LAND APPEAL COURT OF QUEENSLAND
CITATION:
Sorrento Medical Service Pty Ltd v Department of Main
Roads [2006] QLAC 0016
PARTIES:
Sorrento Medical Service Pty Ltd
(appellant)
v.
Department of Main Roads
(respondent)
FILE NO:
LAC2005/0487
DIVISION:
Land Appeal Court of Queensland
PROCEEDING:
An appeal from a decision of the Land Court that the Land
Court has no jurisdiction to hear and determine a claim for
compensation under the Acquisition of Land Act 1967
ORIGINATING COURT:
Land Court of Queensland
DELIVERED ON:
31 March 2006
DELIVERED AT:
Brisbane
HEARD AT:
Brisbane
JUDGE
MEMBERS
Justice Philippides
Mr RP Scott, Member
Mrs CAC MacDonald, Member
ORDER:
The appeal is disallowed
CATCHWORDS:
Resumption – right to claim compensation – Acquisition of
Land Act 1967 – whether claimant has an estate or interest
in resumed land under s.12(5) – whether necessary to
establish proprietary interest – whether claimant has a
lease – whether claimant has a licence coupled with a
grant – whether licence sufficient.
APPEARANCES:
Mr CJ Carrigan for the appellant
Mr PJ Flanagan SC with him Mr DA Quayle for the
respondent
SOLICITORS:
[1]
Short Punch Greatorix for the appellant
Crown Solicitor, Crown Law, for the respondent
This is an appeal by Sorrento Medical Service Pty Ltd (the appellant) from a decision of
the Land Court that the Land Court has no jurisdiction to hear and determine a claim for
compensation made by the appellant under the provisions of the Acquisition of Land Act
1967 (the Act).
Background
[2]
By proclamation published in the Queensland Government Gazette on 13 October 2000,
the Department of Main Roads (the respondent) resumed land described as an area of
about 167 square metres being part of Lot 49 on RP 118683, Parish of Nerang, County of
Ward. The land was resumed for the purpose of transport, in particular road purposes.
As at the date of resumption, Malchada Pty Ltd was the registered proprietor of the land,
which is located at the corner of Allawah Street and Bundall Road, Sorrento. The area
resumed was a strip of land along the Bundall Road frontage which was to be used for
road widening purposes.
[3]
In 1982, the building on Lot 49 had been approved by the Gold Coast City Council for
use as a 24 hour medical centre. Clause 11 of the conditions attached to the approval
required –
"Provision of at least ten (10) off-street car parking spaces and access
thereto to be constructed in accordance with Paragraphs 40 and 42, Part
VII of the Town Planning Scheme and to the reasonable satisfaction of the
Chief Inspector. The two car spaces with access to Bundall Road are to be
used only for long term medical practitioner parking."
As at the date of resumption, the appellant operated a medical centre in the building and
leased part of the ground floor.
[4]
The lease, which was registered, had originally been granted for five years from 1 July
1993 and was renewed, pursuant to the exercise of an option, for a further term of five
years from July 1998. Item 7 of the lease described the land being leased as:
"Part of the ground floor of the building erected on the said land as
hatched in red on the attached sketch."
In 1996, Sorrento was granted the right to use the balance of the ground floor of the
building so that from that time it was the only occupant of the premises. Details of the
arrangement pursuant to which the appellant occupied the balance area were not in
evidence before the Court.
2
[5]
Certain car parking rights were also granted to the lessee in the lease document. Clauses
42 and 43 provided that "42. THE Lessor grants to the lessee exclusive rights to use the area
marked as 'Doctor Parking' on the plans annexed hereto for parking of the
vehicles of the Lessee or its permitted invitees.
43. THE Lessor grants to the Lessee in common with the Lessee and its
invitees of the area marked 'D' on the said plan the right to permit its
patients and the patients of any person associated with the Lessee the right
to park its his her or their vehicles upon the land marked 'Patient Parking'."
[6]
The resumption did not affect the building but it did take part of the car park, namely five
car parking spaces, including the two spaces reserved for long term medical practitioner
parking.
[7]
Both Malchada and Sorrento brought claims for compensation against the respondent.
The claim by Malchada has been settled. The claim by Sorrento, as amended, was for the
payment of $296,763, plus any disturbance items, by way of compensation for the
resumption of land.
[8]
The right to claim compensation for the compulsory acquisition of land is created by
s.12(5) of the Act which provides that –
"12(5) On and from the date of the publication of the gazette resumption notice the land
thereby taken shall be vested or become unallocated State land as provided by the
foregoing provisions of this section absolutely freed and discharged from all trusts,
obligations, mortgages charges, rates, contracts, claims, estates, or interest of what kind
soever, or if an easement only is taken, such easement shall be vested in the constructing
authority or, where the gazette resumption notice prescribes, in the corporation requiring
the easement, and the estate and interest of every person entitled to the whole or any part
of the land shall thereby be converted into a right to claim compensation under this Act
and every person whose estate and interest in the land is injuriously affected by the
easement shall have a right to claim compensation under this Act."
