 to the Northern Territory – Contentions

18                  The applicants contended that the transfer of PPL 1069 to the Northern Territory by the Commonwealth Development Bank was ineffective.  In the alternative, they argued, in written submissions, that, if effective, the transfer resulted in the destruction of the interest created by PPL 1069 by operation of the doctrine of merger.

19                  The first limb of the argument depended upon the statutory scheme for the grant and transfer of pastoral leases and was along the following lines:

1.         The grant and transfer of pastoral leases is provided for by the Pastoral Land Act.

2.         The Pastoral Land Act contemplates the grant of leases by the Crown to other persons and, subject to ministerial consent, the transfer of leases between persons other than the Crown.

3.         Neither the Pastoral Land Act nor any other statute authorises the Crown to grant a pastoral lease to itself nor to acquire such a lease by transfer.

The alternative “merger” argument,  although initially advanced as an application of the common law doctrine of merger, reduced to a logical argument in support of the statutory construction for which the applicants contend.  So it was submitted that the proposition that the Northern Territory could hold a lease from itself, being attended by difficulties of the kind avoided by the common law doctrine of merger, is not contemplated by or implied in the Act.

The Crown Lands Act 1992

20                  The Crown Lands Act 1992 came into operation on 26 June 1992 (s 2).  It repealed the Crown Lands Ordinance 1931 and its many amending Ordinances.  It also repealed the Crown Lands Act 1979 and its various amendments.  The Act came into force on the same day as the Pastoral Land Act 1992.  It deals with the way in which Crown lands may be alienated by grant of estates in fee simple and by lease (ss 4, 9 and 12).  Section 4 provides:

“4(1)  Subject to subsection (2), Crown lands shall not be alienated from the Crown otherwise than in pursuance of this Act.

  (2)  This section does not affect –

(a)       the granting of a lease in pursuance of an agreement or right in existence at the commencement of this Act;

(b)       the granting of an estate in fee simple in pursuance of an Act;

(c)        the granting of a lease in pursuance of an Act; or

(d)       the granting of an estate in fee simple under the Aboriginal Land Rights (Northern Territory) Act 1976 of the Commonwealth.”

The exclusion of leases granted under “an Act” from the operation of the Crown Lands Act, at first blush does not apply to pastoral leases granted under the Pastoral Land Act.  That is because the definition of “lease” in the Crown Lands Act excludes pastoral leases.  But that definition, which appears in s 3, is qualified as are all definitions in the section by its opening words “unless the contrary intention appears”.  There is a plain legislative intention in the Crown Lands Act and the Pastoral Land Act, to be derived from the statutory regimes they establish and their contemporaneous enactment, that the latter Act shall govern the grant and transfer of pastoral leases.  Indeed it is for that very reason that a pastoral lease is excluded from the definition of “lease” in s 3 of the Crown Lands Act.  So the exemption from the operation of the Crown Lands Act contained in s 4(2)(c) of that Act, for leases granted under “an Act” must be taken as applying to pastoral leases.

21                  There is provision in Part 3 for the alienation of land, the grant of estates in fee simple and the grant of Crown leases.  Sections 46 to 48 refer to the transfer of leases granted under the Act.  Ministerial consent is required for their transfer (s 46).  That does not however apply to the transfer of pastoral leases as these are not granted under the Crown Lands Act and are excluded from the definition of “lease” in s 3.

22                  The Crown Lands Act operates within the general framework of the Torrens Title System established by the Real Property Act.  Grants of estates in fee simple or leases of Crown land are to be “by instrument in the prescribed form under the Real Property Act” (s 9(1)).  A reference to the grant of an estate in fee simple is a reference to the transfer of that estate under the Real Property Act.  Where a person has a right to be granted an estate in fee simple or a lease of Crown land, the Minister may in the prescribed form lodge with the Registrar-General “details of the means by which the right arose” (s 10(1)).  On the lodgment of such details the Registrar-General shall, under the Real Property Act, create a folio of the Register and issue a certificate as to title in relation to the land (s 10(2)).  There is provision for the cancellation of certificates of title where the Territory becomes the owner of land in which no person other than the Crown has a registered interest.  Upon such cancellation the land becomes unalienated Crown land (s 11).

23                  The Act also provides for the case in which the Northern Territory holds a registered estate in fee simple from itself.  The absence of any equivalent section in relation to the grant of pastoral leases was said to indicate that the Pastoral Land Act was not intended to authorise such a circumstance.  Section 9(2) purports expressly to preempt the application of the doctrine of merger in respect of estates in fee simple held by the Territory.  Its object, which appears misconceived, is to prevent merger between estates in fee simple and the radical title of the Crown.  It provides:

“(2) A power to grant under subsection (1) an estate in fee simple includes a power to grant an estate in fee simple to the Territory and, subject to section 11, an estate in fee simple so granted or otherwise obtained by the Territory shall not merge with the radical title to the land.”

Transfers of estates in fee simple from the Territory are contemplated by virtue of s 9(3):

“(3)  A reference in this Act to the grant of an estate in fee simple in land shall include, where the Territory is the registered proprietor of an estate in fee simple in land, a reference to the transferring of the estate in fee simple in that land under the Real Property Act.”

There is no equivalent of subs 9(2) or 9(3) in the Pastoral Land Act.

24                  The applicants specifically referred to s 12 of the Crown Lands Act dealing with methods of disposal and subs 12(1) which states:

 “12(1)  In this section “Crown land” does not include land held for an estate in fee simple that is registered under the Real Property Act in the name of the Territory”.

There is no equivalent to s 12(1) in the Pastoral Land Act.  

25                  Division 4 of Part 3 of the Act provides for the grant of easements including easements over Crown leases which, for the purposes of that Division, are defined to include pastoral leases (s 60). 

The Pastoral Land Act 1992

26                  The long title of the Pastoral Land Act  is:

“An Act to make provision for the conversion and granting of title to pastoral land and the administration, management and conservation of pastoral land, and for related purposes.”

The primary object of the Act, as set out in par 4(a) is:

“to provide a form of tenure of Crown land that facilitates the sustainable use of land for pastoral purposes and the economic viability of the pastoral industry;”

Additional objects relate to the prevention, minimisation and rehabilitation of environmental damage, the recognition of the right of Aborigines to follow traditional pursuits, provision of reasonable access to water and places of public interest, and the establishment of Aboriginal community living areas.

27                  The grant of pastoral leases is authorised by s 31 which also provides for notification by the Minister to the Registrar-General under the Real Property Act of the right to be granted a lease.  Where the Minister proposes to sell, or otherwise dispose of a right to the grant of a pastoral lease by auction, tender or application, notice must be given to the public (s 32).  The Minister may fix a purchase or reserve price (s 33).  Subject to certain exceptions no person may hold, alone or together, or have interests in pastoral land which exceeds in aggregate 13,000 square kilometres (s 34).  One such exception arises where the Minister forms the opinion that it would be in the interests of the Territory that the holding limit is exceeded (par 34(1)(a)).  The sanction for exceeding holding limits is forfeiture of the relevant lease or any other pastoral lease of the lessee (s 35).

28                  The Act defines a “pastoral lease” thus:

““pastoral lease” means a lease granted over Crown land for pastoral purposes and includes a pastoral homestead lease and land which, in pursuance of an arrangement under section 50, is held over by the former lessee after the expiration of the term of the pastoral lease;”

“Pastoral lessee” means a lessee under a pastoral lease.  The term “lessee” is defined:

““lessee” includes –

(a)       the person to whom a lease passes, whether by transfer or devolution;

(b)       a person permitted, in pursuance of an arrangement under section 50, to hold over land that was the subject of a former pastoral lease after the expiration of the term of the lease;

(c)        a mortgagee in possession; and

(d)       where applicable, a sublessee or other person in control of the relevant land.”

“Crown land” under the Pastoral Land Act is narrower in scope than under the Crown Lands Act and is defined thus:

““Crown land” means all lands of the Territory, including the bed of the sea within territorial limits, but does not include reserved or dedicated land;”

A reference to a lease as “perpetual” means the lease is granted in perpetuity.  That means that the term of the lease continues indefinitely (s 3(2)).  The term of a lease under the Act is either in perpetuity or for a period not exceeding twenty five years (s 48).  A term may be extended for up to twenty five years (s 49).

29                  There is a general duty cast upon pastoral lessees by s 6 of the Act to prevent degradation, participate in monitoring of the environment, sustain the productive health of the land and improve the condition of the land.  Conditions and reservations to which pastoral leases are subject are set out in s 38.  These are expressed not to limit the power of the Minister to impose such other conditions as he or she thinks fit.  The reservations include a right of entry and inspection by the Minister or the Pastoral Board, reservations of minerals and timber to the Territory, and “a reservation in favour of the Aboriginal inhabitants of the Territory.”  There are statutory access rights for members of the public to natural waters and features of public interest on the leased land (ss 79 and 81).  A lease cannot be transferred or sub-let except with the consent of the Minister (s 67).

30                  The Act establishes a Pastoral Land Board (s 11) which has a number of functions and powers, including monitoring and administering the conditions to which pastoral leases are subject (s 29(h)), making recommendations to the Minister on various matters (ss 29(b), (j) and (k)) and reporting to the Minister on the general condition of pastoral land and the operations of the Board (s 29(a)).  Members of the Board and persons authorised by them are empowered to enter upon pastoral land to assess its condition and for other purposes (s 30(2)).  There is also a general power of entry conferred upon the Minister and members of the Board and persons authorised by them to enter upon pastoral land to carry out functions or exercise powers under the Act (s 9)). 

31                  There is provision for forfeiture of pastoral leases for breach of condition by the lessee (s 40) and a power on the part of the Minister to take remedial action where failure by a lessee to meet its obligations results in danger to life or property in the locality of the land or degradation of the land (s 42).

32                  The Act makes no express general provision for the application of the registration requirements of the Real Property Act to dealings in relation to pastoral leases under the Act.  Ministerial notification to the Registrar-General of the right to be granted a pastoral lease has already been mentioned.  Section 31 which makes provision in that regard also provides for the Registrar-General to create a folio of the Register and to issue a certificate as to title in relation to the land (s 31(3)).  The Act in this respect mirrors the terms of s 10 of the Crown Lands Act.  It also contemplates that mortgages of leases can be registered under the Real Property Act (s 53). Generally speaking application of the provisions of the Real Property Act relating to the transfer of, and other dealings with, pastoral leases under the Act is assumed. 

33                  The transfer of pastoral leases requires the consent of the Minister (s 67).  Before consent is given, the Minister can refer the application to the Board for its report.

34                  Finally it should be noted that s 130(2) empowered the Minister to declare certain specified pastoral leases, including Billengarrah, perpetual pastoral leases from the date specified in the notice.  On and from that date the pastoral lease would, for all purposes, be taken to be a perpetual lease as if granted as such under the Act.  That power was exercised with respect to Billengarrah on 2 March 1993 when the Minister declared PL759 to be a perpetual pastoral lease PPL1069 on and from 1 April 1993.

The Real Property Act 1886

35                  The Real Property Act of the Northern Territory sets up a Torrens system of title by registration.  Section 113 of that Act provides for registration of statutory vesting or grants of land or interests in land.  The power of the Registrar to register such vestings or grants may be exercised on his own motion or on an application in the prescribed form.  In this case the registration of Sydney and Heather Galvin as proprietors of PPL 1069 following the Ministerial declaration of 2 March 1993 became effective on 21 July 1993 at 9.10am.  That registration was done pursuant to s 113.   That section provides as follows:

“113(1)  Where the Registrar-General is satisfied, either on an application in the prescribed form or of his own motion, that the land or any interest in land has become vested in or granted to a person by or under an Act (including an Act of the Commonwealth), the Registrar-General-

(a)       shall make in the Register such entries in relation to the land as he considers necessary in connection with the vesting or grant; and

(b)       may issue such certificates of title as he thinks fit in consequence thereof and, where that is necessary or appropriate, cancel any existing certificate of title.

     (2)  The Registrar-General may exercise the power conferred by subsection (1)(a) whether or not the certificate as to title to the land in question is produced to him.

    (3)  Where an interest in land is transferred to the Territory pursuant to section 69(5) of the Northern Territory (Self-Government) Act 1978 of the Commonwealth, the interest shall be treated for the purposes of subsection (1) as having vested in the Territory under that Act on the execution of the transfer.”

