CPT Manager Ltd v Chief Executive, Department of Natural Resources and Mines [2001] QLC 32 (2001) 22 QLCR 282

LAND COURT BRISBANE 26 APRIL 2001 Re: Appeal against Annual Valuation Valuation of Land Act 1944 Property ID: 545996 Local Government: GCCC-Albert (AV00-177) CPT Manager Ltd v. Chief Executive, Department of Natural Resources and Mines (Hearing at Coolangatta) DECISION ON JURISDICTION Background: (1) This matter relates to land at 57 Station Street, Nerang and described as Lot 7 on RP853668, Parish of Gilston. The subject land has been developed as a drive-in shopping centre known as the Nerang River Plaza Shopping Centre. The matter before the Court relates to the preliminary question of whether the Court has jurisdiction to hear the merits of the matter in respect of an appeal against an annual valuation of the subject land at 1 October 1999 under the Valuation of Land Act 1944 (the Act). Mr K Stapleton of LandMark White appeared on behalf of the appellant. Mr R Paterson, Principal Legal Officer, appeared for the respondent. The Facts: (2) The only issue before the Court is whether the name of the owner shown on the notice of appeal lodged with the Land Court on 25 July 2000 is in fact the actual "owner" as defined by s.7 of the Act. (3) On 27 March 2000 the Chief Executive issued a valuation of the subject land to Trust Company of Australia Ltd ("Trust Co") as trustee. Following an objection by Trust Company of Australia Ltd lodged on 4 May 2000 the Chief Executive confirmed its valuation on 13 June 2000 by issuing a decision on the objection to Trust Company of Australia Ltd as trustee (4) A notice of appeal (Form 59) was lodged with the Registrar of the Land Court on 25 July 2000, showing the name of the owner as CPT Manager Ltd (a wholly owned subsidiary of Centro Properties Ltd). On 31 July 2000 the Registrar [2001] QLC 32 -- 1 of 11 -- 2 acknowledged the notice of appeal to both CPT Manager Ltd and the respondent. On 15 August 2000 the respondent advised the Registrar of the Land Court that the respondent intended to challenge the name of the owner and whether jurisdiction would lie with the Court. (5) On 12 December 2000 a Court Notice set down the matter to decide whether jurisdiction existed, and if it did exist to then set the matter for hearing of the merits at the next available sittings of the Land Court in Coolangatta. The hearing on jurisdiction commenced on 5 February 2001. (6) Mr Stapleton argues that there had been no change in the beneficial ownership of the property, which had remained as the separate unit trust holders of the trust. Those unit holders were small investors around Australia who pooled their resources under the management of Centro Properties. Those unit holders collectively were investing in a number of shopping centres around Australia, including the subject land, all of which were owned by Retail Property Trust. (7) I note that s.5.1 of the Trust Deed directs: "5.1 The beneficial interest in the Trust is divided into Units. Subject to this deed, each Unit confers an equal undivided interest. A Unit does not confer any interest in a particular Asset but only an interest in the Assets of the Trust as a whole, subject to the Liabilities of the Trust." (8) As a consequence of a lack of clarity in respect of the actual situation of the ownership of the trust, leave was granted for both parties to supply further subsequent statements in respect of that particular matter. The following conclusions arise as a result of those further statements exchanged by the parties. The Appellant's Case - (9) On 10 June 1998 Trust Company of Australia Ltd was appointed trustee of the Nerang Trust (Trust), and on 30 June 1998 Trust Company of Australia Ltd as trustee of the Trust, was registered as proprietor of the land. (10) By Deed of Retirement and Appointment under s.9.6, 9.8 and 9.9 of the Trust Deed, CPT Manager Ltd (CPT) was appointed the new trustee (and manager) of the Trust on 8 May 2000. Since that date all rents from tenants of the shopping centre have been received by CPT. On 8 March 2001 CPT became the registered proprietor of the subject land. (11) On transfer of the trustee of the Trust from Trust Company of Australia Ltd to CPT Manager Ltd, and where the manager retired and was not replaced by a related body corporate of the former manager (Heine Management Limited), then under -- 2 of 11 -- 3 s.10.8 of the Deed the name of the Trust was also to be changed to a name which did not include the name "Heine" or the word "Prime", and which is not substantially or deceptively similar to that name or word. Under the deed the name Trust Company of Australia Ltd was formed under "Prime Retail Property Trust" at the date of the deed. The change of trustee has not changed the position of the unit holders of the Trust, who remain ultimately the persons receiving the rents of the centre. (12) On retirement as trustee the Trust Company of Australia Ltd was released from further obligations in relation to the Trust except relevantly in relation to: "(d) Any failure by the retiring Trustee to transfer assets to the new trustee." (13) The appellant argues that under s7.