Koompahtoo Local Aboriginal Land Council v KLALC Property Investment Pty Ltd & Ors [2008] NSWCA 6 (18 February 2008)

Last Updated: 18 February 2008

NEW SOUTH WALES COURT OF APPEAL

CITATION:
Koompahtoo Local Aboriginal Land Council v KLALC Property Investment Pty Ltd & Ors [2008] NSWCA 6


FILE NUMBER(S):
40580/06
40581/06

HEARING DATE(S):
2 August 2007

JUDGMENT DATE:
18 February 2008

PARTIES:
Koompahtoo Local Aboriginal Land Council (Appellant)
KLALC Property & Investment Pty Limited (First Respondent)
LKM Capital Limited (Second Respondent)
Paramount Land Pty Ltd (Third Respondent)
The Registrar General of New South Wales (Fourth Respondent)

JUDGMENT OF:
Giles JA Tobias JA Young CJ in Eq

LOWER COURT JURISDICTION:
Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S):
2573/03, 4680/03, 5114/03

LOWER COURT JUDICIAL OFFICER:
Gzell J

LOWER COURT DATE OF DECISION:
2573/03 - 28/8/06; 4680/03 - 28/8/06; 4680/03 (No 2) - 5/9/06; 5114/03 - 28/8/06

LOWER COURT MEDIUM NEUTRAL CITATION:
2573/03 - Koompahtoo Aboriginal Land Council v KLALC Property & Investment Pty Ltd & Anor [2006] NSWSC 856; 4680/03 - Koompahtoo Local Aboriginal Land Council v KLALC Property & Investment & Anor [2006] NSWSC 863; 4680/03 - Koompahtoo Local Aboriginal Land Council v KLALC Property and Investment Pty Ltd & Anor (No 2) [2006] NSWSC 885; 5114/03 - Koompahtoo Local Aboriginal Land Council v CKT Developments Pty Ltd & Anor [2006] NSWSC 862

COUNSEL:
B A Coles QC and G A Sirtes (Appellant)
R G Forster SC, R S Hollo and M J O'Meara (Second Respondent)
R Khoury (S) (Third Respondent)
P Walsh (Fourth Respondent)

SOLICITORS:
Bartier Perry (Appellant)
Henry Davis York (Second Respondent)
Hugh & Associates (Third Respondent)
Solicitor for Registrar General Department of Lands (Fourth Respondent)


CATCHWORDS:
ABORIGINALS- Disposals of land not in accordance with the Aboriginal Land Rights Act 1983 are void under s 40(2)- whether purported certificates issued by the secretary of a Local Aboriginal Land Council comply with the requirements of s 40D(2)- whether the addition of references to the "land not having cultural significance" in the certificate is explanatory or qualificatory in nature. CONVEYANCING- Indefeasibility of title- whether statute that voids a transferor's disposal of land overrides the indefeasibility of a transferee's registered title. The relevant Act in the circumstances prevailing required a certificate be given that the relevant disposal of Aboriginal land did not contravene the Act. A certificate was given that the disposal did not contravene the Act in that the land is not of cultural significance to Aboriginal people of the area. Held by Giles JA (Tobias JA agreeing, Young CJ in Eq dissenting) that the certificate was insufficient. The Act said that the consequence of the non issue of a valid certificate was that the disposal was void. However one transferee obtained a registered title and this was held by all judges to confer an indefeasible title notwithstanding the legislation.

LEGISLATION CITED:
Aboriginal Land Rights Act 1983, ss 36, 40, 40D

CATEGORY:
Principal judgment

CASES CITED:
Beames v Leader [2001] Qd R 347
Black v Garnock [2007] HCA 31
Breskvar v Wall [1971] HCA 70; (1971) 126 CLR 376
British American Cattle Co v Caribe Farm Industries Ltd [1998] UKPC 28; [1998] 1 WLR 1529
City of Canada Bay Council v F & D Bonaccorso Pty Ltd [2007] NSWCA 351
Ex parte Groot; Re Myers (1958) 75 WN (NSW) 496
Frazer v Walker [1967] 1 AC 569
Hennessy v The Broken Hill Proprietary Company Limited [1926] HCA 32; (1926) 38 CLR 342
Kogarah MC v Golden Paradise Corp (2005) 12 BPR 23,651
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 241 ALR 88
Queensland Premier Mines Pty Ltd v French [2007] HCA 53
R v Jarvis (1756) 1 East 643n; 102 ER 249
Re Lehrer and The Real Property Act (1960) 61 SR (NSW) 365
Re Minister for Immigration and Multicultural Affairs; Ex parte Miah [2001] HCA 22; (2001) 206 CLR 57
Sanpine Pty Ltd v Koompahtoo Local Aboriginal Land Council [2006] NSWCA 291

TEXTS CITED:


DECISION:
In proceedings 40580/06, appeal and cross-appeal dismissed. In proceedings 40581/06, the appeal is allowed and the cross-appeal is allowed in part, proceedings remitted to the Equity Division for determination of cross-claim on the basis of unjust enrichment.



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

40580/06

40581/06

GILES JA

TOBIAS JA

YOUNG CJ in EQ

Monday 18 February 2008

KOOMPAHTOO LOCAL ABORIGINAL LAND COUNCIL v KLALC PROPERTY & INVESTMENT PTY LIMITED & ORS

Judgment

1 GILES JA: The facts are set out in more detail in the reasons of Young CJ in Eq, which I have had the advantage of reading in draft. In brief, on different occasions Koompahtoo Local Aboriginal Land Council (“Koompahtoo”) executed transfers to KLALC Property and Investment Pty Ltd (“KLALC”) of two parcels of land vested in it under the Aboriginal Land Rights Act 1983 (“the Act”), being lot 556 near Morisset (“the Sanpine land”) and lot 11 at Fennell Bay (“the Paramount land”) (together, “the land”). KLALC executed third party mortgages of the respective parcels to LKM Capital Ltd (“LKM”). The transfer and mortgage of the Sanpine land were registered, but the transfer and mortgage of the Paramount land were not registered.

2 Koompahtoo claimed that the transfers and mortgages were ineffective and that it was entitled to hold the land free of the mortgages to LKM. Section 40 of the Act provided that a Local Aboriginal Land Council could not sell, mortgage or otherwise dispose of land vested in it except in accordance with the Division of the Act of which it was part, and that any disposition in contravention of the Division was void. The transfers from Koompahtoo to KLALC were purportedly by way of sale of the land, but in any event were disposals of the land. On Koompahtoo’s case, the disposals were in contravention of the Division because the requirements for a disposal specified in s 40D(1) of the Act had not been complied with, the transfers were ineffective because the disposals to KLALC were void by force of s 40 of the Act, and the mortgages were ineffective because KLALC had nothing to mortgage to LKM. Koompahtoo said also that the mortgages themselves were disposals in contravention of the Division and were void by force of s 40.