36                  The instrument by which the Galvins’ perpetual lease was transferred  to the Northern Territory was a document entitled “TRANSFER BY LENDER EXERCISING POWER OF SALE”.  The transfer, not being a vesting or grant under an Act, did not attract the operation of s 113 of the Real Property Act.  But being an instrument purporting to pass land, defined in s 3 to include “every estate and interest in land”, it could not be effected until registration.  This is the result of s 67 of the Real Property Act.  Section 67 provides:

“67.  No instrument shall be effectual to pass any land or to render any land liable as security for the payment of money, but upon the registration of any instrument in manner herein prescribed, the estate or interest specified in such instrument shall pass, or, as the case may be, the land shall become liable as security in manner and subject to the covenants, conditions and contingencies set forth and specified in such instrument or by this Act declared to be implied in instruments of a like nature.”

37                  Prior to 1991, s 93 of the Real Property Act provided for the entry of Crown Leases in a Register Book of Crown leases.  Crown lease was defined for that purpose as “a lease of Crown land” and so included a pastoral lease (s 91).  PL759 was registered under these provisions but s 93 was substituted by a new provision in 1991 pursuant to the Real Property Amendment Act 1991 (No 32 of 1991).  Section 93 now provides:

“93(1) The Registrar-General shall issue a certificate as to title in the prescribed form in accordance with a grant of an estate in fee simple, or a lease of Crown land, under a law of the Territory relating to the alienation of land if requested to do so by the Minister responsible for the administration of that law.

   (2)  A person who is entitled to an estate in fee simple or a lease from the Crown is entitled to receive a certificate as to title as referred to in subsection (1).”

This provision can be read together with s 10 of the Crown Lands Act and s 31 of the Pastoral Land Act to which reference has already been made whereby the Minister may lodge details of a grant or lease with the Registrar who is then obliged to issue a certificate of title.

38                  Indefeasibility of title on the Register is provided by s 69 of the Real Property Act which, in the relevant parts, reads as follows:

“69.  The title of every registered proprietor of land shall, subject to such encumbrances, liens, estates, or interests as may be recorded in the Register or which were notified on the original grant of title from the Crown for such land, be absolute and indefeasible, subject only to the following qualification:

I.          (This subsection relates to fraud)

 

II.        In the case of a recording in the Register made as the result of fraud or forgery, or a certificate as to title or other instrument of title obtained by forgery or by means of an insufficient power of attorney or from a person under some legal disability, in which case the recording in the Register or the certificate as to title, or other instrument of title shall be void: Provided that the title of a registered proprietor who has taken bona fide for valuable consideration shall not be affected by reason that a certificate as to title or other instrument of title was obtained by any person through whom he claims title from a person under disability, or by any of the means aforesaid:

III.       (This relates to misdescription of land)

IV.       (This relates to rights of way and other easements)

 

V.        (This relates to the case where two or more folios have been created under any of the Real Property Acts in respect of the same land)

 

VI.       (This relates to the rights of persons in adverse occupation at the time land is brought under the Torrens Title system).

 

VIII.     (This relates to the position of a tenant in actual possession.”

 

 

39                  Section 69 is to be read with s 70 which provides for the paramountcy of the title of the registered proprietor.

40                  Registration of transfers is provided for in s 96:

“When any land is intended to be transferred, or any right-of-way or other easement is intended to be created or transferred, the dealing shall be effected by a transfer in the prescribed form which shall be executed –

(a)       by the registered proprietor or, in the case of a transfer of land by a mortgagee, encumbrancee or receiver exercising a power of sale, that mortgagee, encumbrancee or receiver; and

(b)       unless the Registrar-General has directed otherwise with respect to the dealing in question or dealings of a class to which it belongs, by the transferee or grantee.”

The definition of “land” includes “…every estate and interest in land” (s 3).

41                  Reference should also be made to s 95 of the Act which provides:

“Nothing herein contained or hereby implied shall be construed to give any greater effect or different construction to any Crown lease registered pursuant to this part of this Act than would have been given to it if this Act had not been passed, nor shall any right or remedy, which the Crown would otherwise have possessed, be in any way prejudiced or altered.”

In the part of the Act in which s 95 appears, Part IX, “Crown lease” is defined to mean, “a lease of Crown lands.”

Validity of Transfer to Northern Territory – The Nature of the Territory’s Tenure

42                  The proposition that the Crown in right of the Northern Territory, or otherwise, can hold an interest in land granted by itself is inconsistent with the common law doctrine of tenure.  Under the common law all lands and tenements in England were ultimately held from the Crown.  The doctrine, which derived from the time of the Norman Conquest, relied upon the “fundamental maxim and necessary principle (although in reality a mere fiction)…that the King is the universal lord and original proprietor of all the land in his kingdom” – Blackstone Comm. II c.4. p 51.  Statutory reforms in England, many of them mirrored in Australia, have substantially suppressed the practical consequences of tenure but they have not struck at the root of the theory of tenure itself – Megarry and Wade, The Law of Real Property 4^th Edition (1975) p 38.  It was a corollary of the basic doctrine that the Crown could not hold an interest from itself::

“   the King in this sense cannot be said to be a tenant because he hath no Superior but God Almighty” –  Coke, Commentaries upon Littleton at 1b.

McNeil put it thus:-

“At common law, when  the Crown had an estate in fee simple, or indeed any estate, it was necessarily lordless.  Accordingly, an estate can exist without being held in tenure” – Common Law Aboriginal Title (Clarendon 1989) p 149.

That an estate is an estate in fee simple indicates the quantum of the estate and not feudal tenure – Commonwealth v Anderson (1960) 105 CLR 303 at 325 (Windeyer J);  Commonwealth v New South Wales (1923) 33 CLR 1 at 42 and 45 (Isaacs J), see also Pollock and Maitland, The History of English Law Bk 2 Ch 1 p 213.

43                  The basic principles of tenure, including the proposition that the Crown cannot hold as “tenant” an interest from itself, are not, in the Australian context, constitutional in character.  They may be displaced or modified in content or application by statute.  The prerogatives of the Crown which, at common law, enabled it to grant and acquire interests, including absolute beneficial interests in Crown land, were displaced by what Gummow J has called “the constitutional settlement of the mid-nineteenth century”.  This term was a reference to the power given to the Australian colonies by Imperial enactments, mostly in the 1850’s, to regulate the disposal of the waste lands of the Crown – Wik Peoples v Queensland (1996) 187 CLR 1 at 188-189.  That power was given on the basis that it was to be exercised under statutory authority – eg Waste Lands (Australia) Acts Repeal Act 13 and 14 Vic c 55 ss 4, 5 and 7.  In the States the Crown is only authorised to dispose of Crown lands in accordance with statutory authority, Commonwealth v State of Western Australia  (1999) 160 ALR 638 at 666 (Gummow J) and cases there cited.  See also De Britt v Carr (1911) 13 CLR 114 at 122 (Griffith CJ).  The Territories derive their power from ordinances and statutes made pursuant to statutory authority conferred by laws of the Commonwealth made pursuant to s 122 of the Constitution. The authorities so granted did not confine the nature of the interests which could be created or granted to established categories of real property at common law.  Moreover, rights can be created under statute, in relation to Crown land, which do not create an estate or interest in the land – R v Toohey; Ex parte Meneling Station Pty Ltd(1982) 158 CLR 327 at 332, 344, 352 and 364.  Relevantly for this case there is no reason why a statute may not provide, in effect, for the creation, by the Crown, of an interest in land or rights in relation to landwhich can be held as a discrete interest or bundle of rights by the Crown.  The Crown Lands Act has done as much in expressly providing that the power to grant an estate in fee simple extends to the power to create such an estate to be held by the Territory itself (s 9(2)). The present case raises the question whether the same result applies to pastoral leases as a matter of implication from the statutory scheme.  The central issue is therefore one of statutory construction.  But statutes operate in a milieu of common law principle.  It is necessary here to consider the impact of the common law and its relationship to the statutes which provide for the creation and disposition of interests in Crown lands.  The proposition was initially advanced by the applicants, in their written submissions, that the Northern Territory could not acquire a pastoral lease and then transfer it to the NTLC because the lease would have been destroyed by merger with the radical title of the Territory.  Although not maintained as a submission, it illuminates the question we have to decide.

44                  The application of land tenure principles as against allodial ownership in the Australian colonies was asserted in Attorney General (NSW) v Brown (1847) 1 Legge 312.  It was supported by the proposition that the Crown acquired absolute ownership of all lands in the colony when it acquired sovereignty.  That proposition was rejected in Mabo v Queensland (1992) 175 CLR 1. The title of the Crown, upon acquisition of sovereignty in the colonies, was characterised as a “radical title” which, burdened or qualified by indigenous rights and interests, could not expand into full beneficial ownership without some further step on the part of the Crown.  It has been observed subsequently, in the light of Mabo that territorial sovereignty may not equate, even under the common law doctrine of tenure, to absolute beneficial ownership, the latter concept being arguably alien to the medieval cast of mind – Gray, Elements of Land Law, (Butterworths, 2^nd Edition 1993) p 52, referring to A W B Simpson, A History of the Land Law (2^nd Edition, Oxford 1986) p 47f.

45                 Radical title was described in Amodu Tijani v Secretary, Southern Nigeria [1921] 2 AC 399 as “a pure legal estate, to which beneficial rights may or may not be attached”.  It was in that case, found to be burdened or qualified by an indigenous community’s usufructuary title.  It was of variable scope depending on the impact of the indigenous title.  The concept of a radical title of variable scope was to some degree reflected in the judgments of the majority in Mabo.

46                 In Mabo, Brennan J, with whom Mason CJ and McHugh J agreed, accepted the proposition that the doctrine of tenure applied in Australia but did not accept that it was necessary to that doctrine that the Crown acquired full beneficial ownership in the land upon acquisition of sovereignty.  Rather, as in Amodu Tijani and  Nireaha Tamaki v Baker  [1901] AC 561 the Crown was to be treated as having the radical title to all the land in the territory over which it had acquired sovereignty.  His Honour explained radical title thus at 48:-

“The radical title is a postulate of the doctrine of tenure and a concomitant of sovereignty.  As a sovereign enjoys supreme legal authority in and over a territory, the sovereign has power to prescribe what parcels of land and what interests in those parcels should be enjoyed by others and what parcels of land should be kept as the sovereign’s beneficial demesne.”

 

The attribution of radical title to the Crown enabled the grant of interests in land to be held of the Crown and the acquisition of land for the Crown’s demesne.  It enabled the Crown to become “Paramount Lord” of all who hold a tenure granted by the Crown and to become absolute beneficial owner of unalienated land required for the Crown’s purpose.  Only if the land were desert and uninhabited would the Crown take an absolute beneficial title because there would be no other proprietor. His Honour said:

“Recognition of the radical title of the Crown is quite consistent with recognition of native title to land, for the radical title, without more, is merely a logical postulate required to support the doctrine of tenure (when the Crown has exercised its sovereign power to grant an interest in land) and to support the plenary title of the Crown (when the Crown has exercised its sovereign power to appropriate to itself ownership of parcels of land within the Crown’s territory).”

  

Deane and Gaudron JJ at 80 described as “the underlying thesis of the English law of real property” that the “radical title to (or ultimate ownership of) all land was in the Crown …”  They held that the practical effect of the vesting of radical title in the Crown was merely to enable the English system of private ownership of estates held of the Crown to be observed in the colony.  If there were lands within the colony in relation to which there were no pre-existing native title, the radical title of the Crown carried with it a full and unfettered proprietary estate (at p 86).  Mabo therefore left open the possibility that beneficial interests might be attached to the “pure legal estate” comprising the radical title of the Crown as did some dicta in Wik. (Wik at 127 per Toohey J, citing Amodju Tijani).  But Wik rejected the notion that the grant of a statutory “lease” on Crown land involved the creation of a beneficial reversionary interest in the Crown (129 per Toohey J, 155 per Gaudron J, 189 per Gummow J, 234-235 per Kirby J).  Also rejected was the proposition that the mere exercise of sovereignty over the land by the Crown would somehow expand radical title into a beneficial interest.