[9]
Section 26(1) of the Act provides that the Land Court has jurisdiction to hear and
determine all matters relating to compensation under the Act.
[10]
In order to succeed in its claim for compensation before the Land Court, therefore, it was
necessary for the appellant to establish that the car parking rights constituted an "estate
and interest" of a person "entitled to the whole or any part of the land" taken as at the date
of resumption. That was the central issue before the Land Court and before this Court in
this appeal.
Land Court decision
[11]
The appellant submitted before the Land Court that the effect of clause 42 of the lease
was that the appellant was granted an estate or interest in the land either (i) because the
exclusive licence conferred on Sorrento an interest in land as it was a licence coupled
with a grant, or (ii) because Sorrento had been granted a right of legal exclusive
3
possession of the doctors' car park for a fixed or periodic term and, accordingly, was a
lessee of that area.
[12]
In addition, the appellant submitted that although on its face clause 43 did not grant
exclusive possession of the patient car parks, the effect of clause 43, when considered in
context, was that Sorrento, as lessee, was given exclusive possession of that area also.
This was because the building was leased for the purpose of operating a medical centre
and Council approval for the centre required that 10 car parks be provided. It followed
that the only body which could use the non-exclusive car parks was the lessee of the
medical centre.
[13]
The Land Court approached the matter by considering whether the car parking rights
created the relationship of lessor and lessee between Malchada and Sorrento. It was
common ground that if the rights granted to Sorrento were leasehold rights, the appellant
held an estate and interest in the resumed land within the meaning of s.12(5). The Court
held, by applying the reasoning in Lewis v Bell [1985] 1 NSWLR 731, that neither Clause
42 nor Clause 43 created a right to exclusive possession of the car parks, for the following
reasons –
•
Clause 42 granted an exclusive right to Sorrento to use the area marked "Doctor
Parking" for car parking purposes. Although that clause appeared in the lease
document, the "Doctor Parking" area was not included in the area to be leased
which was stated to be part of the ground floor of the building.
•
That car parking area could have been included in the demised area if that had
been intended.
•
The car parking term appeared to be a complementary arrangement to the lease,
not an additional lease in its own right.
•
Clause 42 was headed "Exclusive Rights" and granted the "exclusive right to use"
rather than exclusive possession. Exclusive possession is established by use of
that phrase or by necessary implication from the document, construed as a whole.
•
By itself the use of the word "exclusive" did not connote a lease, as a licence can
also be exclusive.
•
It was not necessary to imply from all the surrounding circumstances that Sorrento
would need to have exclusive possession in order to achieve the right for doctors
to park exclusively in the area.
•
Clause 42 did not expressly state that the rights granted to Sorrento were personal
and non-transferable. However, because of the local authority requirement that
there be 10 car parks attached to the medical centre including the "Doctor
Parking" area, separate transfer of that area could not have been intended by the
parties.
4
[14]
•
Given those considerations, Clause 42 created an exclusive licence to use rather
than a right to exclusive possession.
•
For the same reasons Clause 43 also created a licence. In addition, the rights
granted by Clause 43 were non-exclusive in that they did not necessarily relate to
Sorrento's use of the centre, but could relate to other tenants' usage.
The Court decided, therefore, that clauses 42 and 43 created a licence to use rather than a
lease of the car parking areas. It was held that the appellant had no estate or interest in
the resumed land within the meaning of s.12(5) of the Act, no valid claim for
compensation and that the Land Court had no jurisdiction to hear and determine the
claim.
The issues in the appeal
[15]
The principal ground of the appellant's appeal was that the Land Court had erred in
finding that the rights granted by Clauses 42 and 43 of the lease document did not
constitute a lease of the car park area and, consequently, that the appellant had no estate
or interest in the land within the meaning of s.12(5) of the Act and no valid claim to
compensation under the Act. In the alternative, the appellant submitted that the Court's
conclusion that Clauses 42 and 43 created a licence was sufficient to establish that the
appellant had an estate or interest in the subject land for the purposes of s.12(5) of the
Act. The appellant also submitted that the Land Court had failed to have sufficient regard
to the proposition that the effect of the lease between Malchada and the appellant was that
the appellant had a right to a decree of specific performance, as against Malchada, of the
contract to grant exclusive use of the doctor and patient car parks.
[16]
Other issues were raised by this Court. The parties were invited to make submissions as
to (i) the discussion in Hudsons v Commissioner of Main Roads (1982) 8 QLCR 150 at
157, 158 of the word "interest" as it appears in s.12(5) of the Act;
(ii) the reference to "licensee" in s.18(3) of the Act. Section 18(3) provides that
compensation shall not be claimable by or payable to a person who is lessee,
tenant or licensee of any land taken if the constructing authority upon written
application allows the person's estate or interest to continue uninterrupted;
(iii) whether the car parking rights constituted a licence coupled with an interest in the
land.
Meaning of "estate and interest of every person entitled to the whole or any part of the land"
[17]
As indicated above, the central issue in this appeal was whether, as at the date of
resumption, the appellant held an "estate and interest" in the resumed land, within the
meaning of s.12(5) of the Act.
