Sidoti & Anor v Hardy [2021] HCATrans 207 (3 December 2021)

Last Updated: 6 December 2021

[2021] HCATrans 207

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S90 of 2021

B e t w e e n -

JOSEPH GEOFFREY SIDOTI

First Applicant

NATALIE MARTINOSKI

Second Applicant

and

CHRISTOPHER LUKE HARDY

Respondent

Application for special leave to appeal

GAGELER J
GORDON J
STEWARD J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA BY VIDEO CONNECTION TO SYDNEY AND MELBOURNE

ON FRIDAY, 3 DECEMBER 2021, AT 11.29 AM

Copyright in the High Court of Australia
GAGELER J: In accordance with the protocol for remote hearings, I will announce the appearances of the parties.

MR B.A.J. COLES, QC appears with MR J.L. DOYLE and MS L. WALSH for the applicants. (instructed by Connor & Co Lawyers)

MR J.S. VAN AALST appears for the respondent. (instructed by Wwright Lawyer)

GAGELER J: Yes, Mr Coles.

MR COLES: May it please your Honours. As your Honours will know, these proceedings concern land formerly under common law or old‑system title in New South Wales which were fought under the provisions of the Real Property Act by the Registrar‑General.

May I say at the outset, if your Honours please, that the outcome of the proceedings in the Court of Appeal necessarily produced the result that the court’s order dismissing that appeal was the only order it could or should have been made, to the extent that the first page or two of our application for special leave suggests that might of itself given rise to an appealable error.

I must say, we can only, at best, invite your Honours to regard that material as having relevance to the extent that it may, to what the applicants submit, is in effect the merits of their position and it may accordingly be taken into account in connection with aspects of the interests of justice so far as that may fall for consideration. I.....your Honours at the outset there is no independent ground of appeal that the court should have made a different order to the one it made.

GAGELER J: In relation to the merits, your position is basically that Justice Basten was correct, is it?

MR COLES: Quite yes, on both of the two issues to which the proceedings give rise. Your Honours will know that the limited folio issued in September 2005 and the result of the folio of that kind – that is to say, a folio under Part 4B of the Real Property Act – was that the Registrar‑General recorded, as he is required to do, that the description of the land the subject of the limited folio had not been investigated by the Registrar‑General. That was the requisite notation he should make and, of course, the effect under the same provisions of the legislation, the effect of such a limited title is that the certification of the title in the folio, as regards the definition of the boundaries shown on the folio, is not conclusive.

So, the applicants, themselves, became registered as proprietors of the land, uncontroversially, for value and without fraud, and the like, in April 2018. The application for special leave raises for consideration two specific legal questions, the significance of which I will say a little more in a moment. Firstly, whether the interest in the land in the limited folio was, nevertheless, divisible because of a specified exception to indefeasibility arising where the land was incorrectly included in that limited folio by reason of a wrong description of parcels or boundaries – that is, made an express exception to the otherwise, we would submit, available indefeasible title by the provisions of section 28U, appearing in Part 4B of the Act, itself. And, as I say, it is a specific exception to the indefeasibility generally conferred by section 42 of the Act and reiterated, in a sense, by section 45 of the same Act.

The second question arises by reference to the provisions of section 45C – that is not, perhaps unlike section 28U, a provision expressed to constitute an exception to the indefeasibility of the registered proprietor’s title. Its operation appears to allow possession of land commencing before the creation of a limited or qualified folio to be taken into account, notwithstanding the general principle set out in section 45C, which in general terms disapplies what might otherwise be the application of provisions arising under the New South Wales Limitation Act affording title by adverse position and the like.