3 The active opponent to the claim was LKM. It maintained that it had effective mortgages, saying that KLALC as transferee, alternatively LKM itself as mortgagee, was protected by s 40D(2) of the Act providing that a certificate that the disposal did not contravene s 40D was conclusive evidence that it did not do so, so that the fact of contravention did not avail Koompahtoo. Koompahtoo responded that the purported certificates did not comply with s 40D(2) because they did not in truth certify that the disposals did not contravene s 40D, but that in any event they were not conclusive evidence in favour of KLALC and LKM because both entities had notice that the disposals of the land contravened the section. LKM said in the alternative that Koompahtoo was estopped from denying that the transfers and mortgages were valid and effective, and as to the Sanpine land that the registration of the transfer of that land to KLALC and of the mortgage to LKM gave the entities indefeasible titles in accordance with the provisions of the Real Property Act 1900.

4 In the event that it did not have effective mortgages, LKM claimed from Koompahtoo the money it had advanced on the basis of unjust enrichment, alternatively as damages for misleading or deceptive conduct in representing that the transfers were not in contravention of the Division and were effective, and on a third basis not maintained on appeal.

5 The trial judge, Gzell J, dismissed Koompahtoo’s claims on the ground that the certificates complied with s 40D(2) and had statutory effect to protect KLALC and LKM, including that neither of KLALC and LKM was shown to have had notice that the disposals of the land contravened s 40D. It was therefore not necessary for his Honour to deal with estoppel, indefeasibility or recovery of money, and he did not do so.

6 Young CJ in Eq is of the view that the purported certificates had effect in accordance with s 40D(2) of the Act and that it was not established that KLALC had notice that the disposals contravened s 40D, so that the disposals to KLALC were not void by force of s 40 and the transfers by Koompahtoo to KLALC and the mortgages by KLALC to LKM were effective. His Honour is of the view as to the Sanpine land that in any event KLALC gained an indefeasible title and LKM therefore held an effective mortgage.

7 I am respectfully of a different view in relation to the certificates. In my opinion, they did not comply with s 40D(2) and Koompahtoo could not overcome the statutory avoidance of the disposals to KLALC by relying on them as conclusive evidence that the disposals did not contravene s 40D. Whether KLALC or LKM had notice that the disposals contravened that section does not arise. I do not accept that the mortgages to LKM were independently avoided by force of s 40.

8 I agree as to the Sanpine land that KLALC obtained an indefeasible title and consequentially the mortgage to LKM was effective. Koompahtoo’s claim to hold the Sanpine land free of its mortgage was correctly rejected by the trial judge, but because the transfer and mortgage of the Paramount land were not registered the same can not be said as to that land. I do not accept the estoppel for which LKM contended, and accordingly Koompahtoo’s claim with respect to the mortgage of the Paramount land should be upheld.

9 There thus arises LKM’s claim to recover from Koompahtoo the money it had advanced to the borrowers on the security of the mortgage of the Paramount land. The claim to recover the money as damages should fail, and the proceedings should be remitted to the Equity Division for consideration of the claim on the basis of unjust enrichment.

Sections 40 and 40D of the Act

10 Section 40 provides -

“40 Disposal of land restricted

(1) The New South Wales Aboriginal Land Council or a Local Aboriginal Land Council may not sell, exchange, lease, dispose of, mortgage or otherwise deal with land vested in it, except in accordance with this Division.

(2) Any sale, exchange, lease, disposal or mortgage of, or other dealing with, land in contravention of this Division is void.

(3) This Division does not apply to land purchased as an investment under section 149 or 152.”

11 The land was not purchased as an investment as referred to in s 40(3).

12 At the times of the transactions s 40D, which has since been amended, provided -

“40D Sale etc of land by Local Aboriginal Land Council

(1) A Local Aboriginal Land Council may, subject to the provisions of any other Act, sell, exchange, mortgage or otherwise dispose of land vested in it if:

(a) at a meeting of the Council specifically called for the purpose (being a meeting at which a quorum was present) not less than 80 per cent of the members of the Council present and voting have determined that the land is not of cultural significance to Aborigines of the area and should be disposed of, and

(b) the New South Wales Aboriginal Land Council has approved of the proposed disposal, and

(c) (Repealed)

(d) in the case of the disposal of land transferred to an Aboriginal Land Council under section 36, both the Crown Lands Minister referred to in that section and the Minister have been notified of the proposed disposal.

(2) A certificate in the prescribed form (if any), purporting to be signed by the Secretary of the Local Aboriginal Land Council and certifying that the disposal by the Council of land specified in the certificate does not contravene this section, is conclusive evidence of that fact in favour of any person (whether or not the person is the person to whom the certificate was issued) except a person who had notice, when the certificate was issued, that the disposal of the land did contravene this section.

(3) For the purposes of this section, land is of cultural significance to Aborigines if the land is significant in terms of the traditions, observances, customs, beliefs or history of Aborigines.”

13 No form of certificate was prescribed as contemplated by s 40D(2).

The contraventions of s 40D

14 Koompahtoo transferred the Sanpine land to KLALC by a transfer dated 30 March 2001 expressing a consideration of $850,000. It had not been determined at a meeting that the Sanpine land was not of cultural significance to Aborigines of the area and should be disposed of, see s 40D(1)(a). The New South Wales Aboriginal Land Council had not approved of the proposed disposal of the land, see s 40D(1)(b). The land had been transferred to Koompahtoo under s 36 of the Act, but neither the Crown Lands Minister nor the Minister had been notified of the proposed disposal, see s 40D(1)(d). Subject to the effect of a certificate complying with s 40D(2), the disposal of the Sanpine land comprehensively contravened s 40D.

15 It was not submitted that KLALC as trustee of the Koompahtoo Property and Investment Trust held the Sanpine land on trust for Koompahtoo whereby there was no disposal of the land, and the trust and its terms need not be pursued.

16 Koompahtoo transferred the Paramount land to KLALC by a transfer dated 12 April 2002 expressing a consideration of $176,000. For the same reasons as last stated, subject to the effect of a certificate complying with s 40D(2) the disposal of the Paramount land contravened s 40D.

17 The subsequent mortgages of the land by KLALC to LKM were mortgages by KLALC, not by Koompahtoo. They were not caught by the prohibition in s 40(1) or subject to the requirements in s 40D of the Act. Koompahtoo’s submissions included that s 40(2) referred to any mortgage, not just a mortgage by an Aboriginal Land Council as referred to in s 40(1), and to a mortgage of land, not just land vested in an Aboriginal Land Council, so that it caught the mortgages to LKM. However, it is necessary that the mortgage be in contravention of the Division, and the prohibition and conditional permission apply only to an Aboriginal Land Council and land vested in it and this can not be accepted. It was not submitted on appeal that the Koompahtoo Property and Investment Trust meant that a mortgage by LKALC was a mortgage by Koompahtoo for the purposes of those provisions.

The certificates did not comply with s 40D(2) of the Act

18 The Secretary of Koompahtoo, Veronika Bailey, signed a certificate in the following form in relation to the Sanpine land.

“Date: 30 March 2001

TO WHOM IT MAY CONCERN

Re: Lot 556 Deposited Plan 729949

I, Veronika Bailey__________________________________

Secretary of Koompahtoo Local Aboriginal Land Council Incorporated hereby certify that the disposal by way of sale, exchange, mortgage or otherwise by the Land Council of the land specified above does not contravene Section 40D of the Aboriginal Land Rights Act, 1983 in that the land is not of cultural significance to Aboriginal people of the area.