47                  In the end the concept of radical title has little if any relevance to the grant of interests in land in post-federation Australia.  Indeed it has little relevance to the grant of interests in any of the self-governing colonies prior to federation.  It was invoked in Mabo to support the conclusion of the majority that the assumption of sovereignty by the Crown upon its annexation of the various Australian colonies did not give rise to an absolute beneficial ownership in the land inconsistent with indigenous rights which ownership would extinguish native title.  But the authority of the colonies, when they became self-governing, to make laws relating to the disposal of Crown lands, was derived from Imperial statutes and was not an incident of the radical title of the Crown therein.  That authority in the case of New South Wales and Victoria was initially conferred by the Imperial statutes which authorised the enactments of their Constitution Acts of 1855.  At the same time the Imperial Parliament passed the Waste Lands (Australia) Acts Repeal Act 1855 (18 and 19 Vic c.56) which, inter alia, authorised the legislatures of South Australia and Tasmania “to regulate the sale and other disposal of the waste lands of the Crown…” (s V). 

48                  Prior to 1 January 1911 the Northern Territory was part of the colony of South Australia.  It was then surrendered to the Commonwealth as a territory of the Commonwealth.  Thereafter all pre-existing estates and interests in the Territory were “to be held from the Commonwealth on the same terms and conditions as they were held from the State” – Northern Territory Acceptance Act 1910 (Cth) (s 10).  The Governor-General was empowered to make ordinances having the force of law in the Territory – Northern Territory Administration Act 1910 (Cth) (s 13).  Ordinances so made included the Crown Lands Ordinance 1931.  With the coming of self-government in 1978 the Northern Territory was established as “a body politic under the Crown by the name of the Northern Territory of Australia” – Northern Territory (Self Government) Act 1978 (s 5).   The Legislative Assembly was empowered to make laws for the peace, order and good government of the Territory (s 6).  The Crown Lands Act 1979, the Crown Lands Act 1992 and the Pastoral Land Act 1992 are such laws.  By s 69(2) of the Northern Territory (Self Government) Act all but certain interests in land in the Territory which were held from the Commonwealth were, by force of the Act, to be held from the Territory (s 69(4)).  In the Northern Territory, as in the States of Australia, “the Crown cannot contract for the disposal of any interest in Crown lands unless under and in accordance with power to that effect conferred by statute” – Cudgen Rutile (No 2) Pty  Ltd v Chalk [1975] AC 520 at 533.  Nor can the Crown dispose of any interest in Crown lands except under statutory power.  The constitutional supremacy  of Australian Parliaments and the Crown over all Australian lands, as much as the feudal doctrines of the common law, is the origin of most of the incidents of Australian land tenure – Fry, “Land Tenures in Australian Law”, Res Judicatae  vol 3 (1947) 158 at 160-161, cited with approval by Toohey J in Wik at 111, see also Gummow J at 188-189.

49                  Against this background of statutory and quasi constitutional provisions for dealing in Crown lands the concept of the merger of a statutory interest with the radical title of the Crown, as first propounded by the applicants, seems far fetched.  So too, does its statutory preemption in s 9(2) of the Crown Lands Act 1992.   Merger occurs where a greater and lesser estate in land vest in the same person in the same right without any intervening estate.  The estates merge.  Effectively, the lesser estate ceases to exist – Bradbrook, McCallum, Moore, Australian Real Property Law (2^nd Edition LBC 1997) par 16.88. The doctrine operates in respect of leases so that if a lessor becomes lessee (eg by assignment) the lease merges in the reversion.  In the absence of evidence as to intention, there is a presumption at equity  that merger is not intended if this will not be in the party’s interest or if the party has only acted consistently with a duty.  If there be no evidence of intention or of the necessary interest, then merger occurs unless the union was not due to a party’s own acts – Halsburys Laws of Australia par 245-4250.  The equitable principle is now embodied in property statutes of all States and Territories. 

50                  In the case of the grant of a Crown lease under statute however, there is no basis for the operation of the doctrine of merger with “radical title”.  Radical title does not of itself have the character of the greater beneficial estate with which a lesser estate will merge, albeit in some cases such an interest may attach to the radical title – see the discussion on this point in Mabo and Wik.

51                  In the case of an interest in unalienated Crown land created by statute, the necessary substratum for the operation of the doctrine, the subsistence of a reversionary interest in the Crown, does not exist.  And even if it did, the question of contrary intention would still have to be addressed by reference to the statute giving rise to the interest.  In the case of the Pastoral Land Act a lease granted under the Act can be forfeited for exceeding the maximum holdings limit or for breach of condition (s 35(10) and s 40(6)).  Forfeiture “has the same effect as a re-entry and recovery of possession by or on behalf of the Territory”.  It extinguishes the statutory interest.  So too does “surrender”, whether in exchange for a perpetual pastoral lease (s 62) or for the grant of a consolidated lease (s 64).   The effect of forfeiture is the same in this case as its effect under s 135 of the Land Act 1910 (Qld) considered in Wik.  That provision established a kind of statutory reversion, whereby forfeited land would “revert to His Majesty and become Crown land, able to be dealt with by [the] Act accordingly”.  Its effect was to assimilate previously alienated land to land in respect of which the Crown had radical title.  It did not assimilate it to any beneficially owned estate (at 156 per Gaudron J, see also 199-200 per Gummow J). 

52                  Given the character of a pastoral lease under the Pastoral Land Act as a statutory lease, analogous to those considered in Wik, and given the statutory provisions for forfeiture and surrender, and of course the simple termination of the interest by expiry of the term,  there is no basis or necessity for importing into the statute common law doctrines of reversion or merger.  There is nothing in the nature of a pastoral lease granted under the Act that requires the application of that doctrine.  Nor is there any necessary implication from the provisions of the Act that requires the extinguishment of a lease upon its acquisition by the Crown in right of the Northern Territory.

53                  In Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (1986) 42 NTR 1, O’Leary CJ, with whom Rice and Asche JJ agreed, held in relation to Crown leases that upon their grant “…the radical title of the land remains in the Crown; the Crown is still the legal owner of the reversion”.  The reference to the “reversion” is, with respect, of questionable authority in the light of the judgments in Wik, which have already been mentioned.  The Jennings’ case was concerned with whether land, the subject of a Crown lease, was nevertheless still “vested in the Crown” for the purposes of exemption from workmens’ liens under the Workmens’ Liens Act (NT). 

54                  There is another consideration against the operation of merger or any statutory analogue requiring extinguishment of the interest upon its acquisition by the Territory.  That is the dependence of legal title to land upon registration under the Torrens Title System for which the Real Property Act provides.  There is powerful authority for the proposition that the Torrens Title System is inconsistent with the doctrine of merger.  So in the case of a mortgage, nothing in the Real Property Act 1886 (SA) supports the idea that when the proprietor of an estate in fee simple becomes registered proprietor of a mortgage or encumbrance over the land, it is thereby sunk and merged in the estate of that proprietor – English Scottish and Australian Bank Ltd v Phillips (1937) 57 CLR 302 at 322-323.  On similar reasoning the view was favoured, though not finally adopted, as it was unnecessary to do so, in Cooper v Federal Commissioner of Taxation (1958) 100 CLR 131 at 142 that “…a registered leasehold interest does not merge at law so long as it remains registered as a separate estate or interest”.  That view, assumed to be correct for the purposes of that case, was said “to conform better with the Torrens System”.  In Shell Co of Australia Ltd v Zanelli (1973) 1 NSWLR 216 at 221, Jacobs P (Hardie and Reynolds JJ agreeing) held that as long as a lease remained on a title as a distinct interest, it must be regarded as a separate interest under the Real Property Act 1900 (NSW).  His Honour said:

“There is no more reason why unity of title should destroy it on a transfer to the lessee of the fee simple than should unity of title in the case of a mortgagee…or unity of title by transfer of a lease to the registered proprietor in fee… Particularly is this so when it is borne in mind that, though unity of title would result in merger at common law, it would by no means necessarily do so in equity. Intention, actual or presumed, was the test in equity.  So long as the interest remained on the title it could not be assumed from the unity of title that there had been a merger.”

See Post Investments Pty Ltd v Wilson (1990) 26 NSWLR 598, with respect to non-extinguishment of a registered restrictive covenant when dominant and servient tenements come into single ownership and possession and also Sandhurst Trustees Ltd v 72 Seventh Street Nominees Pty Ltd (In Liq) (1998) 45 NSWLR 556 at 566-567. 

55                  The Pastoral Land Act is to be read within the general framework for title by registration created by the Real Property Act.  There is nothing in the Pastoral Land Act to require that a pastoral lease held by the Northern Territory be extinguished.  The registration provisions of the Torrens Title System in operation under the Real Property Act, in my opinion, have the effect that the registration of a transfer to the Northern Territory does not effect extinguishment of the title thereby conferred.  The express provision made in the Crown Lands Act 1992 for the Territory to hold an estate in fee simple, does not indicate a contrary intention in relation to leases created under the Pastoral Land Act.  The estate in fee simple is an estate well known to the common law which, it might have been thought, could attract some version of the common law doctrine of merger.  That concern is, in my opinion, misplaced.  But whether it is misplaced or not, the statutory leases granted under the Pastoral Land Act are not creatures of common law descent.  They are, as is apparent from the provisions of the Act, sui generis statutory creations.  They are not carved out of any larger title and their transfer could not attract the kind of apprehension that seems to have misinformed the drafting of s 9(2) of the Crown Lands Act.

56                  There is a distinct argument that the Pastoral Land Act does not authorise the transfer of a pastoral lease from a lessee to the Northern Territory.  In this connection reference was made to the requirement for ministerial consent to the transfer of leases under s 67 as well as the obligations of lessees to the Crown to comply with the conditions of their leases upon pain of forfeiture.  These provisions and the scheme of the Act generally were said to exclude the possibility of a transfer to the Crown itself.  It is true that these provisions may have little if any work to do in the case of a transfer of a lease to the Crown.  But that does not of itself prevent the Crown from acquiring, by transfer or otherwise, the interests comprised in a pastoral lease.  Indeed considerations of practical convenience may make the capacity of the Crown to hold such leases useful.  There is nothing which offends any fundamental principle in so concluding.  The Crown in right of the Territory could, consistently with the concept of radical title, in the exercise of its sovereignty under statutory powers create for itself a bundle of rights and interests comprising a pastoral lease.

57                  In the reasons for judgment of Sackville J, which I have had the opportunity of reading in draft, his Honour suggests that the want of any explicit provision for transfer of leases under the Pastoral Land Act reflects a legislative intention that the transfer of such interests be effected under the Real Property Act which provides for such transfers to be effective by virtue of their registration.  I agree with his Honour that this is the most plausible explanation of the relationship between the two statutes so that the special provisions of the Pastoral Land Act are seen to be integrated into the general system of title by registration for which the Real Property Act provides.  That integration also provides an answer to the argument, based upon s 95 of the Real Property Act, that that Act could not be relied upon as a source of power for the transfer of PPL 1069 to or from the Northern Territory.  To apply the transfer provisions of the Real Property Act to the transfer of pastoral leases, assuming them to be Crown leases for the purposes of that section, does not “give any greater effect or different construction” to the leases, contrary to s 95, than if the Real Property Act had not been passed.  The fact that a statutory lease can be transferred pursuant to a statutory provision goes neither to its effect nor to its construction.

58                  Concluding as I do, that the Northern Territory was empowered to take a transfer of PPL 1069 and to hold the lease, there is no need to resort to the indefeasibility provisions of the Real Property Act to support its title.

Validity of the Transfer of PPL 1069 to the Northern Territory Land Corporation

59                  The applicants submitted that the NTLC was not empowered by its Act to acquire an interest in land from the Crown.  Alternatively it was said that the scheme of the Pastoral Land Act did not provide for a transfer by the Crown of any crown land to a third person. 

60                  The NTLC was initially established as the Northern Territory Development Land Corporation pursuant to the Territory Development Act.  It was continued by the Northern Territory Land Corporation Act.  By  s 4(2) of that Act:

“4(2)  The Corporation is –

(a)       a body corporate with perpetual succession and a common seal; and

(b)       capable, in its corporate name, of –

            (i)         subject to this Act, acquiring, holding and disposing of real (including leasehold) and personal property; and

            (ii)        suing and being sued.”