The operation of 45C(2) appears to allow therefore for possession of land commencing before the creation of a limited or qualified title to be taken into account, notwithstanding the general position described in subsection (1). In the context of the part in which section 45 appears – that is to say Part 6A of the Real Property Act, which provides specific provisions enabling by application to the Registrar‑General the issue of a title – in effect a title by adverse position – where certain criteria are established, such as, for example, the need for that parcel to be the whole parcel of land and some other considerations found in section 45D, it is the opinion of all the judges who sat in the Court of Appeal that section 45 – or Part 6A, which includes section 45D – was not satisfied and it was not open to the respondent to require a statutory title by application to the Registrar‑General under the provisions of Part 6A, in which section 45 is to be found. So far as section 45 ‑ ‑ ‑

STEWARD J: Mr Coles, before you go on, could I ask, are these provisions that we are looking at, 28U, 45C, are they unique to the State of New South Wales, or do they have analogues in other State real property legislation?

MR COLES: May I deal firstly, then, your Honour, with section 28U, which is a section dealing specifically with the situation said to arise where by any wrong description of parcels or boundaries, land is included in a folio of the register. Every Real Property Act or analogous legislation in each State and Territory of the Commonwealth has a provision, usually in the part of our Act which is where such reference occurs in section 42, but, in short, the issue of whether or not land might by a wrong description of parcels or boundaries be erroneously or incorrectly included in a limited folio of the register, appears in legislation relating to exceptions to indefeasibility of title. Not necessarily in absolutely identical words, I must say, but so far as our examination indicates, in substantially similar legislation throughout the Commonwealth.

In one respect, section 28U is a little more emphatic than that which is its other State counterpart, namely, section 42(1)(c), because 42(1)(c), exempts the operation of – exempts the exception from indefeasibility of title supplied by the wrongful inclusion or the incorrect inclusion by description of parcels or boundaries that is disapplied in section 42 so far as concerns a purchaser for value, and that is the position, pretty much in every other State that replicates that aspect of New South Wales’s section 42.

So, I should add with the qualification that section 28U goes a little step further and says that the exception to indefeasibility for limited folio land applies regardless of whether the registered proprietor is a purchaser for value or not. It is analogous to – or perhaps that is the wrong word – but it is part of a formula for description of exceptions to indefeasibility that exists in various phrasings throughout the country, as we would follow it. And we might say, your Honour, the courts of the various States, not all of them, but particularly in, I think, Victoria and Queensland, on our researches, have generated case law on the question of what is a relevant misdescription or error of the kind with which, for example, our section 42 is dealing, and which is a component, apart from the purchaser for value element of the section 28U.

GORDON J: Mr Coles, while you are interrupted, may I raise three matters which concern me, at least at present. The first is what Justice Basten said about the findings of adverse possession. You did not seek to challenge those and these are questions relating to appropriate vehicle.

The second is the failure to give notice to the mortgagee, which is addressed in the reasons for decision of Justice Brereton. In other words, does the order bind the mortgagee, should they have been joined as a party and what is to happen?

The third and final thing, which is sort of connected, is in relation to 45C(2) and the reasoning of Justice Simpson at paragraph 209 where her Honour says that possession of land for any time before the transfer or.....to qualified title must be taken into account.

MR COLES: Can I deal with perhaps the last of those. There is no doubt that the wording of section 45C(2) is as her Honour recorded. The question, however, is: what account must be taken of it in the context of land which is limited title to land if the – well, the first observation I suppose is that, as we would contend and indeed as I think Justice Basten would support, section 45C(2) is not one of those provisions which itself constitutes an express qualification on indefeasibility, merely an indicator that one – not merely but is an indicator, however, that when one is looking at the general displacement of limitation legislation, which is affected by 45C(1), one does not disregard, where appropriate one would suppose, the possession which may have, for any length of time, occurred before the land was brought under the Act.

Again, for the reasons we have set out in our written outline or our application, we suggest that the primary importance of 45C ‑ we agree really with Justice Brereton and with Justice Basten, for example, as Justice Brereton indicated or observed, I think at page 147 of his judgment, I will not read it to you – that he concluded that 45C(2), in the context of limited folio, or so far as the limited folio was concerned, referred to a pre‑existing possessory claim which had been included in the limited folio – that is to say, a claim which had matured or ripened or crystallised, as the case may be, into a proper possessory claim but was nevertheless, when the limited title issued, included in that limited title incorrectly because the limited title described the land as including land which had already ripened beforehand into a possessory title when that was not the case.