Yours faithfully,

KOOMPAHTOO LOCAL ABORIGINAL LAND COUNCIL Incorporated

(signed)

Secretary.”

The Secretary signed a certificate dated 4 April 2002 in relation to the Paramount land, in the same form save that it said “whomever” instead of “whom”.

19 The trial judge said at [51] that a certificate “answers the description in [s 40D(2)] if it certifies to the matter specified in the sub-section”. He said as to the certificate of 30 March 2001 -

“52 The Council submitted that what is required is an unequivocal, unqualified assertion of statutory compliance. It was submitted that the certificate was qualified by the statement that the land was not of cultural significance to Aboriginal people of the area. That constituted a qualification, so it was submitted, because it was but one of the prerequisites in the Aboriginal Lands Rights Act 1983, s 40D(1). It was submitted that the certificate should be read as one certifying only to that prerequisite.

53 I reject that submission. It is inconsistent with the language of the certificate taken as a whole. The secretary of the Council could not have certified that there was no contravention of s 40D of the Aboriginal Lands Rights Act 1983 if the only matter to which reference is made in s 40D(1) that had occurred was the determination that the land was not of cultural significance to Aborigines in the area. It must be assumed that in giving her certificate, the secretary was aware of the requirements of s 40D(1). In certifying that the disposal of lot 556 did not contravene s 40D she must be taken to have had in mind the other requirements of s 40D(1).

54 In my view, the addition of the reference to the land not having cultural significance for Aboriginal people is explanatory in nature and does not constitute a qualification upon the secretary’s certification that s 40D of the Aboriginal Lands Rights Act 1983 had not been contravened. That is the specified information that is to be communicated by a certificate that has force under s 40D(2). In my opinion, that was the certification made by the secretary, and the addition of the explanation does not rob the certificate of statutory effect.

55 In my view, therefore, notwithstanding the failure of the Council to comply with the requirements of the Aboriginal Land Rights Act 1983, s 40D(1) when it transferred lot 556 to the Trustee, the certificate of the secretary of the Council of 30 March 2001 protected LKM from the voiding of the transaction under s 40(2) if it had no notice that the disposal did contravene the section. The certificate also protected the Trustee if it had no such notice.”

20 The judge adopted the same view in relation to the certificate of 4 April 2002.

21 Words to the effect that the disposals of the land specified in the certificates did not contravene s 40D of the Act did appear in the certificates. But it is wrong to pick words out of the certificates rather than read them as a whole. Reading them as a whole calls for regard first, to the fact that they referred not to disposal but to “the disposal by way of sale, exchange, mortgage or otherwise”, and secondly, to the fact that there was added “in that the land is not of cultural significance to Aboriginal people of the area”.

22 The first of these might cause the reader of the certificates to question whether they certified as to “the disposal” of the land specified, since “by way of sale, exchange, mortgage or otherwise” indicated that no particular disposal was addressed in the certificate. Independently of that, the added words had work to do. Whether it be described as qualification or explanation of the certification that the disposal did not contravene s 40D, they gave to the statement that it did not contravene s 40D the content that the non-contravention was because the specified land was not of cultural significance to Aboriginal people of the area. The content follows from the words “in that”. Reading the certificates as a whole, the certification was in substance that the specified land was not of cultural significance to Aboriginal people of the area. The words that the disposal did not contravene s 40D of the Act were conclusory, and did not rise above the absence of cultural significance.

23 The purpose of a s 40D(2) certificate is to protect from avoidance of the disposal because it was in contravention of the Division; that is, was a disposal absent one or more of the requirements in s 40D(1)(a), (b) and (c). Section 40D(2) is not express as to the persons protected, save that they need not be a person to whom the certificate was issued, but the paradigm case would be a person to whom the land was sold, exchanged, mortgaged or otherwise disposed of. Such a person is not forced to investigate whether in fact the requirements in s 40D(1) were satisfied, and to run the risk of either not investigating or getting it wrong. If there is a certificate, the person can rely on it as conclusive evidence.

24 On the proper construction of s 40D(2), what is required? On one view, the protective purpose means that what suffices for certifying should be regarded benevolently, so that there can be certification that a disposal does not contravene s 40D even if the certificate is qualified or explained in the manner of the certificates in the present case. But the obverse of protection of the disponee or other person is detriment to the Local Aboriginal Land Council, in the face of the Act’s emphasis on restricting (to the point of avoidance) disposals of land vested in it, and that suggests a more strict approach to certification. If a certificate is wanting, the person can investigate whether in fact the requirements in s 40D(1)(a), (b) and (d) were satisfied, and there is no occasion to give s 40D(2) a strained meaning. Certifying that a disposal of land does not contravene s 40D means just that – not that the words appear in a certificate, but that on a reading of the certificate as a whole the Secretary so certifies. It should therefore be asked whether, read as a whole, the certificates convey that the disposals do not contravene s 40D.

25 An analogy is provided by Hennessy v The Broken Hill Proprietary Company Ltd [1926] HCA 32; (1926) 38 CLR 342. A worker’s right to compensation ceased if a Medical Board “certifies that a workman who has ... been disabled by lead poisoning, is physically fit to return to employment in or upon a Broken Hill mine”. The certificate stated that the worker was physically fit “insofar as lead poisoning is concerned”. It was held that the certificate did not conform to the statute and was inoperative. Knox CJ and Gavan Duffy and Starke JJ said at 348:

“The general rule of construction is that the Courts should adhere to the ordinary meaning of the words used, unless that is at variance with the statute or leads to some repugnancy or inconsistency. Now, the ordinary and natural signification of the words ‘is physically fit to return to employment in or upon a Broken Hill mine’ indicates a fitness generally, and not merely a fitness so far as lead poisoning is concerned. Adherence to that sense of the words works no absurdity, no repugnance and no inconsistency with any other part of the statute.”

26 So in the present case s 40D(2) called for certification that the disposal did not contravene s 40D, and was not satisfied by certification that the disposals did not contravene s 40D in that the land was not of cultural significance to Aboriginal people of the area. The qualification or explanation, like the qualifying words in Hennessy v The Broken Hill Proprietary Company Ltd, took the certificates outside s 40D(2).

27 The trial judge considered that Koompahtoo’s Secretary “must be taken to have had in mind the other requirements of s 40D(1)”, and it seems reasoned that the certificate embraced all those requirements because she “could not have certified that there was no contravention of s 40D ... if the only matter to which reference is made in s 40D(1) that had occurred was the determination that the land was not of cultural significance to Aborigines in the area”. First, the reference was to absence of cultural significance, not to a determination of absence of cultural significance, let alone to a determination conforming with s 40D(1)(a). Secondly, what the certificate said was not properly enlarged by regard to a state of mind of Koompahtoo’s Secretary, or to an assumed state of mind which begged the question because the assumption was founded on the statement that there was no contravention of s 40D without regard to the qualification or explanation. If regard were to be had to the Secretary’s state of mind, since none of the requirements had in fact been satisfied it seems to me that the preferable inference would be that the qualification or explanation was deliberately added in order to cut down the certification; but the certificate had to be construed objectively for what it conveyed to the reader. I respectfully do not find the judge’s reasoning persuasive.