The Corporation is not an authority or instrumentality of the Crown and is not subject to the control and direction of a Minister of the Crown (s 6).  Its function is described in s 15 thus:

“15(1)  The function of the Corporation is to acquire (by agreement or otherwise), hold and dispose of real property (including an estate or interest in real property) in accordance with this Act and it may acquire and hold such property notwithstanding any other law in force in the Territory which would restrict or otherwise limit the capacity of the Corporation to acquire and hold it.

    (2)  The Corporation has power to do all things necessary or convenient to be done for or in connection with or incidental to the carrying out of its function.

   (3)  Moneys payable by the Corporation for or incidental to the acquisition of an estate or interest in real property may be advanced by the Territory on such terms and conditions as the Treasurer thinks fit.

   (4)  Moneys payable to the Corporation in respect of an estate or interest in real property held or disposed of by the Corporation shall be paid to the Territory, whose receipt shall be a sufficient discharge therefor, and moneys payable by the Corporation in respect of an estate or interest in real property held by the Corporation may be paid by the Territory.

.

.

.

   (6)  The Corporation may enter into such arrangements as it thinks fit with the Territory or any other person in relation to the care, control and management of land or an interest in land held by the Corporation.

   (7)  Subject to subsection (6), the Minister has the care, control and management of all land and interests in land held by the Corporation.”

The Administrator is empowered to declare any land in respect of which all the right title and interest is vested in the Territory or where no person other than the Territory or the Corporation holds a right, title or interest, to be vested in the Corporation (s 16(1)).  Application of such a notice vests in the Corporation all right, title and interest legal and beneficial in respect of the land as though the notice were an alienation in fee from the Crown by way of grant to the Corporation (s 16(2)).  There is also provision for registration of such a notice as though it were an instrument of transfer or conveyance to the Corporation (s 16(3)).

61                  There can be no doubting the power of the Northern Territory Land Corporation, under its Act, to take a transfer of a pastoral lease from the lessee thereof.  What is said in this case is that the transfer of PPL 1069 to the Corporation was not in accordance with the only permitted processes, set out in ss 15 and 16, by which it could acquire interests in land.  The function of the Corporation to acquire interests in real property under s 15, it was submitted, was limited by the words “by agreement or otherwise” which appear in parentheses in that section.  Those words were said to confine the modes of acquisition permitted under s 15 to acquisition by purchase from a third party.  Alternatively it was said the process under s 16, of vesting land or interests in land in the Corporation, was available but was not followed.  In my opinion this argument is untenable.  The provisions of s 15 are facultative and allow for acquisition by “agreement or otherwise”.  The words “or otherwise” allow for any mode of lawful acquisition.  Transfer from the Territory is one of those modes.  The transfer of the lease to the Corporation was therefore valid.

62                  I also agree, for the reasons given by Sackville J, that the necessary consent to the transfer of PPL 1069 to the Northern Territory Land Corporation had been given.

The Effect of Registration of the Transfer under the Real Property Act

63                  Having regard to the conclusions I have already reached, it is unnecessary to consider the operation of the indefeasibility provisions of the Real Property Act upon the registration of the transfer of PPL 1069 to the Territory and the Corporation respectively.  In the event, however, that my primary conclusions are wrong, I agree with Sackville J in relation to the operation and effect of the indefeasibility provisions.

The Motion to Amend the Statement of Claim and for the Determination of Further Issues

64                  A motion to amend the statement of claim was filed on 23 July 1999.  It came on for hearing on 29 July and was adjourned to this hearing by the Full Court.  That was in part because the original jurisdiction, confined to a Full Court in cases involving application for the review of decisions by authorities constituted by or including a judge of the Court, is not able to be exercised by a single judge – Lansen v The Hon Justice H W Olney [1999] FCA 1026. 

65                  The principal amendment to the statement of claim sought in this case was by the introduction of paragraphs alleging that the transfer of PPL 1069 was invalid for having been attended by an improper purpose.  The proposed additional paragraphs are 23A and 23B:

“23A(1)The legislation providing for the power of a Territory Minister to grant or transfer a lease of Crown lands does not extend to permit a grant or transfer for a purpose which would avoid or subvert the operation of an Act of the Commonwealth having application in the Territory.

    (2)   A substantial purpose of the purported grant or transfer of the lease by the Territory Minister to the Second Respondent was to remove the land from the categories of land which could be the subject of an application under s 50(1)(a) of the Land Rights Act.

   (3)    Such a purpose was an improper purpose.

   (4)    Such a purpose rendered the purported grant or transfer beyond power and invalid.

23B(1)If the purported grant or transfer was invalid because it was

            (a)        for an improper purpose with respect to the operation of a Commonwealth Act;

            (b)        beyond the power of the Territory Minister because a law granting such a power would be inconsistent with a Commonwealth law;

            the registration of an interest so granted is invalid and ineffective to confer an indefeasible title on the grantee.

   (2)    To the extent that the Real Property Act purports to have that effect it is invalid as beyond the legislative power of the Legislative Assembly.”

66                  The motion sought an order that the questions of fact and law raised by those paragraphs be decided separately from any other questions raised by the application and be decided before the other questions and that the matter be remitted to a single judge of the Court for determination of the separate questions.  An order was also sought that following the determination of the separate questions, the remaining matters in dispute (and any appeal from the decision of a single judge in relation to the separate questions) be dealt with by this Court at a date to be fixed.

67                  For reasons already mentioned, to the extent that the questions of fact and law were raised as part of the matter in which this Court is exercising jurisdiction under s 20(2), they could not be remitted to a single judge of the Court for determination.  The scope of the factual inquiry contemplated by the amendments is potentially very substantial.  This was evidenced by a proposed notice to produce dated 9 July 1999 annexed to an affidavit in support of the motion which included a requirement directed to the Northern Territory Government to produce:

“Any minute, resolution, letter, memo, file note, discussion paper or other document regarding, proposing, or leading to:

(1)       the enactment of the Territory Development Act 1979 (Act No 80 of 1979), being an Act of the Legislative Assembly of the Northern Territory which amended the Territory Development Act.”

The same request was made in respect of five other statutes and that was merely one of some five paragraphs setting out the classes of documents whose production was sought.

68                  The proposed amendments raised substantial factual issues which were not before Olney J.  It was never put to his Honour that such allegations were in contemplation by the applicant.  They would go, if established, to demonstrate that on another basis altogether from that debated before Olney J and this Court, the transfer to the Northern Territory Land Corporation should be held invalid.  The applicants have approached this issue on the basis that the Commissioner could not have been asked to deal with the question of improper purposes as it would have involved the exercise of judicial power.  Plainly enough it would be open to the applicants, subject to questions of limitation, to take proceedings in the Supreme Court of the Northern Territory seeking to impugn the validity of PPL 1069 on the basis of alleged improper purpose.  It may even be arguable that this Court would have jurisdiction to entertain such an application under s 39B(1A) of the Judiciary Act, although I express no concluded view on that point.  Either way, the difficulty arises that it may not then be open to the applicants to make a fresh application to the Commissioner because of the provisions of s 50(2A), the so called “sunset” clause in the Act. 

69                  In my opinion the amendment should not be allowed.  These are not the appropriate proceedings in which to ventilate the issue of improper purpose.  At a practical level it would require hearing by a Full Court of extensive evidence relating to the central and ancillary issues.  It may be a matter that could separately be ventilated in the Supreme Court or possibly in the jurisdiction of this Court conferred by s 39B(1A) in respect of matters arising under laws of the Commonwealth.  But the proposed amendment is not appropriate to an application for judicial review of Olney J’s decision.

Conclusion

70                  For the reasons set out above, I would dismiss the application with costs.

I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French .

Associate:

Dated:              17 December 1999

IN THE FEDERAL COURT OF AUSTRALIA
NORTHERN TERRITORY DISTRICT REGISTRY	DG 14 OF 1998

 

BETWEEN:	HARRY LANSEN First Applicant   GORDON LANSEN Second Applicant   FREDDY RAGGETT Third Applicant
AND:	THE HONOURABLE JUSTICE H W OLNEY Acting as Aboriginal Land Commissioner First Respondent   THE NORTHERN TERRITORY LAND CORPORATION Second Respondent   THE NORTHERN TERRITORY OF AUSTRALIA Third Respondent   THE REGISTRAR-GENERAL FOR THE NORTHERN TERRITORY Fourth Respondent

 

JUDGE:	FRENCH, TAMBERLIN AND SACKVILLE JJ
DATE:	17 DECEMBER 1999
PLACE:	PERTH

REASONS FOR JUDGMENT

TAMBERLIN J:

71                  I agree with the reasons for judgment delivered by Sackville J and the reasons of French J incorporated therein.  I also agree with the orders proposed by Sackville J.

I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin.

Associate:

Dated:              17 December 1999

IN THE FEDERAL COURT OF AUSTRALIA
NORTHERN TERRITORY DISTRICT REGISTRY	DG 14 OF 1998

 

BETWEEN:	HARRY LANSEN First Applicant   GORDON LANSEN Second Applicant   FREDDY RAGGETT Third Applicant
AND:	THE HONOURABLE JUSTICE H W OLNEY acting as Aboriginal Land Commissioner First Respondent   THE NORTHERN LAND CORPORATION Second Respondent   THE NORTHERN TERRITORY OF AUSTRALIA Third Respondent   THE REGISTRAR-GENERAL FOR THE NORTHERN TERRITORY Fourth Respondent

 

JUDGES:	FRENCH, TAMBERLIN, SACKVILLE JJ
DATE:	17 DECEMBER 1999
PLACE:	PERTH (HEARD IN DARWIN)

REASONS FOR JUDGMENT

SACKVILLE J:

The Issues

72                  The question raised by this application, which is brought pursuant to s 39B of the Judiciary Act 1903 (Cth), is whether the first respondent, the Aboriginal Land Commissioner (“the Commissioner”), erred in law in determining a preliminary issue that arose in a claim instituted under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (“Land Rights Act”).  The Commissioner determined that the claimed land, known as the Billengarrah Station, at 29 May 1997 (the date of the application to the Commissioner), was neither

(a)        “unalienated Crown land”, nor

(b)        “alienated Crown land in which all estates and interests not held by the Crown [were] held by, or on behalf of Aboriginals”,

for the purposes of s 50(1)(a) of the Land Rights Act.  On this basis, the Commissioner decided that he had no jurisdiction to perform in relation to the application.

73                  The course of events has been set out in the judgment of French J and I need not repeat his Honour’s account.  It will be seen from that account that, at 29 May 1997, the second respondent (“the Land Corporation”) was registered under the Real Property Act (NT) (“Real Property Act”) as the proprietor of Perpetual Pastoral Lease 1069 (“PPL 1069”) in respect of Billengarrah Station.  The Land Corporation derived its interest by a transfer from the third respondent (“the Territory”), executed on 6 July 1993.  The transfer to the Land Corporation, which stated the value of the interest transferred to be “nil”, was lodged for registration with the Registrar General on 20 July 1993 and duly registered on 21 July 1993 at 9.20 a.m.  The transfer described the land as that comprised in Volume 111, Folio 76, located at Billengarrah, being the parcel known as NT Portion 1323.  The tenure under which the land was held was described as “Pastoral Lease No. 759”.  As will be explained, the reference to Volume 111, Folio 76 was to a folio in the Register Book of Crown Leases.

74                  For its part, the Territory had received a transfer of land, dated 6 July 1993, from the Commonwealth Development Bank of Australia (“the Bank”) in the exercise of its power of sale as mortgagee over the Billengarrah Station.  The value of the interest so transferred to the Territory was recorded as $250,000, presumably reflecting the consideration paid by the Territory.  The transfer to the Territory was lodged on 20 July 1993, a few seconds before the Territory’s transfer to the Land Corporation and was registered at the same time as the transfer to the Land Corporation.  The description of the land included in the transfer to the Territory was in substance the same as that in the transfer to the Land Corporation.

75                  On 24 June 1993, the delegate of the Minister of Lands, Housing and Local Government had consented in writing to the transfer of what was described as “Perpetual Pastoral Lease No. 1069 – Billengarrah” by the Bank to the Territory and by the Territory to the Land Corporation.