5
[18]
"Land" is defined in s.4 of the Act –
""Land" means land, or any estate or interest in land, that is held in fee simple, but does
not include a freeholding lease under the Land Act 1994."
The words "estate" and "interest" are not defined in the Act. Those words and the word
"property" are defined in s.36 of the Acts Interpretation Act 1954 ""estate" includes easement, charge, right, title, claim, demand, lien and encumbrance,
whether at law or in equity.
"interest", in relation to land or other property, means –
(a) a legal or equitable estate in the land or other property; or
(b) a right, power or privilege over, or in relation to, the land or other property.
"property" means any legal or equitable estate or interest (whether present or future,
vested or contingent, or tangible or intangible) in real or personal property of any
description (including money), and includes things in action."
[19]
Relying on those definitions, Counsel for the appellant submitted that the car parking
rights constituted an "estate" in the land in that clauses 42 and 43 gave the appellant
"rights" over the land. Reliance was placed on the Macquarie Dictionary (3rd Edn) where
"right" is defined as including "(18) a just claim or title, whether legal, prescriptive, or
moral, (19) that which is due to anyone by just claim; to give one his or her rights …".
Specifically, Counsel said, Sorrento had the right to seek specific performance of clauses
42 and 43 against the lessor, should Malchada attempt to deny Sorrento's rights to use the
car parks. Similarly, Sorrento had sufficient rights, in equity, both to restrain members of
the public from using the car parks, should they seek to do so, and to remove their cars.
[20]
Counsel submitted further that clauses 42 and 43 also satisfied the criteria of "a right,
power or privilege over or in relation to land" in para (b) of the definition of "interest" in
s.36. Relying on the decision in Rakus v Energy Australia (2004) 138 LGERA 373,
Counsel submitted that Sorrento's contractual right to occupy the car parking areas on
condition that it observed the terms of the lease, meant that Sorrento had a right, power or
privilege over the land within the meaning of s.36.
[21]
Senior Counsel for the respondent submitted that the words "estate and interest" used in
s.12(5) of the Act required the appellant to establish that it had a proprietary interest in the
land. Despite the wide definitions in s.36 of the Acts Interpretation Act, the words "estate
and interest", it was said, must be considered in the context in which they are used in
s.12(5). Since the reference there is to estate and interest, the appellant must establish
that it had both an estate and an interest in the land as at the date of resumption. It was
contended that the appellant merely had a licence which did not confer a proprietary
interest in land.
6
Conclusions as to the meaning of "estate and interest of every person entitled to the whole or
any part of the land"
[22]
We do not consider that it is necessary for the appellant to establish that it had both an
estate and an interest in the resumed land as at the relevant date. Section 14A(1) of the
Acts Interpretation Act provides that the interpretation of a provision in an Act that will
best achieve the purpose of the Act is to be preferred to any other interpretation. The
definitions of "estate" and "interest" in the Acts Interpretation Act are not mutually
exclusive because "interest" is defined to include, inter alia, an estate in land.
Furthermore, when the phrase "estate and interest" as used in s.12(5) is considered in the
context of the Acquisition of Land Act as a whole, it is evident that the word "and" is used
disjunctively. The scheme of the Act indicates a legislative intention that a person who
loses either an estate or an interest in land, by compulsory acquisition, is to be entitled to
claim compensation. Section 19(1)(b) thus provides that a claim for compensation shall
be accompanied by a statement of the nature and particulars of "the claimant's estate or
interest in the land taken". Section 20(2) provides that compensation shall be assessed
according to the value of the claimant's "estate or interest in the land" taken on the date
when it was taken. There are numerous other references in the Act to the compendious
phrase estate or interest: see ss.12(2A), 16(1C) and 17(2)(b). The purpose of the Act and
the effect of s.12(5) is that persons who have either an estate in the land which is resumed
or an interest in such land have a right to claim compensation under the Act.
"Estate"
[23]
As set out in [19] above, Counsel for the appellant submitted that the car parking rights
constituted an estate in the land relying on s.36 of the Acts Interpretation Act, where
"estate" is defined to include easement, charge, right, title, claim, demand, lien or
encumbrance whether at law or in equity.
[24]
It can be accepted that the words easement, charge, title, lien and encumbrance are words
which, under the general law, refer to rights or interests of a proprietary nature. Likewise,
as explained in Stow v Mineral Holdings Pty Ltd (1977) 51 ALJR 672 at 679, (to which
further reference is made below) although the words right, claim and demand have an
apparently wide meaning, we consider that they are confined by their context to refer to
rights of a proprietary nature.
"Interest"
[25]
Paragraph (a) of the definition of "interest" in s.36 of Acts Interpretation Act provides that
interest, in relation to land, means a legal or equitable estate in the land. Our conclusion
7
in relation to the meaning of the definition of "estate" means that, to come within para (a)
the appellant must establish that the car parking rights are rights of a proprietary nature.
Paragraph (b) of the definition of "interest" in s.36, provides that interest, in relation to
land, means a right, power or privilege over, or in relation to, the land or other property.
