Re Director-General of Social Security v Roger John Townsend and Wendy Townsend [1984] FCA 359; 57 ALR 220 (23 November 1984)

FEDERAL COURT OF AUSTRALIA

Re: DIRECTOR-GENERAL OF SOCIAL SECURITY
And: ROGER JOHN TOWNSEND AND WENDY TOWNSEND
No. TG 5 of 1984
Administrative Law
[1984] FCA 359; 57 ALR 220

COURT

IN THE FEDERAL COURT OF AUSTRALIA
TASMANIA DISTRICT REGISTRY
GENERAL DIVISION
Bowen C.J.
Northrop J.
Everett J.

CATCHWORDS

Administrative Law - Appeal from Administrative Appeals Tribunal - Grant under Home Deposit Assistance Act 1982 - Purchase of approved interest in land - purchase by tenant in common of interests of other co-tenants.

Administrative Appeals Tribunal Act 1975 s.44.

Home Deposit Assistance Act 1982 ss.3,4,11,15.

HEARING

HOBART
23:11:1984

ORDER

1. The appeal be dismissed.
2. The applicant pay the respondents' costs of the appeal.

DECISION

This is an appeal from a decision of a Deputy President of the Administrative Appeals Tribunal raising a question of law in respect of the interpretation of the expression "approved interest" in the Home Deposit Assistance Act 1982 ("the Act").

2. The facts were not in dispute. On 21 November 1980 Roger John Townsend, the firstnamed respondent, his sister and two brothers became registered proprietors as tenants in common in equal shares of a property at Cradoc, in Southern Tasmania ("the property"), which they inherited from their deceased father. The property was comprised in Certificate of Title Volume 2160 Folio 25. By a contract of sale dated 18 May 1982 the respondents, Roger John Townsend and Wendy Townsend, who were husband and wife, agreed to purchase the property for $21,000 from Roger John Townsend's sister and his two brothers. A memorandum of transfer was executed by the vendors and by Roger John Townsend. The transferees were the respondents who were registered on 22 June 1982 as joint proprietors of the land described in the Certificate of Title to which reference has been made.

3. The respondents applied on 26 July 1982 for a home deposit assistance grant in respect of the dwelling on the property in accordance with sub-s.16(1) of the Act. At the time of the application the Act was administered by the Department of Social Security. On 3 September 1982 a delegate in Tasmania of the Director-General of Social Security advised the respondents that "on the basis of the information disclosed in the application and supporting documents, the legislation does not permit the payment of a grant in your case". On 8 September 1982 solicitors for the respondents wrote to the delegate of the Director-General requesting that the decision be reconsidered (sub-s.47(1) of the Act). However, the delegate of the Director-General affirmed the decision on 11 March 1983.

4. Pursuant to sub-s.29(1) of the Administrative Appeals Tribunal Act 1975, the respondents applied to the Tribunal for a review of that decision. On 13 April 1984, a Deputy President of the Tribunal set aside the decision under review and, in substitution for it, decided that the respondents are entitled to a grant in accordance with the provisions of the Act. This appeal is from that decision.

5. Subject to the interpretation placed by the delegate of the Director-General, and maintained by counsel for the Director-General, on the words "the purchase of a dwelling" in sub-s.15(1) of th Act, it has not been disputed that each of the respondents is otherwise a "prescribed person", as defined in sub-s.4(1), in relation to the dwelling on the property by virtue of sub-s.15(1), which provides:

"15(1) Where, on or after 18 March 1982, a person (in

this section referred to as the "home acquirer") has,
or 2 or more persons (in this section referred to as
the "home acquirers") together have -

(a) entered into a contract for the purchase of a
dwelling situated in Australia;

(b) .....

(c) .....

then, subject to sub-section (2) and section 5, the
home acquirer or each of the home acquirers, as the
case may be, is, .... for the purposes of this Act, a
prescribed person in relation to the dwelling."

6. (The qualifications in sub-s.(2) and s.5 are not relevant).

7. Sub-section 15(3) is in these terms:

"15(3) Where -

(a) a person is a prescribed person in relation to a
dwelling; and

(b) subject to sub-section (5), a grant under a
prescribed Act or under this Act has not been
made to the prescribed person, either alone or
jointly with another person,

the prescribed person is, for the purposes of section
16, a person to whom this sub-section applies."

8. Sub-section 16(1) provides:

"16(1) Where the person, or each person, who is a
prescribed person in relation to a dwelling is a person
to whom sub-section 15(3) applies in relation to the
dwelling, an application for a grant in respect of the
dwelling may be made in accordance with this section."

9. The essential issue raised by the appeal is whether or not, having regard to the whole Act, the contract of sale dated 18 May 1982 was "for the purchase of a dwelling" (sub-s.15(1)).

10. The other relevant provisions are expressed in ss.4 and 11, which, so far as is material, provide:

"4(1) In this Act, unless the contrary intention
appears-

"approved interest: means -

(a) An estate in fee simple;
....."

11. The terms of s.11, so far as relevant, are:

"11(1) A reference in this Act (other than sections 26
and 27) to purchase, or to ownership, in relation to
land or an undivided share in land, shall be read as a
reference to purchase or ownership, as the case may be,
otherwise than as trustee, of -

(a) whether or not the dwelling is a dwelling of a
kind referred to in paragraph (b) - the land on
which the dwelling is, or is to be, erected;

....."