76                  The reference to “Perpetual Pastoral Lease No. 1069” (“PPL 1069”) in the Ministerial consent is explained by the fact that, on 2 March 1993, the Minister had signed a declaration pursuant to s 130(2) of the Pastoral Land Act 1992 (NT) (“Pastoral Land Act”).  This declared so much of Pastoral Lease 759 (“PL 759”), as was not excised from the declaration to be a perpetual pastoral lease, as from 1 April 1993.  The declaration was expressed to be “subject to the reservations and conditions applicable to perpetual pastoral leases by virtue of the [Pastoral Land Act]”.  The schedule to the declaration identified a number of strips of land as areas “excised from PL 759”.

77                  A document described as an “Application to Register Statutory Vesting” and designated VO No 282 998 was lodged for registration by the then registered proprietors of PL 759, the Galvins, on 23 March 1993 at 10.06 am.  The Vesting Order was ultimately registered on 21 July 1993, ten minutes before the transfers to the Territory and the Land Corporation were registered.

78                  Vesting Order No 282 998 was recorded on the folio of the Register as relating to PL 759 (Volume 111, Folio 76).  The recording noted that PL 759 had been cancelled and that a new PPL 1069 had been issued (Volume 318, Folio 78).  Each of the Territory and the Land Corporation was registered, successively, as the proprietors of PPL 1069 (not PL 759).  It was not suggested in oral argument that any significance attached to the fact that the transfers to the Territory and the Land Corporation referred to PL 759, as distinct from PPL 1069, in respect of which they were ultimately registered as the proprietors.  At the time those transfers were executed, the Ministerial declaration had been signed and lodged for registration, but it had not yet been registered.  The applicants raised a question concerning the transfers and their registration in supplementary written submissions to which I shall refer later.

79                  The primary submission put forward by the applicants is that the “statutory scheme” constituted by the Pastoral Land Act, the Northern Territory Land Corporation Act 1986 (NT) (“Land Corporation Act”), and the Crown Lands Act 1992 (NT) (“Crown Lands Act”) does not permit a pastoral lease to be acquired by the Northern Territory and, in any event, did not permit the Territory validly to transfer such a lease to the Land Corporation.

80                  The submission on behalf of the applicants was put in various ways, some of which were not pursued.  In particular, Mr Basten QC, who appeared with Mr Williams for the applicants, abandoned a contention that any pastoral lease acquired by the Territory would necessarily merge with either or both of the Territory’s radical title or its reversionary interest in the land subject to the pastoral lease.  Mr Basten did so, correctly in my view, having regard to observations made by members of the High Court in The Wik Peoples v Queensland (1996) 187 CLR 1.

81                  As ultimately formulated, the applicants’ contentions were in substance as follows:

(i)         The statutory scheme, although recognising that pastoral leases generally could be assigned or transferred, did not contemplate that pastoral leases could be granted or transferred to the Territory.  To construe the legislation in this way would be to countenance the Territory owing obligations, as pastoral lessee, to itself as the grantor of the lease and the entity entitled to enforce the terms of the lease.  In effect, the legislation, on its proper construction, did not authorise the acquisition by the Territory itself of a pastoral lease.

(ii)        In any event, the Land Corporation could not lawfully acquire a pastoral lease by transfer from the Territory.  This consequence followed from the limitations upon the Land Corporation’s capacity to acquire property imposed by, or implicit in the Land Corporation Act.

(iii)       The fact that the Land Corporation had become registered as proprietor of PPL 1069 produced no different result.  For any one of several reasons, so it was submitted, the indefeasibility provisions of s 69 of the Real Property Act did not give the title of the Land Corporation any greater protection than it would have had under the general law.

82                  The third limb of the applicants’ argument was put forward in answer to the reasons for decision of the Commissioner, which were supported by the second and third respondents (the Land Corporation and the Territory, respectively) in this Court.  The Commissioner considered that s 69 of the Real Property Act was decisive in the Land Corporation’s favour as to whether the Land Corporation had an estate or interest in Billengarrah Station.  Since the High Court had authoritatively determined in R v Kearney; Ex parte Japanangka (1984) 158 CLR 395 that the Land Corporation was not an emanation of the Crown, it followed that Billengarrah Station could not be brought within either limb of s 50(1)(a) of the Land Rights Act and thus could not be claimable land.

83                  The Commissioner stated his reasons for this conclusion concisely:

“The [Land Corporation] is the registered proprietor of land and by virtue of s 69 of the Real Property Act its title, subject to any registered encumbrances (of which there are none), its title is absolute and indefeasible, it being the case that none of the exceptions to indefeasibility set out in items I to VII s 69 apply.  And the title of the [Land Corporation] prevails against the Crown notwithstanding any error, omission or informality in any application or proceedings (s 70).

Section 69 of the Real Property Act is decisive of the issue of whether or not the [Land Corporation] has an estate or interest in the claimed land.  It is the registered proprietor of the land and so long as it so remains it has an absolute and indefeasible title to the leasehold interest identified in the certificate as to title.  To say that does not deny the authority of a court of competent jurisdiction to direct the Registrar-General to give effect to any judgment, decree or order of the court given or made in any proceeding respecting the land (s 64), but so long as the [Land Corporation] remains the registered proprietor its title remains absolute and indefeasible.  On that basis therefore the [Land Corporation] has an estate or interest in the claimed land and as it is not an authority or emanation of the Crown, it must follow that the claimed land is not Crown land as defined in s 3 of the Land Rights Act.  The land is not capable of being made the subject of an application of the kind referred to in s 50(1)(a) of the Land Rights Act and accordingly the application made to the Aboriginal Land Commissioner on 29 May 1997 is not an application that can give rise to the exercise by the Commissioner of the functions referred to in that section.”

The Principle of Indefeasibility of Title

84                  The applicant’s submissions appeared to assume that, if the Pastoral Land Act did not authorise the transfer of PL 759 from the Bank (exercising its power of sale) to the Territory or the registration of the Territory as proprietor of PPL 1069, the latter’s title was void notwithstanding the fact that it was registered under the Real Property Act.  Most of the initial written submissions and oral argument concentrated on the question whether, assuming the Pastoral Land Act did not contemplate or authorise the Territory to take a transfer of a pastoral lease from the Bank, the registration of the transfer by the Territory to the Land Corporation nonetheless conferred an indefeasible title to PPL 1069 on the Land Corporation.  Doubtless this is why the Commissioner’s reasons concentrated on the indefeasibility of the registered title of the Land Corporation, rather than that of the Territory.

85                  There is, however, an anterior question, namely whether the Territory itself is entitled to the protection of the indefeasibility provisions of the Real Property Act in respect of its registered title to PPL 1069.  These are contained in ss 67-70 of the Real Property Act, which are in precisely the same terms as ss 67-70 of the Real Property Act 1886 (SA).  (The South Australian Act is the source for much of the Northern Territory enactment.)  The sections relevantly provide as follows:

“67.     No instrument shall be effectual to pass any land or to render any land liable as security for the payment of money, but upon the registration of any instrument in manner herein prescribed, the estate or interest specified in such instrument shall pass, or, as the case may be, the land shall become liable as security in manner and subject to the covenants, conditions, and contingencies set forth and specified in such instrument or by this Act declared to be implied in instruments of a like nature.

68.       The person named in the Register as the owner or taking any estate or interest in land shall be the registered proprietor thereof.

69.       The title of every registered proprietor of land shall, subject to such encumbrances, liens, estates, or interests as may be recorded in the Register or which were notified on the original grant of title from the Crown for such land, be absolute and indefeasible, subject only to the following qualifications:

            I.          ...

II.         In the case of a recording in the Register made as the result of fraud or forgery, or a certificate as to title or other instrument of title obtained by forgery or by means of an insufficient power of attorney or from a person under some legal disability, in which case the recording in the Register or the certificate as to title, or other instrument of title shall be void: Provided that the title of a registered proprietor who has taken bona fide for valuable consideration shall not be affected by reason that a certificate as to title or other instrument of title was obtained by any person through whom he claims title from a person under disability, or by any of the means aforesaid:

...

70.       In all other cases the title of the registered proprietor of land shall prevail, notwithstanding the existence in Her Majesty, Her heirs, or successors, or in any person of any estate or interest whatever whether derived by grant from the Crown or otherwise, which but for this Act might be held paramount or to have priority; and notwithstanding any want of notice of insufficient notice of any application, or any error, omission, or informality in any application or proceedings."

86                  As I have noted, Mr Basten initially framed the applicants’ contention, that the Territory could not acquire a pastoral lease in its own right, in terms of the doctrine of merger. When he abandoned reliance on that doctrine, I think it fair to say that the basis for the applicants’ argument that the Territory could not validly acquire such a lease was not formulated with precision.  However, I understand the substance of the argument to be that the Pastoral Land Act assumes in its language and construction that pastoral leases will not and cannot be granted or transferred to the Territory.  It was said that for this reason, while pastoral leases are generally assignable or transferable, they cannot be assigned or transferred to the Territory and thus the purported transfer of what was described as PL 759 by the Bank to the Territory was void.  It appeared to have been assumed in oral argument that registration of the Territory on 21 July 1993 as the proprietor of PPL 1069 could not improve the Territory’s title.

87                  Section 69 II of the Real Property Act has no counterpart elsewhere in Australia (other than South Australia).  There has been some controversy as to the particular question of whether an innocent party registering a forged transfer or other instrument is entitled to the benefits of so-called immediate indefeasibility, having regard to the language of s 69 II.  The view that has prevailed in South Australia is that the registered proprietor of an estate or interest in land, being a bona fide purchaser for value, acquires an indefeasible title to that estate or interest, notwithstanding that he or she acquired registration by means of a forged instrument: Arcadi v Whittem (1992) 59 SASR 515, at 535-536, per Debelle J with whom Matheson J agreed (special leave refused sub nom Nield v Whittem (1993) 67 ALJR 514); followed in Public Trustee v Paradiso (1995) 64 SASR 387 (FC); contra Rogers v Resi – Statewide Corporation Ltd (1991) 29 FCR 219 (von Doussa J). 

88                  Subject to one exception, this line of authority brings South Australia (and the Northern Territory) into line with the construction of the Torrens legislation in other States and Territories, notwithstanding that none of these has any equivalent to s 69 II: Breskvar v Wall (1971) 126 CLR 376.  That is to say, a registered proprietor who obtains registration in good faith and for value on the basis of an instrument that is void will ordinarily be entitled to an absolute and indefeasible title notwithstanding the invalidity of the instrument or dealing by which he or she obtains registration.  In the words of Barwick CJ in Breskvar v Wall, at 385-386:

“The Torrens system of registered title of which the Act is a form 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.  Consequently, a registration which results from a void instrument is effective according to the terms of the registration.  It matters not what the cause or reason for which the instrument is void.”

The exception in South Australia, to which I have referred, is that where a registered proprietor has obtained registration from a “person under disability”, s 69 II appears to deny the proprietor the benefits of immediate indefeasibility: Wicklow Enterprises Pty Ltd v Doysal Pty Ltd (1986) 45 SASR 247 (O’Loughlin J), at 260-261; Arcadi v Whittem, at 536.  In addition, although the point was not referred to by counsel in oral argument, it may be that a volunteer cannot claim the protection of the indefeasibility provisions of Torrens legislation.  This has been held to be the position in Victoria (King v Smail [1958] VR 273 (Adam J); Rasmussen v Rasmussen [1995] 1 VR 613 (Coldrey J); Valoutin Pty Ltd v Furst (1998) 154 ALR 119 (Finkelstein J)), although a different view has been taken in New South Wales (Bogdanovic v Koteff (1988) 12 NSWLR 472 (CA)): see also Sackville and Neave, Property Law Cases and Materials (6th ed 1999), par 6.3.69.

89                  It is common ground that the Territory was a purchaser for value from the Bank.  There is no suggestion that the transfer from the Bank to the Territory was a forgery (notwithstanding what, on one view, may have been an inaccurate or incomplete description of the interest transferred).  Nor is it suggested that the Bank was a “person under disability” (although Mr Basten did argue that, if the Territory’s registration as proprietor of the Billengarrah pastoral lease were void or otherwise ineffective, the Territory was a “person under disability” in relation to its transfer to the Land Corporation).  Thus whatever view is taken of the scope of s 69 II, the Territory, as the registered proprietor of PPL 1069, could not, by virtue of that provision, be denied the benefits of immediate indefeasibility.  Nor, I should add, is there anything to suggest that the Territory’s title was subject to the so-called in personam exception to indefeasibility: Breskvar v Wall, at 384-385, per Barwick CJ; Bahr v Nicolay [No 2] (1988) 164 CLR 604, at 637-638, per Wilson and Toohey JJ.