[26]
In Hornsby Council v Roads and Traffic Authority of NSW (1997) 41 NSWLR 151, the
Court of Appeal considered whether the appellant was the "owner of an interest in land"
and thus entitled to compensation under s.37 of the Land Acquisition (Just Terms
Compensation) Act 1991 (NSW). "Interest in land" was defined in s.4 of that Act as "(a)
a legal or equitable estate or interest in the land; or (b) an easement, right, charge,
power or privilege over, or in connection with the land". "Land" was defined as including
any interest in land, and an ''owner" of land was defined to mean any person who has an
interest in the land.
[27]
The resumed land was part of a Crown Reserve. The Hornsby Council had "control" of
the reserve under the Local Government Act 1993 (NSW) so that one issue was whether
the loss of that right of control as the result of a resumption was compensable. The
relevant discussion in the case focused on whether the statutory right to control the
reserve was an "interest in land" within the meaning of s.4 of the Land Acquisition Act
(NSW). It was held that the right of control was not the type of right which is referred to
in para (b) of the definition of "interest in land" in s.4. It therefore did not constitute an
interest in land within the meaning of s.37 of that Act. Meagher JA (with whom Mason P
and Powell JA agreed) said (at 155) that –
"Mr Tobias QC, learned senior counsel for the appellant, submitted that the words of par
(b) were extraordinarily wide and should be interpreted literally. However, this could not
possibly be correct. In a sense every member of the public has a "right" over the land in
question: he can go on it and have a picnic. But it was hardly intended that he could
claim compensation on a resumption. If it were, the machinery of notifying holders of
"interests" would extend to infinity. Some limitation must be placed on the words.
Whilst the rights which fall within par (b) must be wider than the rights which fall within
par (a), I feel that they must be limited to jura in re aliena, proprietary or quasiproprietary rights less than a fully-fledged estate, that is easements, charges, profits à
prendre, profits à rendre, licences coupled with interests, etc."
Mason P said (at 152) –
"It is true that the definition of "interest" is liberal, especially in its second part. But, as
Meagher JA demonstrates, a literal interpretation produces absurdity, and the words
cannot be construed out of context. … Part of that context is the colour which each part
of the overlapping definition takes from its associates. Even more critical to that context
is the reference to ownership of an interest in s.37 of the Land Acquisition (Just Terms
Compensation) Act."
[28]
The word "estate" is defined in s.21 of the New South Wales Interpretation Act 1987 as
including an "interest, charge, right, title, claim, demand, lien or encumbrance, whether at
law or in equity". The definition of "estate" in the Queensland Acts Interpretation Act is
8
very similar to that definition and the definition of "interest, in relation to land" in the
Queensland Acts Interpretation Act is similar to that of "interest in land" in the New
South Wales Land Acquisition Act. We consider therefore that the decision in Hornsby is
of assistance in the approach to be taken in interpreting the Queensland definitions. It
should be noted, however, that the conclusions of the Court of Appeal in Hornsby have
not passed unchallenged in subsequent decisions in New South Wales.
[29]
In Minister for Education and Training v Tanner (2003) 128 LGERA 281, the New South
Wales Court of Appeal held that the common law and statutory private right of an owner
whose land adjoins a highway or public road, to access that road was a private right
enjoyed by the owner of that land which was to be distinguished from the public right
which every member of the public enjoys to pass along the highway. It was held that
such a landowner has a right over or in connection with the public road adjoining his or
her land which was a right within the meaning of s.4(b) of the definition of "interest in
land" of the New South Wales Land Acquisition Act. Brownie A-JA (with whom Beazley
JA and Santow J agreed) said (at 284) –
"What Meagher JA said in Hornsby was apt to resolve the issue posed in that case, but of
course his Honour's words ought not to be treated as a substitute for or a restatement of
the words of the legislation, and they need to be read in their context. It may be that on
some future occasion it will seem appropriate to refine those words, if they are to be used
for guidance in the resolution of other cases, but that is not necessary or appropriate
now."
[30]
In Mooliang Pty Ltd v Shoalhaven City Council (2001) 114 LGERA 45, Mooliang Pty
Ltd was the owner of a caravan park which was compulsorily acquired by the Shoalhaven
City Council. The caravan sites on the property were occupied by a number of owners of
caravans, who were unitholders in the Mooliang Unit Trust. It had been intended that
ownership of units in the unit trust would entitle the owner to exclusive use and
occupancy of a caravan site on the land but no effective steps were taken to ensure that
the unitholders were beneficial owners of the land. Lloyd J held that the caravan owners
had tenancies at will over their respective sites, and as such were the owners of an interest
in the resumed land. More relevantly to the matter before us, it was also held that the
caravan owners had a right of exclusive occupancy of their sites which was a privilege in
connection with the land within the meaning of para (b) of s.4 of the New South Wales
legislation.
