Parramore v Duggan [1995] HCA 21; (1995) 183 CLR 633 (3 November 1995)

HIGH COURT OF AUSTRALIA

COLIN HAROLD PARRAMORE v VALDA FRANCES DUGGAN
F.C. 95/042
Number of pages - 18
[1995] HCA 21; (1995) 183 CLR 633

HIGH COURT OF AUSTRALIA
BRENNAN(1), DEANE(2), DAWSON(3), TOOHEY(4) AND McHUGH(5) JJ

CATCHWORDS

HEARING

CANBERRA, 19 April 1995
3:11:1995

ORDER

1. Appeal allowed with costs.
2. Set aside the order of the Full Court of the Supreme Court of Tasmania

(a) Appeal allowed with costs to be taxed.
(b) Set aside the order of Zeeman J made on 17 August 1993 and in lieu

thereof order:

(i) Answer the question reserved in the special case as follows:
On the basis of the Special Case stated and the pleadings as they stand the

land described in Folio of the Register Volume 4012 Folio 97 is not subject to a right of way (as described in Folio of the Register Volume 3820 Folio 26 or Conveyance dated the 2nd day of May 1925 or otherwise) appurtenant to the land described in Folio of the Register Volume 3820 Folio 26, save and except to the extent that the Plaintiff's claim is based upon long user or upon a grant of easement by a deed now lost made after the 2nd May 1925.

(ii) Plaintiff to pay the defendant's costs to be taxed.
3. Remit the matter to the Supreme Court of Tasmania to determine any

application by the respondent to raise a case based on s 40(3)(e)(ii) of the Land Titles Act 1980 (Tas) or to add the Recorder of Titles as a party and otherwise to hear and determine the matter according to law.

DECISION

BRENNAN J The appellant and respondent are respectively the registered proprietors of estates in fee simple in adjoining parcels of land. The appellant's land was brought under the provisions of the Real Property Act 1862 (Tas) on 10 March 1980 ("the former Act"). The respondent's land was brought under the provisions of the Land Titles Act 1980 (Tas) ("the Act") on 11 April 1983. The appellant's land also is now subject to the Act(1). The respondent claims to be entitled to an easement over the appellant's land in accordance with a memorial entered upon her certificate of title pursuant to s 43 of the former Act. The appellant denies that claim and relies upon his certificate of title which states that the "encumbrances and interests" to which his estate is subject are "nil".

2. The Act and the former Act are the successive Tasmanian Acts which implemented the Torrens system of registration of estates and interests in land in Tasmania. The essential characteristic of the Torrens system is stated by Barwick CJ in Breskvar v Wall(2):

" 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."

A Torrens system statute necessarily contains two key provisions: one, a provision that makes a certificate (or duplicate certificate) of title conclusive proof of the title of the registered proprietor so that no other person can be heard to claim that he or she is the proprietor of the title to which the certificate relates; and, two, a provision that makes that title immune from defeasance by a paramount title. Those requirements are met by ss 39 and 40 of the Act. Section 39 reads:

" (1) A folio of the Register is evidence of the particulars

recorded in the folio.

(2) Except as otherwise provided in this Act, a folio of the

Register is conclusive evidence that -

(a) the person named in the folio as registered proprietor of or as taking an estate or interest in the land described in the folio is entitled to that land for that estate or interest; and

(b) that land has been duly brought under this Act."

3. Section 40 is the provision which makes the title of a registered proprietor of land immune from defeasance by an otherwise paramount title. Sub-sections (1) and (2) of s 40 read as follows:

" (1) For the purposes of this section 'indefeasible', in

relation to the title of a registered proprietor of land, means subject only to such estates and interests as are recorded on the folio of the Register or registered dealing evidencing title to the land.
(2) Subject to subsections (3) and (4), the title of a registered proprietor of land is indefeasible."

4. There is a difference between the terms used to describe the subject of conclusive evidence in s 39(2)(a) and the terms used to describe the subject of indefeasibility in s 40(1) and (2). Section 39(2) relates to the entitlement of a "registered proprietor of or (a person) taking an estate or interest in the land described in the folio". Section 40 confers indefeasibility on "the title of a registered proprietor of land" subject to the "estates and interests ... recorded on the folio ... evidencing title to the land". Indefeasibility necessarily relates to the title to land which might otherwise be defeated. It is erroneous to regard indefeasibility as relating to an interest which merely confers rights in or over the land of another registered proprietor whose title is indefeasible. A registered proprietor of a dominant tenement has an indefeasible title to the land to which the easement is appurtenant but the easement is not indefeasible. Similarly, where the servient tenement is land to which a registered proprietor has title under the Act, that title is indefeasible. Unless the easement is registered on the certificate of that title, or unless the easement falls within one of the exceptions contained in s 40(3), the unencumbered title of the registered proprietor of the servient tenement is not subject to the easement: see s 40(1). In other words, the registered proprietor of land to which an easement is appurtenant has an indefeasible title to that land but not to the easement, so that the easement cannot be enforced unless the certificate of title of the registered proprietor of the servient tenement states that that title is subject to the easement or unless the easement falls within s 40(3)(e) of the Act.

