Borserio v Minister for Lands of NSW [1955] HCA 48; (1955) 93 CLR 518 (24 August 1955)

HIGH COURT OF AUSTRALIA

BORSERIO v. MINISTER FOR LANDS OF N.S.W. [1955] HCA 48; (1955) 93 CLR 518

Crown Lands

High Court of Australia
McTiernan(1), Williams(1), Fullagar(1), Kitto(1) and Taylor(1) JJ.

CATCHWORDS

Crown Lands - Crown Lease - Mortgage - Transfer - Consent of Minister - Conditional purchase - Conversion - Application - Reservation from sale - Local Land Board - Hearing of application - Lease transferred - Holder - Owner - Status - "Made in good faith" - Stated case - Land and Valuation Court Act 1921-1940, s. 17 - Crown Lands Consolidation Act 1913, ss. 29, 154, 184.

HEARING

Sydney, 1955, August 23, 24. 24:8:1955
APPEAL from the Supreme Court of New South Wales.

DECISION

The following judgment of the COURT was delivered by McTIERNAN J: This is an appeal from a judgment of the Full Court of the Supreme Court of New South Wales, given upon a case stated by the Land and Valuation Court. (at p524)

2. The case stated concerned an application which the present appellant had instituted for the conversion of a Crown lease into a conditional purchase, under s. 184 of the Crown Lands Consolidation Act 1913 (N.S.W.), as amended. It is provided by sub-s. (1) of that section that "Upon application as prescribed the holder or the owner (subject to mortgage) of any settlement lease or Crown lease which is not liable to forfeiture may convert such lease into a conditional purchase . . ." The sub-section goes on to make a number of provisions, in lettered paragraphs, to apply to any such application. We need mention only par. (f), which provides that upon confirmation by the local land board the conversion shall be deemed to have taken effect as from the date of application for conversion. (at p524)

3. The appellant lodged an application for conversion of his Crown lease into a conditional purchase on 17th July 1951. At that time he was recorded in the books of the Lands Department as the holder of the Crown lease; and the books, apparently through some departure from the usual practice, also showed that the Bank of New South Wales was the mortgagee of the holding. Even if it were considered that because of this entry in the books the appellant was not the holder of the Crown lease within the meaning of s. 184, it would nevertheless follow that he was the owner subject to mortgage. It may therefore be taken that he was competent to lodge the application for conversion. He had, it is true, already contracted with one Livermore to sell the Crown lease to him, but we shall assume without deciding that the existence of that contract created no obstacle to the application. Before the application was dealt with by the local land board, however, the appellant transferred the lease to Livermore, and on 17th August 1951, the transfer was registered in the books of the Lands Department. In the meantime, namely on 20th July 1951, the land comprised in the Crown lease became reserved from sale, and by reason of s. 188 it was not thereafter convertible into a conditional purchase unless and until the reservation should be revoked: see Hawkins v. Minister for Lands [1949] HCA 21; (1949) 78 CLR 479 . This has not happened, and consequently Livermore is not entitled at present, and may never become entitled, to make an application of his own for conversion. It has been assumed, however, that the appellant's application, having been instituted before the reservation was made, is unaffected by the reservation, and we are content, without expressing any opinion upon it, to accept this assumption for the purposes of the appeal. (at p525)

4. Before the local land board, several questions arose as to the right of the appellant to have his application granted by the local land board, and these questions were submitted to the Land and Valuation Court for decision. In that court, sugerman J. held that the application could not be proceeded with, because the appellant had ceased to be either the holder of the Crown lease or the owner of it subject to mortgage. His Honour stated a case for the opinion of the Supreme Court on that point and others, and the Supreme Court affirmed his decision. It should be said that Sugerman J. had also held that the application, if incompetent, could not be rendered competent by an amendment adding Livermore as an applicant, and that his Honour's decision in that respect was not attacked in the Supreme Court. (at p525)

5. The argument presented in support of the challenge now offered to the Supreme Court's decision has been, in effect, that s. 184 gives a holder, or an owner subject to mortgage, of a Crown lease which is not liable to forfeiture and which comprises land which has not been reserved for sale, an option to convert it into a conditional purchase; and that the option is exercised by the lodging of an application in the prescribed manner, whereupon the applicant acquires an absolute vested right to have the conversion confirmed and thus made effective retrospectively to the date of the lodgment of the application - a right which is not divested from him by his ceasing, before confirmation, to be the holder of the Crown lease or the owner of it subject to mortgage. (at p525)

6. It is true that s. 184 gives a right to convert if in fact the Crown lease is not liable to forfeiture and the land comprised in it is not reserved from sale. But it is a right to convert "upon application as prescribed". Paragraph (f) makes it clear that there is no conversion until the local land board confirms the application, though the conversion which then takes effect is retrospective. Therefore it is not the lodging of the application, but its confirmation, which brings about the conversion: Hawkins v. Minister for Lands (1949) 78 CLR, at pp 487, 488, 492, 499 ; Re Hawkins (1948) 49 SR (NSW), at p 123; 65 WN 270 . From this it seems necessarily to follow that when the section says that the conversion may be made by the holder or owner subject to mortgage "upon application" it means upon an application being made, that is to say completely made, not only initiated but carried through to the point of confirmation. (at p526)

7. If this be so, then an applicant must possess his qualification as holder, or as owner subject to mortgage, not only when he becomes an applicant, but continuously until confirmation is obtained. (at p526)

8. The construction for which the appellant contends would produce strange results. It would mean, in the present case for example, that the appellant could insist upon converting the Crown lease into a conditional purchase without Livermore's concurrence, thereby producing no benefit to himself but involving Livermore in liabilities which he may not wish to assume. Moreover it would mean, in the case of an application to convert a settlement lease, that par. (b) of s. 184 (1) would bring about an incredible result. That paragraph provides for dividing the area of a settlement lease in certain cases, converting part into an original conditional purchase and the remainder into a conditional lease, by reference to the question whether the land comprised in the settlement lease, together with certain other lands held by the applicant for conversion, would substantially exceed a home maintenance area. If the appellant's argument is correct, in a case in which the facts resembled those of the present case except that the holding to be converted was a settlement lease instead of a Crown lease, the paragraph would have to be applied by considering, not whether the lands held by the person who would become the holder of the converted holdings would exceed a home maintenance area, but the completely irrelevant question whether the lands held by the applicant, a person no longer interested in the land, would exceed such an area. This simply cannot be right. (at p526)

9. In our opinion when the appellant transferred his Crown lease to Livermore his application for conversion ceased. (at p526)

10. In the Supreme Court the only questions answered were those numbered (2) and (6). Question (1) was not answered, but should be stated. These three questions were: -

"(1) Whether on 17th July 1951 the applicant was, in the
events which had happened competent to make the said
application: (2) if so, whether in the events which have
happened there is now any subsisting application which is
capable of confirmation: (6) whether having regard to the
answers to questions (1) to (5) both inclusive above the
said application should now be confirmed".
Questions (2) and (6) were answered: -
when the Local Land Board sat to make its determination but that application was incapable of confirmation.

Question Number Six (6): No." (at p527)

11. In our opinion the answer to both of these questions should be "No" and, subject to this variation of the answer given by the Supreme Court to question (2), the appeal should be dismissed with costs. (at p527)

ORDER

The answer to question Number (2) should be varied to read "No". Subject to that variation of the answer given by the Supreme Court to question (2), appeal dismissed with costs.