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THE COMMONWEALTH V SOUTH EAST QUEENSLAND ABORIGINAL CORPORATION FOR LEGAL SERVICES
Supreme Court at Brisbane (Muir J)
22 April 2005
Statutes — acts of parliament — interpretation — function of court — conveyancing — relationship of vendor and purchaser — purchaser’s lien — constitutional law — operation and effect of the Australian Constitution — the races power (Australian Constitution s 51 xxiv) — the incidental power (Australian Constitution s 51 xxxix) — discrimination law — Commonwealth provisions
On 27 June 1994, the original applicant in these proceedings, the Aboriginal and Torres Strait Islander Commission (‘ATSIC’), made a grant of $480 000 to the first respondent, South East Queensland Aboriginal Corporation for Legal Services, to enable it to purchase land.
The corporation had contracted to purchase the land prior to receiving the grant money but the contract was conditional on its receiving sufficient money from ATSIC to enable it to complete the purchase. Settlement under the contract took place in early July 1994, after ATSIC paid the grant money to the corporation. The grant was made pursuant to s 15 of the Aboriginal and Torres Strait islander Commission Act 1989 (Cth) (‘the Act’), which then stated that the Commission ‘may, on such terms and conditions as it determines, make grants of money to Aboriginal or Torres Strait Islander corporations for the acquisition of interests in … land’.
Section 21 of the Act set out a restriction on the right to dispose of property. It provided:
(1) This section applies where a body … has acquired an interest in land under subsection 14(1) or as a result of a grant under section 15 …
(2) The body shall not dispose of the interest without the written consent of the Commission.
(3) If the body purports to dispose of the interest without the written consent of the Commission, the purported disposition is of no effect.
The grant was made, and accepted, on the basis of certain terms and conditions. Clause 3 of those conditions provided:
3.1 Title to assets acquired by the Grantee for the Approved Project will vest in the Grantee or such other organisation as determined in writing by the Commission. The asset acquired may be transferred to the Commission on any breach.
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3.4 The Grantee acknowledges that written approval by the Commission must be obtained prior to the disposal of any interest in land or other real property.
On 13 August 2004, the corporation, without obtaining ATSIC’s written consent, entered into an agreement in writing with the second respondent, John Vernon, for the sale and purchase of the land. The third respondent, Australia and New Zealand Banking Group Limited, financed the second respondent’s purchase. Settlement under the agreement took place on 13 October 2004.
The applicant (the Commonwealth) lodged a caveat on the title before lodgement by the bank of the memorandum of transfer. The bank and the second defendant counterclaimed for removal of the caveat. The corporation and the bank contended that as s 21 in its original form was repealed on 1 July 1994, and as the corporation did not acquire absolute interest in the land until after that date, no obligation ever arose for the corporation to obtain ATSIC’s consent.
1. A declaration that the purported disposal by the first respondent to the second respondent of the first respondent’s interest in the land is of no effect by reason of s 21(5) of the Aboriginal and Torres Strait Islander Commission Act 1989 (Cth): [95].
2. Statutory interpretation is not merely a linguistic or semantic exercise. The context of the words used and the purpose of the statutory provisions must be borne in mind: [38], Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 72 ALJR 841 referred to.
3. The expression ‘interest in land’ in s 21(1)(a) encompasses an absolute estate in fee simple as well as lesser estates or interests. The corporation acquired the land prior to 1 July 1994 and it is the land which is the subject of the purported disposition: [40].
4. There could be no rational explanation for exempting land acquired as a result of a grant under s 15 of the Act from the application of s 21 merely because the acquisition of the land had not been finalised before 1 July 1994: [45].
5. If there is a gap in the legislation, it has arisen inadvertently. It is appropriate to fill it in order to implement its legislative purpose: [43], [46]–[48], Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd (1971) AC 850, Saraswati v The Queen [1991] HCA 21; (1991) 172 CLR 1 discussed.