5. In the present case, although the respondent is entitled to claim indefeasibility of title to the dominant tenement and the appellant is entitled to claim indefeasibility of title to the servient tenement, the indefeasibility conferred by s 40 avails only the registered proprietor of the servient tenement. His title is taken free of any easement that is not recorded on the folio of the register evidencing title to his land unless the respondent can bring the case within one of the exceptions contained in s 40(3).

6. I agree with Toohey J, for the reasons which he gives, that the appellant's indefeasible title is unaffected by the "conclusive evidence" provision in s 106 of the Act on which the respondent seeks to rely and that the respondent fails to bring the easement she seeks to enforce within the exception to indefeasibility contained in s 40(3)(e)(i) of the Act. As to the respondent's argument that the case falls within the exception contained in s 40(3)(e)(ii), I agree with what Deane J has written. I am therefore in agreement with an order which gives effect to his Honour's judgment.

DEANE J Both at first instance and in the Full Court of the Supreme Court of Tasmania, this special case was argued and decided on the basis that it gave rise to three questions relating to the construction and effect of the Land Titles Act 1980 (Tas) ("the Act"). One of those questions, that relating to s 40(3)(b) of the Act, was resolved against the respondent in the courts below and has not been raised in this Court. The other two questions, that relating to the construction and effect of s 40(3)(e)(i) and that relating to the effect of s 106(1), are identified in the judgment of Toohey J. I agree with Toohey J that, for the reasons which he gives, they should be answered adversely to the respondent. It is unnecessary that I add anything to what his Honour has written in that regard. There is, however, a further aspect of the appeal in relation to which I wish to make some supplementary comments.

2. In the course of argument in this Court, counsel for the respondent sought to rely upon two related arguments to raise a new case of an "equitable easement" protected by s 40(3)(e)(ii) of the Act. Both arguments were advanced in the context of the proposition that, immediately prior to the appellant's land being brought under the Act, it was subject to the burden of a common law easement appurtenant to the respondent's land. The first argument is that the failure to record the fact that the appellant's land was so burdened was an error which could, after registration, be corrected by the Recorder. The respondent was said to have an equitable right, as against the appellant, to have the error so corrected. That meant, so the argument proceeded, that the respondent's land enjoyed the benefit of an equitable easement which was protected by s 40(3)(e)(ii) of the Act. Alternatively, it was argued on behalf of the respondent that, in circumstances where the easement had existed at common law but by an omission was not recorded on the title when the land was brought under the Act, an equitable easement, protected by s 40(3)(e)(ii), existed by reason of doctrines of unjust enrichment or estoppel.

3. In the context of a dispute between neighbours which would seem to have developed, or to be fast developing, into a potentially ruinous chain of hearings and appeals, I am conscious of the considerations favouring the approach that this Court should entertain and determine those new equitable arguments. I am, however, constrained to conclude that it should not. As has been indicated, those arguments and a case of an equitable easement were not raised in the pleadings or in the course of argument in the courts below. Nor were they foreshadowed on the application for special leave to appeal to this Court or raised by any notice of contention. In so far as the argument of unjust enrichment or equitable estoppel is concerned, senior counsel for the appellant informed the Court notice of it did not "reach" him until 10 pm on the night preceding the hearing of the appeal. In so far as the argument based on error on the face of the record is concerned, it would be desirable, and is arguably essential, that the Recorder be joined as a party to the proceedings before any issue raised by that argument is authoritatively resolved even as between the appellant and the respondent.

4. Most importantly, the special case was clearly not framed to raise the question whether the appellant's land was burdened by an equitable easement which was protected by s 40(3)(e)(ii) of the Act. In particular, the appellant's defence not only denied long user of the alleged "right-of-way" by the respondent or her predecessor in title but expressly raised defences which might preclude a successful claim of equitable easement and which remain unresolved. Thus, the defence alleges acquiescence and consent by the respondent and/or her predecessors in title to acts inconsistent with an easement stretching back more than twenty years before the commencement of the proceedings. Indeed, senior counsel for the appellant indicated that the appellant claimed that he had purchased his land for value in good faith and without notice of the claimed easement and that the appellant "contends that the gate has been locked since he has been the owner of the property; that the shed has been constructed in besser block, which is concrete; that he has used that area for the parking of vehicles and for the establishment of bee hives without any interruption from (the respondent)". None of those factors was conceded by the respondent. Some or all of them might, if established, cumulatively preclude the existence of an equitable easement.

5. In the result, I agree with the orders proposed by Toohey J. However, I would add that it will be a matter for the judge dealing with the matter in the Supreme Court to determine any application by the respondent for leave to take whatever steps are necessary to raise a case based on s 40(3)(e)(ii) and/or to add the Recorder as a party.

DAWSON J I agree with Toohey J and have nothing to add.

TOOHEY J This appeal raises a question as to the consequences under the Torrens system in Tasmania where an easement has been registered on the certificate of title of the dominant tenement but not on the certificate of title of the servient tenement.

2. The question arises in relation to land which, at the time of the creation of the easement, was not under the Torrens system but which was later brought under the system, the dominant tenement before the servient tenement. It is convenient to describe the land by these terms without thereby prejudging the outcome of the appeal.