(1)(a) of the Act the word "owner" is defined as "the person who is entitled to receive the rent from the land". The appellant advises that since 8 May 2000 rents to an amount of $250,000 per month have passed directly to CPT, which, in their opinion, designates CPT as the "owner" under the Act. To support that conclusion reference is drawn to the Trusts Act 1973, where s.15(1) states: "15(1) Where a new trustee is appointed the instrument of appointment vests, subject to the provisions of any other Act, the trust property in the persons who become and are the trustees as joint tenants without any conveyance, transfer or assignment." (14) However, it is also noted that where the provisions of another Act may impact the rights of the trust property, then s.15(3) may also be relevant: "15(3) Where, by reason of the provisions of any other Act or for the protection of any trust property, it is requisite that the vesting in a new trustee or divesting from a discharged trustee should be notified to or registered or recorded by the registrar or other person having the duty or function of registering or recording any discharge or appointment of trustees or divesting or vesting or other dealings under that Act, the trustees shall - (a) execute and produce to the registrar or such other person such instrument or instruments as may be necessary; and (b) do such other act or acts as may properly be required by the registrar or such other person; for the purpose of effecting such notification, registration or recording; and an instrument of appointment or discharge shall be deemed a conveyance from the persons in whom the trust property was previously vested to the persons in whom it vests by virtue of such instrument." -- 3 of 11 -- 4 (15) Under the Trust Act 1973 the word "registrar" means the Registrar of Titles (s.5) I note also that "trustee" is defined to include: "(a) a trustee corporation; and (b) any other corporation in which property subject to a trust is vested;" (16) As further support, the appellant also notes that s.2 of the Valuation of Land Act 1944 does not operate to limit the class of individuals who are "owners", but provides provisions which include a range of owners. By adopting the wider understanding of the word "includes" the appellant contends that it was meant to enlarge the ordinary meaning of the word, and seeks support in Robinson v. Local Board of Barton-Eccles (1883) 8 APP CAS 798, at 801 per Lord Celbourne who said: "An interpretation clause of this kind (ie one which uses the word 'includes') is not meant to prevent the word from receiving its ordinary, popular and natural sense whenever that would be properly applicable; but would enable the word as used in the Act when there is nothing in the context or subject matter to the contrary, to be applied to some things which would not ordinarily be applicable." (See also Statutory Interpretation Australia Pearce & Geddies, 4th Edition Butterworths 1996 at p.168 and also p.189). (17) In respect of the relevance of s.15(3) of the Trusts Act 1973, the appellant argues that ownership did pass to CPT Manager on 8 May 2000, and CPT Manager has been entitled to be registered as proprietor of the land from that date. That the registration was not perfected until 8 May 2001 does not disentitle it to the status of "owner". In support of that principle the appellant argues that s.15(1) of the Trusts Act 1973 establishes that a trust is appointed "without any conveyance, transfer or assignment". The appellant also notes that under the Land Title Act 1994 s.109 directs: "109. A person may be registered as trustee of an interest in a lot only by the registration of - (a) an instrument of transfer of the interest to the person as trustee; or (b) a request to vest the interest in the person as trustee." (18) While there is no requirement under the Land Title Act 1994 for the Trustee to become registered, the directions of s.15(3)of the Trusts Act 1973 would appear to direct otherwise, where the provisions of another Act (ie the Valuation of Land Act 1944) may require registration. However, even if that was to be concluded, then the -- 4 of 11 -- 5 appellant argues that the execution of the registration as registered proprietor may be delayed for whatever reason. (19) The appellant seeks support in that principle in Beedell Farms and Grazing Pty Ltd v. The Valuer-General (1979) 6 QLCR 109, where the Land Appeal Court said at p.116: " There must, in Queensland, be many estates in the process of subdivision on which sales are continuously being made. The Valuer- General may not be immediately informed of these sales. When he is so informed it is no doubt administratively practical only to issue amended valuations periodically and not as soon as a notification of sale of each individual subdivision is received. We have been told that with the use of a computer it is now anticipated that monthly amendments will be made. Even assuming this regularity of amendment, if the respondent's interpretation of 'owner' is correct, there will be many cases where the 'owner' at date of notification will not factually own all the land contained in such notification when he comes to lodge an objection or prosecute an appeal and so would not be competent to proceed. In the case of a large estate with a good sales record it is not difficult to