[31]
In Rakus v Energy Australia, the issue was whether an applicant who occupied an area of
Crown land under a Permissive Occupancy was entitled to compensation for the
deprivation of an interest in land following compulsory acquisition of the land. It was
held that the Permissive Occupancy did not amount to a leasehold interest in the land and
9
therefore, that the applicant did not have a legal or equitable interest in the land within the
meaning of s.4(a) of the definition of interest in land in the New South Wales Land
Acquisition Act. Lloyd J said (at 379), after quoting passages from Hornsby, –
"These passages demonstrate that the definition may be limited to remove any absurdity
that would result from a literal interpretation. [Hornsby], however, differs significantly
from the facts in these proceedings. Hornsby involved the public's purported interest in a
reserve, whereas the applicant submits that he has a personal interest in the land over and
above the public through the permissive occupancy. Clearly, the definition of para (b)
would be absurd if it entitled the public at large to assert an interest in, and claim
compensation for the acquisition of, a public reserve. The limitation imposed by
Meagher JA removed that absurdity in the specific circumstances of that case. That
limitation, however, need not be applied to other factual circumstances where such
absurdity would not result. Rather, the statutory definition must first be considered
according to the ordinary meaning of the words. Only if an absurdity then arises in its
application, should a limitation be placed upon the definition."
[32]
Lloyd J referred to the Macquarie Dictionary (3rd edn) definitions of right, power and
privilege and held that the Permissive Occupancy was a right, power and privilege over
the land. This was because the applicant was granted various rights under the Permissive
Occupancy including a non-exclusive right to occupy the land. The applicant also was
given certain powers over or in connection with the land, and because it possessed those
powers over and above those of the general public, the Permissive Occupancy also
constituted a privilege over and in connection with the land. Since the terms of the
Permissive Occupancy placed certain obligations on the applicant, there was a contractual
right to occupy the land provided he fulfilled the obligations. This was a contractual right
over or in connection with the land. It was held even if the Permissive Occupancy were
characterised as a personal licence or a contractual right, it nevertheless fell within the
natural and ordinary meaning of the words right, power and privilege in para 4(b) of the
definition of "interest in land" in the Land Acquisition Act. However, the Permissive
Occupancy was also found to be a ius in re aliena, a right in the property of another, as
referred to by Meagher JA in Hornsby.
[33]
Prior to the decision in Hornsby, the Land and Environment Court had held, in West v
Roads and Traffic Authority of New South Wales (1995) 88 LGERA 266, that a family
company which operated from a house which was on land resumed by the respondent had
a right to claim compensation for disturbance.
The company occupied part of the
premises with the owner's permission and made payments which, it was held, were not
paid as rent. The Court also held that there was no grant of a right to exclusive possession
and therefore no lease. At its highest, the legal relationship between the owners and the
company was a mere contractual licence. Nevertheless the company had a right, derived
from the owners, to occupy the premises. That right gave the company the privilege of
conducting its affairs within the house. The Court therefore held that the company had a
10
right and privilege in connection with the land within the meaning of para (b) of the
definition in s.4 of the Land Acquisition Act (NSW).
[34]
The definition of "interest" in s.36 of the Acts Interpretation Act is extremely wide and
cannot, we consider, be applied literally. We do not consider that the legislature can have
intended that every person who has a contractual right over or in relation to land has a
right to claim compensation under the Acquisition of Land Act should the land be
resumed. As Mason P said in Hornsby, a literal interpretation produces absurdity. We
consider, therefore, consistently with the reasoning of the New South Wales Court of
Appeal in Hornsby that some limitation should be placed on the use of the words "right,
power or privilege" in para (b) of the definition of "interest" in s.36 of the Acts
Interpretation Act (Qld) at least for the purpose of construing the word "interest" in
s.12(5) of the Act.
[35]
How should that limitation be framed? In West, Mooliang and Rakus it was held that
contractual licences were compensable because they created rights to occupy and
privileges over the land.
We consider that a mere right to occupy land and its
concomitant privileges, with nothing more, is a contractual licence. In our view, the
absurdity that would flow from a literal interpretation of paragraph (b) of the definition of
"interest" in s.36 of the Acts Interpretation Act is not avoided by the approaches of the
Courts in West, Mooliang and Rakus. We prefer the reasoning of the New South Wales
Court of Appeal in Hornsby that is, that the right, power and privilege referred to in
paragraph (b) of the definition should be limited to rights, powers and privileges of a
proprietary or quasi-proprietary nature.
"Estate and interest of every person entitled to the whole or any part of the land"
[36]
The definitions in the Acts Interpretation Act are to be construed in the context of the
Acquisition of Land Act (see s.32A of the Acts Interpretation Act). Section 12(5) of the
Acquisition of Land Act provides that on and from the date of the publication of the
gazette resumption notice, the land taken shall be vested "absolutely freed and discharged
from all trusts, obligations, mortgages, charges, rates, contracts, claims, estates, or interest
of what kind soever," and "the estate and interest of every person entitled to the whole or
any part of the land shall thereby be converted into a right to claim compensation under
this Act …".
