AT MELBOURNE
COMMON LAW DIVISION
VALUATION, COMPENSATION & PLANNING LIST
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JUDGE: | ||
WHERE HELD: | Melbourne | |
DATE OF HEARING: | ||
DATE OF JUDGMENT: | ||
CASE MAY BE CITED AS: | ||
Revision 1 (18 June 2012) | ||
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LAND ACQUISITION AND COMPENSATION – Leased land – Notice of compulsory acquisition published in Government Gazette – Construction of notice – Principles – What interest(s) acquired – What interest(s) divested – Whether tenant’s leasehold interest acquired or divested - Surrounding circumstances - Whether extrinsic material can be considered – Whether private correspondence from acquiring authority can be considered - Held: Leasehold interest divested and tenant entitled to compensation accordingly – Land Acquisition and Compensation Act 1986 Parts I and II and ss 30 and 81; Land Acquisition and Compensation Regulations 1998 – Transfer of Land Act 1958ss 53, 54; Interpretation of Legislation Act 1984 s 35, 38, 53; Victorian Urban Development Authority Act 2003, s 42. ESTOPPEL – Whether tenant estopped from enforcing statutory right to compensation – No relevant reliance by acquiring authority – No detriment – Estoppel not established.
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APPEARANCES: | Counsel | Solicitors |
For the Plaintiff | Rennick & Gaynor | |
For the Defendant | Garland Hawthorn Brahe |
Overview
1 The plaintiff, Mr Samir Obeid, applies by originating motion for a declaration that his interest as a tenant of a certain retail shop in Mason Street, Dandenong was divested by virtue of a notice of acquisition under the Land Acquisition and Compensation Act 1986 (‘the LAC’) published in the Victoria Government Gazette on behalf of the defendant (‘VicUrban’) on 26 June 2008, and a declaration that he is entitled to make a claim for compensation under the LAC accordingly.
2 VicUrban acknowledges that Mr Obeid’s interest in the retail premises was an interest in land for the purposes of the LAC, but denies that his interest was divested by the relevant notice of acquisition, on its true construction. According to VicUrban, the publication of the notice resulted in the acquisition of only the landlord’s interest in the land; that this did not terminate or divest Mr Obeid’s leasehold interest; and that Mr Obeid therefore has no claim for compensation.
3 This case turns mainly on the proper interpretation of the notice of acquisition in the light of the provisions of the LAC. It raises questions of principle concerning the approach to be taken to interpreting notices of acquisition under the LAC, including questions concerning the extent to which the Court may have regard to matters external to the notice, such as private communications between the acquiring Authority and the relevant interest holders. In this regard, VicUrban seeks to rely in part on its private correspondence with Mr Obeid and his solicitors.
4 On the other hand, Mr Obeid submits that the compulsory acquisition of land is a public exercise of statutory power and that attention should be focused exclusively, or at least primarily, on the terms of the published notice of acquisition itself, read in the light of the relevant statutory provisions.
5 There is one additional issue. VicUrban advances, albeit belatedly and faintly, a claim that Mr Obeid is estopped by his conduct from contending that his leasehold interest was divested by the acquisition. It says that Mr Obeid continued in occupation of the retail shop for about 3 years after the publication of the notice and thereby and otherwise induced VicUrban to believe that it was his landlord during that period and to act accordingly.
6 In my view, Mr Obeid is substantially correct about the interpretation of the notice of acquisition and its effect. No estoppel applies. Mr Obeid is entitled to the declarations he seeks.
The statutory framework
7 Section 1 of the LAC avers that the main purposes of the Act are to establish a new procedure for ‘the acquisition of land for public purposes’[1] and to provide for the determination of the compensation payable in respect of ‘land so acquired’.[2] For the most part, the operative provisions of the LAC refer to the acquisition of ‘an interest in’ land, rather than land itself. That corresponds with the common law understanding that, generally speaking, physical land itself is not the subject of ownership. Rather, estates or interests in physical land are owned.[3] There is no definition of ‘land’ in the LAC, but s 38 of the Interpretation of Legislation Act 1984 provides that in all Acts and subordinate instruments, unless the contrary intention appears, ‘land includes buildings and other structures permanently affixed to land, land covered with water, and any estate, interest, easement, servitude, privilege or right in or over land’. Nevertheless, as s 1 of the LAC recognises, the usual purpose and effect of an acquisition under the LAC is to bring an identifiable piece of physical land under the dominion and control of the acquiring authority for public purposes.
8 Correspondingly, s 3 of the LAC provides that in the LAC:
the Authority means a person or body who or which –
9 Other definitions worth noting in s 3 of the LAC are as follows (so far as relevant):(a) is authorised by or under the special Act to acquire land; and (b) in the special Act is expressed to be the Authority for the purposes of this Act;
...
date of acquisition, in relation to an interest in land acquired pursuant to the procedures contained in this Act, means the date on which a notice of acquisition in relation to that interest is published in the Government Gazette ... . interest, in relation to land, means –
(a) a legal or equitable estate or interest in the land; or (b) an easement, right, charge, power or privilege in, under, over, affecting or in connexion with land;
10 The last mentioned definition (the definition of ‘this Act’) serves to draw special attention to the relevant provisions of the regulations, including those of the prescribed forms.[4]lease includes an agreement for a lease; notice of acquisition means a notice referred to in s 19;
notice of intention to acquire means a notice referred to in section 6;
the special Act means an Act or a provision of an Act which is expressed to be a special Act for the purposes of this Act;
this Act includes the regulations.
11 It is common ground that the acquisition in question was authorised by a relevant ‘special Act’, namely s 42(1) of the Victorian Urban Development Authority Act 2003, and that VicUrban answers the description ‘the Authority’ for the purposes of the LAC. By virtue of s 24 of the LAC, the usual consequence of an acquisition under the LAC is that the acquired interest vests in the relevant Authority, but in the particular case of VicUrban the acquired interest vests in the Crown and is deemed to be unalienated land of the Crown: see s 42(4) of the Victorian Urban Development Act 2003.
12 Section 4 of the LAC provides that an Authority which is empowered under a special Act to acquire an interest in land by compulsory process must not acquire that interest by compulsory process or by agreement except in accordance with Part II of the Act. Part II comprises ss 4-29.
13 Section 6 of the LAC provides that ‘if the Authority intends to acquire an interest in land for the purposes of the special Act, the Authority must serve upon each person who has an interest in the land...a notice of intention to acquire the first-mentioned interest’.
14 The notice of intention to acquire an interest in land must be in the prescribed form and contain certain particulars.[5]It must also be accompanied by a statement in the prescribed form setting out the principal rights and obligations under the LAC of persons interested in the land proposed to be acquired.[6]
15 At the relevant time, the prescribed form of notice of intention to acquire (Form 1) provided for the notice to be addressed to the ‘person(s) whose interest(s) is/are to be acquired’. The prescribed form of accompanying statement (Form 4) included provision for a statement informing ‘you’ that the Authority intended to acquire ‘your’ interests in the land described in the notice.[7]
16 Under s 10 of the LAC, the Authority must, without delay after the service of a notice of intention to acquire under s 6, lodge with the Registrar of Titles notice, in the form approved under the Transfer of Land Act 1958(‘the TLA’), of the notice of intention to acquire. The Registrar of Titles must then make a recording of the notice in the Register or (if this is not practicable) must, by displaying a map or other appropriate means, make the notice of intention to acquire available for inspection: s 10(2). Any notice of intention to acquire so made available for inspection has effect for the purposes of s 42 of the TLA[8] as if it were recorded in the Register: s 10(8). If a notice lapses or is cancelled, appropriate entries must be made in the Register: s 10(4) and (5).
17 For so long as a notice of intention to acquire is in force with respect to an area of land, any person who has been served with the notice is precluded from entering into any dealing with respect to the land, except with the permission of the Authority: s 12.
18 Section 18 provides for acquisitions by agreement.
19 Section 19 of the LAC is a particularly important provision for present purposes. It reads:
20 Section 21 of the LAC is also important. It provides:19. Notice of acquisition Subject to this Act, the Authority may acquire an interest in land for the purposes of the special Act by causing a notice declaring that interest to be acquired to be published in the Government Gazette.
21. Form of notice
A notice of acquisition must –
21 At the relevant time (June 2008), the prescribed form of notice of acquisition was as follows:(a) be in the prescribed form; and (b) contain a description sufficient to identify the interest in land acquired and the land in which that interest subsists.
22 Under s 22 of the LAC, within 14 days after the date of acquisition the Authority must cause a copy of the notice of acquisition and a statement in the prescribed form setting out the rights and obligations of the person whose interest has been acquired to be served upon all persons upon whom the notice of intention to acquire was served and upon any other person known to have had an interest in the land immediately before the date of acquisition. The prescribed form of the statement at the time was Form 8.[9] Such a statement (together with a copy of the notice of acquisition) should have been sent to Mr Obeid, among others, within 14 days of the acquisition. There is no copy of any such statement in evidence, nor any evidence that such a statement was actually sent to anyone. However, the prescribed form of statement includes the following parts:Notice of Acquisition COMPULSORY ACQUISITION OF INTEREST IN LAND
The [name of Authority] declares that by this notice it acquires the following interest in the land described as [insert description of land]:
[List interest(s) acquired]
Published with the authority of the [name of Authority]
[Insert any map, diagram or plan of the land acquired that may assist in describing the land.]
For and of behalf of the [name of Authority]:
Date:
__________________.
1. What does the notice of acquisition do? You have been given a copy of a notice of acquisition. This notice was published in the Government Gazette on [date]. This means the [name of Authority] has compulsorily acquired all interests in the land described in the notice and any person who had an interest in that land which was acquired by the notice is now entitled to claim compensation.
2. You should get an offer of compensation within 14 days
The [name of Authority] must make an offer of compensation to you within 14 days of [date of publication] unless you agree to give the [name of Authority] more time or unless the Minister permits it to have more time to make an offer. The offer must be fair and reasonable and will be based on a valuation and other information available at the time the offer is made.
...
8. Authority may take possession of the land
The [name of Authority] is now able to enter the land and occupy it. The Authority will try to agree with you about possession. If the [name of Authority] wants to occupy the land and you live on the land or if it is your main place of business then you can continue to occupy the land for 3 months from the day the land was acquired rent-free unless—
(a) you agree with the [name of Authority] to leave earlier; or (b) you leave the land earlier; or
(c) the Governor in Council certifies that it is not practicable for the [name of Authority] to wait 3 months.
23 The compulsory acquisition of land is not merely a private matter between the parties immediately concerned. Section 23 of the LAC provides:In any case, the [name of Authority] must give you at least 7 days' written notice before it can take possession. You may be permitted to stay longer than 3 months if the [name of Authority] permits you to remain.
If you have agreed to leave or if the 7 days' notice has expired and you do not leave, you may incur extra costs for which you will not be compensated.
... .
24 Of considerable significance for present purposes is s 24(1) of the LAC, which reads:23. Publication of notice in newspaper The Authority must as soon as practicable after publication of the notice of acquisition in the Government Gazette cause a copy of the notice in the prescribed form to be published in a newspaper circulating generally in the area in which the land is situated.
24. Effect of notice of acquisition
(1) Subject to this section, upon publication in the Government Gazette of a notice of acquisition—
25 Section 25 of the LAC provides:(a) the interest in land described in the notice vests in the Authority without transfer or conveyance freed and discharged from all trusts, restrictions, dedications, reservations, obligations, mortgages, encumbrances, contracts, licences, charges and rates of any kind; and (b) any interest that a person has in that land is divested or diminished to the extent necessary to give effect to this subsection.
... .
26 The vesting provisions of the LAC referred to above are reflected in Division 4 of Part IV of the TLA, especially ss 53 and 54 thereof. In particular, s 54 provides (so far as relevant):An interest in land acquired under section 19 may be an interest which did not previously exist as such.