That, of course, is looking at the position from the original – from the proprietorship of the land at the time of the creation of the folio in 2005. One needs to also look at the situation from the perspective of the persons acquiring the land on the “faith of the registerer” – to use that expression – in 2018, which are the present applicants who, prima facie, we would be suggesting, acquired their interests without any full value and without discovering the supposed – or the position asserted by the defendant in the proceedings, Mr Hardy – and without any means of being alerted, notified, or able to find out that that person had been in possession for some period of time and, thus, was a person who, for example, had not put on any caveat on the title to notify or to warn about his interest, thus was simply in the position of a person who had an estate or interest acquired by position, if that be the case, for the relevant period of time. But, later, the applicants became registered as proprietors and their registered title, by virtue of section 42, itself, prevailed to the exclusion of unregistered interests that were not notified or recorded on their title.

Your Honour asked me three questions. There is nothing I can really say, your Honour, about the absence of joinder of the mortgagee. That was mentioned, as your Honour says, in the judgment of Justice Brereton, but we respectfully think that the court dealt with the position of the – that that state of affairs arose and it does not really, we would respectfully submit, bear on the merits or claims of the present proceedings and is not, necessarily, likely to be a factor that impacts or bears on other people in similar positions in other cases.

I would, however, add that it is not unimportant that mortgagees are in the same position as purchasers when it comes to the benefits of indefeasibility so that, for example, if this Court does not take the step of clarifying or correcting the outcome of Justice Brereton’s judgment in relation to inchoate interests – as he described them – having the capacity to produce – unknown to everybody, really – the prospect of actual erroneous inclusion in the title to land issued many years before.

Then, that would be a matter of general concern to mortgagees in the event. Of course, one knows that the costs of banking and financial transactions and borrowing costs, and the like, are ever on the increase in the light of contemporary finance industry vigilance and it would be, perhaps, not in the public interest if the burden on prospective borrowers were further increased by the necessity to consider the prospect of – in the context of limited folios – the prospect that there might be these undiscoverable, or undiscovered, inchoate titles that had, potentially, lobbed into the scenario along the way. Your Honour asked me a third question. I may not have ‑ ‑ ‑

GORDON J: It was the observation by Justice Basten about the findings of adverse possession themselves as the building block upon which these arguments are based, and, in a sense it was ‑ ‑ ‑

MR COLES: Yes, I am sorry. Yes, of course. His Honour pointed out the facts of – let me say this. It is plain his Honour did not necessarily entertain a strong conviction that the respondent’s claims to adverse possession were either strong or, indeed, even necessarily prevailing, but your Honour is correct that the applicants did not challenge that. That must have been a matter of forensic judgment at the time, your Honour, and, in a sense, it does purify – I see, that is the three minute ‑ it does purify and make good the proposition that there are no controversial facts. And when – well, I think I had better shorten the point.

Could I just then, your Honour – I will come very shortly in the minute or two remaining. We have suggested this may be a suitable case for your Honours to entertain a special leave grant, partly because the facts are uncontroversial, albeit that the parcel of land is distinctly modest,
nevertheless, the provisions and the exceptions to the principle do resonate and have potential importance by reference to legislation in other States or Territories.

The disparity of judicial opinion in the court of opinion is a matter that we say can be taken into account in considering the interests of justice. There may be, for the reasons I have mentioned in relation to the position of mortgagees and financiers, be an advantage to the simplification of the legal principle which would result if the pure and undiluted stream of indefeasibility is preserved despite the inroad made into it by notions of inchoate and unmatured interests, and, generally, that your Honours may consider that the interests of justice may be better satisfied if proceeding where the views ‑ where the submissions of the then plaintiffs prevailed by majority on each issue but nevertheless produced the outcome that they were unsuccessful in the case. Whether that is an outcome, whilst inevitable as a matter of appellant’s position, it is not a congenial one, and it may serve to count in the interests of justice scales as appropriate for consideration. Subject to any other matter, your Honour, I think my 20 minutes is about to receive a buzzer. May it please the Court.