[37]
The significance of context in statutory interpretation was emphasised by Mason P in
Hornsby (at 152). The context in which the words "estate and interest" are used in s.12(5)
suggests that they refer to rights of a proprietary nature. Under s.12(5) it is only a person
who is "entitled to the whole or any part of the land" whose estate and interest is
11
converted into a right to claim compensation. We consider that the words "entitled to the
whole or any part of the land", particularly the word "entitled", are apt to describe rights
of a proprietary or quasi-proprietary nature. While a person who has a contractual right,
power or privilege over or in relation to land may be regarded as having an interest in
relation to land, if a literal interpretation of the definition of "interest" in the Acts
Interpretation Act were adopted, such a person is not "entitled to the whole or any part of
the land". We have, therefore, concluded that the phrase "estate and interest" as used in
s.12(5) of the Act refers to rights of a proprietary or quasi-proprietary nature.
[38]
We note also that, traditionally, the words "estate or interest in land" have been regarded
as having a proprietary connotation. In Stow v Mineral Holdings (Aust.) Pty. Ltd. the
High Court considered whether the appellants held an "estate or interest" in certain land
as required by s.15C(3) of the Mining Act 1929 (Tas).
Section 46 of the Acts
Interpretation Act 1915 (Tas) provided that "estate, used in reference to land, shall
include any estate or interest, easement, right, title, claim, demand, charge, lien or
encumbrance in, over, to or in respect of such land". Aickin J (with whom the other
members of the Court agreed on this point) said, at 679:
"The expression "interest in land" is not defined in any relevant Act, nor is the compound
expression "estate or interest in land". I do not consider that assistance is to be derived
from an attempt to apply the statutory definition of "estate" to the compound expression
"estate or interest in land". The word "right" in that definition does not in its context
mean a public right; it means an individual right of a proprietary nature and I do not think
that the word "demand" in this context has any more extended meaning. In my opinion
the ordinary meaning of the compound expression "estate or interest in land" is an estate
or interest of a proprietary nature in the land. This would include legal and equitable
estates and interests, for example, a freehold or a leasehold estate, or incorporeal interests
such as easements, profits à prendre, all such interests being held by persons in their
individual capacity."
[39]
In The Queen v Toohey: Ex part Meneling Station Pty Ltd (1982) 158 CLR 327, the High
Court held that the holder of a grazing licence under the Crown Lands Act 1931 (NT) did
not have an estate or interest in the land the subject of the licence. The only relevant
definition was contained in s.3(2) of the Aboriginal Land Rights (Northern Territory) Act
1976 (Cth) which provided that, unless the contrary intention appeared, "a reference in
the Act to an estate or interest in land includes a reference to an interest by way of a right
against the Crown to a grant of an estate or interest in land". Mason J said (at 342) –
"There is no question that the phrase "estate or interest" in s.3(11) of the Act has, in its
ordinary and natural usage, a proprietary connotation: see Stow v Mineral Holdings
(Aust) Pty Ltd; Harada v Registrar of Titles. No one who has a merely personal right in
relation to land can be said to have an "estate or interest" in that land." [Citations
omitted]
[40]
The reasoning in Stow and Ex parte Meneling Station, although not concerned with the
construction of compulsory acquisition statutes, nor the definitions in the Queensland
12
Acts Interpretation Act, supports our conclusion that the phrase "estate and interest" when
used in s.12(5) of the Act refer to rights of a proprietary or quasi proprietary nature. It
follows that we do not accept that rights, powers and privileges of a purely personal or
contractual kind fall within the meaning of "estate and interest" so defined. For the
appellant to succeed it must be established that the rights claimed are rights of a
proprietary or quasi proprietary nature.
[41]
In coming to this conclusion, we have taken into account the judgment of Gaudron J in
Marshall v Director General, Department of Transport (2001) 205 CLR 603 at 623
where her Honour said "Although the rule that legislative provisions are to be construed according to their
natural and ordinary meaning is a rule of general application, it is particularly important
that it be given its full effect when, to do otherwise, would limit or impair individual
rights, particularly property rights. The right to compensation for injurious affection
following upon the resumption of land is an important right of that kind and statutory
provisions conferring such a right should be construed with all the generality that their
words permit. Certainly, such provisions should not be construed on the basis that the
right to compensation is subject to limitations or qualifications which are not found in the
terms of the statute."
We recognize that it is a basic rule of statutory construction that words are 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. In this case, we conclude that the words
"estate and interest" must be construed in the context in which they are used in s.12(5) of
the Act. Moreover we consider that if the phrase "estate and interest" were to be given
the extended meaning for which Counsel for the appellant contended, an absurd result
would follow, which the legislature cannot have intended.
[42]
It follows that we do not consider that s.18(3) assists the appellant. Counsel for the
appellant submitted that the use of the term "licensee" in s.18(3) is a statutory recognition
that a licence comes within the phrase "estate and interest" as used in s.12(5) of the Act.
However, in our view, when read in conjunction with s.12(5), the word licensee must be
confined to cases where a licensee has a proprietary or quasi proprietary interest in the
land such as where the licence is coupled with an interest.
Did the car parking rights constitute a lease?