The background
3. The dispute between the parties came before Zeeman J in the Supreme Court of Tasmania by way of Special Case in which his Honour was asked to determine "as a question of law on the basis of the Special Case stated and the pleadings as they stand" whether the appellant's land is subject to a right of way appurtenant to the respondent's land. Since the Special Case sets out few matters of fact(3) and since the defence challenges a number of assertions in the statement of claim, the Special Case is not a particularly suitable vehicle for resolving the dispute. The Special Case puts to one side any claim by the respondent to an easement based upon long user or lost modern grant. The appellant agrees that if he succeeds in this appeal such a claim must be remitted to the Supreme Court of Tasmania for determination.

4. By an Indenture of Conveyance dated 26 April 1877, land which included the present dominant and servient tenements was conveyed to Alfred Nichols. He devised the land to his daughter Gwendolyn Elsie Nichols who in due course sold various portions. By an Indenture of Mortgage and Conveyance dated 2 May 1925, registered number 16/8671, Miss Nichols granted and conveyed to James Alfred Dransfield lot 1 on plan P13956, the dominant tenement. While the indenture itself is not before this Court, it is apparent from the judgment of Zeeman J that the easement upon which the respondent relies has its origin in the indenture. It conveyed the land together with a right of way, apparently a "roadway", over the land retained by Miss Nichols. By an Indenture of Mortgage made 19 October 1929, registered number 18/1799, Miss Nichols mortgaged the servient tenement to May Eleanor Lilley. The mortgage made no reference to the easement created by conveyance 16/8671, an omission which Zeeman J attributed to an oversight on the part of the draftsman. Miss Nichols defaulted under the mortgage and, in exercise of a power of sale, the personal representative of Miss Lilley conveyed the servient tenement to Frederick Thomas Whelan. The conveyance made no mention of the easement.

5. The history of dealings with the land is further complicated by the fact that one of the appellant's predecessors in title sold lot 2 on plan P13956 to one of the respondent's predecessors in title without any grant of easement. Zeeman J notes:

"The relevance for present purposes is that on the face of it

the folio of the Register relating to the (respondent's) land makes the easement appurtenant to the whole of that land whereas the only grant of the easement was by way of it being appurtenant to lot 1 on plan P13956."

His Honour further observes that, leaving lot 2 aside, all conveyances of the dominant land up until the time it was brought under the Torrens system were expressed in terms of conveying the land together with the benefit of the easement. On the other hand, no conveyance of the servient tenement before that land was brought under the Torrens system by the appellant mentioned the easement.

6. The dominant tenement was the first to be brought under the Torrens system, as described in the folio of the Register vol 3820 fol 26. Pursuant to an application made by a predecessor in title to the respondent to be registered as proprietor of that land, the folio of the Register records an easement in the following terms:

"TOGETHER WITH a full and free and uninterrupted right of way

and passage for the Purchasers their heirs and assigns their tenants and the owners and occupiers for the time being of the land firstly described and their servants and all and every person and persons thereunto authorised by them from time to time and at all times hereafter at his her and their pleasure by day and by night and for all purposes jointly with the other parties now or hereafter entitled thereto to go return pass and repass with or without horses cattle and other animals carts waggons motor vehicles and all other carriages laden or unladen to and from the said land firstly described through over across and upon the roadway shown hereon".

The "roadway" referred to is a roadway shown on a plan annexed to the certificate of title. It is adjacent to part of the respondent's land but forms part of the appellant's land which is described in the folio of the Register vol 4012 fol 97. The appellant is expressed to be the registered proprietor "subject to such encumbrances and interests as are shown in the Second Schedule". The Second Schedule reads "Nil". Although the roadway forms part of the appellant's land, no easement is disclosed by the relevant folio.

The judgments of the courts below
7. The Torrens system in Tasmania is presently governed by the Land Titles Act 1980 ("the Act")(4). Its predecessor, the Real Property Act 1862 ("the former Act"), was in force on 10 March 1980 when the dominant tenement was brought under the Torrens system. On 11 April 1983, when the servient tenement was brought under the system, the Act was in force. Section 173(2) of the Act provides that all lands, estates and interests subject to the former Act "shall be subject to this Act". Only the dominant tenement was subject to the former Act.

8. Zeeman J held that the respondent's dominant tenement had the benefit of the easement described in the relevant folio notwithstanding the absence of any reference to the easement in the appellant's certificate of title. That decision was upheld by the Full Court though its members relied to different degrees on the considerations that led the trial judge to his conclusion. At trial the respondent relied upon three arguments. Only one of these found favour with Zeeman J. Put shortly, the arguments were as follows:

1. Where two or more folios of the Register "subsist for conflicting estates in respect of the same land", s 40(3)(b) of the Act gives priority to the title which was first brought under the Torrens system.

2. Section 106(1) of the Act provides that "a statement in a folio of the Register to the effect that the (land in question) has the benefit of an easement shall be conclusive evidence that the land has that benefit".

3. Section 40 of the Act gives indefeasibility to the title of a registered proprietor, with certain exceptions. One exception, to be found in s 40(3)(e)(i), is "an easement arising by implication or under a statute which would have given rise to a legal interest if the servient land had not been registered land". The provision should be read, so the argument ran, as if the word "or" appeared after "statute", thereby creating three categories of exception. This construction, the respondent argued, would render the title to the servient tenement subject to the easement granted in favour of the dominant tenement in 1925.