6. Section 21(2) does not prevent the existence and operation of an equitable lien in the current circumstances: [63].
7. Section 21(5) of the Act does fall within the powers set out in s 51(xxvi) and s 51(xxxix) of the Australian Constitution. Aboriginal and Torres Strait Islander people are not disadvantaged or discriminated against by the operation of s 15 of the Act. A grant under s 15, made pursuant to s 21, does not directly or indirectly deprive the grantee of anything: [83].
8. The restriction imposed by s 21 applies only in the limited circumstances that section prescribes. It is not based on the race of the person who has title to the property, but simply on the fact that the property was acquired by the use of public moneys provided by ATSIC. Therefore, the obligation to obtain consent under s 21 of the Act is not abrogated by the provisions of s 10(1) of the Racial Discrimination Act 1975 (Cth): [87].
1. The original applicant in these proceedings was the Aboriginal and Torres Strait Islander Commission (‘ATSIC’). In its statement of claim filed 21 January 2005, it claimed a declaration that the purported disposal by the first respondent to the second respondent of the first respondent’s interest in a certain parcel of land was of no effect by reason of s 21(5) of the Aboriginal and Torres Strait Islander Commission Act 1989 (Cth) (‘the Act’).
2. The first respondent, South East Queensland Aboriginal Corporation for Legal Services, is an Aboriginal Council incorporated pursuant to the Aboriginal Councils Association Act 1976 [(Cth)]. The second respondent, John Vernon, entered into an agreement with the first respondent for the purchase of the land. The third respondent, Australia and New Zealand Banking Group Limited, financed the second respondent’s purchase.
3. Settlement under the agreement took place on 13 October 2004 but before lodgement by the bank of the memorandum of transfer, the applicant lodged a caveat on the title. The bank and the second defendant counterclaim for removal of the caveat.
4. ATSIC was abolished by the Aboriginal and Torres Strait Islander Commission Amendment Act 2005 [(Cth)] (‘the Abolition Act’) and its assets and rights were vested in the Commonwealth of Australia. … On the hearing of the application, leave was given to substitute the Commonwealth of Australia for ATSIC as the applicant. The second respondent did not appear.
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22. The Commonwealth relies on s 21 of the Act. The evidence establishes that the land was acquired by the corporation as the result of a grant made by ATSIC pursuant to s 15 of the Act. It is contended that: s 21(1)(a) of the Act thus applies; the written consent of ATSIC to the sale was not obtained and that, by operation of s 21(3), any purported disposition of the land is of no effect. This admirably simple case, however, was spoilt by the respondents’ reliance on amendments made to the Act which took effect on 1 July 1994.
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28. The grant was made on 27 June 1994 and the land was acquired pursuant to a contract for sale and purchase dated 21 April 1994. It was a term of the contract that the corporation receive approval for a loan from ATSIC in an amount sufficient to complete the contract by 18 April 1994. It may be inferred that the time for completion was extended. The transfer from the vendor to the corporation is dated 5 July 1994 and it may be inferred also that settlement under the contract took place on or after that date.
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30. Regrettably, the evidence surrounding the corporation’s acquisition of the land and the making by ATSIC of a grant for that purpose is sketchy.
31. On the balance of probabilities, by 1 July 1994, the contract under which the corporation purchased the land was unconditional and the vendor had an obligation, in consideration of payment by the corporation of the purchase price, to convey unencumbered title. The corporation had thus ‘acquired an [equitable] interest in (the) land’ [Stern v McArthur (1998) 165 CLR 498, 521–3]. … This, however, was not sufficient, of itself, to bring the transaction within section 21. In order to achieve that, it was necessary for the interest to be acquired ‘as a result of a grant under section 15’.
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33. Once the grant was made on 27 June 1994 it became possible to conclude that the corporation had acquired an interest in the land as a result of the grant. The contract was entered into in expectation of the grant and was conditional upon it being made. In ascertaining the application of s 21, it is appropriate in my view that regard be had to the substance of the subject transaction … and the separate steps involved in it should not be analysed in isolation. By the date of the repeal of s 15 and the amendment of s 21, an equitable interest in the land had been obtained. That interest, by virtue of the fact that the contract was conditional upon ATSIC’s provision of the purchase price, was not identical to the equitable interest in the land held by the corporation at the date of the contract of purchase and prior to the time when the contract became unconditional.