GAGELER J: Thank you, Mr Coles. Mr van Aalst?

MR VAN AALST: Thank you, your Honour. The position of the respondent is this. Insofar as this application is concerned, we say that the important provision of the Act which would appear to dispose of this application is the delimitation provision in section 28V. That is, under that provision, a person investigating the title is informed immediately that the State is not guaranteeing an indefeasible title – that is that the Registrar‑General has not investigated the title but it immediately puts those investigating the title on notice.

What that provision does is it enables persons examining the title and who want to proceed with the purchase of the land – they have the right at law prior to completion of a contract to make an application for delimitation under that provision. What happened here is that, for whatever reason, the applicant did not avail itself – or him or herself – of that provision, and that has caused us to be before the Court today.

It was a very simple matter for the proposed purchaser to inquire from the conveyancer or solicitor as to what steps ought to be taken to remove the limitation. That did not happen. We say that disposes of this application. It is a fairly straightforward matter. The Act makes it very clear, by that provision that there is a process by which the limitation could be removed, and that is by the Registrar‑General satisfying himself as to the boundaries, and as to the description of the land. That was ignored by the applicants. We do not see any importance in this case. There are no issues
of principle which would warrant the Full Court of this Court having to spend any time whatsoever on this matter.

It is very peculiar to the very limited facts which have brought us here, which are not in dispute – and, in a sense, I am not going to waste time by repeating myself, because I have really nothing else to add other than – unless there is any questions your Honours would like some assistance with – we say that 28V is critical and it is there for the benefit of people who wish to proceed with purchasing land to have the opportunity of making an application to the Registrar‑General – and I make it clear the application must provide the Registrar‑General with a current survey – not an old survey, or an old document – but it has to be at the time of investigation by the Registrar‑General, not at some other time.

So, we say that we are here because of a – shall I be kind and say an “oversight” on the part of the applicant at the time he completed his purchase. Your Honours, unless there is anything else I can say to assist the Court, they are our submissions.

GAGELER J: Thank you, Mr van Aalst. Do you have anything in reply, Mr Coles?

MR COLES: Section 28V does not support a conclusion that there is any necessity, or compulsion, to obtain a deed invitation process. Some cases will be more obvious than the others. The fact that land is included in a limited folio does not compel the conclusion that there is anything wrong with its description. It merely.....the Registrar‑General has not, in effect, guaranteed it. But, in the facts of the present case, the boundaries of lot E, as described, were not controversial. Lot E – which is described as the “Yellow Land” was, according to the evidence, precisely defined, both by survey drawings which a registered surveyor had attested, and by detailed metes and bounds description.

It was not controversial at the trial. No evidence was led to suggest that there was anything wrong with the land, as described. Indeed, one of the reasons why the Yellow Land could not have been included by mistake is in what became the registered title – the limited title land – was the Yellow Land had to be there as part of the description of the land because a right of way was going to be created, and was created, in common with the seven or eight neighbours on either side of the applicants’ premises over that very land.

The orders made by the trial judge recognised lot E was, in effect, a separate – I am sorry – a defined, but included, part of the applicants’ land and the absence, as we say, of any – there is no reason to suppose that one is burdened with a conclusion that land is, in effect, included by error in the
certificate of title because of an erroneous description when no one raises that topic for consideration and it is not either self‑evident or reasonably to be suspected. The production of an invitation, or a 28V process, is not obligatory and subsequent purchasers for value without any notice to the contrary will be entitled to proceed with the reliance on the indefeasibility provisions. May it please it please the Court.

GAGELER J: Thank you, Mr Coles. We will adjourn for a moment to consider the course we will take in this matter.

AT 11:59 AM SHORT ADJOURNMENT

UPON RESUMING AT 12.03 PM:

GAGELER J: We are of the opinion that the procedural context makes this an inappropriate vehicle in which to consider the issues of statutory construction sought to be raised by the application. The application for special leave to appeal is refused with costs.

The Court will now adjourn.

AT 12.04 PM THE MATTER WAS CONCLUDED