9. Zeeman J accepted only the third of these arguments. In the Full Court Cox J accepted the second argument, Wright J the third and Crawford J also the third argument. Thus the judgment of the Full Court in favour of the respondent's claim to a right of way turned on the view of the majority that the title of the appellant was subject to an easement which gave rise to a legal interest when the appellant's land was under the general law and the respondent's easement is therefore protected by s 40(3)(e)(i).

The first argument
10. There was no support in the courts below for the argument based on s 40(3)(b) of the Act nor did the respondent rely upon it in this Court. Clearly the situation here is not one of "conflicting estates in respect of the same land". The respondent has no estate in the appellant's land. An easement over the appellant's land is not an estate in that land. An easement is a "privilege without profit"(5). It relates only to user of land and confers neither seisin nor possession of the land over which the easement subsists. While there may be an inconsistency between the two folios in the Register in the sense that the dominant tenement evidences the existence of an easement and the servient tenement does not, there are no conflicting estates in respect of the same land. The decision of Everett J in Pearce v City of Hobart(6) that an easement may be accorded priority through the operation of s 40(3)(b) should not be followed.

The second argument
11. It is necessary to turn now to s 106 of the Act, in particular the evidentiary effect which sub-s (1) ascribes to the statement in a folio of the Register that the land has the benefit of an easement. Nothing in either sub-s (2) or (3) of the section bears on the present inquiry.

12. Whatever operation is given to s 106(1), it is clear that it must be read in conjunction with other relevant provisions of the Act. Speaking of s 67 of the Transfer of Land Act 1928 (Vic) which required a certificate of title to be received in all courts "as evidence of the particulars therein" and as "conclusive evidence" that the person named as the proprietor of an estate or interest is possessed of that estate or interest, Dixon J said in Clements v Ellis(7):

" In spite of their absolute terms, these provisions(8) do not

mean to give an unqualified finality to the certificate in all circumstances."

His Honour then referred to provisions in the Transfer of Land Act including those which deprived a registered proprietor who had been guilty of fraud of indefeasibility of title and concluded(9) that "sec 67 cannot be understood as more than a general statement to be read subject to other provisions".

13. Section 106 must be read in conjunction with s 40, sub-s (3) of which lists those circumstances in which the title of a registered proprietor is not indefeasible. It must also be read together with s 149(1) of the Act which precludes an action of ejectment or other action for the recovery of registered land against the person registered as proprietor of land but then lists a number of situations, including fraud, to which the prohibition does not apply. Section 106(1) is an evidentiary provision. It prevents a collateral attack upon the existence of an easement to which the title refers. But it does not preclude reliance upon any other provision of the Act which confers indefeasibility of title upon the registered proprietor of servient land free from the easement. Equally, the indefeasibility attaching to that title must be gauged by reference to any other provision such as s 40(3)(e)(i) which removes indefeasibility in the particular circumstances referred to. Section 106(1) would give force to the respondent's claim in the absence of any such provision or where there was a provision which made all easements exceptions to the indefeasibility provided by the Act as was the position in a number of Victorian cases(10). However in the present case the section does no more than direct attention to s 40(3)(e)(i).

The third argument
14. The appellant points to s 40(2) of the Act whereby, subject to sub-ss (3) and (4), the title of a registered proprietor is expressed to be indefeasible. In doing so he relies upon the indefeasibility of his title which is not expressed to be subject to any relevant encumbrance.

15. Faced with the appellant's assertion of indefeasibility, the respondent in turn points to s 40(3)(e)(i) as constituting an exception to indefeasibility which renders the appellant's title subject to the easement mentioned on the respondent's title even though no reference is made to it on the appellant's title. Paragraph (e) provides that the title of a registered proprietor is defeasible:

"so far as regards-

(i) an easement arising by implication or under a statute which would have given rise to a legal interest if the servient land had not been registered land; and
(ii) an equitable easement, except as against a bona fide purchaser for value without notice of the easement who has lodged a transfer for registration".

16. Read literally, par (e)(i) gives the respondent no basis for contending that the appellant's title is subject to her right of way. The easement upon which she relies does not arise by implication nor does it arise under a statute. But, in the view of Zeeman, Wright and Crawford JJ, the sub-paragraph must be read as if it created three disjunctive categories as follows:

(i) an easement arising by implication

(ii) an easement arising under a statute

(iii) an easement which would have given rise to a legal interest if the servient land had not been registered land.

Zeeman J put the matter succinctly when he said: "What has occurred is that the word 'or' has been omitted after the word 'statute' appearing in s 40(3)(e)(i)." His Honour considered, as did Wright and Crawford JJ, that the sub-paragraph must be read as if "or" were there in order to make sense of the provision. An easement arising by implication is a legal interest, his Honour said, as is an easement arising under a statute. That being so, the words that follow are otiose unless they are intended to create a further category of exception. Crawford J added: "I express my inability to comprehend any sensible reason why the legislature would have intended to include within the exceptions easements arising by implication or under a statute but not those arising by express grant."

17. The courts have from time to time sounded warnings that "it is no power of the judicial function to fill gaps disclosed in legislation"(11). But such a power has been exercised and it was done by this Court in Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation(12), that is, the Court departed from the literal meaning of the words in question where that literal meaning would "lead to an incongruous result"(13) or would defeat the objects of the Act(14) or would be "capricious" or "irrational"(15). The question is whether this is such a case and whether in the circumstances it is permissible to read s 40(3)(e)(i) as creating three categories of exception.