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38. The following observations in the majority judgment in Project Blue Sky Inc v Australian Broadcasting Authority [(1998) [1998] HCA 28; 72 ALJR 841] … make the point that statutory interpretation is not merely a linguistic or semantic exercise and that the context of the words used and the purpose of the statutory provisions must be borne in mind … :
The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined ‘by reference to the language of the instrument viewed as a whole’.
In Commissioner for Railways (NSW) v Agalianos [1955] HCA 27; (1955) 92 CLR 390, 397 Dixon CJ pointed out that ‘the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning that the logic with which it is constructed’. Thus, the process of construction must always begin by examining the context of the provision that is being construed’. (References not provided)
Some of these principles are given legislative force by s 15AA of the Acts Interpretation Act which provides:
In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.
39. It is difficult to escape the conclusion that in enacting s 21, the Parliament’s concern was to fetter grantees’ rights to dispose of property acquired with granted moneys and that the precise nature of the interest concerned was of no particular relevance. Nor does it seem likely that the restrictions in s 21 were intended not to apply where there was, in substance, a disposition of a grant acquired interest, but as a matter of legal theory or principle, there was no precise legal correspondence between that which was acquired and that which was disposed of.
40. The expression ‘interest in land’ in s 21(1)(a) plainly encompasses an absolute estate in fee simple as well as lesser estates or interests. In my view, for the purposes of the section, the corporation acquired the land prior to 1 July 1994 and it is the land which is the subject of its purported disposition. That is the substance of the transactions in which the corporation is and was engaged. That conclusion is sufficient to decide this point in favour of the Commonwealth but there are other ways of considering the problem which suggest the same conclusion.
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45. The legislation … contemplated that there be no change to the restrictions on the disposition of grant acquired interests. And there could be no rational explanation, in my view, for exempting from the application of s 21 land acquired as a result of a grant under s 15 of the Act or s 14(a) of the Act as amended merely because the grant had been made under s 15 but the acquisition had not been finalised prior to 1 July 1994.
46. If there is a gap in the legislation it has arisen as a result of inadvertence and it is appropriate to fill it in order to implement the legislative purpose. …
47. In Saraswati v The Queen [(1991) 172 CLR 297, 321] … McHugh J, after referring to the passage from the reasons of Mason and Wilson JJ in Cooper Brooks (Wollongong) Pty Ltd v Federal Commissioner of Taxation [(1981) [1981] HCA 26; 147 CLR 297, 321] … quoted above, said:
Moreover, once a court concludes that the literal or grammatical meaning of a provision does not conform to the legislative purpose as ascertained from the statute as a whole including the policy which may be discerned from its provisions, it is entitled to give effect to that purpose by addition to, omission from, or clarification of, the particular provision …
48. As authority for that proposition his Honour also cited Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [[1971] AC 850]. …
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62. It is well established that a purchaser of land who has paid part of the purchase price to the vendor has a lien on the land for repayment of such moneys and interest if the agreement for sale and purchase is terminated through no fault of the purchaser. The lien extends to interest paid on the unpaid balance of the purchase money and the costs of an action for specific performance. … The lien is independent of possession of the land or title deeds and is in fact an equitable charge on the land. … A lender who has advanced the purchase price is entitled to a lien by subrogation …
63. The words ‘dispose’ and ‘disposition’ are words of extremely wide meaning capable of encompassing a great variety of dealings with property. … For s 21(2) to apply, however, it is the grantee which must make the disposition; its language is not apt to catch a disposition which arises by involuntary operation of law. Nor would one readily conclude that s 21(2) manifests an intention to prohibit grantees from mortgaging or charging subject property without consent. Elsewhere in the Act, where it is intended to prohibit the charging of an asset, the prohibition is expressed. … I find that s 21(2) does not prevent the coming into existence and operation of an equitable lien in the circumstances under consideration.