KLALC obtained an indefeasible title to the Sanpine land

28 The Real Property Act provides in s 42 that, with exceptions not presently relevant, the registered proprietor of an estate or interest in land holds it subject to other estates or interests recorded in the register but free from all other estates or interests that are not so recorded. In the well-known words of Barwick CJ in Breskvar v Wall [1971] HCA 70; (1971) 126 CLR 376 at 385, recently adopted by Gummow and Hayne JJ in Black v Garnock [2007] HCA 31 at [10], “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”: see also at [75] per Callinan J.

29 Obtaining title by registration has recently been fully considered by this Court in City of Canada Bay Council v F&D Bonaccorso Pty Ltd [2007] NSWCA 351. The Local Government Act 1993 provided by s 45(1) that a council “has no power to sell, exchange or otherwise dispose of community land”. Community land was sold and the transfer was registered. It was held that the transferee obtained an indefeasible title by registration, notwithstanding that the sale was in contravention of s 45(1).

30 The issue, in brief, was whether s 45(1)’s invalidity through lack of power precluded obtaining title by registration. The Court asked at [75] -

“75 The critical question is whether s 45(1) of the LG Act, being a later enactment, prevails over the RP Act. To adopt what Ormiston JA in Horvath regarded as the determinative issue (at 655 [28]), the question to be resolved is this: does a transfer of land in breach of s 45(1) of the LG Act deny the conclusive nature of the third respondent’s title to the land comprising Chapman Reserve? Is such a breach so inconsistent with the indefeasibility provisions of the RP Act that s 45(1) must prevail over those provisions? As Ormiston JA observed (at 655 [29]), such an inconsistency would only be relevant and prevalent in its consequence if it works an implied repeal pro tanto of the relevant provision of the RP Act. The legislature must, by enacting s 45(1), have intended that that provision was one with which the indefeasibility provision of the RP Act could not stand.”

31 The Court answered the question in the negative. The sale in contravention of s 45(1) was open to challenge until registration, but s 45(1) did not impliedly repeal pro tanto or otherwise prevail over the indefeasibility provisions of the Real Property Act and upon registration those provisions had effect. The Court said at [88] that -

“... the two sets of provisions can stand together. There was no implied repeal by s 45(1) of the LG Act of the indefeasibility provisions of the RP Act. The careful terms of s 45(1) merely deny to a council the power to sell or otherwise dispose of community land. It neither declares any transfer (let alone a registered transfer) of such land to be void and of no effect nor does it invalidate or render unlawful the acquisition of the title to the land obtained by the purchaser or disposee. In these circumstances in our opinion it is impossible to discern a legislative intent that s 45(1) was to operate to deny to a transferee of community land the benefit upon registration of indefeasibility of title.”

32 The Court’s detailed consideration canvassed the arguments and authorities the subject of submissions in the present case. Two members of the present bench, Tobias JA and Young CJ in Eq, were parties to the decision. Although judgment was given in City of Canada Bay Council v F&D Bonaccorso Pty Ltd after the Court reserved its decision in the present case, the consideration is fully in point. It would be pointless to repeat the exercise; if its reasoning governs the present case, City of Canada Bay Council v F&D Bonaccorso Pty Ltd should be followed.

33 The parties were invited to provide written submissions on the application of City of Canada Bay Council v F&D Bonaccorso Pty Ltd in these appeals, and written submissions were received. In my opinion, on the reasoning in that case KLALC obtained title by registration notwithstanding s 40 of the Act.

34 Koompahtoo submitted that s 40 of the Act should not be “construe[d] in the shadow of indefeasibility by assuming that the doctrine of indefeasibility pervades”, but rather that the question is “why indefeasibility should apply in light of emphatic terms of s 40(2) of the [Act]”. I do not think that an assumption one way or the other should influence the determination of whether s 40(2) prevails over the indefeasibility provisions. However, it is proper to recall the importance of the register in the Torrens system as providing the underlying legitimacy of title to land under that system. As Kirby J observed in Queensland Premier Mines Pty Ltd v French [2007] HCA 53 at [14], the important public policy underlying the old system is “that the land title register should be sufficient of itself to inform those concerned about the nature and extent of any outstanding interest in relation to the land”.

35 Section 40 of the Act differs from s 45(1) of the Local Government Act, in that it is not expressed in terms of lack of power. It is provided in s 40D(1) that land may not be dealt with except in accordance with the Division, and in s 40D(2) that any dealing in contravention of the Division is void. There is qualified power to deal with land, but with the express statement that a contravening dealing is void.

36 The substance of the two provisions, however, is the same. Section 40(1) leaves “may not” up in the air, a prohibition rather than a lack of power, and s 40(2) states the result of a disposal contrary to the prohibition. The result is that the sale, exchange, lease, disposal or mortgage of, or other dealing with land, is void, but (as considered more fully hereafter) it is not declared that the registration of the transactional document is void. In City of Canada Bay Council v F&D Bonaccorso Pty Ltd at [88] the Court noted that s 45(1) did not declare any transfer to be void, but a sale without power contrary to s 45(1) may well have been a void transaction (see at [58], [83]). More to the point in the present case is that s 40(2) declares the transaction to be void, not the title obtained by registration of that transaction. That reasoning was also at the heart of the reasoning in City of Canada Bay Council v F&D Bonaccorso Pty Ltd. Looking at the substance of the matter, s 40 of the Act is no more irreconcilable with the indefeasibility provisions of the Real Property Act than s 45(1) of the Local Government Act.

37 Koompahtoo relied on the difference between s 40 of the Act and s 45(1) of the Local Government Act, and submitted that s 40(2) “is specifically concerned with the invalidation of interests created in land”. In its submission, the references in s 40 to sale, exchange, lease, disposal, mortgage or other dealing with land extended to the registration of the transactional document; “sale”, for example, included the registration giving effect to the sale, and “dealing” was itself apt to refer to the registration of the transactional document. It relied in this connection on British American Cattle Co v Caribe Farm Industries Ltd [1998] UKPC 28; (1998) 1 WLR 1529, but there what was declared void included any certificate of title evidencing title; in referring to a dealing with land, I do not think s 40 means registration of an instrument. It is pertinent that s 40(1) is in terms of an Aboriginal Land Council dealing with land: it certifies the transaction (of sale etcetera) by the Aboriginal Land Council, short of the act of registration, equivalent to the transaction identified in s 45(1) of the Local Government Act’s statement that a council has no power to sell, exchange or otherwise dispose of community land.

38 Nor in my view are the subject-matters of the respective legislation such that what was said in City of Canada Bay Council v F&D Bonaccorso Pty Ltd is inapplicable in the present case. The purposes of the Act include providing for land rights for Aboriginal persons and the vesting of land in Aboriginal Land Councils and its management. Restrictions on disposal of land by Aboriginal Land Councils, lest land vested in them for the benefit of Aboriginal persons be disposed of without appropriate approvals or improvidently, are important. Koompahtoo contrasted this with the “diffuse purposes of the Local Government Act focussed on the establishment and management of councils. But it is important that councils retain land classified as community land, in City of Canada Bay Council v F&D Bonaccorso Pty Ltd a public park, for the benefit of residents in the locality and others. Perhaps in the Act there is a specific focus on Aboriginal persons whereas the Local Government Act is concerned with community members more generally, but I do not think that there is purposive reason to regard s 40 of the Act as more apt to repeal pro tanto or otherwise prevail over the indefeasibility provisions of the Real Property Act.