18. Section 40(3)(e)(i) appears to be unique in Australian Torrens system legislation. Bradbrook and Neave(16) comment:

" This newly-enacted legislation differs fundamentally from

the now repealed Real Property Act 1862 (Tas) s 40 and from the equivalent legislation in the other States in that the statutory exception to indefeasibility does not extend to easements created by express grant or reservation (except in the case of equitable easements) under any circumstances."

Section 40 of the former Act, which is discussed later in these reasons, listed among the exceptions to indefeasibility "any public or other right of way or other easement created in or existing upon any land".

19. A different view was taken by Zeeman J and by Wright and Crawford JJ. Zeeman J referred to the second reading speech by the Minister who introduced the Land Titles Bill 1980. The Minister said(17):

" In clause 40, the exceptions to indefeasibility - those

relating to the interest of a tenant and to easements - are stated in a different form from the present act. The form in which they are stated in the bill is thought to declare the present law as interpreted by the courts."

The relevant clause notes accompanying the bill read in relation to cl 40(3)(e):

" At common law an easement can only operate at law if it is

created by a grant under seal, or where the existence of a grant is implied, eg by prescription under the Prescription Act 1934, or under the doctrine of lost modern grant. However there are many other kinds of implied easements arising by estoppel, acquiescence or agreement which operate in equity only.

20. Under this Act an easement can only operate at law if it is created by the prescribed form and registered, but by analogy with Smith v Ritchie(18) the Bill has been drawn to provide

(i) That where, but for the Act an easement would have operated at law, the right of a registered proprietor is always subject to it, and

(ii) a person who takes as a bona fide purchaser for value without notice of an equitable easement takes free from it on lodgment of his transfer for registration."

21. The approach taken in the judgments below which leads to reading s 40(3)(e)(i) as if the word "or" appeared after "statute" has its attractions. The concern is whether that approach pays regard to all the relevant provisions of the Act, the way in which the Act relevantly operates and the history of the legislation. Furthermore, does the approach take into account the timing and sequence of events surrounding registration of title under the Act?

The Real Property Act 1862
22. When the dominant tenement was brought under the Torrens system the former Act was in force. Section 15 of that Act required every applicant to bring land under the Act to produce all instruments in his possession or control affecting his title and to state the nature of the estate or interest held by any other person, "whether at law or in equity". Section 32(2) obliged the Recorder to note on the certificate of title "the particulars of all unsatisfied mortgages or other incumbrances, and of any lease, or rent-charge to which the land may be subject". "Incumbrance" was defined by s 3(1) to mean "any charge on land created for the purpose of securing the payment of an annuity or sum of money other than a debt". These provisions did not extend to easements though it appears to have been the practice to make a note on the folio of a servient tenement if the easement was known to the Recorder. Furthermore a court could order that an easement be so recorded(19).

23. Of course we are dealing with a situation in which the dominant, not the servient, tenement was brought under the former Act. The point is that had the servient tenement been brought under the Torrens system before the dominant tenement there was no obligation on the Recorder to record the easement on the appellant's land. Even if an easement were created over land already under the former Act, the only obligation of the Recorder was to enter a memorial of the instrument creating the easement upon the folium of the register book relating to the dominant land(20). Whether an easement existed before the dominant tenement was brought under the former Act or was created over land already under that Act, the absence of a record on the servient tenement was in no way fatal because s 40(b) excepted from the indefeasibility of title conferred on a registered proprietor "the omission or mis-description ... of any public or other right of way or other easement created in or existing upon any land"(21).

24. Substantial additions were made to the former Act by the Real Property Act 1886 (Tas). None throws any light on the present problem though in passing it may be noted that s 26 of the 1886 Act is similar to and the forerunner of s 106 of the Act.

25. As mentioned earlier, s 173(2) of the Act provides that all lands, estates and interests subject to any of the repealed Acts (the repealed Acts include the former Act and the 1886 Act) "shall be subject to this Act". Since at the time of the proclamation of the Act only the dominant tenement was subject to any of the repealed Acts, only that land was at that time subject to the Act. That said nothing as to the relevant positions of the dominant and servient tenements save for the evidentiary effect s 106 gave to the recording of the right of way on the respondent's land.

26. The respondent did place some reliance on ss 15 and 16 of the Acts Interpretation Act 1931 (Tas), in particular s 16 which preserves rights accrued under a repealed statute, unless the contrary is expressly provided by the repealing Act. But this will not assist the respondent for her "right" to an easement derived from the general law not from the former Act, the servient tenement not being under the Torrens system at the time.

Registration under the Land Titles Act 1980
27. The next step is to consider the consequences when the servient tenement, the appellant's land, was brought under the Act in 1983. In the course of his judgment Zeeman J said: "The (appellant's) land was brought under the provisions of the Act ... apparently as required by the Act, s17."