27 Division 5 regulates the entry into possession of the acquired land by the Authority. It is comprised of ss 26-29. The parties referred mainly to s 26. Section 26 is too lengthy to set out in full. However it seems that nowhere in Division 5 is it expressly envisaged that the Authority might simply step into the shoes of the current landlord in relation to leased land. Rather, the provisions of Division 5 seem to assume that, at least usually, any leasing arrangements in place as at the date of acquisition of an interest in land will come to an end as a result of the acquisition, in that provision is made for new arrangements concerning occupation and rent to be entered into for the period prior to the time at which the Authority will enter into possession of the land.[11]Notwithstanding anything in any Act, where any land vests, whether free from encumbrances or subject to any particular encumbrances, in any acquiring authority by the operation of the [LAC] ... without transfer or conveyance thereto, ... upon the granting of an application made in an appropriate approved form by the acquiring authority (which application shall be made as soon as practicable after the vesting) ... the acquiring authority shall, without any further transfer conveyance disposition or assurance or the production of any certificate of title or any other instrument or document be registered as proprietor of the land in fee simple free from all encumbrances or subject to the encumbrances hereinbefore referred to (as the case requires) by the creation of a new folio of the Registrar recording the name of the acquiring authority as the registered proprietor.[10]
28 Part 3 of the LAC deals with compensation for acquisition. The first and, for present purposes, the most significant section in Part 3 is s 30, which provides:
29 Finally, regard should be had to the last section in Part 3, namely s 39. It provides:30. Right to compensation on acquisition Subject to this Act, every person who, immediately before the publication of a notice of acquisition, had an interest in land that is divested or diminished by the acquisition of the interest to which that notice relates has a claim for compensation.
(a) the lessee, as to all future rent which becomes payable, is liable only to so much of the rent as is so apportioned in respect of the residue of the land;(1) If part of any land comprised in a lease for a term of years unexpired is acquired under this Act, the rent payable in respect of the land comprised in the lease must be apportioned between the part so acquired and the residue of the land. (2) The apportionment referred to in subsection (1) may be settled by agreement between the lessor and lessee of the land comprised in the lease and, failing agreement between the parties, must be settled by the Tribunal or the Court.
(3) After apportionment has been made in accordance with subsection (2)—
(b) the lessor, as to the residue of the land and as against the lessee, has the same rights and remedies for the recovery of the apportioned rent henceforth payable by the lessee; and
(c) all the covenants, conditions and agreements of the lease, except as to the amount of rent to be paid, remain in force with regard to the residue of the land.
30 Section 39 only applies to a case (unlike the present) where a part of leased land (not the whole) is acquired; and the section is principally concerned to adjust the rights and liabilities of the lessee and the lessor in respect of the unacquired land; but the section also seems to assume that, at least usually, there will not be any relationship of landlord and tenant between the acquiring Authority and the original lessee in respect of the acquired land, much less that any such relationship will be governed by the lease which was previously applicable to the acquired land.
The factual history
31 Both parties filed affidavits relating to the issues between them. There was no cross-examination. The factual history I am about to relate is not relevantly in dispute. Mr Obeid contends that, generally speaking, surrounding circumstances and matters of history should not be taken into account for the purposes of interpreting a notice of acquisition. Nevertheless, having regard to VicUrban’s case in particular, it is necessary to refer to the history in some detail.
The Revitalising Central Dandenong Initiative
32 On 26 September 2005, the Victorian Government launched the ‘Revitalising Central Dandenong Initiative’ as a partnership between the Victorian Government, through VicUrban, and the City of Greater Dandenong. The project was explained or described in a number of publications, including a brochure entitled ‘Revitalising Central Dandenong: A Shared Vision’, first made available on 26 April 2006 and a note entitled ‘Revitalising Central Dandenong: A Partnership To Develop a Vibrant City Centre’, dated June 2006. Both documents are included in the evidence before this Court.[12]
33 The brochure refers to a shared vision for central Dandenong, said to represent the collective goals of the community and other stakeholders for what the City could look like in 2020. The brochure includes a number of guiding principles and key ideas to deliver the principles. The key ideas include works to Lonsdale Street; works to the Dandenong station precinct; a City Walk to link the station with key destinations in the city; and the strengthening of the attraction of the Foster Street area, with its concentration of Indian businesses. At the relevant time, that area was known as ‘Little India’. It comprised a collection of shops on Foster Street from Robinson Street to Thomas Street and on part of Mason Street. It included the premises in Mason Street occupied at the relevant time by Mr Obeid.
34 The note of June 2006 includes the following statements:
(a) The project is an urban renewal project for central Dandenong. The Victorian Government committed $92.8 million to the project in September 2005 and later announced a second funding allocation of $197 million, with the State to invest more than $290 million in central Dandenong over a period of 15 to 20 years.
(b) The aims of the project include attracting more than $1 billion worth of private sector investment into central Dandenong over the period of 15 to 20 years; to increase employment in Dandenong by an extra 5,000 full-time jobs during the life of the project; and to increase population and housing by an extra 4,000 households.
35 In April 2007, the Victorian Government published a draft Urban Master Plan for the project. Following this, there was a process of public consultation in relation to the draft plan. In November 2007, VicUrban published an Urban Master Plan for the project. The Urban Master Plan identifies four priorities for investment in public infrastructure projects to ‘kick start’ the revitalisation process. The public infrastructure projects are works to Lonsdale Street, the construction of the City Walk; enhancement of the station precinct; and development of a new bridge over the railway line at George Street.
36 So far as the ‘Little India’ area is concerned, the project includes:
(a) upgrading Walker, Mason and Robinson Streets through providing more lighting, better footpaths, new trees, improved drainage and road changes allowing easier bus movements;
(b) creating a new street, Ruddock Street, to link Walker and Foster Streets;
(c) minor service works along Foster Street; and
(d) extending Mason Street to connect it with the station.
Mr Obeid, his Lebanese grocery business and the lease
37 Mr Obeid was born in 1951 in Lebanon. He was educated there to Year 12. He immigrated to Australia in October 1977. For 17 years thereafter he worked as a machine operator in a soft drink factory and was promoted to supervisor. In about 1994, his employer closed the factory and he lost his employment. His prospects of finding a new job were not good. So he decided to purchase a business.
38 By a contract dated 22 September 1995, he purchased a Lebanese grocery and video hire business named ‘Al Shark Store’ operating from leased shop premises situated at 2A Mason Street, Dandenong, being Unit 4 on Strata Plan 005899. He commenced operating the business on 29 December 1995. He added many additional lines of goods and expanded the business.
39 The lessor of the premises was Ms Sandra Di Giulio. In 2004 Mr Obeid entered into a new lease with Ms Di Giulio. It commenced on 24 September 2004. It was a lease for three years, with two further optional terms of three years each. It was a retail lease under the Retail Leases Act 2003. Subject to complying with his obligations under the lease, Mr Obeid had the right to remain in possession under the lease and the two options until 23 September 2013. He also had the protections afforded by the Retail Leases Act 2003, especially ss 21, 27 and 28. By an exercise of option dated 10 August 2006 Mr Obeid opted to exercise his right to occupy the premises for a further term of 3 years from June 2007.
The lead-up to the acquisition
40 In late 2006 or early 2007, Mr Obeid became aware of the project to revitalise central Dandenong. He consulted solicitors, Rennick and Gaynor, who were acting for both freehold owners and tenants of premises in the ‘Little India’ district. On 24 May 2007, Rennick and Gaynor wrote to VicUrban on behalf of their clients (including Mr Obeid) seeking various assurances about the project. The letter expressed concern about the likely adverse impact of the project on the businesses of the tenants and on the rental income of the owners. An assurance was sought that, where acquisition occurred by compulsion, all interests in the land (including those of the tenants and of the owners) would be acquired on the same date. The solicitors also sought assurances that VicUrban would not commence construction works in the vicinity of ‘Little India’ prior to the date of acquisition and that VicUrban would compensate not only owners but also tenants in relation to any acquisitions.
41 VicUrban replied by letter dated 5 June 2007.[13]VicUrban declined to give any of the assurances sought by Rennick and Gaynor. It described the Revitalising Central Dandenong (RCD) project as a major project involving a comparatively large area of central Dandenong. It said that it was VicUrban’s responsibility to secure (either by negotiation or in due course by compulsory process) freehold interests in the lands required for the RCD project. It said that while the project may extend over some years, it was necessary to obtain freehold interests at that stage in order to secure the overall site and to ensure that development took place in accordance with the RCD Master Plan. In many instances, VicUrban said, it was not necessary to take immediate possession of acquired lands and, in those circumstances, tenants might be permitted to remain in possession pursuant to the terms of any tenancy or leasehold arrangement which may be current. VicUrban, however, reserved its rights, if necessary, to acquire by compulsory process other interests, such as those of an occupier, in the land. VicUrban proceeded to make the following further observations (among others) in the letter: so far as possible, tenants would be permitted to remain in occupation upon the same terms as they currently enjoyed; VicUrban might therefore become the landlord/lessor as may be appropriate; it was not possible to say exactly when possession of various parcels of land would be required, but VicUrban would give as much notice as it could in that regard and, in any event, if compulsory acquisition of occupiers’ interests were undertaken, VicUrban would comply with the requirements of the LAC; and VicUrban could give no undertaking that construction works in the vicinity of ‘Little India’ would not commence prior to the acquisition of interests in land.
42 On 6 June 2007, VicUrban wrote again to Rennick and Gaynor.[14] In relation to an area of land that encompassed 2A Mason Street, VicUrban advised that it expected that the land would be required for construction works after January 2010. It was envisaged that the compulsory acquisition process would commence for ‘owner interests’ in late 2007 to mid 2008. VicUrban repeated that tenants would be able to remain in occupation until possession was required.
43 On 8 June 2007, VicUrban sent yet another response to the letter of Rennick and Gaynor dated 29 May 2007. The response stated that VicUrban was negotiating the purchase of freehold interests with a number of registered proprietors of land in the project area and that if VicUrban did not acquire all the interests it required in the project area, it intended ‘to acquire the remaining interest (freehold interests and, where relevant, other interests) by compulsory process’.[15]
44 On 23 April 2008, VicUrban wrote directly to Mr Obeid at 2A Mason Street, Dandenong.[16] The letter referred to previous correspondence about the RCD initiative. It advised that the Minister for Planning and Environment had approved the public acquisition overlay affecting Mr Obeid’s leasehold property on 31 July 2007 and that the RCD Urban Master Plan had been finalised and launched to the public on 2 November 2007. It proceeded:
45 The enclosed notice of intention to acquire (in the form of Form 1) was addressed to Sandra Di Giulio ‘(as Registered Proprietor)’, Samir Obeid ‘(as Occupant)’, Body Corporate RP5899 and ‘all other interests’.[17] The notice stated that VicUrban intended to acquire ‘an interest’ in the land in question. The nature of the interest to be acquired was not specified. The land itself was identified by title particulars and by description. The notice recited that VicUrban thought that the land was suitable for the RCD initiative because of its location; and the notice further recited that the land was reserved for a public purpose under the Dandenong Greater City Planning Scheme. The notice also stated (among other things):This letter is to inform you that VicUrban intends to acquire the freehold (owner) interest in the property which you currently occupy. In accordance with the Land Acquisition and Compensation Act 1986 (the Act) VicUrban is required to serve a Notice of Intention to Acquire on all parties with an interest in land. Accordingly, please find attached a Notice of Intention to Acquire, together with a Statement of rights and obligations for your information. When VicUrban becomes the owner of the property, you will be able to continue to occupy the property in accordance with the terms and conditions of your existing lease. If possession is required before the expiration of your lease, VicUrban will acquire your interest in the property at a later date.
At this point in time, possession will not be required before 2010. You will be kept informed of possession requirements as the RCD program is developed and becomes more detailed.