12. The expressed object of the Act is to asist persons to purchase or build their own homes. More specifically, s.3 provides.

"3. The objects of this Act are to encourage and assist
persons to purchase or build their own homes and to
encourage persons to save for the purpose of purchasing
or building their own homes, and, in the construction
and the administration of this Act, regard shall be had
to those objects."

13. In Secretary, Department of Housing and Construction v Wildman (judgment given on 23 November 1984), this Court stated:

"In having regard to those objects, the Secretary must
take them into account and give weight to them as a
fundamental element in making this determination under
sub-section 15(6); see R v Hunt; Ex Parte Sean
Investments Pty. Ltd. (1979) 25 ALR 559 per Evatt
and Northrop JJ at pp 578-9 and Wright v McLeod (1983)
51 A.L.R. 483 per Bowen C.J. at p.489."

14. The submission advanced to the Deputy President, and repeated to this Court, was that because Roger John Townsend had been, before the date of the contract of 18 May 1982, a tenant in common of the property in equal shares with his sister and two brothers, he had not entered into "a contract for the purchase of a dwelling" (sub-s.15(1) of the Act).

15. The argument of counsel for the Director-General was that, although it was not disputed that the respondents, from about 27 May 1982, had owned an estate in fee simple in the subject land, it did not follow that they entered into a contract for the purchase of an estate in fee simple on 18 May 1982. Rather, it was argued, they contracted to purchase undivided shares in an estate in fee simple, because that was all that the three vendors owned and, therefore, all that they culd lawfully agree to sell.

16. The Court does not accept such an interpretation of the relevant statutory provisions. To do so would negate the expressed objects of a statute designed to encourage persons to purchase their own homes, in accordance generally with a policy which was given statutory expression in the Home Savings Grant Act 1964.

17. On the undisputed facts, the Court considers that the respondents entered into a "contract for the purchase of a dwelling" (sub-s.15(1)). The contract was in proper form. By virtue of para.11(2)(a) of the Act the reference in sub-s.15(1) to "purchase of a dwelling" must be read as a reference to purchase of the land on which the dwelling was erected. Sub-section 11(1) then required that a reference in the Act to purchase in relation to land or an undivided share in land" shall be read as a reference to "purchase of an approved interest in the land or in the undivided share". The final step in determining the eligibility of the respondents for a grant under the Act is to decide whether or not the contract was in respect of an "approved interest" (sub-s.4(1)). The primary "interest" is therein defined as "an estate in fee simple" (our emphasis). Other paragraphs of the definition specify "interests" which are less than an estate in fee simple, but in two such cases the Secretary of the Department of Housing and Construction must be satisfied that the interest gives "reasonable security of tenure" to the holder of the lesser interest. Those provisions reinforce the expression of the objects of the Act in s.3.

18. At the date of the contract, Roger John Townsend was the owner of one undivided quarter share in the property. He contracted to purchase, jointly with his wife, the three remaining undivided quarter shares. The consequential memorandum of transfer vested an estate in fee simple in the respondents jointly.

19. In the opinion of the Court, the contract was one for the acquisition of an estate in fee simple, both on a literal interpretation of the relevant provisions of the Act and with a proper regard for the fundamental element in the approach prescribed by s.3. In both the contract of sale and the memorandum of transfer there was recognition of the existence of separate interests in the property.

20. The interpretation adopted by the Court is consonant with the practical position under the Tasmanian Torrens system of land registration. Section 15 of the Real Property Act 1886 provided:

"15 In all cases where two or more persons are entitled
as tenants ion common to undivided shares of or in any
land, such persons may receive one certificate for the
entirety or separate certificates for the undivided
shares."

21. The 1886 Act, together with all related statutes, was repealed by the Land Titles Act 1980, which was proclaimed to commence on 1 October 1981. Although the 1980 Act does not contain a separate section in the same form as s.15 of the 1886 Act, the effect of s.15 is preserved by the following provisions of the 1980 Act:

"33(6) The Recorder may, if he deems it convenient to
do so, create a folio of the Register for -

(a) .....

(b) .....

(c) .....

(d) an undivided share in land.

33(8) Except as may otherwise be prescribed, when the
Recorder creates a folio of the Register, he shall in
the prescribed manner prepare a certificate of title to
the same land."

22. Counsel for the Director-General sought to support his argument by reference to the provisions of the Home Savings Grant Act 1964, the Home Savomgs Grant Act 1976 and the First Home Owners Act 1983. The Court does not derive any assistance in determining this appeal from any of those statutes.

23. For completeness, it is recorded that in the course of argument it became apparent that the contract and memorandum of transfer were not formally tendered to the Deputy President, no doubt because there was no dispute in respect of the relevant facts. In order to obviate any difficulty arising from the fact that the Court is exercising original jurisdiction in respect of a question of law, counsel for all parties agreed that office copies of the contract and memorandum of transfer should be tendered as exhibits to enable the Court to exercise its discretion as to what form any orders made by the Court should take. This course was followed with the approval of the Court.

24. The appeal will be dismissed and the decision of the Administrative Appeals Tribunal affirmed. The applicant should pay the respondents' costs of the appeal.