28. Part III of the Act prescribes different procedures by which land may be brought under the Act. Section 11 is a provision in general terms whereby a person claiming to be the owner of the fee simple in land may apply to bring the land under the Act. The application must be "in the prescribed form". The prescribed form is Form 1 in Sched 1 to the Land Titles Regulations 1981. It requires the disclosure of any estate or interest in the land, at law or in equity. Section 11(3) of the Act obliges the applicant to lodge with the Recorder any instruments in his possession or control affecting the title of the land. Section 17 operates only when, after the appointed day, a person lodges for registration under the Registration of Deeds Act 1935 (Tas) a conveyance on sale or a legal mortgage by conveyance of the fee simple. The appointed day was 1 October 1981(22). In those circumstances the person must leave with the Registrar of Deeds a statement of facts relating to ownership of the land and all instruments in his possession or control affecting the person's title to the land. Section 17(3) obliges the Registrar of Deeds to give the conveyance or mortgage together with the statement of facts and the instruments to the Recorder who may then, "if he thinks fit", "bring the land comprised in the conveyance or mortgage under this Act by creating a folio of the Register for that land"(23).

29. Division 5 of Pt III - General provisions - contains various provisions relating to the bringing of land under the Act. Section 28, for instance, deals with the recording of interests where an instrument may not be in registrable form. Section 28(2) provides that where on the bringing of land under the Act it appears to the Recorder that an instrument registered under the Registration of Deeds Act creates an estate or interest in that land that could have been created by an instrument registered under the Act if at the time of its creation the land were under the Act, the Recorder may record the instrument as if it were the appropriate instrument under the Act to create the estate or interest(24). Section 28(10) provides that where, on the bringing of land under the Act, it appears to the Recorder that the land is subject to an equitable interest incapable of registration under the Act he shall record a caveat to protect the interest of the person entitled in equity. Thus the Act confers a range of powers on the Recorder to protect interests in land brought under the Act, other than the interest which is to be registered.

30. It appears from what was said by Zeeman J and from other material in the appeal book that the appellant lodged with the Registrar of Deeds the conveyance of the land to him and that thereafter the Recorder invoked s 17(3) and brought the land under the Act. No mention was made in the conveyance to the appellant of the right of way held by the respondent and no mention was made of it by the appellant in the material provided to the Registrar of Deeds. There is nothing before this Court to suggest that the appellant was aware of the existence of the right of way when he took a conveyance of the servient tenement or at any time before he was issued with a certificate of title under the Act.

31. Section 152 of the Act provides that a person deprived of land or of any interest in land in the circumstances there mentioned, namely

" (a) in consequence of fraud;

(b) through the bringing of that land under this Act;
(c) by the registration of another person as proprietor of that land,

estate, or interest; or
(d) in consequence of any error, omission, or misdescription in the Register,

may bring an action for the recovery of damages".

In particular situations the damages may be recovered out of the assurance fund(25). It is unnecessary, having regard to the issues presented to this Court, to pursue the question whether, if the appellant's indefeasibility of title prevails against the respondent, the respondent may have an action for recovery of damages. Likewise, there is no reason to consider whether, if the appellant's title does prevail, the respondent has an action for damages against the Recorder based on s 153 of the Act by reason of the "omission" from the appellant's title of the right of way.

32. Where both tenements are under the Torrens system, the Recorder is obliged by s 105(3), when registering a memorandum of transfer which grants an easement, to record the grant on the folios of both the dominant and servient tenements. If the Recorder failed to do so he might be liable in damages but could perhaps use the statutory power to rectify omissions conferred by s 139(26). Again, these are not matters this Court is called upon to decide.

33. I have mentioned these provisions so that the true construction of s 40(3)(e)(i) may be gauged from a rather wider context than seems to have been argued before Zeeman J and before the Full Court.

Construction of s 40(3)
34. I return to s 40 of the Act. It will be recalled that s 40(b) of the former Act created an exception to indefeasibility in the case of "any public or other right of way or other easement". Section 40(3) of the Act approaches the matter in more precise terms. Section 40(3)(c) specifies as an exception to indefeasibility "the omission or misdescription of ... any public right of way". Easements are no longer linked with public rights of way; they constitute an exception by reason of s 40(3)(e). Notwithstanding the statement by the Minister that though the exception to indefeasibility relating to easements is stated in a different form, the form "is thought to declare the present law as interpreted by the courts", the language of s 40(3)(e) of the Act is markedly different from s 40(b) of the former Act. And, as was said in Re Bolton; Ex parte Beane(27):

"The words of a Minister must not be substituted for the text of

the law ... The function of the Court is to give effect to the will of Parliament as expressed in the law."

35. Whatever construction is placed on sub-par (i), it cannot be concerned with equitable easements; they are dealt with in sub-par (ii). As the matter was argued in the courts below and as the matter came to this Court, the right of way claimed by the respondent is not an equitable easement. The references in s 40(e) to "legal interest" and "equitable easement" are references to the character of those interests as they exist outside the Act, just as the reference in s 28 to "legal mortgage" and "equitable mortgage" is to the character of interests created outside the Act. An equitable easement will lose its protection against a bona fide purchaser without notice who has lodged a transfer for registration. The protection of the holder of an equitable easement against such a person is, presumably, to lodge a caveat against any dealing with the land. The person who claims the protection of sub-par (i) does not need to lodge a caveat. That person's protection comes from the sub-paragraph itself. It is understandable that easements arising by implication are given express statutory protection for there is nothing capable of being registered under the Registration of Deeds Act or under the Act. Yet the easement would have given rise to a legal interest if the servient land had not been registered land(28).