At the present time it is expected that VicUrban may require possession of the land in 2010. This date may change. VicUrban requires you to provide it with information about the following –
- The name of any person who has, or you think may have, an interest in the land (such a person might be a tenant or a mortgagee or a person to whom you have agreed to sell the land)
...
- Any other matters of which you are aware which will help VicUrban to work out what compensation you should receive for the land (this information may include details of any mortgage, lease or other arrangement affecting the land. If you claim financial loss, please provide financial documents and other records to substantiate all losses. ...).[18]
47 In accordance with s 12 of the LAC, the statement further advised Mr Obeid and the others to whom it was addressed that they were prohibited from selling or otherwise dealing with their interests in the land without permission from VicUrban.The attached NOTICE OF INTENTION TO ACQUIRE informs you that the Victorian Urban Development Authority (VicUrban) intends to acquire yourinterest in the land described in that notice ... . The notice informs you that VicUrban requires your land and at this stage intends to acquire it compulsorily or by agreement from you.
The notice is not an offer or agreement to buy the land and it does not mean that VicUrban will definitely buy the land ... .[20]
48 Critically, on 26 June 2008, the following notice of acquisition referring to the land in question was published in the Victoria Government Gazette:[21]
49 VicUrban sent a copy of the notice of acquisition to Mr Obeid accompanied by a letter dated 26 June 2008 which stated that in accordance with the LAC, ‘VicUrban has determined to compulsorily acquire the owner’s interest in the property’.[22] The letter went on:Land Acquisition and Compensation Act 1986 FORM 7 S 21
Reg 16
Notice of Acquisition
Compulsory Acquisition of Interest in Land
The Victorian Urban Development Authority (VicUrban) declares that by this notice it acquires the following interest in the land described as Unit 4 on Strata Plan 005899 and an undivided share in the common property, Parish of Dandenong, being the land contained in Certificate of Title Volume 9088 Folio 557:
Sandra Di Giulio (as Registered Proprietor); and
Body Corporate RP 5899, Melbourne Body Corporate Management, 160 South Gippsland Highway, Dandenong South, Vic. 3164.
Published with the authority of VicUrban.
Dated 26 June 2008
For and on behalf of VicUrban
JOHN WARK
Development Manager
Urban Revitalisation
50 As mentioned above, an explanatory statement in the form of Form 8 should have been served on Mr Obeid and others (together with the copy of the notice of acquisition), but it is not clear whether such a statement was served or not.As at the date of acquisition, VicUrban became the proprietor and landlord in respect of the property which you occupy. The terms and conditions of your lease remain the same, however you are now required to pay your rent to VicUrban. ...
As previously advised, you will be able to continue to occupy the property in accordance with your existing lease until physical possession of the property is required by VicUrban for construction works. At this stage, possession will not be required before 2010. If possession is required before the expiration of your lease, VicUrban will acquire your interest in the property at this time.
51 Mr Obeid then commenced to pay rent to VicUrban. Between June 2008 and August 2009, Mr Obeid’s rent was increased three times from $825 per month (before the acquisition) to $1,100 per month.[23]
52 There were a number of inspections of the property on behalf of VicUrban but no request was made for delivery up of possession.
53 On 15 June 2010, Mr Obeid gave notice of exercise of the option to renew the lease for a further 3 years from 24 September 2010. He states that at this time he was uncertain whether VicUrban had compulsorily acquired his lease.[24]He states that he exercised the option in order to preserve as much of his business as possible.[25]
54 At no stage did VicUrban take any of the steps provided for in s 26 of the Act in relation to an acquisition, such as endeavouring to obtain agreement as to the terms on which it would enter into possession of the land, or giving a notice of intention to enter into possession under s 26(2) or s 26(5), or seeking to obtain agreement with Mr Obeid under s 26(6) to extend the statutory period during which an occupier may remain in occupation after an acquisition.
55 On 25 June 2010, Mr Obeid lodged a claim for compensation. VicUrban’s solicitors responded that Mr Obeid’s interest had not been acquired or divested and, accordingly, that no claim was available to him. The parties subsequently agreed to put the issue of the maintainability of Mr Obeid’s claim before this Court for determination as a discrete point of law. Mr Obeid commenced this proceeding accordingly in January 2011. Any question of quantum was to be determined in separate proceedings either at the Victorian Civil and Administrative Tribunal or in this Court, if Mr Obeid were to succeed on the point of law. There was no suggestion of an estoppel claim by VicUrban at that stage.
56 Between 16 August 2010 and late March or early April 2011, VicUrban carried out significant works in the vicinity of the premises in question as part of the RCD project. Those works required Mason Street to be at least partially closed for certain periods. The works otherwise reduced access to the premises from time to time. By May 2011, Mr Obeid apparently decided that his business was no longer viable and had to close.[26]Rightly or wrongly, he attributes this, at least in part, to VicUrban’s roadworks and building works and VicUrban’s attitude with respect to rent and other matters. Mr Obeid purported unilaterally to terminate the lease. He vacated the shop on 24 June 2011.[27] VicUrban protested at the time that Mr Obeid had no right to terminate the lease, but it has apparently taken no steps against Mr Obeid in this regard. These matters do not fall for further consideration or determination in this proceeding. They do not need to be considered in relation to the estoppel claim which, as will be seen, is in any event unmaintainable. The only substantial question to be determined in this case is whether Mr Obeid’s leasehold interest was divested on 26 June 2008.
VicUrban’s contentions
57 Putting aside the estoppel claim, VicUrban’s essential contentions may be stated as follows:
(a) The issues for determination turn upon the proper construction of the notice of acquisition dated 26 June 2008.[28]
(b) As a matter of construction of the notice, whether considered in isolation or in the light of the surrounding circumstances, VicUrban did not acquire the leasehold interest of Mr Obeid.[29]
(c) The notice differentiated, as s 19 of the LAC contemplates, between the land in certificate of title volume 9087 folio 557 and the interest in the land acquired, that of Sandra Di Giulio (as Registered Proprietor).[30]
(d) The interest of Sandra Di Giulio as Registered Proprietor was a freehold estate held in reversion during the remaining term of the Obeid lease and upon the expiration of that term, the full fee simple.[31]
(e) The notice did not purport to acquire Mr Obeid’s interest in the land, being the leasehold, nor was it effective to do so.[32]
(f) The LAC contemplates and permits the acquisition of a specified interest without affecting other interests. Upon the acquisition of a fee simple estate in reversion, any leasehold interest is unaffected.[33]
(g) Contrary to the submissions for Mr Obeid, s 26 does not operate so as to divest or diminish interests in land. It does not give rise to a separate entitlement to compensation.[34]
(h) Commonwealth v Maddalozzo[35] does not support the proposition that, in the present case, the publication of the notice resulted in VicUrban acquiring the leasehold interest of Mr Obeid. Rather, the principles of construction applied by the Court in Maddalozzo, when applied to the notice in issue in the present case, lead to the conclusion that, here, an identified interest in land, being the particular interest held by a particular person, Ms Di Giulio, was acquired and not other interests, except for that of Body Corporate RP5899 to which interest the notice also expressly referred.[36]
(i) Generally speaking, the compulsory acquisition of land interferes with vested property rights, notwithstanding that compensation is available. A strict presumption in favour of the preservation of vested property rights applies. It follows that notices of acquisition should be read down, not up, where more than one construction is open.
(j) Further or alternatively, applying Maddalozzo, the Court should take into account relevant surrounding circumstances. Here those circumstances include the terms of the notice of intention to acquire and the terms of the correspondence between VicUrban, on the one hand, and Mr Obeid and his solicitors, on the other; and those matters support VicUrban’s construction of the notice.
(k) Mr Obeid was under no illusions as to the effect of the notice. On 15 June 2010 he exercised the option he held pursuant to the pre-acquisition lease and renewed the lease, consistent only with his interest as lessee not having been acquired.[37]
Determination: short reasons
58 I am not persuaded by VicUrban’s arguments. In my view, the effect of the publication of the notice of acquisition was to divest from Mr Obeid his leasehold interest in the land.
59 In arriving at that determination, I do not necessarily accept all of the plaintiff’s submissions. In particular, I am not convinced that under the LAC an Authority can never do what VicUrban claims to have done in this case, namely acquire the landlord’s interest in a piece of land without acquiring or disturbing the tenant’s interest. Although it is not necessary to decide the point in this case, my preliminary view, contrary to the plaintiff’s submissions, is that neither s 24 nor s 26 of the LAC precludes that possibility.
60 However, in the present case, the publication of the notice of acquisition did, on the proper construction of the notice, divest from Mr Obeid his leasehold interest. In essence, it did so because:
(a) the notice was expressed to acquire the interest of Ms Di Giulio as registered proprietor of the land;
(b) the interest that Ms Di Giulio held as the registered proprietor of the land was an estate in fee simple in the land;
(c) likewise, the interest of the Body Corporate in the common property was as the registered holder of the fee simple estate in the common property;
(d) the notice did not refer to any reversionary interest nor otherwise expressly limit or qualify the interest being acquired;
(e) it is unnecessary to determine the nature or extent of any presumption against the acquisition of vested property rights that may arise under the LAC, because the construction contended for by VicUrban is not open in any event;
(f) the notice should be construed as it would be construed by a member of the public reading it as published in the Government Gazette and in the light of the relevant legislation and the relevant entries in the register of titles;
(g) knowledge that Ms Di Giulio’s interest as registered proprietor was encumbered by a lease to Mr Obeid should not be attributed to a reader of the notice;
(h) even if such knowledge were to be attributed to a reader of the notice, the notice would still not indicate to the reader that the leasehold interest of Mr Obeid was to be preserved;
(i) therefore, section 24 of the LAC operated so as to vest the fee simple estate in the whole of the land in the Crown freed and discharged from the leasehold interest of Mr Obeid and from all other encumbrances.
The notice on its face acquired the fee simple estate
61 It is common ground that the critical document is the gazetted notice of acquisition. The notice declared that VicUrban acquired ‘the following interest’ in the described land:
62 The critical task is therefore to identify the principal subject matter of the acquisition as described in the notice, being the interest held by ‘Sandra Di Giulio (as Registered Proprietor)’.Sandra Di Giulio (as Registered Proprietor); and Body Corporate RP 5899, Melbourne Body Corporate Management, 160 South Gippsland Highway, Dandenong South, Vic. 3164.
63 VicUrban submits that the interest so described in the notice was not the ‘full’ estate in fee simple. Rather, VicUrban says, the interest of Sandra Di Giulio was a freehold estate held in reversion during the remaining term of the Obeid lease and, upon the expiration of that term (but not before), the ‘full’ fee simple.[38]
64 VicUrban concedes that if the notice had simply declared that (by the notice) VicUrban acquired ‘the fee simple’ in the land, Mr Obeid’s claim could not be resisted.[39] In my opinion, that concession is correctly made. VicUrban went on to submit, however, that the absence of the words ‘estate in fee simple’ in the notice indicate that the interest being described is merely the reversion and that this is less than the ‘full’ fee simple.[40] In this regard VicUrban points out that the notice identified the interest both by reference to its legal nature (being the interest of a registered proprietor) and by reference to the person (Sandra Di Giulio) whose interest was being acquired. VicUrban mentions also that in the notice the identification of the land itself was separate again. VicUrban submits that if the notice had been intended to acquire not only the reversionary interest but also all other ‘interests’ in the land as defined in s 3 of the LAC, including the interest of the lessee, Mr Obeid, it would have been a simple matter to draft the notice accordingly.[41]
65 VicUrban says that the present notice:
(a) makes no reference to the acquisition of the interest of a lessee;
(b) does not name Mr Obeid;
(c) does not treat as synonymous the land in which the interest subsists and the interest(s) in that land acquired by the notice;
(d) gives no clue and raises no ambiguity as to the acquisition of any other interests, beyond those of Ms Di Giulio and the body corporate.[42]
66 VicUrban submits that those features of the present case distinguish it from Maddalozzo, on which the plaintiff relies. It is desirable at this point to refer to Maddalozzo in more detail.