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70. I find it unnecessary … to go into the factual basis for the bank’s estoppel case in any great length because of my conclusion that estoppel cannot be relied on by the bank to prevent the operation of s 21 of the Act. The applicable principle is that there can be no estoppel against the operation of a statute. …
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79. The corporation’s argument is as follows. Although s 51(xxvi) of the Constitution confers sufficient power on the Commonwealth Parliament to enact the Act, … s 21(5) of the Act is not within the incidental power, s 51(xxxix).
80. Section 51(xxvi) of the Constitution empowers the Commonwealth Parliament to make special laws which it deems necessary to make for the benefit of people of the Aboriginal race which do not adversely and detrimentally discriminate against people on the ground of their race. … Section 21(5), however, ‘effects an immunity of a kind that infringes the implied constitutional limitation of the s 51(xxvi) power, which is a power to make special laws for the benefit of Aboriginal people or at least not to adversely discriminate against Aboriginal people’. There is adverse discrimination because ‘Aboriginal persons and Torres Strait Islanders would be disadvantaged by being deprived, either directly or indirectly, of the benefits that are afforded people of another race’.
81. It is said that aspects of s 21(5) which assist in showing that it falls outside s 21(xxvi) are that it ‘purportedly invalidates a disposal of land in perpetuity’ and adds ‘a further exception to the well established principles of indefeasibility of title’.
82. Section 21 relevantly invalidates a disposition of property acquired by the disposer with a grant from ATSIC which, when made, was subject to a statutory restraint on the disposition of the land without ATSIC’s consent. There is no temporal limit on the duration of the restraint but no support was offered for the proposition that such a restraint on alienation was beyond the power of the Commonwealth Parliament. I am satisfied that it is not.
83. I am unable to accept the proposition that persons of Aboriginal and/or Torres Strait Islander extraction are disadvantaged or discriminated against by legislation which provides for their advancement but which, in the case of a grant under s 15 of the Act, arguably, limits the value of the benefits conferred by imposing a restriction on the grantee’s right to dispose of grant acquired property. The relevant statutory provisions and their effect cannot be considered separately from one another. … When a grant under s 15 was made, it was made subject to the requirements of s 21. The fact that s 21 applies does not directly or indirectly deprive the grantee of anything, let alone a right enjoyed by ‘persons of another race, colour or nationality or ethnic origin’. The restriction is a characteristic of the grant.
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86. It was argued that the obligation to obtain a consent under s 21 of the Act was abrogated by the provisions of s 10(1) of the Racial Discrimination Act 1975 (Cth). …
87. It was contended that by operation of s 10(1) ‘the Aboriginal people will enjoy the right to the transfer and registration of the their interest in land to the same extent as persons of that other race, colour or national or ethnic origin’. The point seems to be that citizens generally have a right to dispose of property and the Act by imposing a fetter on that right causes ‘Aboriginal people’ to enjoy a right to alienation ‘to a more limited extent’ than such other persons. But the restriction imposed by s 21 applies only in the limited circumstances there prescribed. It is not based on the race of the person who has title to the property but is based simply on the fact that the property was acquired with public moneys provided by ATSIC. As with the previous point, the corporation’s argument seeks to focus on one aspect of the legislation to the exclusion of other relevant aspects. That approach is impermissible …
95. For the above reasons I propose to make declarations and orders to the following effect:
1. A declaration in terms of paragraph 1 of the prayer for relief in the statement of claim.
2. A declaration that the second defendant has a lien over the land described in paragraph 4 of the statement of claim securing the payment to him of purchase moneys of $466 734, together with the amount of interest at the rate of 7.5 per cent per annum paid or payable on the balance outstanding from time to time of that sum under the mortgage over the land granted by the second defendant in favour of the third defendant.
3. A declaration that the third defendant is entitled by subrogation to the rights and benefits of the second defendant under his lien.
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URL: http://www.austlii.edu.au/au/journals/AUIndigLawRpr/2005/39.html