[43]
Since it is common ground that if clauses 42 and 43 created leasehold interests in the car
parking areas, the appellant held an estate and interest in the resumed land as at the date
of resumption, it is convenient to consider first whether the rights created by clauses 42
and 43 constituted rights in the nature of a lease.
[44]
In support of his submission that the clauses did create leasehold interests, Counsel for the
appellant said that –
13
[45]
•
each clause established an equitable interest sufficient for an estate or interest
within the meaning of s.12(5);
•
on its proper construction, clause 42 expressly granted to the appellant the right to
exclusive possession of the doctor parking area;
•
the local authority consent to the use of the premises as a 24 hour medical centre
provided that the two car parking spaces with access to Bundall Road were to be
used for long term medical practitioner parking;
•
clause 42 granted rights to the exclusion of persons other than the appellant and its
permitted invitees;
•
the rights given were to the exclusion of the general public.
Counsel for the appellant submitted that clause 43 also established the relationship of
lessor/lessee. Clause 43 granted Sorrento and its invitees the right to permit its patients to
park in the "Patient parking" area. Although the word "exclusive" was not used, it was
implicit that the parking was for the sole benefit of the appellant and its invitees for the
purposes of its patients to the exclusion of the general public.
Moreover it was a
condition of the local authority consent that such parking be available.
[46]
Senior Counsel for the respondent submitted that clauses 42 and 43 gave rise to a licence,
rather than a lease because –
•
the area referred to as "doctor parking" was not part of the description of the land
being leased in Item 7 of the lease;
•
a lease of the parking area could have been granted by identifying that area as part
of the leased area in Item 7. By granting separate rights in clauses 42 and 43, the
parties indicated their intention that the appellant obtain only contractual rights in
respect of the parking area;
•
the use of the words "rights" and "rights to use" in clause 42 was inconsistent with
the concept of exclusive possession which is the touchstone for determining the
existence of a lease;
•
the use of the word "exclusive" in the document was not determinative of the
issue;
•
the geography of the parking area suggested that it was more likely that nonexclusive possession was granted by way of a personal contractual licence;
•
the surrounding circumstances did not meet the test for the implication of a quality
of exclusive possession in clause 42;
•
although not expressly stated, the circumstances suggested that the parties'
intentions were that the car parking area could not be transferred separately.
14
[47]
Senior Counsel also submitted that the same observations applied to clause 43, although
even more forcefully, because clause 43 did not refer to the rights granted as exclusive.
Conclusions as to whether a lease was created
[48]
In Radaich v Smith (1959) 101 CLR 209, the High Court held that to create a lease it is
necessary that a right to exclusive possession be granted to the occupant. The Court also
said that even if there were no intention to create a lease, a lease would be created where
there is a grant of the right to exclusive possession. A right to exclusive possession
means that the lessee is granted the right to exclude all other persons, including the lessor,
from the premises, subject to such specific provisions for entry as may be provided in the
document (Lewis v Bell at 734).
Clause 42
[49]
Pursuant to clause 42, the lessee was granted "exclusive rights to use the area marked as
'Doctor Parking' on the plans … for parking of the vehicles of the lessee or its permitted
invitees".
[50]
Clause 42 does not in its terms grant a right to exclusive possession of the doctor parking
area. An exclusive right to use the area is not, on its face, a grant of exclusive possession.
Nor have the words "lease" or "demise" been used. Such words would, prima facie, lead
to the conclusion that a lease had been created (Lewis v Bell at 735).
[51]
In the absence of an express grant of a right to exclusive possession, or the use of words
such as "lease" or "demise", the High Court said in Radaich v Smith that in some cases a
grant of exclusive possession may be inferred because the rights granted could only be
exercised by one who was granted exclusive possession. In Lewis v Bell, Mahoney JA
said (at 736) that such an inference should normally only be made where it was necessary
to give business efficacy to the transaction. We do not consider that it is necessary to
make such an inference here. By clause 42, the appellant was granted an "exclusive right
to use the area … for parking of the vehicles …". The right granted was a right to use the
area for a defined and particular purpose. The right to park cars in the doctor parking area
can be exercised to the full without the need to infer that the appellant was granted the
right to exclude all other persons, including the owner of the land from that area. The
effect of clause 42 is that the owner has agreed that it will not grant a similar right of
usage to any other person. This does not mean that the owner has granted the appellant a
right to exclusive possession of the doctor parking area.
[52]
Moreover, although the appellant was granted the right of "exclusive use" of that area, the
failure to grant "exclusive possession", in a situation where the rights in question were
granted as part of a lease document, is telling. As the Land Court observed (RJ [19]) if a
15
leasing arrangement had been intended, the parking area could have been included in the
demised area.
[53]
Finally, we do not consider that the condition in the local authority approval requiring that
the two car parks be used for long term medical practitioner parking necessarily implies
that the rights granted to the appellant were leasehold rights. A grant of exclusive rights
to use the doctor parking area is sufficient to ensure compliance with that condition.