Estoppel and the Paramount land

39 LKM contended that Koompahtoo was estopped from denying that the transfers of the Sanpine land and the Paramount land were disposals complying with the requirements of s 40D of the Act. It is sufficient to address the Paramount land. Questions of estoppel contrary to the provisions of the Act could arise, but do not, because in my opinion an estoppel was not made out.

40 LKM relied on the assumption of a legal relationship induced by Koompahtoo, namely that Koompahtoo was the valid transferor of the Paramount land and KLALC was the valid transferee. For the inducing of the assumption by Koompahtoo it relied on the provision to its solicitors through Koompahtoo’s solicitors of the executed transfer of the Paramount land and the provision by Koompahtoo’s solicitors of the s 40D(2) certificate in respect of that land. The documents were provided in April 2001.

41 However, providing the documents did not represent to LKM that the disposal of the Paramount land by Koompahtoo in favour of KLALC was or would be effective in accordance with the provisions of the Act. LKM was aware that the disposal would be void if the requirements in s 40D(1) were not met, subject to receipt of a certificate complying with s 40D(2), and its solicitors requested that a certificate be supplied. It was aware that Koompahtoo and KLALC were not valid transferor and transferee unless the requirements were in fact met or there was an effective certificate. Other than through the certificate, there was no representation that the requirements were in fact met. The certificate provided to LKM was described as “section 40D Aboriginal Land Rights Act certificate”, without other assurance of its effect, and there was represented through its supply no more than what it said. If, as I have held, it was not a certificate complying with s 40D(2) it did not represent that the requirements in s 40D(1) had been met, or that it was an effective certificate. There can not have been the inducing of an assumption of a valid transfer from Koompahtoo to KLALC.

42 LKM relied also on Koompahtoo standing by when the mortgage was varied in November 2001, and saying nothing about contravention of the Division or invalidity of the transfer or mortgage until late April 2002. These do not take the estoppel further.

Recovery of money

43 For the misleading or deceptive conduct LKM relied on the same matters as for estoppel. For the reasons last explained there was no misrepresentation, and the reliance was misplaced. If there is to be recovery, LKM must succeed on the basis of unjust enrichment.

44 LKM said that unjust enrichment would appropriately be remitted to the trial judge, indeed that it “would probably need to go back to the trial judge”. It drew attention to written submissions as to unjust enrichment made to the trial judge, but did no more. Koompahtoo said that this Court “probably would not want to decide the unjust enrichment claim afresh as first instance judges”, and put no submissions upon it. Findings of fact are necessary, for example on how Koompahtoo was enriched by LKM’s advances, which were made not to Koompahtoo itself but to a joint venture to which it was a party. It may be that this Court could have addressed the necessary findings. However, given the attitudes of the parties and the absence of submissions on which the factual and legal issues for recovery on the basis of unjust enrichment can be properly identified and decided, I do not think this Court should embark upon the unjust enrichment claim. The proceedings should be remitted to the Equity Division for its determination.

Costs

45 Although there are two appeals and a cross-appeal, they have been effectively heard as one appeal. Koompahtoo has had partial but not complete success in the result and on the various issues in the one appeal. In my opinion the just disposition of the costs of the appeals and cross-appeal is that there be no order for costs as between Koompahtoo and LKM. The Registrar-General’s limited involvement concerning indefeasibility was upheld and he would be entitled to costs, but it does not appear that a costs order involving him was made below and I assume that he does not seeks costs. The costs of the trial should be in the disposition of the judge hearing the unjust enrichment claim, who will be in a position to assess the overall outcome of the proceedings.

Orders

46 I propose the following orders. There should be liberty to apply in the event that the parties consider that the orders do not properly resolve the position between them or that the Registrar-General seeks costs of the appeals.

In proceedings 40580/06 -

1. Appeal and cross-appeal dismissed.

In proceedings 40581/06 -

1. Appeal allowed.

2. Set aside declarations and orders 1, 2, 3, 4, 5 and 8 made on 5 September 2006 and the orders of 7 September 2006 entered on 16 November 2006 are vacated.

3. In lieu thereof –

(a) declare that the purported disposal of the land in folio identifier 11/562939 (“the land”) by transfer from the appellant to the first respondent dated 4 April 2002 is void pursuant to s 40(2) of the Aboriginal Land Rights Act 1983;

(b) declare that the second respondent has no estate or interest in the land as mortgagee;

(c) order that the second respondent deliver certificate of title folio identifier 11/562939 to the appellant.

4. Cross-appeal allowed to the extent of setting aside order 6 made on 5 September 2006; proceedings remitted to the Equity Division for determination of the cross-appellant’s claim against the appellant on the basis of unjust enrichment.

In both proceedings -

1. No order as to costs.

2. Liberty to apply for variation of these orders, any application to be made by notice of motion filed within 14 days.

47 TOBIAS JA: I agree with Giles JA.

48 YOUNG CJ in EQ: These reasons deal with two appeals each from a decision of Gzell J. Appeal 40580 of 2006 concerns the judgment of Gzell J in proceedings 2573/03 given on 28 August 2006 ([2006] NSWSC 856) and appeal 40581 of 2006 concerns that judge’s judgment in 4680/2003 delivered on the same day. Both appeals raise the same issues.

49 The basic facts are undisputed and are noted at the commencement of Gzell J’s judgment in each matter.

50 The first appeal concerns land at Morisset. Gzell J set out the facts in his reasons for judgment in 2573/03 and the following is taken from those reasons.

51 The appellant, Koompahtoo Local Aboriginal Land Council (“Koompahtoo”) was the registered proprietor of Lot 556. A claim to the land by Koompahtoo had previously been granted by the Crown Lands Minister under s 36 Aboriginal Land Rights Act 1983 (“LRA”).

52 In July 1997, Koompahtoo entered into a joint venture with Sanpine Pty Ltd (“Sanpine”) to develop part of Lot 556 as a residential subdivision.

53 In November 1998, Sanpine as borrower and Koompahtoo as mortgagor entered into a loan agreement with Inteq Custodians Ltd (“Inteq”) under which Inteq agreed to lend Sanpine $780,000 and Koompahtoo agreed to provide a first registered mortgage over Lot 556.

54 In December 1998, Koompahtoo resolved to change the use of part of Lot 556 to residential development and to mortgage the Lot. The New South Wales Aboriginal Land Council (‘NSWALC”) resolved to approve the proposed change of use and the mortgage of the land to Inteq.

55 Koompahtoo granted the mortgage to Inteq in February 1999, which mortgage was duly registered.

56 Inteq later changed its name to Cardinal Financial Securities Ltd (“Cardinal”). Cardinal later transferred the Koompahtoo mortgage to LKM Capital Ltd (“LKM”).