envisage, by virtue of the continually changing composition of the parcel owned, that an 'owner' having meaning as advanced by the respondent would, only if he ceased selling, be in a position to object and prosecute an appeal. This would be an absurd state of affairs! We find that the person who owned the land at the time the valuation notice issued and who duly objected an appeal is not debarred because of the definition 'owner' from continuing to prosecute his appeal even though at the date of hearing before the Land Court or this Court he has ceased to be the owner of part of the land referred to in the Notice of Appeal. It follows that both this Court and the Land Court in such cases have jurisdiction to hear such an appeal." (20) I believe Beedell Farms can be distinguished as the argument there was the right for the owner at the date of issue of the valuation and at the date of the appeal, to continue to be considered the owner even though he had subsequently ceased to be the owner. However, the argument that the respondent may not immediately be informed of the transfer of ownership of land is noted in the current matter. It is the case of the appellant that failure to register under the Land Titles Act 1994 does not extinguish the character and right of ownership, but rather that registration reinforces ownership. (21) The appellant also distinguishes the findings of Estate of Staunton (Deceased) v. The Valuer-General (1988-89) 12 QLCR 326. In that matter the learned Member (later President) struck out the appeal as incompetent because the agent lodging the appeal had not been duly appointed by the person who was the registered proprietor of the highest estate or fee simple in the land. The appellant in the current matter argues -- 5 of 11 -- 6 that in Staunton the appellant had not subsequently become the registered proprietor of the land at the date of the hearing. That is different in the current matter where CPT was entitled to be registered at the date of appeal, and has in fact now become registered on 8 March 2001. (22) In respect of compliance by the appellant with s.81 of the Valuation of Land Act 1944, I note that states: "81.(1) Whenever any person agrees to acquire or dispose of any land held in fee simple or held under lease or licence from the Crown or any share or interest in land held in fee simple or held under lease or licence from the Crown the person shall give notice in writing in, or to the effect of the approved form, of such transaction within 30 days after the execution of the instrument of transfer or agreement (as the case may be) to the chief executive." I also note that failure to comply with s.81 may involve a maximum penalty of five penalty points, but I see no mention in that section which would further condition the meaning of "owner" under s.7. The appellant further argues that, in his opinion, s.81 would not commence to run until the execution of the transfer on 8 March 2001. (23) The appellant further argues that CPT became the owner of the land on 8 May 2000, and under s.46(2) of the Valuation of Land Act 1944 it is entitled to maintain and bring the appeal as the new "owner" on the objection of the previous owner. I note s.46(2) directs: "46(2) If an objection or appeal as aforesaid was made or instituted by the former owner prior to the change in ownership then the new owner shall have the right to carry on in the new owner’s own name that objection or appeal but the new owner shall not be entitled in that case to himself or herself make or institute a fresh objection or, as the case may be, appeal." The Respondent's Case - (24) By clause 3.3 of the Nerang Trust Deed of 10 June 1998 the assets were vested in the then trustee Trust Company of Australia Ltd. On 8 May 2000 by Deed of Retirement and Appointment, CPT Manager Ltd became the new trustee, and under clause 9.9(a) of the Deed the assets must be vested in the new trustee. Relevant in this matter the subject land comprises the assets of the Nerang Trust. The respondent argues that the assets of the Trust were not vested in CPT Manager Ltd pursuant to clause 9.9(a) until 8 March 2001, being the date the transfer was registered with the Registrar of Titles. -- 6 of 11 -- 7 (25) The respondent argues that under s.181 of the Land Titles Act 1994 an interest in a lot is not created at law until an instrument of transfer is registered; and under s.182 the interest in a lot is vested on registration in the person entitled to the interest. Mr Paterson argues that s.15(1) of the Trusts Act 1973 is intended to operate subject to the provisions of s.181 and s.182 of the Land Titles Act 1994 in respect of the vesting of the subject land in CPT Manager Ltd. (26) Mr Paterson therefore concludes that CPT Manager Ltd was not the owner of the subject land within the meaning of s.7 of the Valuation of Land Act 1944, when the notice of appeal was signed by its authorised agent. Accordingly, CPT Manager Ltd had no authority to authorise the agent on its behalf. That view, he submits, is further supported by s.15(3) of the Trusts Act 1973. Was CPT the owner between 8 May 2000 and 8 March 2001 (27) Accepting that CPT was in possession of the subject land, and that it did receive the rents of that land between 8 May 