Clause 43
[54]
For the same reasons, we do not consider that clause 43 creates a leasehold interest. We
agree with the Court below that there is an additional reason for this conclusion, in that
the rights granted by clause 43 are not exclusive. Similar rights over the same car parking
spaces could have been granted to other tenants of the building. While there were no
other tenants at the time of resumption, that will not necessarily be the case in the future.
In any event the nature of the rights granted is to be determined by construing the
instrument itself, not by examining the way in which those rights are exercised.
A licence coupled with an interest?
[55]
The appellant also submitted that the car parking rights were of a proprietary nature
because they constituted a licence coupled with an interest, in that the licence to use the
car parks was connected with the grant of the lease within the meaning of the principles
stated in Wood v Leadbitter (1845) 153 ER 351 and Cowell v The Rosehill Racecourse
Co. Ltd (1936-37) 56 CLR 605. Malchada had granted a proprietary right to the appellant
– the lease – and had also given the appellant a licence to use the car parking areas so that
the appellant might use and enjoy the proprietary rights conferred by the lease.
[56]
Examples of licences coupled with an interest in land are grants of easements, profits à
prendre or the right to take natural produce or profits from the lands of others. Such
licences are irrevocable (Cowell v Rosehill Racecourse Co Ltd at 626 per Starcke J).
Most of the authorities concerning licences coupled with an interest have been concerned
with identifying the circumstances in which a licence may be irrevocable (eg see Cowell,
Wood v Leadbitter and Hounslow London Borough Council v Twickenham Garden
Developments Ltd [1971] 1 Ch 233), and the nature of the interest created by the licence
when it is coupled with an interest has not been in issue. However, in Hornsby, Meagher
JA said (at 155) that a licence coupled with an interest was an example of a proprietary or
quasi-proprietary right which is less than a fully fledged estate in land. It seems that the
reason that such a licence is a proprietary or quasi-proprietary interest is that the licence is
"part and parcel of the interest granted" (Megarry and Wade, The Law of Real Property,
16
5th edn, (1984) at 801; see also Dawson and Pearce, Licences relating to the occupation
or use of land, (1979) at 44-45).
[57]
Where a licence is coupled with an interest, the licence is incident to the grant (Wood v
Leadbitter at 354). The grantee owns the property to which the licence is incident, and
this ownership, with its incidental licence, is unaffected by what purports to be a
revocation of the licence (Cowell v Rosehill Racecourse at 615, per Latham CJ). The
reason the licence cannot be revoked is to ensure that there is no derogation from the
grant of the interest in land (Halsbury's Laws of Australia [245-240]). "The licence to go
upon the land is incident to the grant and depends upon it. But the purpose must be to
take away something which is upon the land or forms part of the soil or otherwise to deal
with an ascertainable subject of property. For the licence is irrevocable because it is
necessary to the enjoyment or effectuation of a right of property that has been conferred."
(Cowell v Rosehill Racecourse at 630, per Dixon J).
[58]
In this case, we do not consider that the car parking rights were incident to the grant of the
leasehold interest to the appellant in the sense used in those authorities. Although not
expressly stated, it appears to be implicit in all the authorities that the licence and the
proprietary interest with which it is coupled relate to the same land. That is not the case
here as the licence gives the right to access the car parks, not the building which is the
subject of the lease. Moreover, the use of the word "incident" in this context indicates
that the licence rights form an essential part of the grant of the interest in land such that,
unless the incidental right is granted and not revoked, the rights of property which are
granted cannot be exercised. For example, the grant of a right to cut down trees on the
grantor's land cannot be exercised unless the grantee is also given a licence to enter the
grantor's land. Here, although the car parking rights were connected with the leasehold
premises in that they facilitated the use and enjoyment of those premises, they were not
essential in the sense that the lessee's rights could not be exercised without those rights.
Compliance with the local authority development approval requiring that 10 car parking
spaces be provided could have been achieved by Malchada setting aside the spaces for car
parking. While inclusion of the rights in the lease was probably desirable, it was not
essential to the grant of the lease.
[59]
Our conclusion is therefore that clauses 42 and 43 do not create licences coupled with an
interest in the land.
17
Other Matters
[60]
The submission by Counsel for the appellant concerning the right to specific performance
does not advance the appellant's case unless an interest of a proprietary nature were
established.
[61]
As to the decisions in Hudsons v Commissioner of Main Roads and Sydney Harbour
Foreshore Authority v Walker (2005)141 LGERA 243, both are concerned with principles
associated with the assessment of compensation and are not of assistance in determining
the issues in this case.
Conclusion
[62]
We consider that the words "estate and interest" as used in s.12(5) of the Act should be
interpreted to mean rights of a proprietary or quasi-proprietary nature.
We do not
consider that it has been established that the appellant's rights to the car parks are rights of
such a nature. The appellant therefore has no valid claim to compensation under the Act
and the Land Court has no jurisdiction to hear and determine the claim. The decision of
the Land Court is affirmed.
Order
[63]
The appeal is disallowed.
PHILIPPIDES J
JUSTICE OF THE SUPREME COURT
RP SCOTT
MEMBER OF THE LAND COURT
CAC MacDONALD
MEMBER OF THE LAND COURT
18