67 In Maddalozzo the applicable Commonwealth lands acquisition legislation was broadly similar to the LAC. Mr Madalozzo sought compensation for the alleged acquisition by the Commonwealth, under the legislation, of two mining leases held by him over land included within an area referred to in a gazetted notice of acquisition. The notice was relevantly in the following terms:
68 The parties in Maddalozzo agreed that the land described in the notice comprised an area of some 32 square miles and consisted of ‘either unalienated Crown Land not subject to lease or land in private ownership in fee simple’ and that to ascertain which was which would require extensive searches in the Titles Office.Notice of the Acquisition of land by the Commonwealth It is hereby notified that his Excellency the Governor-General acting with the advice of the Federal Executive Council has authorised pursuant to the provisions of the Lands Acquisition Act 1955-1966, the acquisition by compulsory process of all estate in fee simple land included in the area of land hereunder described, and I hereby declare that the said land is acquired by the Commonwealth of Australia under the said Act for the following public purpose approved by the Governor-General: the planned development and control of the City of Darwin and its adjacent areas ... .[43]
69 It had been established many years before, in Commonwealth v New South Wales,[44]that a notice of acquisition that purports to acquire simply ‘land’ operates to acquire all the estates, interests and rights in or over the land save those already held by the acquiring body. Hence the case for the Commonwealth in Maddalozzo depended upon an acceptance of the initial proposition that by the notice it acquired an estate in fee simple or estates in fee simple and no more. The next step in the argument was to say that the interests conferred on Mr Maddalozzo by his mining leases under the Mining Ordinance stood apart from an estate in fee simple, formed no part of it and were therefore not the subject of the acquisition.[45]
70 Mason J dealt with the question of construction of the language of the notice as follows:
71 Aickin J reasoned in much the same way:We have no means of knowing how it came about that the notice published in the Gazette was so clumsily expressed. However, in spite of the defects and deficiencies of the language employed, I have come to the conclusion that the majority of the Full Court was right in holding that the notice, in speaking of “all Estate in fee simple land”, was referring to all land which had been granted in fee simple by the Crown in the area in question. This is to treat the words ‘estate in fee simple’ as adjectival in character, describing land which has been granted in fee, not as denoting the particular estate in land which is the subject of the acquisition. It is perhaps a use of language which would cause a skilled conveyancer to wince. But, though it lacks elegance, it has a meaning and one which can be ascertained without doing violence to the words used. On the other hand, the principal competing constructions which have been suggested require verbal surgery of a radical kind. One suggestion is that we should read the notices as if the drafstman intended to say “all estates in fee simple in land”. Another suggestion is that we should read it as “an Estate in fee simple in land”. Each alternative not only does some violence to the language of the notice, it also involves cumbersome surplusage. In each instance the words “in the area of land” are unnecessary and could have been eliminated.
The only criticism made of the construction which I favour is that the draftsman could have expressed it more simply by acquiring “all land included in the area of land hereunder described”. This is to assume that in the area in question there was no land in private ownership which was not alienated in fee. We have been told that this was the fact. But it is a fact which makes the respondent’s construction a more natural construction than either of the alternative suggestions.[46]
72 Barwick CJ agreed with the judgments of both Mason and Aickin JJ and added some remarks of his own. Judgments to the same general effect were delivered by Stephen J and Wilson J. Accordingly, Mr Maddalozzo succeeded.The expression “the Estate in fee simple land” is perhaps not a particularly felicitous phrase but nonetheless its meaning in the context appears to me to be quite clear. It will be pointless for the Crown to purport to acquire that which was already Crown Land. In an overall area part of which had been alienated by way of estates in fee simple, and part of which was unalienated Crown Land it would be a natural way of describing so much as had been alienated as “all Estate in fee simple land included in the area hereunder described”. The words “Estate in fee simple” are in that context an adjectival expression which avoided the inconvenience of specifying by way of metes and bounds or some other mode the alienated Crown land which the Crown was taking back by way of compulsory acquisition from those to whom, or to whose predecessors in title, the land had been granted. Thus what was being acquired was so much of the land in that 32 square mile area as answered the description “land in fee simple”. Since the word “land” includes an “interest in land” it must follow that what was acquired was land held in fee simple and all “interests” therein. Indeed the grammatical structure of the notice makes it clear that the expression is not used to describe the estate being acquired but to describe the land itself which is to be acquired. That must necessarily mean all estates and interest in the land. Indeed one would expect that to be the case in light of the purpose of the acquisition as set out in the notice itself, namely, “the planned development and control of the City of Darwin and its adjacent areas”.[47]
73 VicUrban seeks to distinguish Maddalozzo on the basis that the notice in that case was found to have treated the physical land itself, as distinct from estates or interests in the land, as the subject matter of the acquisition. By contrast, VicUrban submits, the notice presently in question treats not the land itself but the interests of Ms Di Giulio and of the Body Corporate as the (only) subject matter of the acquisition. VicUrban submits that to read the notice as acquiring all interests rather than ‘the following interests’ as specified requires verbal surgery of the radical and impermissible kind to which Mason J referred. By way of example, says VicUrban, it would require the assumed inclusion of the following bolded words:
74 In Maddalozzo, VicUrban says, the ‘clumsy’ approach used was one to acquire land as distinct from some limited interest in land. Hence, agreeing with the construction for which Mr Maddalozzo contended and adopting it for the reasons set out in the opinions of Mason and Aickin JJ, Wilson J observed:Sandra Di Giulio (as Registered Proprietor) and Samir Obeid (as Occupant) and
Body Corporate RP 5899.[48]
75 Unlike Maddalozzo, where the notice purported to acquire simply ‘land’, here, says VicUrban, the notice in question served to identify the particular relevant interest in land as being only that of ‘Sandra Di Giulio (as Registered Proprietor)’.[50]The respondent’s answer to the Commonwealth’s contention is a simple one. It takes the critical phrase “all Estate in fee simple land” in the notice of acquisition, and extracts from it the plain ordinary meaning of the words, resulting in the conclusion that the intention is to take all land within the described area which has been alienated in fee simple from the Crown. The words preceding “land” in the quoted phrase are adjectival in function, serving to identify the land to which the notice applies, as distinct from any particular interest in the land. I understand the Commonwealth to concede the next step in the respondent’s argument, which is that if this is the proper construction of the notice of acquisition then its effect is necessarily to acquire all interests of whatever description in the land including the interests of the respondent.[49]
76 I accept that Maddalozzo does not dictate the result of the present case. However the mere fact that the subject matter of the notice of acquisition presently in question was expressed to be an interest or interests in land rather than physical land itself does not mean that a result opposite to the result in Maddalozzo must follow. It will be recalled that the prescribed form of notice of acquisition under the LAC requires that the notice be expressed in that way in every case. That was not the situation under the Commonwealth legislation.
77 Moreover, the words of the notice here in question do not refer to the interest of Sandra Di Giulio simpliciter, but rather to the interest of Sandra Di Giulio as registered proprietor. Likewise, the notice refers to the interest of ‘Body Corporate RP 5899’ and the expression ‘RP’ is, of course, short for Registered Plan.
78 In Victoria, a reference to the registered proprietor of land is generally understood to be a reference to the person who is registered under the TLA as the owner of the fee simple estate in the land. Accordingly, in the present case, a simple search of the public register would have revealed that on the certificate of title Sandra Di Giulio was shown as the registered proprietor of an ‘estate in fee simple’ in the land; that the body corporate was registered as the owner of the common property; that there were no other registered estates or interests in the land; and that there were no registered encumbrances.
79 An estate in fee simple is the largest estate in land known to the law.[51]It is as close to absolute ownership as the law permits.[52] The following passage from the judgment of Barwick CJ in Maddalozzo,[53] which was quoted by the plaintiff, is worth setting out:
80 It is true that, as at the time of the acquisition, Ms Di Giulio’s estate or interest was affected by the unregistered lease to Mr Obeid. Hence, as a matter of legal nomenclature, the interest of Ms Di Giulio could have been described as a freehold estate held in reversion. In this regard, VicUrban draws attention to the following comment made by Austin J in Heggies Bulkhaul Ltd v Global Minerals Australia Pty Ltd:[54]In my opinion, land as the subject-matter of acquisition is indistinguishable from an estate in fee simple in the described land. That estate is the largest estate which can be held in land and thus, in my opinion, is synonymous with land as the subject of acquisition. If an estate in fee simple is acquired within that description, the land is acquired.
However, although a fee simple owner who grants a lease creates a reversion, the owner does not thereby lose his or her fee simple estate.[55] Notwithstanding that a tenant clearly has a proprietary interest, the landlord still retains the fee simple in possession. Professor Butt offers the following explanation:[56]It is undoubtedly correct that, where the holder of an estate in fee simple grants a lease, the reversionary estate during the term of the lease is that part of the estate in fee simple that the lessor has not disposed of by granting the lease.
81 The nature of a landlord’s interest was pithily summarised by Gray J in Balgra Office Enterprises Pty Ltd v Commissioner of State Taxation:[57]On the creation of a leasehold interest, there arises in the landlord a “reversion” – “reversion” here meaning simply the interest that remains in a person who has granted away less than the whole of his or her interest in the land. Sometimes the lease is said to be “carved out of” the fee simple, as if the landlord’s fee simple estate is somehow diminished. While this “carving out” metaphor may suffice for some purposes (for example, to show that the lease is a new interest in the land), it should not disguise the legal reality that the landlord retains the entire estate in fee simple – indeed, that necessarily follows, because the lease is not an “estate” in the land. So while a proprietary right is created in the tenant, denying the landlord the right to possession for the duration of the lease, the landlord remains the owner in fee simple.
82 The reversion, therefore, is not some lesser interest than the fee simple.[58] Nor is it, as VicUrban seems to suggest, a future right that only comes into existence once the lease ‘reverts’ at the end of the term.[59] It describes all those rights that the fee simple owner enjoys during the term of a lease, namely the rights not granted to the tenant, the rights held pursuant to the lease (such as the right to receive rent), and the rights granted to the tenant, held in abeyance.[60]An estate in fee simple gives to the holder a bundle or constellation of rights. Possession, or the right to it, is one of the incidents of ownership of an estate in fee, albeit a very important and valuable one. The rights to lease, to receive rents and profits, to mortgage or charge, and to develop are further examples. A right to physical possession when granted in exchange for rent does not reduce the estate in fee simple or its value in the hands of the owner. It is correctly viewed as the way in which the owner has chosen to exploit the undiminished estate in fee simple.
83 Indeed, in Maddalozzo Barwick CJ and Wilson J were of the view that, under the Commonwealth legislation, the Commonwealth could not acquire the fee simple in land and leave ‘unacquired’ some lesser interest in the land.[61] That view represented obiter dicta on the part of Wilson J and perhaps also on the part of Barwick CJ. The other three members of the High Court did not squarely address the point. I need not and do not decide the question whether, under the LAC, an Authority cannot acquire the fee simple in land and still leave some lesser interest, such as a leasehold interest, unacquired. As mentioned above, I am not convinced that that cannot be done. In other jurisdictions, it has been thought possible to resume only the reversion of leased land.[62] However, the judgments in Maddalozzo, especially those of Barwick CJ and Wilson J, indicate that, in jurisdictions such as Victoria, where the relevant legislation is broadly similar to the legislation considered in Maddalozzo, acquiring authorities should at least be extremely careful in drafting notices of acquisition if, in effect, they wish to acquire a large estate (such as the fee simple) ‘minus’ some lesser estate or interest.
84 No such care was exhibited in the drafting of the notice of acquisition presently in question. On its face, the notice looks very like a declaration of acquisition of the fee simple.