36. Likewise, an easement arising under a statute may not be capable of registration as in the case of an easement arising under the Prescription Act 1934 (Tas). The Conveyancing and Law of Property Act 1884 (Tas) also creates easements in various situations(29). The respondent's argument that an easement arising under a conveyance which is registered under the Torrens system is an easement "arising under a statute" must be rejected.

37. The present situation is one where both dominant and servient tenements were under the general law when the easement was created. It was open to the owner of the dominant tenement, either in 1925 or at any time up until 1980 when that tenement was brought under the Torrens system pursuant to the former Act, to register the right of way as an easement under the Registration of Deeds Act 1935 or one of its predecessors. That Act provides for the registration of an "instrument", a term which is defined by s 5 to mean "any deed, judgment, document or writing ... affecting or intended to affect land in this State". The right of way established by the Indenture of Mortgage and Conveyance of 2 May 1925 was clearly an instrument. By s 9(1) instruments take priority according to the priority of registration. In the case of an application under s 17 of the former Act, which the appellant's application was, even though there was no disclosure of the right of way by the appellant, registration of the right of way under the Registration of Deeds Act by the respondent or other dominant owner would have brought its existence to the attention of the Recorder(30).

Conclusion
38. In the course of his judgment Zeeman J observed:

"It would be remarkable if Parliament had intended, by the Act,

to take away all legal easements, properly created by express grant or reservation before either the dominant tenement or the servient tenement had been brought under the former Act, merely because the existence of the easement was not disclosed by the folio of the Register relating to the servient tenement. Yet, if s 40(3)(e)(i) is to be construed as not referring to such easements, that would appear to be the effect of the Act."

39. But the language of s 40(3)(e)(i) is capable of understanding when read literally. The intention of par (3)(e) is to give protection to those easements, legal or equitable, which are or were incapable of registration under the Act or under the Registration of Deeds Act. The protection for an easement created by express grant is registration of the instrument creating the easement under the Act or under the Registration of Deeds Act where appropriate. Registration under the Registration of Deeds Act would bring the existence of the easement to the attention of the Recorder once an application was made to bring the servient tenement under the operation of the Act. An easement not created by express grant needs its own protection, a protection which s 40(3)(e)(i) seeks to achieve.

40. This rather lengthy discussion aims to demonstrate that a literal reading of s 40(3)(e)(i) does not lead to an incongruous result, would not defeat the objects of the Act and would not be capricious or irrational. In that event there is no justification for doing any violence to the plain meaning of the words by inserting "or" after "statute". Once the limitations of s 106 of the Act are understood, the focus is necessarily on the indefeasibility of the title of the appellant. If the respondent cannot bring her claim within s 40(3)(e)(i), that title is unaffected by the right of way.

41. It follows that the appeal must be allowed and the order of the Full Court of the Supreme Court of Tasmania set aside. Likewise the order of Zeeman J made on 17 August 1993 should be set aside and the question reserved in the Special Case, namely, whether "as a question of law on the basis of the Special Case stated and the pleadings as they stand" the appellant's land is subject to a right of way appurtenant to the respondent's land, be answered in the negative save and except to the extent that the respondent's claim is based upon long user or upon a grant of easement by a deed now lost made after 2 May 1925.

42. An order remitting the matter in those limited terms would dispose of the appeal in accordance with my judgment. Other judgments would permit the respondent, on remitter, to apply to the Supreme Court of Tasmania to raise a case based on s 40(3)(e)(ii) of the Act or to add the Recorder of Titles as a party. No such case was raised on the pleadings or in the course of argument in the courts below. Furthermore the Special Case does not identify the issues or contain the findings of fact necessary to deal with such a case. In those circumstances, I express no view as to the merits of such a case or indeed as to the appropriateness of the Supreme Court granting an application to allow it to be raised at this stage of the litigation.

McHUGH J. I agree that this appeal should be allowed for the reasons given by Toohey J.

2. In addition to the arguments of the respondent that his Honour rejects, the respondent sought to rely in this Court upon two alternative arguments that were not put to the Supreme Court of Tasmania. One argument was that the respondent had an equitable easement over the appellant's land; the other was that the indefeasibility of the appellant's title was subject to the right of the Recorder to correct errors or rectify omissions in the Register. Although counsel for the appellant did not object to the respondent pursuing these arguments, I think it is inappropriate, indeed not feasible, for this Court to entertain them.

An equitable easement
3. The respondent contended that she was entitled to an equitable easement over the appellant's land and that it was an exception to the indefeasibility of the appellant's title under s 40(3)(e)(ii) of the Land Titles Act 1980 (Tas). First, she submitted that, when the appellant's land was converted to Torrens title, it was subject to an easement which is still enforceable in Equity against those who were bound by it before the conversion. Second, she submitted that the easement was not recorded because of mistakes on the part of the appellant or the Recorder or both and that it would be unconscionable for the appellant now to deny the existence of the easement. As an alternative to this second argument, the respondent contended that, if the appellant retained the benefit of the easement knowing of the mistake or omission in the Register, he would be unjustly enriched within the meaning of David Securities Pty Ltd v Commonwealth Bank of Australia(31).