57 In October 2000, a supplemental joint venture agreement was executed between Koompahtoo and Sanpine to take into account a decision to develop the joint venture site as a staged, integrated community development on a larger part of the land. The original stage one land was of 64 hectares. The supplemental agreement increased the total area to 162.5 hectares.

58 In March 2001, KLALC Property & Investment Pty Ltd (“KLALC”) was constituted trustee of the Koompahtoo Property & Investment Trust. The trust fund was split into units in three classes, A, B and C. All the initial unit holders were members of Koompahtoo.

59 On 30 March 2001, Koompahtoo transferred an estate in fee simple in Lot 556 to KLALC as trustee for $850,000. The transfer was registered.

60 On the same day the secretary of Koompahtoo, Veronika Bailey, signed and issued a certificate, in the following form, certifying that the disposal did not contravene LRA, s 40D.

“Date: 30 March 2001

TO WHOM IT MAY CONCERN

Re: Lot 556 Deposited Plan 729949

I, Veronika Bailey, Secretary of Koompahtoo Local Aboriginal Land Council Incorporated hereby certify that the disposal by way of sale, exchange, mortgage or otherwise by the Land Council of the land specified above does not contravene section 40D of the Aboriginal Land Rights Act, 1983 in that the land is not of cultural significance to Aboriginal people of the area.

Yours faithfully,

KOOMPAHTOO LOCAL ABORIGINAL LAND COUNCIL Incorporated”

61 LRA, s 40D as inserted by Act No 60 of 1990 and as in force at the time of the relevant transactions (it has since been amended) is as follows:

“(1) A Local Aboriginal Land Council may, subject to the provisions of any other Act, sell, exchange, mortgage or otherwise dispose of land vested in it if:

(a) at a meeting of the Council specifically called for the purpose (being a meeting at which a quorum was present) not less than 80 per cent of the members of the Council present and voting have determined that the land is not of cultural significance to Aborigines of the area and should be disposed of; and

(b) the New South Wales Aboriginal Land Council has approved of the proposed disposal; and

(c) ...

(d) ...

(2) A certificate in the prescribed form (if any), purporting to be signed by the Secretary of the Local Aboriginal Land Council and certifying that the disposal by the Council of land specified in the certificate does not contravene this section, is conclusive evidence of that fact in favour of any person (whether or not the person is the person to whom the certificate was issued) except a person who had notice, when the certificate was issued, that the disposal of the land did contravene this section.

(3) For the purposes of this section, land is of cultural significance to Aborigines if the land is significant in terms of the traditions, observances, customs, beliefs or history of Aborigines.”

62 LRA, s 40(2) states that “Any sale, exchange, lease, disposal or mortgage of, or other dealing with, land in contravention of this Division is void”.

63 Whilst a meeting had been convened for the members of Koompahtoo to consider the proposals, at no time was a resolution of Koompahtoo favouring the disposal of Lot 556 passed by not less than 80% of the members present and voting as was required under s 40D(1)(a) LRA.

64 Further, there was no approval of the proposed transfer from the New South Wales Aboriginal Land Council, which was required under s 40D(1)(b) LRA and there was no notification of the proposed transfer to the relevant New South Wales Government Ministers as was required under s 40D(1)(d) LRA.

65 It was common ground at the trial that the sale of Lot 556 (and Lot 11 at Fennel Bay referred to below) did not comply with the requirements of the LRA. However, LKM submitted, successfully, that it was protected by a certificate under s 40(2) LRA. Koompahtoo submitted that the certificate issued did not comply with the requirements of that section and was of no validity.

66 However, the purported transfer to KLALC was registered by the Registrar General as dealing 761229 making KLALC the current registered proprietor of Lot 556.

67 In April 2001, LKM and Sanpine entered into a loan agreement for $1,650,000 and KLALC granted a mortgage over Lot 556 to LKM. The Cardinal mortgage was discharged and the fresh mortgage was registered. In November 2001, the fresh mortgage was varied to increase the sum secured to $1,950,000.

68 In April 2002, the Registrar General of New South Wales lodged a caveat over Lot 556. In March 2003, Koompahtoo also lodged a caveat over Lot 556.

69 LKM obtained judgment in the amount of $2,697,853.50 against Sanpine and KLALC as trustee. However, no principal or interest has been paid to LKM.

70 The facts in 40581/06 are closely similar to those which I have already set out. The principal differences are that:

(1) The relevant land, this time, was Lot 11 at Fennel Bay;

(2) The joint venturer was Paramount Land Pty Ltd (“Paramount”);

(3) The transfer to KLALC and the mortgage to LKM did not achieve registration;

(4) LKM had a judgment against KLALC and Paramount, but has received no proceeds from that judgment.

71 In both proceedings, the principal claims made by Koompahtoo were for orders that the transfer of the land and the mortgages granted over the lands were void and that they be cancelled and a clean certificate of title delivered to it.

72 Gzell J dismissed those claims and associated claims with costs. Koompahtoo has appealed this decision so far as the LKM mortgages are concerned.

73 In summary, Gzell J found for the LKM mortgages for the following reasons:

(1) A certificate under LRA s 40D is conclusive except where a relevant person has notice;

(2) There was insufficient material to show that any relevant person had notice in this case;

(3) “Notice” in s 40D means actual, not constructive notice;

(4) In any event, LRA s 40(1) did not apply to the mortgage as it was from KLALC not Koompahtoo;

(5) Therefore the attack on the LKM mortgages must fail.

74 As a consequential order made 7 September 2006 and entered on 16 November 2006, Gzell J ordered the Registrar-General to register the 2002 transfer from the appellant to KLALC and the mortgage to LKM and directed the Registrar-General to deliver the certificate of title of Lot 11 to the solicitors for LKM when this had been done

75 Because of these reasons, his Honour did not need to decide whether the indefeasibility provisions of the Real Property Act 1900 “trumped” the prohibitions of the LRA.

76 In addition to the appeals, there is before us a cross-appeal on the basis that his Honour should have found for LKM on its claim under the Trade Practices Act 1974 (Cth) or Fair Trading Act 1987 or under the principles of unjust enrichment. It was made clear that the cross-appeal was only to become relevant if the appeal was allowed in whole or in part.

77 LKM also filed notices of contention seeking to uphold the decision: (a) on estoppel grounds; and (b) on the basis that its mortgages had gained indefeasibility.

78 The appeals were heard on 2 and 3 August 2007. Mr BA Coles QC and Mr G A Sirtes appeared for the appellant, Mr R G Forster SC and Messrs R S Hollo and M J O’Meara appeared for LKM, Mr P Walsh appeared for the Registrar-General and Mr R Khoury, solicitor, indicated a submitting appearance for Santine and was excused from further attendance.

79 The Court was informed when the appeal was called on that whilst some arrangements had been reached between the parties and that NSWALC now had a greater proprietary interest in the subject properties and had virtually replaced LKM, NSWALC did not propose to be joined as a party to either appeal unless the court considered it necessary and that the court should continue with the hearing notwithstanding these arrangements.

80 The appellant says that the LKM mortgages suffer the following infirmities:

(1) They were created in contravention of the LRA;

(2) They are defeasible because of the terms of the LRA;

(3) They could not be indefeasible as at all times the land was owned by Koompahtoo and not by KLALC, the purported mortgagor.