85 The notice of acquisition did not describe the interest to be acquired as a freehold estate held in reversion. Rather, the notice described it as the interest of Ms Di Giulio ‘as Registered Proprietor’. As mentioned above, that would normally be read as a reference to the ‘full’ estate in fee simple. All the more so where, as here, no reference is made in the notice to any leasehold interest or other encumbrance. [63]
86 It is true that the notice refers separately to the land and to the interest or interests to be acquired. However, as mentioned above, that will always be so, because s 21(a) requires that a notice of acquisition be in the prescribed from; and, in conformity with s 21(b), the prescribed form provides for the notice to contain a description of the land and a separate identification of the ‘interest(s) acquired’.
87 In my view, the fact that the notice contains a separate reference to Body Corporate RP 5899 does not assist VicUrban. If anything, it tends to confirm the impression otherwise conveyed by the notice that the notice is designed to effect a comprehensive acquisition of the land in question.
88 On its face, the notice appears to bring about an acquisition of the ‘full’ fee simple in the land.
Interpreting documents affecting vested property rights
89 Nevertheless, VicUrban submits that, as a matter of construction, a notice which potentially deprives a person of an interest in land by compulsory process must, to the extent of any ambiguity, be read down, not ‘read up’ as contended for by Mr Obeid.[64] VicUrban cites passages from R and R Fazzolari Pty Ltd v Parramatta City Council[65] and PJB v Melbourne Health[66] in support of this proposition.
90 In Fazzolari, a local council had purported to acquire private land compulsorily. The owner objected, notwithstanding that compensation was payable. By statute, the council’s ordinary powers of compulsory acquisition were limited or unavailable when the land was to be acquired for the purpose of resale, except in certain circumstances. All members of the High Court were satisfied that the acquisitions in question had been for the purpose of resale, and were unlawful. The case turned in part on the interpretation of the relevant statutory provisions. French CJ discussed the proper approach to interpretation. His Honour said:
His Honour elaborated upon this point as a manifestation of the ‘principle of legality’.[68] He referred to a ‘presumption’ against a statutory intention to interfere with vested property rights. French CJ said that the presumption had been expressed by Griffith CJ in Clissold v Perry[69]; and that the presumption had been restated on more than one occasion in the High Court.[70] He said that this did not authorise the court to put to one side ‘the unambiguous effect of the words which Parliament has seen fit to use’.[71] However, it meant that where a statute was capable of more than one construction, ‘that construction will be chosen which least interferes with private property rights’. The plurality comprised Gummow, Hayne, Heydon and Kiefel JJ. There was no reference to any such general approach to interpretation in their Honours’ judgment.In accordance with established principles of statutory interpretation the preferable construction is that which authorises the least interference with private property rights.[67]
91 Subsequently, in Mandurah Enterprises Pty Ltd v Western Australia Planning Commission,[72] a question arose about the power of the respondent to compulsorily acquire certain land. French CJ, Gummow, Crennan and Bell JJ said:[73]
In a footnote to the last sentence of this passage three citations are given. The first is a reference to the part of the judgment of Griffith CJ in Clissold v Perry[74] to which French CJ had referred in Fazzolari, as mentioned above. However I note that Griffith CJ had been dealing with a claim by the acquiring authority that it was entitled to displace without compensation the holder of a possessory title. Griffith CJ and the other members of the High Court rejected the authority’s claim to be able to do so. The second citation given in the abovementioned footnote in Mandurah is a reference to a paragraph of the judgment of McHugh J in Western Australian Planning Commission v Temwood Holdings Pty Ltd.[75] In that paragraph, after setting out the passage from the judgment of Griffith CJ in Clissold v Perry to which French CJ had referred in Fazzolari, McHugh J immediately went on to say that the principle applied in Clissold was but a particular exemplification of the wider principle that, in the absence of clear words, ‘legislation is not construed as intending to interfere with economic rights and interests without compensation’.[76] The third citation is a reference to certain remarks of Gaudron J in Marshall v Director-General, Department of Transport.[77] Gaudron J had there said that it was a basic rule of statutory construction that legislative provisions were to be construed according to their natural and ordinary meaning unless that would lead to a result that the legislature must be taken not to have intended. Her Honour said that good reason must be shown before it will be concluded that the legislature did not intend the consequences that would flow if the provision in question were given its natural and ordinary meaning. Her Honour continued that it was particularly important that this rule be given its full effect when, to do otherwise, would limit or impair individual rights, particularly property rights.The power to compulsorily acquire land is a power to take land for the purpose for which the power is granted. Compulsory acquisition and associated compensation is entirely the creation of statute. The submissions concerning s 13 of the Planning Act and s 161 of the Land Act raise questions of statutory interpretation to be assessed by reference to the statutory presumption against an intention to interfere with vested property rights.
92 It seems to me, with respect, that there may be some tension between the way in which the ‘presumption’ was described by French CJ in Fazzolari and the approach taken in the three cases mentioned by the plurality in Mandurah in the footnote to which I have referred. It is true that, in Fazzolari, in addition to the authorities to which I have so far referred, French CJ cited Greville v Williams[78], Wade v New South Wales Rutile Mining Co Pty Ltd[79], Clunies-Ross v The Commonwealth[80] and Pearce and Geddes, Statutory Interpretation in Australia, 6th edition (2006)[81] in support of his Honour’s relatively strict statement of the presumption. However, neither Greville nor Wade was a case in which compensation was available for the proposed interference with property rights. Clunies-Ross was such a case; and the High Court did say in Clunies-Ross that an executive power to deprive a citizen of his property by compulsory acquisition ‘should be construed as being confined within the scope of what is granted by the clear meaning or necessary intendment of the words by which it is conferred’.[82] In the latest edition of Pearce and Geddes,[83] the learned authors say that one might have expected that the presumption referred to in Clissold v Perry would apply with less force than previously, given the extent to which modern legislation inevitably interferes with property rights. But the learned authors immediately acknowledge what French CJ had said in this regard in Fazzolari, and they also proceed to quote from Clunies-Ross.
93 I suspect that the last word on this subject has yet to be uttered. Whether it is appropriate to read with equal strictness a statute providing for expropriation of property without compensation and a statute like the LAC, which provides for full compensation, for independent assessment of quantum on review and for up to ten per centum additional compensation by way of solatium, is surely a question. The question is all the more acute given the High Court’s relatively recent apparent endorsement, in Kettering Pty Ltd v Noosa Shire Council,[84] of the further observation made by Gaudron J in Marshall, namely that statutory provisions conferring a right to compensation for the resumption of land should be construed ‘with all the generality that their words permit’.[85]
94 The other case relied upon by VicUrban in the present connection, namely the decision of Bell J in PJB v Melbourne Health,[86] does not assist its argument. It does contain a detailed and helpful discussion of the principle of legality. However PJB was a case about the extent, and the proper exercise, of the statutory powers of the Victorian Civil and Administrative Tribunal relating to the making of guardianship and administration orders in respect of the property and affairs of persons under disability. In discussing the principle of legality, Bell J spoke of the need to adopt a nuanced approach to the interpretation of statutes in the light of the Charter of Human Rights and Responsibilities 2006, and to strike an appropriate balance between competing indicators. His Honour said:
It appears to me that, if anything, the judgment of Bell J in PJB assists Mr Obeid’s position, rather than VicUrban’s position, in relation to the correct approach to the interpretation of the relevant provisions of the LAC.In such cases, it surely necessary to go beyond stating an oracular conclusion that a ‘strict’ interpretation means the legislation does not authorise the drastic interference or that the legislation unmistakably permits it. That is not the nature of the interpretative problem. It is hardly pertinent to say the legislation should be interpreted strictly when it unmistakably authorises some or even a substantial interference with rights. It is equally unhelpful to say the legislation contains provisions having that unmistakable effect when there is legitimate dispute about the scope of operation of those provisions, properly interpreted. It is necessary to engage more intensely and explicitly with the purposes of the legislation and its impact on individual rights and freedoms and then determine where, on a proper interpretation of the provisions, the legislative balance has been struck. The principle of legality allows this to be done, and transparently.[87]
95 Fazzolari and the other cases to which I have so far referred in this present connection were mainly cases about the proper approach to the interpretation of statutes (of particular kinds). None was a case about the proper interpretation of administrative documents, much less about the proper interpretation of notices of compulsory acquisition in particular. Of course, Maddalozzo was a case of that kind, but in Maddalozzo the High Court made no reference to any presumption of the sort referred to in Fazzolari. That silence may be thought rather eloquent, because when Maddalozzo was before the Full Court of the Federal Court Lockhart J (who was in dissent and who would have found against Mr Maddalozzo) had said:
96 In any event, in this case, for the reasons already given and for the further reasons set out below, I do not consider that the construction of the notice of acquisition for which VicUrban contends is open. Therefore, even if the notice falls to be construed with all the strictness of the presumption as it was described by French CJ in Fazzolari, VicUrban still fails.Although the language of the notice is not as clear and felicitous as it might be, it is not ambiguous. If it suffered from ambiguity, this would afford an additional reason for accepting the construction contended for by the respondent. Statutes must not be construed so as to divest persons of proprietary rights unless the intention of the legislature is expressed in clear and unambiguous language: see Re Cuno (1889) 43 Ch D 12; Craies on Statute Law 7th ed p 118.
VicUrban’s submission that the surrounding circumstances may be taken into account in interpreting the notice of acquisition
97 VicUrban submits that, if need be, the notice should be read in light of its surrounding circumstances; that those circumstances include the terms of the notice of intention to acquire dated 23 April 2008 and also the terms of the correspondence between the parties; and that, so read, the notice of acquisition is seen to exclude Mr Obeid’s interest as tenant.