4. However, the appeal has come to this Court through the procedure of a Special Case and the Case was not framed so as to raise the issue whether the respondent had an equitable easement. Consequently, this Court does not have the benefit of the Supreme Court's findings on relevant matters of law or fact, nor does it have the evidentiary material before it that would allow the Court, if it was so minded, to make relevant factual findings.

A correctable error
5. The respondent also contended that the indefeasibility of the appellant's title is subject to the right of the Recorder to call in the appellant's title and record the easement to which the appellant's land was subject before its conversion to Torrens title. Section 139 of the Act provides that the Recorder may, upon such evidence as appears to him sufficient, correct errors or supply omissions in the Register and may "call in" a certificate of title for that purpose. Section 163 of that Act empowers the Recorder to "call in" the certificate of title "for the purpose of registration or of being, cancelled, corrected or otherwise dealt with" in a number of specified circumstances. One circumstance is that:

"(e) it is necessary for him to have the certificate of title

... for the purpose of registering a dealing, or of cancelling, correcting, or otherwise dealing with the certificate".

6. No doubt it is arguable that an error that is correctable by the Recorder is an exception to indefeasibility and that it may be proper, depending upon all the circumstances of a particular case, to call in a certificate and correct an error even when it means subjecting the title, evidenced by the certificate, to a hitherto unrecorded interest on the folio. But even if the major premise of the argument is correct, the minor premise depends upon the particular facts and circumstances of the case, and they are not found or recorded in the Special Case. More than that, the Recorder is not a party to this appeal. To seek to determine the rights of these parties in proceedings to which the Recorder is not a party would be highly inappropriate and probably an exercise in futility.

Order
7. The appeal should be allowed. The question in the Special Case should be answered "No". The action should be remitted to the Supreme Court of Tasmania to deal with the outstanding issues between the parties concerning the claim to a right of way based upon long user or lost deed and to determine any application by the respondent to raise issues of equitable easement or correctable error.

Footnotes

1 s 173(2).

2 [1971] HCA 70; (1971) 126 CLR 376 at 385-386.

3 Much of the information in the judgments below must have been distilled from documents accompanying the Special Case, which do not form part of the appeal book in this Court.

4 The Act came into operation on 1 October 1981 by reason of a proclamation made pursuant to s 2(2).

5 Gale on Easements, 7th ed at 6, quoted in Municipal District of Concord v Coles [1905] HCA 35; (1905) 3 CLR 96 at 110. See now 15th ed. (1986) at 6-7.

6 (1981) Tas R 334.

7 (1934) 51 CLR 217 at 239.

8 Dixon J was referring to s 51 as well as s 67.

9 [1934] HCA 18; (1934) 51 CLR 217 at 239.

10 See, for example, Webster v Strong (1926) VLR 509. See also Duffy and Eagleson, Transfer of Land Act 1890, (1895) at 192-194, 196-197; Wiseman, The Law Relating to the Transfer of Land, 2nd ed (1931) at 85-90, 94-95.

11 Marshall v Watson [1972] HCA 27; (1972) 124 CLR 640 at 649. See also Parramatta City Council v Brickworks Ltd [1972] HCA 21; (1972) 128 CLR 1 at 12; Mills v Meeking [1990] HCA 6; (1990) 169 CLR 214 at 223-224; Thompson v Goold and Co (1910) AC 409 at 420.

12 [1981] HCA 26; (1981) 147 CLR 297. See also Saraswati v The Queen [1991] HCA 21; (1991) 172 CLR 1 at 21-22.

13 (1981) 147 CLR 297 at 305 per Gibbs CJ.

14 [1981] HCA 26; (1981) 147 CLR 297 at 311 per Stephen J.

15 [1981] HCA 26; (1981) 147 CLR 297 at 321 per Mason and Wilson JJ.

16 Easements and Restrictive Covenants in Australia, (1981), par 1138.

17 Tasmania, Legislative Assembly, Parliamentary Debates (Hansard), 26 March 1980 at 598.

18 (1919) 15 Tas LR 60. In Smith v Ritchie Crisp J held that the interest of a lessee, ineffective at law as a lease for 5 years because it was not registered under the Real Property Act 1862 (Tas), was nevertheless protected as against the registered proprietor, being an interest as equitable lessee which fell within the words "the interest of any tenant" in s 40 of that Act.

19 See In the Matter of the Application of J Schmid (1881) 15 SALR 48.

20 s 43.

21 In Wilkinson v Spooner (1957) Tas SR 121 it was held that an easement may be acquired under the Prescription Act 1934 (Tas) in land registered under the former Act.

22 Statutory Rules 1981, No 228.

23 s 17(3)(a).

24 An easement is an interest that could have been created by an instrument registrable under the Act: s 105.

25 s 152(8). See Saade v Registrar-General (NSW) [1993] HCA 73; (1993) 179 CLR 58.

26 The meaning of "omission" in s 42 of the Real Property Act 1900 (NSW) was considered at length in Dobbie v Davidson (1991) 23 NSWLR 625.

27 [1987] HCA 12; (1987) 162 CLR 514 at 518.

28 Wheeldon v Burrows (1879) 12 Ch D 31 at 49.

29 See, for instance, ss 75A, Pt XIA, 84J.

30 See s 28(2) of the Act.

31 [1992] HCA 48; (1992) 175 CLR 353 at 389.