90                  Even in these circumstances, however, the principle of immediate indefeasibility does not necessarily lead to the conclusion that the Territory acquired an indefeasible title to PPL 1069 upon registration of its transfer from the Bank.  It is well established, for example, that where there is a conflict between the title of the registered proprietor of land and an unregistered interest in the same land created by a statute enacted later than the relevant Real Property Act, the unregistered statutory interest prevails: The South-Eastern Drainage Board (South Australia) v The Savings Bank of South Australia (1939) 62 CLR 603 (an unregistered statutory charge held to prevail over the title of the registered proprietor); Pratten v Warringah Shire Council [1969] 2 NSWLR 161 (unregistered statutory vesting of land in a council prevailed over subsequently registered title of the proprietor); Travinto Nominees Pty Ltd v Vlattas (1973) 129 CLR 1, at 33-34, per Gibbs J (with whom Menzies J agreed, at 30) (statute avoiding a provision in a registered lease given effect).  Similarly, a statute which renders a term in a registered lease illegal will have the effect of rendering that provision ineffective or unenforceable: Travinto Nominees, at 18, per Barwick CJ (with whom McTiernan and Stephen JJ agreed); cf Benmar Properties Pty Ltd v Makucha [1996] 1 Qd R 578 (CA).

91                  Moreover, not all the provisions of a registered instrument will necessarily acquire the quality of indefeasibility.  In Mercantile Credits Ltd v Shell Co of Australia Ltd (1976) 136 CLR 326, Gibbs J adopted (at 343) the proposition, endorsed by the Judicial Committee of the Privy Council in Waimiha Sawmilling Co Ltd (in liq) v Waione Timber Co Ltd [1926] AC 101, at 106, that

“[n]othing can be registered the registration of which is not expressly authorized by the statute”.

For this reason his Honour expressed the view that

“[s]peaking generally, the Act would not appear to be intended to render indefeasible a personal right created by a covenant which, although contained in a registered instrument, in no way affects the estate or interest in land with which the instrument deals.  An example is a covenant of guarantee contained in an instrument of mortgage”.

Registration of Pastoral Leases

92                  It is therefore necessary to consider whether there is anything in the language or structure of the Pastoral Land Act or Real Property Act, which denies to the Territory the quality of indefeasibility that ordinarily attaches to a title registered under the Real Property Act.  It is convenient to begin with a brief analysis of the provisions governing registration of the pastoral lease relating to Billengarrah Station.  I shall consider separately the effect of s 95 of the Real Property Act, upon which the applicants placed some reliance.

93                  PL 759 was granted under the Crown Lands Ordinance 1931 (NT) to Ross and Francis Berry on 25 January 1972.  It was registered in Volume 111, Folio 76 of the Register Book of Crown Leases.  The materials in the Application Book do not reveal the precise date of registration, but it appears to have been shortly after the date of the grant.

94                  The folio of the Register Book of Crown Leases does not specify the provision pursuant to which PL 759 was registered.  However, at the relevant time, s 93(1) of the Real Property Act and Ordinance 1886 (NT) provided that a copy of every Crown lease was to be bound in the Register Book of Crown Leases.  Any such Crown lease was deemed to be registered and could be transferred and dealt with for all purposes of the Act as if it had been granted by a registered proprietor and registered in the Register Book in the ordinary way: s 93(2).

95                  The Pastoral Land Act came into force on 26 June 1992.  At that time, PL 759 was in existence and registered under the provision of s 93 of the Real Property Act and Ordinance 1886 (NT), although there had been several transfers registered in the intervening period.  The continuing effect of a “pastoral lease” (defined in s 3(1) to mean a lease granted over land for pastoral purposes) was dealt with by the transitional provisions of the Pastoral Land Act.  Section 129 provides that a pastoral lease in existence immediately before the commencement of the Act

“shall, subject to section 130, continue in existence under this Act after the commencement as if granted under this Act for the unexpired period of its term...”.

96                  Section 130(2) of the Pastoral Land Act provides a mechanism for the Minister to declare that a pastoral lease, on and from the date specified in the declaration, should be a perpetual pastoral lease, subject to the reservations and conditions specified in the declaration and those applicable to perpetual pastoral leases under the Act.  As I have explained, it was the exercise of this power that resulted in the creation of PPL 1069 as from 1 April 1993.  Section 130(3) provides that if the Minister has not, within twelve months of the date of commencement of the Pastoral Land Act, exercised his or her powers in relation to a pastoral lease specified in the Schedule, the pastoral lease becomes a perpetual pastoral lease on the expiration of the period as if granted under the Act.  “Billengarrah – PL 759” was designated in the Schedule as one of the “pastoral leases for automatic conversion to perpetual pastoral leases”.

97                  The effect of the Minister’s declaration, as stated by s 130(2) of the Pastoral Land Act, was that, from the date specified in the declaration

“the pastoral lease shall for all purposes be taken to be a perpetual pastoral lease as if granted as such under this Act on that date”.

Section 132 of the Pastoral Land Act provides as follows:

“Nothing in this Act derogates the legal or equitable rights of a person that existed in or in relation to land immediately before becoming the subject of a perpetual pastoral lease under this Act by virtue of section 130 (other than the rights of the Crown in right of the Territory as the lessor of the land) and those rights shall continue and may be enforced against the pastoral lessee in the same manner as they could have been enforced immediately before the land became so subject.”

98                  The application to register the Minister’s declaration (VO No 282 998) recorded that it was made under “Section 113”.  This is a reference to s 113 of the Real Property Act which was introduced in 1989 and amended in 1991.  Section 113 provides that where the Registrar-General is satisfied, whether by reason of an application or on his or her own motion, that land or an interest in land has become vested in or granted to a person by or under any Act (including an Act of the Commonwealth), the Registrar-General must make an entry in the Register (that is, the Register established under s 47 of the Real Property Act) as he or she considers necessary and may issue such certificates of title as he or she thinks fit.  This appears to impose a duty on the Registrar-General to act where land (which is defined to include any estate or interest in land) becomes vested in or granted to any person under an Act.  There is no reason to doubt that s 113 encompasses registration of a Ministerial declaration made under s 130(2) of the Pastoral Land Act.

99                  It is clear from this description of the statutory provisions that registration or deemed registration of title to pastoral leases, whether for a fixed term or in perpetuity, has been integral to the legislative scheme governing such leases.  To the provisions already mentioned should be added the current provision in the Pastoral Land Act which empowers (but does not oblige) the Minister “where a person has a right to be granted a lease of Crown land” to lodge with the Registrar-General details of the means by which the right arose: s 31(2).  On the lodgment of these details, the Registrar-General must create a folio of the Register and issue a certificate as to title in relation to the land: s 31(3).  Section 31 appears to be intended to apply at a stage prior to the vesting in or granting to a person of land by or under an Act (at which point s 113 of the Real Property Act takes effect).  The section illustrates further the key role played by the registration of title in the scheme governing pastoral leases.

Transferability of Pastoral Leases

100               Within this framework, the question that arises is whether a pastoral lease validly granted under the law of the Territory and registered under the Real Property Act is capable of being transferred to the Territory itself so that, upon registration of the transfer, the Territory acquires an indefeasible title to the pastoral lease.  To answer this question, reference must also be made to the legislation relating to the transfer or assignment of pastoral leases and the provisions of the Pastoral Land Act governing the terms of pastoral leases.

101               The Pastoral Land Act does not expressly provide that pastoral leases granted or continued in existence under the Act are transferable or assignable.  Section 67(1) simply states, so far as relevant, that a pastoral lessee is not, without the consent of the Minister, to transfer his or her pastoral lease and that compliance with the sub-section is a condition of the lease.  Section 68 establishes a detailed procedure for the making of applications to the Minister and for recommendations to be made by the Board in respect of such applications.  Plainly, as all parties in the present case accepted, ss 67 and 68 of the Pastoral Land Act assume that pastoral leases are transferable or assignable.  And they apply to perpetual pastoral leases, as well as pastoral leases for a fixed term: see s 48 providing that a pastoral lease may be in perpetuity or for a fixed term.

102               During the course of argument it was suggested that the transferability of a pastoral lease derived from the fact that, under the general law, a lease is assignable.  (Under the general law a lease is assignable even if it contains a covenant against assignment, although breach of the covenant may expose the assignee to forfeiture of the lease: Barrow v Isaacs & Son [1891] 1 QB 417.)  It was said that the transferability of a pastoral lease was implicit in the statutory description of a lease or, alternatively, the transferability of a pastoral lease was to be inferred from the language of ss 67 and 68 of the Pastoral Land Act.

103               In my opinion, a more convincing explanation for the drafting assumptions underlying ss 67 and 68 of the Pastoral Land Act is that the drafter took the view that a pastoral lease would be registered or deemed to be registered under the Real Property Act.  As such, the pastoral lease can be the subject of a transfer executed pursuant to s 150 of the Real Property Act, which provides, inter alia, that a registered lease “may be transferred to any person by a transfer as aforesaid, or by an instrument in the prescribed form”.  Section 151 addresses the effect of such a transfer or instrument:

“Upon such transfer or other instrument being registered, the estate or interest of the transferor, as set forth in the instrument transferred...shall pass to the transferee, and such transferee shall, while he remains the registered proprietor of such estate or interest, be subject to and liable for all and every the same requirements and liabilities to which he would have been subject and liable if named in the transferred instrument originally as...lessee...”.

The reference in s 150 to “a transfer as aforesaid” appears to be to s 96 of the Real Property Act.  This provides that where any land is to be transferred, the dealing is to be effected by a transfer in the prescribed form executed by the registered proprietor or, in the case of a transfer of land by a mortgagee or encumbrancee, that mortgagee or encumbrancee.

104               There is no reason, in my view, to construe ss 150 and 151 as excluding Crown leases from their scope.  In The English Scottish and Australian Bank Ltd v Phillips (1937) 57 CLR 302, at 322, a case on the Real Property Act 1886 (SA), the joint judgment of Dixon, Evatt and McTiernan JJ observed that the “language [of s 150] conferring the power of transfer by registered instrument is universal”.  While that case did not involve a Crown lease, the broad view taken of s 150 gives no support to the notion that it should be read down.  Moreover, the view that ss 150 and 151 extend to pastoral leases is consistent with practice in the Northern Territory.  This is illustrated by the fact that the transfer of PL 759 in the present case followed the forms prescribed for transfers by the Real Property Regulations.  It is also consistent with the view long taken under the Real Property Act 1886 (SA) that

“Crown Leases when registered may be dealt with for all the purposes of the Torrens Statute, as if they had been granted under the System in the ordinary way…”:

Kerr, The Principles of the Australian Lands Titles (Torrens) System (1927), at 30.

Can the Northern Territory Acquire a Registered Title to a Pastoral Lease?

105               At the heart of the applicants’ submissions was the proposition that the Pastoral Land Act did not permit the Northern Territory to acquire, whether by transfer or otherwise, title to a pastoral lease.  There is nothing in the Pastoral Land Act which expressly prohibits or disentitles the Territory from acquiring a pastoral lease.  Yet it is fair to say that, if the Pastoral Land Act is considered in isolation from the provisions relating to the registration and transfer of pastoral leases, there are some indications that the drafter did not contemplate that the Territory itself would acquire a pastoral lease.

106               The point is illustrated by a number of provisions which suggest that the role of the Territory, through the Minister and the Board created by the Pastoral Land Act, is to supervise or enforce the performance of the pastoral lessee’s obligations, as distinct from undertaking the obligations of a pastoral lessee itself.  For example, both the Minister and a member of the Board are authorised to enter land subject to a pastoral lease for the purpose of carrying out a function or exercising a power under the Act: ss 9(1), 30(2).  The Minister is empowered, where a pastoral lessee has failed to comply with a condition of his or her pastoral lease, to give notice of the breach and determine what enforcement action, if any, should be taken: s 40.  Similarly, the Minister is responsible for recovering or waiving arrears of rental due by a pastoral lessee: ss 56-59.