98 In this regard VicUrban relies in particular on the following passage from the judgment of Aickin J in Maddalozzo:
99 Emphasising that Aickin J spoke of the proper construction of the notice ‘in the light of the surrounding circumstances’, and that Mason J likewise took into account the agreed fact (not stated in the notice) that there was, within the 32 square mile area to which the notice referred, both unalienated Crown land and land held in fee simple, VicUrban submits that the surrounding circumstances here include the facts that:The substantial question therefore is simply one of the proper construction of the notice in the light of the surrounding circumstances. The relevant circumstances are the fact that the 32 square miles described in the notice of acquisition comprised both land which had been granted by way of an estate in fee simple and land which was unalienated Crown land. The critical words in the notice are those which describe the land acquired, namely, “all estate in fee simple land included in the area of land hereunder described” and the opening words of the description of the land, namely, “that area” defined by the various boundary lines set out under the heading “Description of Land”, and those which describe the purpose of the acquisition, namely, “the planned development and control of the City of Darwin and its adjacent areas”.[88]
(a) the notice of intention to acquire, a statutory prerequisite to the validity of the acquisition, expressly referred to the interests of Mr Obeid whereas the notice of acquisition did not;
(b) the letters which preceded the notice of intention to acquire, including that of 5 June 2007 from VicUrban to Rennick & Gaynor, and that which accompanied the notice of acquisition of 26 June 2008, expressly gave notice that VicUrban had determined to compulsorily acquire the owner’s interest in the property only.[89]
100 VicUrban points out that, in order for the notice of acquisition to be validly issued in reliance upon the s 19 power, it was necessary in the present case that VicUrban first serve a notice of intention to acquire under s 6 of the LAC, not on each person whose interest was to be acquired, but upon each person ‘who has an interest in the land’.[90]
101 It is obvious, says VicUrban, that there will not always be correspondence between the interest or interests of the person or persons to whom a notice of intention is required to be given and the person or persons whose interest or interests is or are to be acquired pursuant to s 19. According to VicUrban, the present case is an example of a case where not all interests known to the Authority and therefore required to be notified pursuant to s 6 were acquired. The interest of Mr Obeid (as occupant) and ‘all other interests’ were both identified in the notice of intention. So too were the interests of Ms Di Giulio and of the Body Corporate. However, says VicUrban, when it came to acquisition only these two latter interests and no others were acquired.[91]
102 In this connection, VicUrban mentions that the notice of intention also informed recipients of it that the expectation of VicUrban was that possession would not be likely to be required prior to 2010; and VicUrban points out that the giving of information of that kind is expressly contemplated by s 8(1)(f) of the LAC Act.[92]
103 VicUrban contends that the notice of acquisition must be construed in the context of what went before it and in the context of the letter which accompanied it.[93] In this regard, VicUrban submits that it is clear that Mr Obeid was in no doubt that his leasehold interest remained. VicUrban asks rhetorically: If the position were otherwise, why did Mr Obeid move to exercise the option?[94]
104 According to VicUrban, the materials constituting the surrounding circumstances, or, put another way, the factual matrix, lead solely to the view that only the reversionary interest was acquired and that the leasehold interest remained. To the extent, if any, that the notice is unclear or ambiguous, VicUrban submits that the factual matrix leaves no doubt that the interest acquired was the reversionary interest held by Ms Di Giulio and that alone. It says that Mr Obeid proceeded on that basis and that he was correct to do so.[95]
105 Further, says VicUrban, unlike the position in Maddalozzo, no ‘purpose’ was stated in the notice of acquisition in this case. The purpose was identified in the notice of intention to acquire as the Revitalising Central Dandenong Initiative. The same notice advised that at ‘the present time it is expected that VicUrban may require possession of the land in 2010. This date may change’.[96]The acquisition of the interest of Ms Di Giulio as registered proprietor in 2008 was not accompanied by any advice to Mr Obeid or anyone else that the position of VicUrban as to the date on which possession may be required had changed. Unlike the ‘planned development and control of the City of Darwin and its adjacent areas’ which was identified as an unqualified objective in the notice in Maddalozzo, here the purpose was one which, in the notice of intention to acquire, was expressly not to be immediately achieved by a requirement for possession. Rather, possession was to be deferred.[97]
VicUrban’s reliance on the ‘surrounding circumstances’ is misplaced
106 VicUrban’s submissions relating to the surrounding circumstances suffer from three basic interrelated flaws.
107 First, they overlook the public nature of compulsory acquisition. As a result, VicUrban wrongly attributes to the reader of the notice of acquisition knowledge of the circumstances of Ms Di Giulio, of Mr Obeid and of VicUrban itself, beyond anything adverted to in the notice of acquisition or otherwise referred to on the public record.
108 Second, VicUrban’s submissions wrongly assume that the process of construction of the notice consists of a search for VicUrban’s subjective intention, or Mr Obeid’s subjective understanding, rather than an examination of what a reasonable member of the general public would take to be the meaning of the language used in the notice.
109 Third, VicUrban’s case mistakes the effect of s 24 of the LAC. Whereas VicUrban submits that the question is whether the interest of Mr Obeid was acquired, the true question is whether it was divested. As a result, VicUrban adopts the wrong starting point or default position in dealing with what is not said in the notice.
110 As mentioned, these three points are interrelated.
111 Under the LAC, the compulsory acquisition of an interest in land occurs, and can only occur, by formal, public means. An Authority may not acquire an interest in land by compulsory process except in accordance with Part II of the LAC.[98]The interest acquired is the interest which, in the notice published in the Government Gazette, is declared to have been acquired.[99] The notice must be in a certain form.[100] There is no provision for amendment or withdrawal of the published notice.[101] A copy of the notice, in the prescribed form, must be published in a newspaper circulating in the relevant area as soon as practicable after the publication of the notice in the Gazette.[102] Immediately upon publication of the notice in the Gazette the interest in land ‘described in the notice’ vests in the Authority (or, as here, the Crown), ‘freed and discharged’ from all restrictions, encumbrances etc.[103] Any interest that a person has in the land is ‘divested or diminished’ to the necessary extent.[104] Instantly, the interest of every person that is divested or diminished by the acquisition is converted into a claim for compensation.[105] Limited periods for the taking of steps in relation to compensation commence to run.[106] Hence any entitlement to compensation falls to be assessed by reference to the notice of acquisition itself.
112 The publication of a notice of acquisition is a unilateral governmental act having instantaneous effects that may be very significant for a range of persons. The ‘audience’ for a notice of acquisition includes not merely the holder of the interest to be acquired (as described in the notice) but also every other person who may be affected by the fact that the acquisition frees and discharges the interest acquired from ‘all trusts, restrictions, dedications, reservations, obligations, mortgages, encumbrances, contracts, licences, charges and rates of any kind’.[107] From time to time, persons with claims or potential claims for compensation as a result of an acquisition may not have been served with a notice of intention to acquire nor otherwise informed of the proposed acquisition. So it is important that a notice of acquisition be widely published and that it be clear on its face.[108] Further, notices of intention and notices of acquisition are published not only for the information of persons with interests or rights or possible interests or rights relating to the land but also ‘to inform the public in general of the taking’.[109] Publication of the notice of acquisition ‘has the effect of bringing the resumption process out into the open instead of being solely a matter in which only the authority and the landowner are concerned’.[110] As Lee J said in Ball v Maritime Services Board:[111]
113 For the purposes of interpretation, a notice of acquisition under the LAC is analogous to the kind of notice considered by the Court of Appeal in Director of Public Prosecutions Reference No 2 of 1996.[112] Under s 13 of the National Crime Authority Act 1984 (Cth), matters for investigation by the National Crime Authority were to be referred to it by notice in writing. The Authority could employ special, intrusive, investigatory powers in relation to a matter referred. The Court of Appeal held, contrary to the decision of the trial judge, that it was not permissible to have regard to preliminary materials extrinsic to the notice under s 13 to determine what was the matter referred to the Authority. Rather, it was the notice itself, not some other act or document, that determined what matter had been referred. The leading judgment was delivered by Brooking JA, with whom Winneke P and Tadgell JA agreed. Brooking JA held that a notice under s 13 of the National Crime Authority Act 1984 (Cth) was not an ‘instrument’ within the meaning of s 46(1) of the Acts Interpretation Act 1901 (Cth) because it was not of a legislative nature. It followed that s 15AB(1)(i) of the Acts Interpretation Act 1901 (Cth) (as applied to ‘instruments’ by s 46(1)(a) thereof), which permitted a Court to give consideration to ‘any material...capable of assisting in the ascertainment of the meaning of’ any obscure part of an instrument, was not available as a source of power to consider extrinsic materials for the purpose of construing a notice under s 13. Brooking JA went on to hold that even if such a notice were an ‘instrument’ within the meaning of s 46(1), it would still be inappropriate to have regard to preliminary extrinsic materials for the purposes of interpreting it. His Honour noted that under s 15AB the Court would have a discretion, not a duty, to consider extrinsic materials, and that one discretionary factor recognised in s 15AB itself (by subsection (3) thereof) was the desirability of persons being able to rely on the ordinary meaning conveyed by the text.[113] His Honour proceeded:[114]The resumption of land for public purposes is a matter which legitimately concerns not only the individual landowner, but adjoining landowners and the community as a whole.
114 In AB v National Crime Authority,[115] the Full Court of the Federal Court agreed with the view of Brooking JA that, for the reasons he had given, evidence was not admissible to aid in the construction of a notice under s 13 of the National Crime Authority Act 1984 (Cth).A notice under s. 13 is given in the exercise of an executive power conferred by statute upon a Minister of the Crown. If, as I believe, s. 15AB of the Acts Interpretation Act is not to be applied to it, the use of extrinsic materials in its interpretation must be justified on some other basis. The reference under s. 13 is an executive act, performed by notice in writing, a unilateral instrument. Authorities on the construction of contracts, where the juristic act results from agreement, are scarcely helpful. The will or intention of the sole actor, the minister, must, so s. 13 requires, be expressed formally — by notice in writing. ...
It would lead to highly inconvenient results if it were to be held that recourse could be had to preliminary materials for the purpose of interpreting a notice given under s. 13. In the first place, I should find great difficulty in formulating rules, either about the circumstances in which recourse to relevant material was permissible or about what was capable of constituting relevant material (bearing in mind always that the intention to be sought was that of the minister). In the second place, I see great virtue in the simple view that one must seek the intention of the minister with regard to what constitutes the matter within the four corners of the written document which is the formal expression of his will. The authority can then have no doubt about what constitutes its charter for the purposes of the investigation, nor can those who will be affected by its compulsive powers.
115 In R v Ng,[116] a case relating to the validity of a warrant issued under the Customs Act 1901 (Cth), the Court of Appeal overruled Director of Public Prosecutions Reference No 2 of 1996 insofar as it had been held in that case that a notice under s 13 of the National Crime Authority Act 1984 (Cth) did not constitute an ‘instrument’ within the meaning of s 46(1) of the Acts Interpretation Act 1901 (Cth). However, there are very significant differences between ss 15AB and 46(1) of the Acts Interpretation Act 1901 (Cth), on the one hand, and the corresponding provisions of the Interpretation of Legislation Act 1984 (Vic), namely s 35 and the definition in s 38 of ‘subordinate instrument’, on the other. I am strongly inclined to the view that s 35of the Interpretation of Legislation Act 1984 (Vic) is inapplicable to a notice of acquisition under the LAC. However, I need not and do not decide that point. The matter was not argued before me. VicUrban did not submit that s 35 of the Interpretation of Legislation Act 1984 was applicable. Moreover, the reasoning of Brooking JA in Director of Public Prosecutions Reference No 2 of 1996 was not dependent on the relevant notice not constituting an ‘instrument’. Further, in the detailed and heavily researched judgment of the Full Court in Ng, no case is referred to in which – whether under s 15AB of the Acts Interpretation Act 1901 (Cth), s 35 of the Interpretation of Legislation Act 1984 (Vic), any comparable provision or otherwise – a court has held that it is appropriate to take into account preliminary extrinsic materials (of the kind VicUrban seeks to rely upon) in construing a notice or declaration issued in the exercise of executive power conferred by statute on a Minister or administrative body.[117] Indeed, the reasons of the Full Court in Ng suggest positive agreement with the conclusion of Brooking JA that it was not appropriate to have regard to such material in construing a notice under s 13 of the National Crime Authority Act 1984(Cth).[118]
116 Comparably, in Westfield Management Limited v Perpetual Trustee Company Limited,[119] the High Court held that, generally speaking, a registered easement should be construed simply in accordance with its terms. The Court held that establishing the intention or contemplation of the parties to an instrument registered under the Real Property Act 1900 (NSW) by reference to material extrinsic to the register would, with very limited exceptions, be contrary to the principles of the Torrens system.[120] The High Court emphasised that one of the ‘fundamental considerations’ concerning the operation of the Torrens system of title by registration was ‘the maintenance of a publicly accessible register containing the terms of the dealings with land under that system’.[121] That fundamental consideration also has application here, not only by way of analogy, but also because express provision is made in both the LAC and the TLA for the steps taken as part of the process of compulsory acquisition to be mirrored by recordings in the register under the TLA, as mentioned above.
117 As indicated above, VicUrban relies on the fact that in Maddalozzo at least some members of the Court took into account the fact that the land referred to in the notice of acquisition consisted partly of Crown land and partly of land which had been alienated in fee simple. However, Maddalozzo is distinguishable in this regard. In Maddalozzo the language of the notice of acquisition itself strongly suggested that the geographical area in question was divided up between Crown land and land alienated in fee simple. That an attempt was being made to refer to some such dichotomy was, on the face of the notice, a very likely explanation for the use in the notice of the inelegant expression ‘all Estate in fee simple land included in the area of land hereunder described’. That is to say, on a reading of the notice which was plainly open and which was indeed ultimately adopted by all members of the High Court, the notice itself adverted to the particular fact that was taken into account by the Court for the purpose of construing the notice. That fact, in turn, was not a private fact. Rather, it was ascertainable, albeit with some effort, from public records relating to the ownership of land in the relevant area. For convenience, the fact was simply agreed between the parties. Understandably then, the Commonwealth did not object to Mr Maddalozzo’s reliance on the agreed fact.