81 The appeal proper was contested both on the construction of the relevant sections of the LRA and the certificate issued under the hand of Ms Bailey and also that in making his finding of fact, the primary judge denied natural justice.

82 It is necessary to state some additional matters before discussing the grounds of appeal and the associated matters.

83 At the time of the transfer, the Chairman of Koompahtoo was William (Bill) Smith and the Treasurer was Stephen Griffen. At that time, Bill Smith was one of two directors of KLALC and he was also the secretary. The other director was Stephen Griffen.

84 In the cases of both parcels of land, Smith and Griffen executed the transfer as representatives of both vendor and purchaser.

85 Gzell J found that although no meeting had occurred pursuant to s 40D(1), Koompahtoo, in failing to call direct evidence from Bill Smith, had failed to prove affirmatively that Smith had notice of the non-compliance with section 40D.

86 The appellant submits that, by doing so, Gzell J has effectively reversed the onus, requiring Koompahtoo to prove a negative which it could not have been expected to establish other than through the evidence it led to establish that no meeting took place.

87 Gzell J suggested that Koompahtoo could have called evidence from a person other than Smith testifying as to Smith’s state of knowledge. As to this, the appellant argues that such evidence would only be admissible if Smith had confessed directly to that other person that he knew Koompahtoo had not held the meeting.

88 The appellant submits that his Honour’s findings were infected with a number of errors, some of which are overlapping.

89 These alleged errors are, in summary:

(1) Gzell J had suggested that Smith could have delegated his chairmanship (at 63), yet, it is argued, Smith was the only person who could have chaired the required meeting as his chairmanship could not be delegated. Further, even if Smith could have delegated his chairmanship, such delegate could only have been Smith’s agent and as such knowledge would have been imputed to the agent anyway.

(2) Gzell J failed to infer from his finding that no meeting had taken place that Smith, as Chairman, must have been aware of that fact. Counsel referred to Sanpine Pty Ltd v Koompahtoo Local Aboriginal Land Councils [2006] NSWCA 291 where this Court held that an inference ought to be made that Koompahtoo was aware of departures in compliance with the terms of the joint venture agreement (the subject of those proceedings) in the absence of any direct evidence of knowledge of such departures. That decision was reversed by the High Court after the argument in the present case was concluded (see Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 241 ALR 88), but this is of no consequence in the present case.

(3) Given that Smith was an officer of KLALC, and therefore hostile to Koompahtoo’s claim, Gzell J was not warranted in making the suggestion that Koompahtoo should have called Smith as a supporting witness. It was not incumbent upon Koompahtoo, so it was argued, to lead evidence to establish a negative, that is, that Smith knew that a meeting which he did not chair had not taken place. In the written submissions Counsel said “It is one thing for a witness to testify as to the absence of knowledge of an event that in fact took place; it is a different thing entirely to be required to positively prove an absence of knowledge concerning a nullity”.

(4) Gzell J was able to and ought to have found that both Smith and Griffen had actual or imputed knowledge that there had been no compliance with LRA section 40D.

90 In its points of defence, KLALC had denied that Bill Smith was Chairman of Koompahtoo and simultaneously Director of KLALC at the time of the purported transfers of Lot 556 and Lot 11. However, as KLALC did not appear at the hearing, no evidence was submitted on this point.

91 LKM submits that it is irrelevant to it whether or not KLALC had notice of the contravention of s 40D(1). LKM did not have any knowledge or notice of the contravention and Gzell J so found at trial. This point is not under challenge on appeal.

92 However, it should be noted that if the transfers to KLALC were void, then, logically, the void state of KLALC’s purported transfers necessarily means that KLALC had no interest which it could mortgage and thus, whilst LKM may have registered mortgages, there is no property over which the mortgages can be secured.

93 LKM submits that it and KLALC are entitled to rely on the certificate as conclusive evidence that s 40D(1) had been complied with, even though in fact it was not.

94 With regard to LRA s 40(2), LKM says that the word “void” cannot be understood in this context as meaning “void for all purposes and against the whole world”. Rather, “void” in s 40(2) must mean “void as against any person who cannot rely on a certificate issued under s 40D(2)”. This must be correct.

95 Indeed, as LKM submits, if “void” has the unqualified meaning of “void against all persons and for all purposes” then the result for innocent third parties, like LKM, would be unjust as those parties had relied upon the certificate. The inconvenience as giving “void” this meaning may result in the unravelling of an unlimited number of transactions for an unlimited time, and thus, it could not have been intended by the legislature.

96 LKM says that the legislature must have contemplated that a s 40D(2) certificate would be relied on by more than one person and this is demonstrated by the phrase in that section “any person (whether or not the person is the person to whom the certificate was issued)”. In other words, it is not uncommon for the recipient of such a certificate to enter into other legal arrangements such as mortgages or leases and for those other parties to rely on the certificate.

97 Moreover, LKM submits that s 40D(2) denies the benefit of a certificate only to those persons who had knowledge of a contravention of the section and it was found at trial that LKM had no such knowledge.

98 On the appeal, Mr Coles QC put that what Ms Bailey signed was not a certificate under LRA s 40D at all. This was because of the italicised words in the following extract from the certificate, “does not contravene section 40D of the Aboriginal Land Rights Act, 1983 in that the land is not of cultural significance to Aboriginal people of the area.” The italicised words, he puts, are qualificatory in nature.

99 These words, it was argued, meant that Veronika Bailey certified that LRA s 40D had not been contravened only in regard to the cultural significance of the land requirement and not in regard to any of the other requirements under the section.

100 Although no form for a certificate under the section had been prescribed, the submission was that the certificate must satisfy all three prerequisites since the word “and” is used to connect subsections (a) with (b) with (d). That is, the prerequisites are the resolution of the prescribed meeting AND the approval from the New South Wales Aboriginal Land Council AND notification to the relevant Ministers. Any certificate under s 40D must convey all the required information stated in s 40D. This is the gist of the provision. A recipient of a s 40D certificate must be able to rely on that certificate saying exactly what it purports to say.

101 The documents issued by Veronika Bailey in regard to the purported disposals of Lot 556 and Lot 11 were not s 40D certificates. They were mere statements or declarations by the Koompahtoo Local Aboriginal Land Council Incorporated, through its Secretary, that the lands in question were not of cultural significance to the Aboriginal people of the area.

102 Gzell J held that the essential quality of a certificate was the communication of “the specified information”. Further his Honour said that a certificate answers the description under s 40D(2) of the LRA if it certifies the matters specified in that subsection.

103 However, Gzell J then went on to find that the certificate in question was indeed a certification under s 40D(2) and that it was substance and not form which was the crucial point such that the words “in that the land is not of cultural significance to the Aboriginal people of the area” were merely explanatory in nature and did not constitute a qualification upon Ms Bailey’s certificate that no part of s 40D had been contravened.

104 His Honour held that Ms Bailey “must be taken to have had in mind the other requirements of s 40D(1)” (at 55).

105 LKM submits that given that the aim of LRA is “to restore certain lands to Aboriginal hands and control” and the insertion of ss 40A-40D in 1990 was to facilitate that aim, the purpose of s 40D(2) is to provide persons who engage in transactions with Local Aboriginal Land Councils involving land with protection and certainty regarding the validity of the transaction upon receipt of a certificate.