107               In my opinion, however, it is not appropriate to consider these and like provisions in the Pastoral Land Act in isolation from the legislative mechanisms for the registration and transfer of pastoral leases and from the provisions of the Real Property Act itself.  As I have explained, the legislation at all material times has provided for the deemed registration, or required the registration of pastoral leases under the Real Property Act and has contemplated that they will be registered and dealt with under that Act.

108               In Wik, the judgments explored the long history of pastoral leases in Australia within the framework of statutory controls over the alienation by the Crown of interests in land: see at 108-112, per Toohey J; at 172-177, per Gummow J, at 226-230, per Kirby J.  The judgments emphasise that pastoral leases are the creature of statute and that their terms and effect are not to be construed as if they are intended to conform to common law concepts: at 112, 118 per Toohey J; at 149-154, per Gaudron J; at 189-190, 195-198, 203, per Gummow J.  As Kirby J said (at 242)

“[p]astoral leases give rise to statutory interests in land which are sui generis.  Being creatures of Australian statutes, their character and incidents must be derived from the statute”.

109               It follows from Wik that a pastoral lease is a creature of statute and that its scope and effect are not to be determined by preconceived notions derived from the common law.  The characteristics and incidents of pastoral leases, as creatures of statute fall to be determined not merely by the Pastoral Land Act, but by the Real Property Act.  In particular, ss 150 and 151 of the Real Property Act provide a mechanism for a registered pastoral lease to be transferred, while s 69 confers the quality of indefeasibility upon the registered title of the proprietor of a pastoral lease.  Subject to the effect of s 95 of the Real Property Act (to which I refer later), these provisions, in my view, overcome any difficulty that might otherwise arise from the circumstance that the Northern Territory is both the registered proprietor of a pastoral lease and, through the Minister or the Board, is responsible for enforcing its terms and conditions. 

110               This conclusion is reinforced by the authorities dealing with the effect of the Real Property Act on the common law doctrine of merger.  In ES&A Bank v Phillips, the question was whether the liability of a mortgagor on personal covenants contained in a registered mortgage was extinguished by reason of the fact that the mortgage, for a time, had vested in the mortgagor himself (that is, in the registered proprietor of the land).  The majority of the High Court held that the common law doctrine of merger did not apply to a mortgage registered under the Real Property Act 1886 (SA).

111               The joint judgment considered (at 322) that “the most important consideration” was the “universal” language of s 150 which imposed no limit on the persons who could deal in the interest created by mortgage or lease.  Their Honours continued (at 322-324):

“The registered proprietor of the fee simple may take a transfer of that interest.  He may do so although he is the very person who created it, and therefore the person who is the convenantor.  But if he is capable of taking a transfer and becoming a registered proprietor, he is in that character capable in his turn of making a transfer.

...

For our part we are unable to find anything in the legislation to support the idea that when the proprietor of the estate in fee simple becomes registered proprietor of a mortgage or encumbrance subsisting over the land it is ipso facto sunk and merged in the estate in the land of which he is already registered proprietor.  Machinery is provided for the discharge of mortgages (secs. 143, 144).  None is provided for showing on the register the destruction of the mortgage by merger.  When a mortgage comes into the same proprietorship as the fee simple a discharge may be executed by the proprietor in his two capacities and registered.  But otherwise the presence on the register of a mortgage is conclusive that the registered proprietor thereof may transfer it free from all encumbrances or matters of defeasance, with certain well-known specified exceptions none of which includes destruction of the interest by merger.  A mortgage under the system is the creature of statute and its incidents depend upon the provisions of the statute and so much of the general law as is availed of by or under those provisions.  Destruction by merger does not appear to us to be a part of the general law which the provision relating to registered mortgages should be understood as invoking.

...

It must, of course, be true that where the person under a liability to another acquires the other’s correlative right he cannot thus incur or come under a liability to himself.  But the legislature is not obliged to respect theories of jurisprudence and, when it proceeds to deal with obligations on the analogy of property, it is not likely to do so.  When sec. 151 of the Real Property Act 1886 says that upon registration of a transfer of a mortgage, lease or encumbrance, the estate or interest of the transferor, as set forth in the instrument transferred, with all rights, powers and privileges thereto belonging, including the right to sue upon and recover in his own name any debt, sum of money, annuity or damages under such transferred instrument, shall pass to the transferee, it means, we think, that they shall pass and be enjoyed as a congeries of separate and distinct rights which in turn may be alienated by him by means of a registered transfer.  Thus, we think that in accordance with the general intent of the statutory provisions, a mortgagor who acquires the mortgage by subsequent transfer may himself transfer it in turn just as if he were a stranger to the original transaction by which it came into existence.  When he does so the transferee takes it in the same way as if there never had been a coincidence of the obligation and benefit of the covenant in the same person.”

112               The majority in Phillips did not find it necessary to resolve the question of whether a registered lease might be affected by the doctrine of merger.  However, in Cooper v Federal Commissioner of Taxation (1958) 100 CLR 131, the Court expressed the view (at 142), on the authority of Phillips, that

“a registered leasehold interest does not merge at law so long as it remains registered as a separate estate or interest and that [this view] appears to conform better with the Torrens system”.

See also Shell Co of Australia Ltd v Zanelli [1973] 1 NSWLR 216 (CA), at 221, per Jacobs P, with whom Hardie J and Reynolds JA agreed.

113               The issue in the present case is not whether a common law doctrine, such as merger, applies to leases created by statute. It is, rather, whether an inference should be drawn from the Pastoral Land Act to the effect that the Territory cannot be both a pastoral lessee and the entity responsible for enforcing the terms and conditions of a pastoral lease.  The authorities to which I have referred support the conclusion that, having regard to the terms of the Real Property Act, no such inference need or should be drawn.  It is true that the Territory, as the holder of the pastoral lease, will be required to observe the terms of the Pastoral Land Act and that the Minister will have simultaneous responsibility for enforcing the Act.  But there is nothing inherently absurd or impracticable in this state of affairs.

114               This conclusion is consistent with the stated objects of the Pastoral Land Act and the “general duty” of pastoral lessees.  The objects of the Act (s 4) include providing a form of tenure of Crown land that facilitates the sustainable use of land for pastoral purposes and the economic viability of the pastoral industry; monitoring pastoral land; preventing or minimising degradation of the land; and recognising the rights of Aborigines to follow traditional pursuits on pastoral land.  Pastoral lessees are obliged (s 6) to carry out the pastoral enterprise under the lease; to participate in the monitoring of the environmental and sustained productive health of the land; and, within reasonable limits, to improve the condition of the land.  There is nothing in these provisions which is incompatible with the Territory acquiring a pastoral lease.  On the contrary, circumstances can be envisaged in which the acquisition by the Territory of a pastoral lease might well enhance the objectives of the legislation.  The documentary evidence in this case, for example, indicated that the Galvins (the registered proprietors of PL 759 who mortgaged the land to the Bank) had walked off the property and that the Bank, prior to transferring the property to the Territory, had appointed a caretaker.  There may well be environmental and economic reasons why it would be beneficial for the Territory to acquire the pastoral lease.

115               The position might of course be different if the Pastoral Land Act contained provisions prohibiting the Territory from obtaining registration as the proprietor of a pastoral lease.  Such provisions would be likely to bring into play the principles established in cases such as South-Eastern Drainage Board, Pratten and Travinto Nominees.  However, there is nothing to that effect in the legislation.

116               I should add that there is nothing in the Crown Lands Act which detracts from the conclusion I have expressed.  The Crown Lands Act specifies detailed procedures governing the manner in which the Minister is to exercise the power to grant an estate in fee simple or lease of Crown land (ss 12-17).  It also establishes classes of Crown leases (s 26) and makes provision, inter alia, for general conditions and reservations applicable to leases under the Act and the consequences of breach of conditions (ss 27, 36, 38).

117               The Crown Lands Act is not, however, intended to affect the grant or transfer of pastoral leases pursuant to the Pastoral Land Act.  There is what might be thought to be a drafting slip in s 4(2)(c) of the Crown Lands Act, which states that s 4(1) (which provides that Crown lands are not to be alienated from the Crown otherwise than in pursuance of the Crown Lands Act) is not to affect the “granting of a lease in pursuance of an Act”.  Since “lease” is defined in s 3 to exclude a pastoral lease, s 4(2)(c), if read in conjunction with that definition, would not of itself take pastoral leases outside the scope of s 4(1).  But it is quite clear that the detailed regime governing leases under the Crown Lands Act is not intended to apply to pastoral leases under the Pastoral Land Act, which are subject to their own equally detailed regime.  Section 4(2)(c) must therefore be taken as expressing a contrary intention for the purposes of the definition of “lease” in s 3.  That is, the word “lease”, as used in s 4(2)(c) of the Crown Lands Act includes pastoral leases.  It follows that the Crown Lands Act does not affect the statutory regime governing pastoral leases in any way material to the issues in the present case.

The Effect of Section 95 of the Real Property Act

118               The applicants’ submissions relied on s 95 of the Real Property Act to impugn the registered title of the Land Corporation.  The same, or similar, arguments can be used to support the proposition that the Territory cannot acquire a pastoral lease under the Pastoral Land Act and its position cannot be improved by registration of the pastoral lease under the Real Property Act.  Section 95 of the Real Property Act reads as follows:

“Nothing herein contained or hereby implied shall be construed to give any greater effect or different construction to any Crown lease registered pursuant to this part of this Act than would have been given to it if this Act had not been passed, nor shall any right or remedy, which the Crown would otherwise have possessed, be in any way prejudiced or altered.”

119               There is one especially curious feature to s 95.  It refers to “any Crown lease registered pursuant to this part of this Act”.  Section 95 is contained in Part IX of the Real Property Act, headed “Crown Grants” (ss 91-95).  In its present form, Part IX does not appear to provide for registration of a Crown lease, although it does provide for registration of a notice of forfeiture of a Crown lease: s 94.  (The term “Crown lease” is defined to mean “a lease of Crown lands”: s 91).

120               Section 93(1) of the Real Property Act provides that the Registrar-General shall issue a certificate as to title in the prescribed form in accordance with a grant of an estate in fee simple or a lease of Crown land under a law of the Territory relating to the alienation of land if requested to do so by the responsible Minister.  The Real Property Act distinguishes between the Register relating to land (s 47) and a certificate of title, which is a document containing the information or an extract of the information on a folio of the Register (s 49). The issue of a certificate of title in relation to a Crown lease would not ordinarily be thought of as the registration of the Crown lease, at least in the absence of the recording of an entry in the Register.  Moreover, it is by no means clear what the relationship is intended to be between s 93 and s 113 of the Real Property Act, since the latter obliges the Registrar-General, if satisfied that land has become vested in or granted to a person under an Act, to make entries in the Register and issue such certificates of title as he or she thinks fit.  It may be possible that Part IX of the Real Property Act, as presently framed, does not provide for registration of a Crown lease.

121               Whatever the answer to these questions, the explanation for s 95 taking its current form appears to be historical.  Part IX of the Real Property Act, until its amendment in 1991provided for registration of every Crown lease in the Register Book of Crown Leases (s 93(1)).  It also provided (s 93(2)) that such Crown lease should thereupon

“be deemed to be registered and may be transferred, mortgaged and dealt with for all the purposes of this Act, as if it had been granted by a registered proprietor and registered in the Register Book in the ordinary way excepting only that any entries which ordinarily would require to be made in the Register Book shall be made in the Register of Crown Leases, and on the folio constituted by the Crown lease.”

Within that context, s 95 was apparently addressed to the effect of registration of a Crown lease in the Register Book of Crown Leases (and of the deemed registration under the Real Property Act).  Section 95 has been carried over into the consolidated Real Property Act notwithstanding the repeal of the old s 93 and the insertion of the new s 93.

122               The Territory became the registered proprietor of PPL 1069 on 21 July 1993.  PPL 1069 had come into existence by virtue of the exercise by the Minister of his powers under s 130(2) of the Pastoral Land Act to declare that so much of PL 759 as had not been excised would be, as from 1 April 1993, a perpetual pastoral lease.  The declaration thus took effect prior to the execution by the Bank of the transfer to the Territory and by the Territory of the transfer to the Land Corporation.  The declaration itself was registered in the Register established under the Real Property Act pursuant to s 113 of that Act.  Apparently at the time the declaration was registered, a recording was made in the Register of Crown Leases that PL 759 had been cancelled.