118 In the present case, by contrast, there is nothing in the gazetted notice itself that would suggest to an outside reader (even if a practising lawyer) that there was a lease on foot, much less that an attempt was being made to preserve or deal specially with the interest of the lessee.
119 It is true that the prior notice of intention to acquire included a reference to Mr Obeid ‘as occupier’, whereas the notice of acquisition does not refer to him at all. I am prepared to assume, without deciding, that knowledge of the contents of the notice of intention to acquire dated 23 April 2008 may be attributed to the reasonable member of the public reading the notice of acquisition, because the statutory scheme tells the reasonable member of the public that a notice of intention to acquire will have been issued, and because the notice of intention to acquire is required to be notified to the Registrar of Titles and recorded on the Register.[122]Hence, with considerable misgivings, I am prepared to assume that, in the present case, the reasonable member of the public should be taken to know that as at 23 April 2008 (about two months before the acquisition), Mr Obeid was understood by VicUrban to be in occupation of the premises; that the acquisition related to the RCD initiative; and that as at 23 April 2008 VicUrban did not expect to require possession until 2010. On the other hand, the reasonable member of the public could not tell from public sources whether Mr Obeid had had a lease or whether he was, say, merely a tenant from week to week, or whether he remained in occupation as at the date of publication of the notice of acquisition.
120 In any event, the notice of intention to acquire referred to Mr Obeid as a person who would be entitled to compensation if VicUrban decided to go ahead with the acquisition. Indeed, the notice of intention, addressed as it was to Mr Obeid himself (among others), referred to a proposal to acquire ‘your interest in the land’. That hardly assists VicUrban. Rather, it suggests that the proposed acquisition would terminate Mr Obeid’s occupancy (whatever the basis of his occupation was) and would entitle Mr Obeid to compensation.
121 Even if that suggestion were ignored, the mere fact that Mr Obeid was not referred to in the (later) notice of acquisition does not in truth help VicUrban. The reasonable reader would appreciate that, whereas a notice of intention to acquire is required to be addressed to all known interest holders, a notice of acquisition has a prescribed format which does not include any provision for it to be addressed to anyone. That might well be taken by the reasonable reader to be the explanation for the absence of reference to Mr Obeid in the notice of acquisition.
122 Further, given the vague and non-committal nature of the statement in the April notice about VicUrban’s expectation as to when it ‘may’ require possession of the land, and given the omission of any reference at all to that matter in the notice of acquisition itself, I do not think that the notices in combination would have conveyed to the reasonable reader that the leasehold interest of Mr Obeid was to be preserved for a period, rather than divested.
123 The private correspondence from VicUrban to Mr Obeid and his solicitors should not be taken into account. It was not provided for in the statutory scheme. It was not publicly available. There was no reference to any of it in either of the statutory notices. Nor, for that matter, was any of it referred to in the explanatory statement that was sent to Mr Obeid with the April notice.[123]As indicated above, the evidence does not reveal whether any explanatory statement at all was sent with the notice of acquisition itself. To take the private correspondence into account would be quite contrary to the approach taken by the Full Court in Director of Public Prosecutions Reference No. 2 of 1996.[124] It would be contrary to the approach taken by the High Court in Westfield. It would also be contrary to the convergent approaches now taken by the courts to constitutional construction, statutory construction, contractual construction and the construction of trusts, as described by Heydon and Crennan JJ in Byrnes v Kendle.[125] In dealing with statutory construction in particular, Heydon and Crennan JJ said:[126]
Heydon and Crennan JJ went on to note that in recent times, through common law developments and by statute, extrinsic materials have been routinely examined to ascertain what the legislature meant. However, their Honours described this as a ‘usually unprofitable course’.Soon after the Constitution came into force, O’Connor J correctly propounded a theory of statutory construction which stressed the irrelevance of the subjective intention of legislators. The construction of the statute depended on its intention, but only in the sense of the intention to be gathered from the statutory words in the light of surrounding circumstances. Even if it were possible to establish the actual mental states of those drafting and voting for a Bill, the inquiry would be irrelevant. The correct approach is also seen in an extra-curial pronouncement by Mr Justice Holmes, only five years before O’Connor J: “We do not deal differently with a statute from our way of dealing with a contract. We do not inquire what the legislature meant; we ask only what the statute means”.
124 I turn to the operation of s 24 of the LAC.
125 VicUrban submits that s 24(1) does not operate to identify or to enlarge the interest acquired. It says that that is the function of the exercise of power pursuant to s 19 and the task of the notice.[127]It says that s 24(1) vests the identified interest in the Authority, freed of all restrictions and encumbrances; and does not operate to enlarge what has been acquired by the notice.[128] Here, says VicUrban, the identified interest was the reversionary interest; and the reversionary interest was what was vested in VicUrban freed of any restraints on that interest.
126 VicUrban notes that in Maddalozzo Mason J said that the Commonwealth equivalent of s 24 of the LAC, namely s 10(4) of the Lands Acquisition Act 1955-1966 (Cth), should be given a ‘distributive application’:
127 It may be accepted that s 24 does not operate to identify or to enlarge the interest acquired and that that is the function of the notice. However that does not mean that s 24 is irrelevant to the task of identifying the effect of the notice. Section 24(1) is expressed to operate such that the interest described in the notice vests in the Authority (or, as here, the Crown) freed and discharged from all trusts, restrictions etc and such that any interest that a person has in the land is divested or diminished to the extent necessary to give effect to s 24(1).[130] Section 24(1) operates on each and every notice of acquisition, saving the drafter from spelling out the consequences to which the subsection refers. The very existence of s 24 creates a starting point or default position in relation to those consequences. To the extent that the drafter of a notice of acquisition wishes to avoid the specified consequences or any of them, the drafter must say so in the notice.It has an appropriate operation whether the subject of the acquisition be land, a paragraph (a) estate or interest in land, or a paragraph (b) interest.[129]
128 To all appearances, Ms Di Giulio’s interest was the fee simple estate in the land. It was burdened by Mr Obeid’s unregistered lease, but VicUrban concedes[131] that a lease is comprehended within the list of restrictions, encumbrances and other like things contained in s 24(1)(a), notwithstanding that leases are not expressly mentioned in that subsection. VicUrban further concedes[132] that, to the extent that Ms Di Giulio’s interest was subject to any restrictions etc other than Mr Obeid’s lease (such as an easement of any kind), those restrictions were discharged by the notice of acquisition as drafted. There is no sufficient reason to pick out and exclude Mr Obeid’s lease in this regard. In my view, the fee simple estate was likewise freed and discharged from Mr Obeid’s lease.
129 Mr Obeid’s leasehold interest was divested or diminished accordingly, and he thereby acquired a right to compensation under s 30 of the LAC.[133]
Estoppel
130 Finally, VicUrban submits that even if, on the proper construction of the notice, Mr Obeid’s leasehold interest was divested, Mr Obeid is estopped from enforcing his right to compensation. It submits that by remaining in possession after 26 June 2008, by paying rent and otherwise complying with the terms of the lease and by exercising his option to renew the lease on 15 June 2010, Mr Obeid induced it to assume that his lease had not been divested, and that, consequently, no compensation was payable. VicUrban says that it honoured its side of the bargain. It argues that because both parties proceeded on the basis that the lease was on foot, it would be inequitable for Mr Obeid to resile from that position. [134]
131 VicUrban relied on the six elements of estoppel outlined by Brennan J in Walton’s Stores:[135]
132 VicUrban has not satisfied me that the plaintiff’s claim is defeated by estoppel.In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant's property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff's reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs.
133 First, I do not accept that by his conduct Mr Obeid induced VicUrban to assume that the lease was on foot. As is apparent from VicUrban’s prior and contemporaneous correspondence referred to above, it was always VicUrban’s own purpose and aim to cause the lease to remain on foot. Its formation of the view that the lease remained on foot owed little or nothing to the conduct of Mr Obeid.
134 Second, there is no evidence that VicUrban acted or abstained from acting in any way at all in reliance on Mr Obeid’s conduct. On the contrary, the evidence of Mr Wark, Development Manager – Urban Revitalisation at VicUrban, tends to show that Mr Obeid had no influence over VicUrban’s conduct and that at all times it was VicUrban who dictated the terms of the relationship between them.[136]Mr Wark does not depose to having done anything in reliance on Mr Obeid’s conduct.
135 VicUrban nevertheless submits that, in reliance on Mr Obeid’s remaining in possession and on his exercise of the (putative) option, it honoured the terms of the lease and granted a renewal and gave effect to Mr Obeid’s rights under the Retail Leases Act 2003.[137] But, even if so, VicUrban suffered no detriment in that connection. Although Mr Obeid had the benefit of the putative lease for the period in question, VicUrban benefited correspondingly. It continued to receive rent during that period. There is no evidence that VicUrban had intended or desired to use the land for some other purpose but was prevented by Mr Obeid’s continued possession. On the contrary, the evidence is that VicUrban wanted the lease to continue until a time of VicUrban’s choosing.
136 Finally, VicUrban submits that it will suffer detriment if Mr Obeid is allowed to enforce his statutory compensation claim in that it will have to meet that claim. That is clearly not a detriment that flows from Mr Obeid having continued in occupation or from Mr Obeid having purported to exercise the option or from VicUrban having purported to honour the lease or the exercise of the option. Mr Obeid’s statutory right to compensation accrued on 26 June 2008 when his leasehold interest was divested. Nothing that occurred subsequently deprived him of that statutory right.
137 Generally speaking, no estoppel can excuse an administrator from performing his or her statutory obligations.[138]VicUrban’s real complaint seems to be that it had thought that it would not be liable to compensate Mr Obeid whereas in fact it is so liable. VicUrban’s disappointment that its notice of acquisition did not have the desired effect is not a relevant detriment. It is certainly not a detriment induced by Mr Obeid. In the circumstances of this case, the submission that it would be ‘inequitable’ for Mr Obeid to enforce his right to compensation is without merit.
138 Even if there had been substance in VicUrban’s estoppel claim, a real question would have arisen about VicUrban’s ability to rely on it in this proceeding, given the agreement between the parties that led to Mr Obeid’s commencement of the proceeding, namely the agreement that the proceeding was to be a vehicle for testing the meaning and effect of the notice of acquisition and no more.
139 I reject VicUrban’s submission that Mr Obeid is estopped from enforcing his right to compensation.
Conclusion and orders
140 For these reasons the plaintiff succeeds. I propose to make declarations in the following form or to the following effect:
(1) the interest of Samir Obeid as lessee of the land described in Certificate of Title Volume 9088 Folio 557 was divested by the publication of a notice of acquisition in the Victorian Government Gazette on 26 June 2008;
(2) Samir Obeid is a person who has a claim for compensation pursuant to s 30 of the Land Acquisition and Compensation Act 1986; and
(3) the claim may be determined either by the Victorian Civil and Administrative Tribunal or by the Court pursuant to s 81(1)(b) of the Land Acquisition and Compensation Act 1986.
141 I will hear the parties as to the precise form of the proposed declarations and as to any other orders that may be appropriate and as to costs.
[1] Section 1(a).
[2] Section 1(b).
[3] Peter Butt, Land Law (Lawbook Co., 6th ed, 2010) [6.05].
[4] But see s 53 of the Interpretation of Legislation Act 1984: ‘Where a form is prescribed by an Act or subordinate instrument for any purpose, any form in or to the like effect of the prescribed form shall, unless the contrary intention appears, be sufficient in law’.
[5] LAC, s 8(1).