2000 and 8 March 2001, Mr Paterson argues that it was merely a tenant at will of the trustee Trust Company of Australia Ltd . Whether CPT Manager Ltd had a right or not in the subject land, the legal right of possession had continued to vest in Trust Company of Australia Ltd until 8 March 2001. (28) The rights of a legal owner and a trustee owner were addressed by the Court of appeal in New South Wales in DKLR Holding Co (No. 2) Pty Ltd. V. Commissioner of Stamp Duties [1980] 1 NSWLR 510, where Hope JA said at p.519: "… although the equitable estate is an interest in property, its essential character still bears the stamp which its origin placed upon it. Where the trustee is the owner of the legal fee simple, the right of the beneficiary, although annexed to the land, is a right to compel the legal owner to hold and use the rights which the law gives him in accordance with the obligations which equity has imposed upon him. The trustee, in such a case, has at law all the rights of the absolute owner in fee simple, but he is not free to use those rights for his own benefit in the way he could if no trust existed. Equitable obligations require him to use them in some particular way for the benefit of other persons." (29) When considering the rights of a beneficiary annexed to the land Hope JA went on to say at p.520: "When placed in possession by the trustee, at law the beneficiary is merely tenant at will of the trustee, the tenancy being determinable at law at any time on demand of possession by the trustee." -- 7 of 11 -- 8 (30) That principle was followed in Chief Commissioner of Land Tax v. Macary Manufacturing Pty Ltd [1999] NSWCA 471, 17 December 1999, at p.12. (31) I note that in Macary para.59 concludes: "The registered proprietor of an estate in fee simple holds (at law) an estate in possession notwithstanding the imposition of a trust requiring the proprietor to hold that estate on behalf of beneficiaries. Nothing turns on whether the trust is active or bare. There will be an equitable estate or interest according to the terms of the trust. However, 'an equitable interest is not carved out of a legal estate but impressed upon it' (DKLR Holding Co (No. 2) Pty Ltd v. Commissioner of Stamp Duties (NSW) (1982) 149 CLR 431 at 474 per Brennan J). In other words, the recognition of a trust does not detract from the estate in possession enjoyed by the trustee at common law. Indeed, the full enjoyment of that trust interest depends upon the trustee's capacity to defend against third parties the plenitude of the legal estate vested in the trustee." Also in Macary at para 63: "A trustee of the entire fee simple (ie where no future interest is involved) holds an estate in possession whether the trust is bare or active. It is beneficial in that (common law) sense. The legal estate confers a legal right to enjoyment or possession of the land and its rents and profits, even though the trustee may be compelled to hold that right for the benefit of the beneficiary. See also Kern Corporation Ltd v. Walter Reid Trading Pty Ltd (1987) 163 CLR 164 at 191-2 (Deane J)." (32) I consider then whether Trust Company of Australia Ltd had conveyed initially an equitable interest in the subject land when it relinquished the trusteeship to CPT on 8 May 2000, and then followed that by the transferring of the fee simple interest on 8 March 2001. While that may provide some support for the appellant's argument that CPT was the actual "owner" at the date of the signing of the notice of appeal, it is not supported by the preeminence of the fee simple interest as noted by the High Court in DKLR Holding Co (No. 2) Pty Ltd v. Commissioner of Stamp Duties (NSW) [1981-82] 149 CLR 431, where Aickin J said at p.463: "A preliminary argument advanced on behalf of DKLR was that the transfer of the land to it by 29 Macquarie was effective to transfer only the 'bare legal estate' and to leave remaining in 29 Macquarie the entire beneficial interest. It was said that immediately prior to the transfer 29 Macquarie held both the unincumbered legal estate and the entire equitable interest in that property and that all it had done was to transfer the legal estate. In my opinion this argument is based upon a fundamental misconception as to the nature of legal and equitable interests in land or other property. If one person has both the legal estate and the entire beneficial interest in the land he holds an entire and unqualified legal interest and not two separate interests, one legal and the other equitable. If he first holds the legal estate upon trust for some -- 8 of 11 -- 9 other person and thereafter that other person transfers to him the entire equitable interest, then again the first-named person does not hold two separate interests, one the legal and the other the equitable estate; he holds a single entire interest - he is the absolute owner of an estate in fee simple in the land. The equitable interest merges into the legal estate to comprise a single absolute interest in the land. It is a fundamental principle of both the common law and of equity that the holder of an estate in fee simple cannot be a trustee of that fee simple for himself for what he holds is a single estate, being the largest estate in land known to the