123               This course of events seems to me consistent with the intention underlying s 130(2) of the Pastoral Land Act.  The effect of the Ministerial declaration was that the pastoral lease was, for all purposes, to be taken to be a perpetual pastoral lease, as if granted as such under the Pastoral Land Act on the date specified in the declaration.  To the extent that PPL 1069 can be said to have been registered pursuant to the Real Property Act, the registration took place pursuant to s 113.  Section 113 is not in Part IX of the Real Property Act, but in Part X, headed “Transfers”.

124               It may be that PL 759, at least at one stage in its life, answered the description of a “Crown lease registered pursuant to [Part IX of the Real Property Act]”.  But, as I have explained, PPL 1069 was created by the declaration made pursuant to the power conferred on the Minister by s 130(2) of the Pastoral Land Act (in Part XII of the Act).  The declaration was effective as from 1 April 1993.  If PPL had been granted as a perpetual pastoral lease under the Pastoral Land Act on 1 April 1993 (as s 130(2) says should be taken to be the case), it would neither have been granted nor registered under Part IX of the Real Property Act.  It follows that PPL 1069 is not a “Crown lease registered pursuant to [Part IX of the Real Property Act]” and is therefore not subject to s 95 of the Real Property Act.

125               Even if, contrary to my view, s 95 of the Real Property Act can be said to apply to PPL 1069, I do not think that it bears on the question of whether the legislative scheme permits the Territory to acquire title to a pastoral lease under the Pastoral Land Act or its legislative predecessors.  As a matter of construction, s 95 is concerned with the interpretation and enforcement of particular terms and conditions of a registered Crown lease, rather than with the effect of registration of a transfer of a Crown lease on the title of the registered proprietor to that lease.

126               The point is illustrated by the direction in s 95 that a registered Crown lease is not to be given a different construction by virtue of registration of the lease pursuant to Part IX of the Real Property Act.  That direction can only affect a term of the Crown lease, whether included in the text of the registered lease or incorporated by statute.  Similarly, any right or remedy of the Crown is not to be in any way altered or prejudiced.  This, too, is a reference to the Crown’s entitlement to enforce a term or condition of the Crown lease.  Plainly, the legislature was concerned that, in the absence of a provision such as s 95, registration of the lease under Part IX of the Real Property Act might have led to a different construction of particular terms and conditions in or applicable to Crown leases, or to a diminution in the rights of enforcement of those terms and conditions otherwise available to the Crown.

127               It is true that s 95 also says that nothing in the Real Property Act is to give any greater effect to any Crown lease registered pursuant to Part IX.  But this, too, seems to me intended to refer to the effect of particular terms and conditions in or applicable to a Crown lease.  For example, s 95 addresses the kind of issue considered by the High Court in Mercantile Credits v Shell, namely whether what would otherwise be characterised as personal covenants in a Crown lease are to be elevated, by virtue of registration, to the status of covenants running with the land.  I do not think s 95 is intended to abrogate the doctrine of indefeasibility of title which is integral to the scheme of registration of title established by the Real Property Act.

128               If the applicants’ construction of s 95 were correct, there would seem to be little point to the detailed provisions governing the registration or deemed registration of Crown leases under the Real Property Act.  It is unlikely that the legislature intended both to create a structure which contemplates the applicability to Crown leases of the well-recognised system of registration of title created by the Real Property Act, but, at the same time, to deny the applicability of that system to Crown leases.

Some Further Arguments

129               As I have pointed out, the applicants did not in their written submissions or oral argument attach any significance to the fact that the transfers to the Territory and to the Land Corporation identified the land being transferred as “Pastoral Lease 759”, as distinct from “Perpetual Pastoral Lease 1069”.  After the hearing, the Court sent a memorandum to the parties.  The memorandum observed that most of the argument had centred on whether the Land Corporation’s title as registered proprietor of PPL 1069 could be impugned by reason of defects in that title.  The memorandum further observed that the case might be approached on the basis of an antecedent question already considered in this judgment, namely whether the Territory had acquired an indefeasible title to PPL 1069 upon its registration as proprietor.  If the Territory had obtained an indefeasible title to PPL 1069, there would seem to be no barrier to the Land Corporation taking a transfer from the Territory other than the contention (dealt with by French J) that the Land Corporation lacked the capacity under its own legislation to take a transfer of a pastoral lease.  The memorandum invited further submissions.

130               In response to this memorandum, the applicants filed written submissions in which they argued that there was an inconsistency between the transfer to the Territory and the notation on the relevant folio in the register.  The transfer executed by the Bank, as mortgagee exercising a power of sale, identified the land being transferred as PL 759.  The registration of the vesting order, ten minutes before the registration of the Bank’s transfer to the Territory, recorded the cancellation of PL 759.  The Territory never became registered as the proprietor of PL 759.  The purported registration of the Territory as the proprietor of PPL 1069, so it was said, was without legal justification because it had never been a transferee of PPL 1069.  This constituted an “error” on the Register which the Registrar has power to correct under s 220(4) of the Real Property Act.  The Registrar also has power under s 60 of the Real Property Act to recall the certificate of title issued to the Territory for the purpose of cancellation.  It was further argued that the same “error” flowed through to subsequent entries in the Register.

131               The applicant’s supplementary submissions did not refer to the authorities construing provisions in the same or a similar form to s 220(4) of the Real Property Act.  Neither the Territory nor the Land Corporation apparently thought it necessary to respond to the applicant’s supplementary submissions, so they carried the issue no further.  The authorities make it clear that there are significant limits on the Registrar’s power of correction and the fact that a mistake has been made in the course of registering an instrument does not necessarily enliven the Registrar’s power to correct the Register: Frazer v Walker [1967] 1 AC 569, at 585-586; State Bank of New South Wales v Berowra Waters Holdings Pty Ltd (1986) 4 NSWLR 398, at 403-404, per Needham J (a decision on s 12(1)(d) of the Real Property Act 1900 (NSW)); see generally G W Hinde, “Indefeasibility of Title Since Frazer v Walker”in Hinde (ed), The New Zealand Torrens System Centennial Essays (1971), at 52-67; Woodman and Nettle, The Torrens System in NSW, pars 12.80 ff.

132               The threshold question is whether the registration of the Territory as the proprietor of PPL 1069 was attended by an error such as would justify the Registrar-General exercising the powers conferred by s 220(4) of the Real Property Act.  It will be recalled that the declaration of a perpetual pastoral lease under s 130(2) of the Pastoral Land Act was made by the Minister on 2 March 1993.  The effect of the declaration was that, as from 1 April 1993, PL 759 was “for all purposes [to] be taken to be a perpetual pastoral lease as if granted as such under [the Pastoral Land Act]”.  The legal and equitable rights of the Bank, as the mortgagee in possession, were preserved by s 132 of the Pastoral Land Act.  It is clear that the Bank was aware prior to the declaration of what the correspondence describes as the “statutory conversion to a Perpetual Pastoral Lease” since it was notified of the process and consented to the exclusion of certain assets from the lease when converted to a perpetual pastoral lease.

133               The transfer from the Bank to the Territory was executed on 6 July 1993.  By that time, the Territory was also well aware of the conversion of PL 759 to PPL 1069.  Quite apart from any knowledge attributable to the Territory by reason of the involvement of the Department of Lands and Housing and Local Government in the process, the Department specifically notified the Solicitor for the Northern Territory on 15 June 1993 that PL 759 had been “converted to perpetual title (PPL 1069) by statutory conversion” as from 1 April 1993.  For reasons not explained in the evidence, the transfer of 6 July 1993 referred to the tenure of the land being transferred as “Pastoral Lease 759” rather than “Perpetual Pastoral Lease 1069”.  The land subject to the transfer was described by reference to Volume and Folio number, location and parcel.  Those references were correct, subject to the qualification that some strips of land had been excised from PPL 1069 by the declaration of 2 March 1993.

134               It may be that a reference to PPL 1069 was omitted from the transfer because the view was taken that the only relevant registered interest as at 6 July 1993 was the Galvins’ registered title as proprietors of PL 759 (subject to the registered mortgage in favour of the Bank).  Whatever the reason, it is quite clear that what the Bank intended to transfer and what the Territory, through its representatives, intended to receive by way of transfer was title to PPL 1069.  What was described in the transfer, under the heading “Tenure”, was a pastoral lease which, by statute, was for all purposes to be taken as a perpetual pastoral lease granted under the Pastoral Land Act.

135               By the time the Bank’s transfer to the Territory was registered (9.20 am on 21 July 1993), the declaration of PPL 1069 had been registered pursuant to s 113 of the Real Property Act.  The Registrar-General took the transfer from the Bank to the Territory as intended to convey the only extant pastoral lease over the land described by Volume and Folio number, location and parcel, namely PPL 1069.  By registering the Territory as the proprietor of PPL 1069, the Registrar-General acted in accordance with the obvious intention of the parties to the transfer and utilised information concerning the “statutory conversion” that was known to him by reason of his duty to administer the Real Property Act.  PPL 1069 was transferable in the same way and to the same extent as PL 759.

136               The Registrar-General, following lodgment of the transfer executed on 6 July 1993, might have issued a requisition to the parties requiring them to substitute or add a reference to PPL 1069.  The fact that the Registrar-General did not take that course does not mean the transfer was registered in error.  The Bank had power as the mortgagee exercising its power of sale to transfer PPL 1069 to the Territory.  Both parties to the transfer intended that the Territory should become registered as proprietor of PPL 1069.  There is nothing to suggest that the Registrar-General was under any misapprehension as to the course he was adopting.  There was no error such as would enliven the power in s 220(4) of the Real Property Act.

137               For similar reasons, there was no relevant error in registration of the transfer of PPL 1069 from the Territory to the Land Corporation.

Minister’s Consent

138               At the heel of the hunt, the applicants submitted that no application had ever been made by the Territory pursuant to s 68(1) of the Pastoral Land Act for the Minister’s consent to the transfer of the pastoral lease to the Land Corporation and that any purported transfer by the Territory to the Land Corporation was therefore invalid.  This submission, which took the form of an undeveloped assertion, apparently rests on the fact that the Land Corporation (and not the Territory) made a written request for the Minister’s consent to the transfer of PPL 1069.  The written request was made on 22 June 1993 and the Minister’s delegate gave his consent on 24 June 1993.

139               It is true that s 68(1) of the Pastoral Land Act provides that an application for consent to transfer a pastoral lease shall be made in writing by the lessee.  There may be a factual question as to who was the lessee of PPL 1069 on 22 June 1993, for the purposes of s 68(1) of the Pastoral Land Act.  In any event, there is no warrant for reading s 68(1) of the Pastoral Land Act as invalidating a consent given by the Minister’s delegate to the proposed transfer merely because the written request was made by the proposed transferee rather than the current lessee.  The consent was given to precisely the transfer that ultimately was executed and registered.

Conclusion

140               In my opinion, upon registration of the Territory as proprietor of PPL 1069, it acquired an indefeasible title to PPL 1069.  For the reasons given by French J, I agree that there was no impediment to the Land Corporation taking and registering a transfer of PPL 1069 from the Territory.  Since the Territory had an indefeasible title to PPL 1069, the Land Corporation’s status as a volunteer is immaterial.  It acquired a good title to PPL 1069 upon registration of the transfer from the Territory.  It follows that the Commissioner was correct to conclude that he had no jurisdiction to perform in relation to the application.  The application should be dismissed with costs. 

141               I should add that I agree with French J, for the reasons his Honour gives, that the applicant’s motion to amend the statement of claim should be dismissed.

I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville.

Associate:

Dated:              17 December 1999

Counsel for the Applicants:	Mr J Basten QC with Mr N J Williams
Solicitor for the Applicants:	Mr R Levy
Solicitor for the First Respondent:	Australian Government Solicitor
Counsel for the Second Respondent:	Mr G Hiley QC with Mr T Anderson
Solicitor for the Second Respondent: Counsel for the Third Respondent: Solicitor for the Third Respondent:	Clayton Utz Mr T Pauling QC SG with Ms R Webb Solicitor for the Northern Territory
Date of Hearing:	1 and 2 September 1999
Date of Judgment:	17 December 1999