[6] LAC, s 8(2).
[7] Land Acquisition and Compensation Regulations 1998 (SR 130/1998), reg 7, Form 1 and reg 10, Form 4. The corresponding prescribed forms currently in force are still in the same form in these respects: see the Land Acquisition and Compensation Regulations 2010, reg 7, Form 1 and reg 10, Form 4.
[8] Which deals with paramountcy and priority of estates and interests in land covered by the TLA.
[9] See reg 17.
[10] Emphasis added.
[11] But see the discussion below of the parties’ submissions concerning Division 5 (and s 26 in particular).
[12] Exhibits JW 1 and JW 2 respectively to the affidavit of John Wark filed 20 June 2011 on behalf of VicUrban.
[13] Exhibit JW4 to the affidavit of John Wark filed 20 July 2011.
[14] Exhibit SO 5 to the affidavit of Samir Obeid sworn 28 January 2011.
[15] Exhibit SO 6.
[16] Exhibit JW 6.
[17] Exhibit SO 8; exhibit JW 6.
[18] Emphasis added.
[19] Exhibit SO 9; exhibit JW 6.
[20] Emphasis added.
[21] Exhibit SO 12.
[22] Exhibit SO11 (original emphasis).
[23] Affidavit of Samir Obeid sworn 4 August 2011, [8].
[24] Ibid, [6].
[25] Ibid, [7].
[26] Ibid, [16].
[27] Ibid, [21].
[28] VicUrban’s written submissions filed 20 October 2011 (‘VicUrban’s submissions’) [1].
[29] Ibid [2].
[30] Ibid [3].
[31] Ibid [4].
[32] Ibid [5].
[33] Ibid [6].
[34] Ibid [9].
[35] [1922] HCA 60; (1980) 29 ALR 161; (1980) 42 LGRA 168; (1980) 54 ALJR 289.
[36] Ibid [7].
[37] Ibid [8].
[38] VicUrban’s written submissions filed 20 October 2011 (‘VicUrban’s written submissions’), [4].
[39] Transcript, 119.
[40] Transcript, 99, 118–119.
[41] VicUrban’s written submissions, [35].
[42] Ibid [36].
[43] VicUrban’s submissions, [38]. The emphasis is that of counsel for VicUrban.
[44] [1923] HCA 34; (1923) 33 CLR 1, 23.
[45] VicUrban’s submissions, [40] citing Maddalozzo [1922] HCA 60; 29 ALR 161 at 165 per Mason J. See also at 168 per Aickin J.
[46] Ibid [41], citing Maddalozzo [1922] HCA 60; 29 ALR 161 at 164-165. Counsel here observed that Mason J noted that this conclusion was sufficient to dispose of the appeal on the basis on which it was argued.
[47] Ibid [42], citing Maddalozzo [1922] HCA 60; 29 ALR 161 at 169.
[48] Ibid [44].
[49] Ibid [46], citing Maddalozzo [1922] HCA 60; 29 ALR 161 at 172-173. Emphasis added by VicUrban’s counsel.
[50] Ibid [45].
[51] Wik Peoples v Queensland (1996) 187 CLR 1, 179 (Gummow J).
[52] Commonwealth v New South Wales [1923] HCA 34; (1923) 33 CLR 1, 42 (Isaacs J);Challenger Property Asset Management Pty Ltd v Stonnington City Council [2011] VSC 184 [59], [63] and [69] (Croft J).
[53] [1922] HCA 60; 29 ALR 161, 163.
[54] [2003] NSWSC 851, [50].
[55] See The Laws of Australia, [28.5.330]; Adrian J Bradbrook et al, Australian Real Property Law (Lawbook Co., 5th ed, 2011) 502; Charles Harpum et al, Megarry & Wade The Law of Real Property (Sweet & Maxwell, 7th ed, 2008) [6-017] and [9-008]–[9-010]; Challenger Property Asset Management Pty Ltd v Stonnington City Council [2011] VSC 184[61]–[63] and [66] (Croft J).
[56] Peter Butt, Land Law (Lawbook Co., 6th ed, 2010) 276.
[57] [2008] SASC 50, [47].
[58] Trust Co of Australia v Chief Commissioner of State Revenue [2006] NSWSC 792, [47] (Gzell J). Appeal dismissed: [2007]NSWCA 255. See also Challenger Property Asset Management Pty Ltd v Stonnington City Council [2011] VSC 184 [63] (Croft J).
[59] Transcript, 104.
[60] Trust Co of Australia v Chief Commissioner of State Revenue [2006] NSWSC 792, [47] and [63] (Gzell J): appeal dismissed [2007] NSWCA 255; Challenger Property Asset Management Pty Ltd v Stonnington City Council [2011] VSC 184 [63] (Croft J).
[61] [1922] HCA 60; 29 ALR 161, 163 (Barwick CJ) and 173–174 (Wilson J).
[62] See Syers v Metropolitan Board of Works (1877) 36 LT 277; Canada Steamship Lines Ltd v Toronto Terminals Railway [1930] 4 DLR 626, 632–633; Jacobs, Law of Compulsory Land Acquisition (2010), [14.60]; cf D Brown, Land Acquisition (LexisNexis Butterworths, 6th edition, 2009) 182–186 [3.36], esp the first three full sentences on page 184.
[63] It is unnecessary to consider whether a lease is properly characterised as an encumbrance: cf Challenger Property Asset Management Pty Ltd v Stonnington City Council [2011] VSC 184 [54]–[70] (Croft J).
[64] VicUrban’s submissions, [37]. No authority was cited for this proposition in VicUrban’s written submissions but during oral submissions counsel for VicUrban cited R and R Fazzolari Pty Ltd v Parramatta City Council [2009] HCA 12; (2009) 237 CLR 603, 608 and 618-620 and PJB v Melbourne Health [2011] VSC 327, [243]-[272].
[65] [2009] HCA 12; (2009) 237 CLR 603, 608 and 618-620.
[66] [2011] VSC 327, [243]-[272].
[67] [2009] HCA 12; (2009) 237 CLR 603, [5].
[68] At 618-620 [40]-[45].
[69] [1904] HCA 12; (1904) 1 CLR 363, 373.
[70] See further below.
[71] At 619 [42].
[72] [2010] HCA 2; (2010) 240 CLR 409.
[73] At 420-421 [32]. Footnotes omitted.
[74] [1904] HCA 12; (1904) 1 CLR 363, 373.
[75] [2004] HCA 63; (2004) 221 CLR 30, 49 [43].
[76] My emphasis.
[77] [2001] HCA 37; (2001) 205 CLR 603, 623 [37]-[38].
[78] [1906] HCA 97; (1906) 4 CLR 694.
[79] [1969] HCA 28; (1969) 121 CLR 177.
[80] [1984] HCA 65; (1984) 155 CLR 193.
[81] At pp 179-180 [5.18].
[82] [1984] HCA 65; (1984) 155 CLR 193, 201.
[83] DC Pearce and RS Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 7th edition, 2011) 184-185 [5.22].
[84] [2004] HCA 33; (2004) 207 ALR 1.
[85] At 10 [31]-[32]. See also Roads Corporation v Love [2010] VSC 32, [774] (Osborn J).
[86] [2011] VSC 327.
[87] At [248].
[88] VicUrban’s submissions, [39] citing Maddalozzo [1922] HCA 60; 29 ALR 161, 168-169 per Aickin J.
[89] Ibid, [48].
[90] Ibid, [49].
[91] Ibid, [50].
[92] Ibid, [51].
[93] Ibid, [52].
[94] Ibid, [53].
[95] Ibid, [54].
[96] Ibid, [56].
[97] Ibid, [57].
[98] LAC, s 4.
[99] LAC, s 19. See Tinker Tailor Pty Ltd v Commissioner for Main Roads [1960] HCA 56; (1960) 105 CLR 334, 345 (Fullagar J).
[100] LAC, s21.
[101] A notice of intention can be amended under s 14 of the LAC, but no provision is made for amendment of a notice of acquisition: see D Brown, Land Acquisition (LexisNexis Butterworths, 6th edition, 2009) 70–71, [2.6], 80–81 [2.16].
[102] LAC, s 23.
[103] LAC, s 24(1)(a). As mentioned above, s 54 of the TLA provides that where ‘any land’ vests in an Authority, the Authority is to be registered as the proprietor of the land in fee simple, subject only to any specified encumbrances.
[104] LAC, s 24(1)(b).
[105] LAC, s 30.
[106] LAC, ss 31(2), 32(2), 33(1), 36(1), and 37(2) among others.
[107] LAC, s 24(1)(a).
[108] See and compare Jones v Commonwealth [1963] HCA 43; (1963) 109 CLR 475, 486–487 (Kitto J); S.S. Constructions Pty Ltd v Ventura Motors Pty Ltd [1964] VicRp 32; [1964] VR 229, 244–245; Harada v Registrar of Titles [1981] VicRp 71; [1981] VR 743, 755 (King J); McKenzie v Minister for Lands [2011] WASC 335, [94]–[102] (Martin CJ).
[109] D Brown, Land Acquisition (LexisNexis Butterworths, 6th edition, 2009) 70 [2.5], citing Wilson v Secretary of State for the Environment [1974] 1 All ER 428.
[110] D Brown, Land Acquisition (LexisNexis Butterworths, 6th edition, 2009) 74 [2.9].
[111] Unreported, Supreme Court of New South Wales, Lee J, 14 April 1988, BC 8802045, p 10.
[112] [1998] 3 VR 241 (WinnekeP, Brooking and Tadgell JJA).
[113] [1998] 3 VR 241, 252.
[114] At 253–254
[115] (1998) 85 FCR 538, 548–549 (Black CJ, Sundberg and North JJ).
[116] (2002) 5 VR 257 (WinnekeP, Batt and Eames JJA).
[117] Putting aside the decision of the trial judge in the matter out of which Director of Public Prosecutions Reference No 2 of 1996 arose.
[118] See (2002) 5 VR 257, 279 [45], 285 [55].
[119] [2007] HCA 45; (2007) 233 CLR 528.
[120] Ibid, [37]. See also Harada v Registrar of Titles [1981] VicRp 71; [1981] VR 743, 755 (King J); Currumbin Investments Pty Ltd v Body Corp Mitchell Park Parkwood CTS [2012] QCA 9, [37]–[53], especially at [53].
[121] Ibid.
[122] LAC, s 10.
[123] There is no requirement for a copy of the explanatory statement to be given to the Registrar of Titles.
[124] [1998] 3 VR 241, 252-254.
[125] [2011] HCA 26; (2011) 243 CLR 253, 282-286.
[126] [2011] HCA 26; (2011) 243 CLR 253, 283-284, [97]. Footnotes omitted.
[127] Ibid, [61].
[128] Ibid, [62].
[129] Ibid, [63], citing Maddalozzo [1922] HCA 60; 29 ALR 161, 166. Compare 174 (Wilson J).
[130] See and compare Bodney v Westralia Airports Corporation Pty Ltd [2000] FCA 1609; (2006) 109 FCR 178, 197 [45] (Lehane J).
[131] Transcript, 177.
[132] Transcript, 164.
[133] See D Brown, Land Acquisition (LexisNexis Butterworths, 6th edition, 2009), 104–105 [3.2] citing Rosenbaum v Minister for Public Works [1965] HCA 65; (1965) 114 CLR 424.
[134] Defendant’s written submissions, [69]; Transcript, 127–132.
[135] Walton’s Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387, [34].
[136] See generally the affidavit of John Wark affirmed 17 June 2011 and the affidavit of John Wark affirmed 7 October 2011.
[137] Transcript, 131.
[138] Minister for Local Government and Ethnic Affairs v Kurtovic [1990] FCA 22; (1990) 21 FCR 193; Minister for Immigration and Ethnic Affairs v Polat [1995] FCA 1204; (1995) 57 FCR 98, 105.
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