law." (33) On that guidance it would support Mr Paterson's contention that Trust Company of Australia Ltd was still the registered proprietor of the fee simple interest of the subject land, and therefore the legal "owner" of the land at the date of signature of the notice of appeal. (34) I also note that s.5.1 of the Trust Deed directs that the unit holders do not have any interest in a particular asset (such as the subject land), but only an interest in the assets of the Trust as a whole. Such directive would conclude that the unit holders are themselves only beneficiaries of the Trust, and not the "owner" of the subject land for the purposes of s.7 of the Valuation of Land Act 1944. Was CPT the same Trustee under a different name? (35) There is no evidence that the new trustee was the same corporation under a different name, and the names of the directors and addresses on the Deed of Retirement and Appointment attest to there being separate entities. However, in the event that it had merely been a change of name of the same company, then under s.382(4) of the Corporations Law, a change of name by a company does not create a new entity. (See Galli Developments (Qld) v. Chief Executive, Department of Natural Resources (1997-98) 17 QLCR 205 at 214). Summary (36) On the evidence it is clear that it was the intention from 8 May 2000 that CPT would become the new trustee of the Trust. It is also clear that from the registration of CPT on the fee simple title on 8 March 2001, that it became both the trustee and the registered proprietor, and the "owner" under s.7 of the Valuation of Land Act 1944. (37) It is also clear that from 8 May 2000 Trust Company of Australia Ltd was released from its obligations as trustee, except in so far as it still had to transfer the asset (the subject land) to CPT (s.9.10(d) of the Deed). I note that this has relevance in respect of s.15(3) of the Trusts Act 1973, and also s.7 of the Valuation of Land Act 1944. -- 9 of 11 -- 10 (40) In respect of s.2 of the Valuation of Land Act 1944 I can accept that the meaning of "owner" may be read to have wider application than only as shown in the legislation. It could, for example, be extended to include a person who is acquiring the fee simple of the land, but who has still to implement the registration of the interest in the land. That would be the corollary of Beedell Farms, and reflect the normal process of property transfer. Under that example CPT could be seen as an owner in transit, and perhaps entitled to consideration under s.46(2) of the Act. (41) Section 46(2) would preclude acceptance of a fresh appeal in the name of the new owner (CPT), where there had been an appeal instigated by the former owner. In this matter that had not occurred and I see no grounds for extending s.46(2) to include an appeal from someone who is not the legal "owner" of the land. Section 46(2) is intended only to cover such matters as when a former owner has correctly appealed, then sold the property, and the new owner is given the right to continue the appeal. (42) While the respondent's argument is correct in that at the date of appeal on 25 July 2000 the registered proprietor of the subject land was still Trust Company of Australia Ltd, that date occurred only some 10 weeks after the Deed of Retirement. I believe in the normal processes of business, such a period was likely to have presented some difficulties in achieving full registration of the new title. Indeed, for whatever reason, the change of registration took some 10 months to 8 March 2001 to finalisation. (43) While CPT could not claim to be the registered proprietor as at 25 July 2000, it was in full receipt of the rents for the land in accordance with s.7(1) of the Valuation of Land Act 1944. The only question to be answered then, in my opinion, is whether CPT acted in its capacity as the trustee (and future "owner"), or whether it collected the rents as an agent for Trust Company of Australia Ltd. (44) The Deed of Retirement and Appointment of 8 May 2000 clarifies that matter in that in s.2.1 it is agreed that the old trustee retires; in s.2.2 CPT agrees to accept the appointment and to undertake all the obligations of the trustee; and s.5.1 and s.5.2 release the old trustee from any further obligation, except to transfer the assets to CPT. The fact that that legal transfer of assets took until 8 March 2001 was beyond the control of CPT, and it should now not be held accountable for delays occasioned by Trust Company of Australia Ltd. On that basis I accept that CPT can be held in the current matter to be identified as the "owner" for the purposes of implementing s.7 of -- 10 of 11 -- 11 the Valuation of Land Act 1944, and jurisdiction is found to exist. The matter should now be called upon for hearing at an appropriate time to be established by the Court. (45) I am reminded that Mr Paterson has reserved his rights to seek appropriate costs which may have occurred as a consequence of the adjournment to seek further applications. However, because of the difficult and complex nature of the matter, I signal that I believe it would be appropriate for each party to bear their own costs in the matter of jurisdiction now determined. NG DIVETT MEMBER OF THE LAND COURT -- 11 of 11 --