106 “In other words,” counsel says, “it is to relieve persons who deal with Local Aboriginal Land Councils from the burden of having to inquire into the internal affairs of those Councils to determine whether the requirements of section 40D(1) have been satisfied.” It is not the case, however, that the interpretation and operation of s 40D(2) could ever have been intended to have the effect that Local Aboriginal Land Councils could get away with not complying with s 40D(1) and then issue a s 40D(2) certificate regardless of that non-compliance.

107 His Honour said that it “must be assumed that in giving her certificate, the secretary was aware of the requirements of s 40D(1). In certifying that the disposal of Lot 556 did not contravene s 40D she must be taken to have had in mind the other requirements of s 40D(1).”

108 Mr Coles puts that conclusive evidence certificates, like estoppels, call out for clear statements. LRA s 40D(2) required the production of a certificate which certified that the disposal by the Local Aboriginal Land Council did not contravene s 40D. A certificate that this was so in that the land is not of cultural significance to Aboriginal people of the area, was invalid.

109 Mr Coles referred to Hennessy v The Broken Hill Proprietary Company Limited [1926] HCA 32; (1926) 38 CLR 342 (“Hennessy’s case”). In that case a medical board could issue a certificate that a worker who had been disabled by lead poisoning was physically fit to return to work. In the case under review, the Board issued a certificate that the appellant was physically fit so far as lead poisoning was concerned. The High Court held that this was not a valid certificate.

110 Mr Forster SC puts that one needs to distinguish certificates under LRA s 40D which are protective of and beneficial to the recipients from certificates such as those in Hennessy’s case which curtail or abridge the recipient’s rights. He puts that no narrow or pedantic approach should be taken with respect to such certificates.

111 I prefer Mr Forster’s submission. However, even if this were an error on my part, even though the “in that ...” words do grammatically weaken the certificate, I would agree with Gzell J’s analysis of the certificate. It is sufficient on its face to qualify as a valid certificate under the section.

112 I now turn to the allegation that Gzell J denied Koompahtoo natural justice by concluding that it had not proven that KLALC had notice of a contravention of s 40D(1). That is, Gzell J should have given Koompahtoo the opportunity of addressing the Court if his Honour was intending to make that finding.

113 LKM submits that, in effect, what Koompahtoo is saying is that Gzell J should have exposed to Koompahtoo his mental processes or his provisional views on the issue of KLALC’s notice of a contravention of s 40D(1). This, LKM says, would have amounted to requiring the trial judge to give a “running commentary” on the presentation by Koompahtoo of its case. Counsel for LKM thus refers to dicta of Gleeson CJ and Hayne J in Re Minister for Immigration and Multicultural Affairs; Ex parte Miah [2001] HCA 22; (2001) 206 CLR 57 at 69.

114 As a matter of principle, a judge of a superior court cannot deny natural justice so as to attract the sort of review that this Court exercises under the prerogative orders: Ex Parte Groot; Re Myers (1958) 75 WN (NSW) 496.

115 This Court, will, however, review a trial process and set aside a decision if it considers that something has happened at the trial which means that the result is such that it should not, as a matter of justice, stand.

116 Although modern judges may from time to time let counsel know what their current thoughts are which may prompt counsel to take a course, there is no obligation on a judge to do so. A fortiori where the parties are represented by experienced counsel of some seniority. Counsel are entitled to and are expected to present their clients’ case as seems to them best.

117 There is nothing in the way in which the primary judge conducted the trial which would cause me to consider that the trial miscarried.

118 It should be noted that counsel for Koompahtoo has not identified any further evidence which it would have sought to adduce at trial.

119 The primary judge found that Rolf Koops, the solicitor for LKM, who gave evidence including evidence under cross-examination at the trial should be accepted as not perceiving any irregularity in the certificate and in considering he could act on it without further enquiry.

120 As to the knowledge of KLALC, Koompahtoo was alleging that the transactions were void because of s 40D of the LRA. It thus had to prove its case. The question, thus, is whether it needed to prove that KLALC did have notice of the defect, or whether it was for KLALC or LKM to establish that KLALC did not have notice.

121 LRA s 40(2) provides that a transaction to which the section applies is void if it is done in contravention of it. Koompahtoo thus had to prove a contravention. The certificate provided conclusive evidence that there was no contravention except where the person relying on the certificate had notice.

122 The general rule is that where there is an exception to a provision, the onus is on the person who alleges the provision has been breached. Although this rule hales from the criminal law, see Lord Mansfield in R v Jarvis (1756) 1 East 643n; 102 ER 249, it applies equally in civil cases, see Cross on Evidence, 5th Australian ed [7150].

123 Thus, the onus of proving that KLALC had notice was on Koompahtoo. It failed to establish notice to the satisfaction of the primary judge and that decision was within his mandate.

124 In view of my views of the issues on the appeal proper, it is unnecessary to consider the issues raised in the notice of contention or the cross-appeal.

125 However, it was urged on us that we should in any event deal with the important matter as to whether registration of a transaction that is made void under the LRA, can produce an indefeasible title.

126 This Court has considered the point recently in a case argued shortly after the present one: City of Canada Bay Council v F & D Bonaccorso, Pty Ltd [2007] NSWCA 351 (“Canada Bay case”).

127 The reasoning in that case would produce the answer “Yes” to the question implicit in the previous paragraph bar one.

128 In view of the detailed reasoning given in the Canada Bay case, it is unnecessary to discuss the question in detail here: a brief summary will suffice.

129 As Mr Walsh submitted, the present case is governed by the principle in Breskvar v Wall [1971] HCA 70; (1971) 126 CLR 376.

130 The philosophy of the Torrens legislation adopted by the High Court in Breskvar v Wall, following the decision of the Privy Council in Frazer v Walker [1967] 1 AC 569, is that upon registration what occurs is virtually the same as if a new Crown Grant had issued.

131 Thus, if it be the fact the transfer upon which the Registrar General acted in bringing about the registration was forged or that the underlying transaction was a nullity, it is of no moment.

132 This philosophy has carried through to a number of situations where statutes have purported to vitiate certain transactions or documents. A recent example is Kogarah MC v Golden Paradise Corp (2005) 12 BPR 23,651.

133 Moreover, the Registrar General, generally speaking, ought not “to refuse registration of an instrument because he forms the view that in law it is a void instrument, unless by registration some validity could be given to the instrument which it would not otherwise have, or some estate or interest could by registration be created beyond that purported to be dealt with in the instrument itself” per Jacobs J in Re Lehrer and The Real Property Act (1960) 61 SR (NSW) 365, 376 and see also Beames v Leader [2000] 1 Qd R 347.

134 The fact that NSWALC now occupies the shoes of LKM could have had a bearing on the way the orders on the appeal were framed. However, in the event, I do not consider it does.

135 Thus in my view both appeals must be dismissed with costs. However as I am in the minority with respect to a major issue in proceedings 40581/06, I agree that the Court’s orders should be as stated by Giles JA in paragraph 46.

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LAST UPDATED:
18 February 2008