CHAPTER 2
THE NATURE OF FREEHOLD AND LEASEHOLD INTERESTS IN
LAND
THE NATURE OF “REAL PROPERTY”
2.1
Butterworths Australian Legal Dictionary defines “real property” in the following
terms:
“Land and interests in land. The term originated in the forms of
action available through the medieval common law courts. In a ‘real
action’, the remedy was recovery of the subject matter of the dispute
itself. In practice, the only property which came within the real
actions was property in land, hence property in land became known
as real property. In actions for recovering other forms of property,
the defendant could elect either to return the property in dispute or
pay monetary compensation”1
2.2
Upon the British settlement of the various Australian colonies in the late eighteenth
and early nineteenth centuries, British statute and common law was received and
applied in those colonies. 2
2.3
The British concept of real property law was itself derived from the feudal system
established following the Norman conquest. Under the feudal system the Crown is the
ultimate owner of all land and private citizens derive their real property rights by way
of the grant by the Crown of an interest in the Crown’s land.3
2.4
As a result of the above inherited common law and the current statutory framework,
the greatest interest that an individual can have in land in Western Australia is an
interest which is good and enforceable absolutely against every other individual or
body except the Crown. Such an interest is known as a “freehold title” in the land.
THE EVOLUTION OF REAL PROPERTY LAW
2.5
At this stage it is worthwhile further exploring the historical and theoretical
development of the concept of real property.
Roman Land Law
2.6
In approximately 450 B.C., fundamental Roman legal principles and practices were
first put in writing on twelve tablets (the Twelve Tables), which were displayed
1
The Honourable Dr P E Nygh and P Butt (General Editors), Butterworths Australian Legal Dictionary,
Butterworths, Sydney, 1997, p981.
2
Bradbrook, et al, Australian Real Property Law, Third Edition, Thomson Lawbook Co, 2002, p4.
3
Ibid.
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5
Public Administration and Finance Committee
SEVENTH REPORT
publicly in the Roman Forum. The Twelve Tables included references to the concept
of “usucapio”, which is defined in Butterworths Australian Legal Dictionary as:
“In Roman law, acquisition of ownership of property belonging to
another as a consequence of uninterrupted technical possession in
respect of the property for a fixed period, originally one year for
movables and two years for immovables.”4
2.7
Extant references to Tables VI and VII include the following laws:
“Table VI.
1.
When one makes a bond and a conveyance of property, as he
has made formal declaration so let it be binding.
3.
A beam that is built into a house or a vineyard trellis one may
not take from its place.
5.
Usucapio of movable things requires one year's possession
for its completion; but usucapio of an estate and buildings
two years.
6.
Any woman who does not wish to be subjected in this manner
to the hand of her husband should be absent three nights in
succession every year, and so interrupt the usucapio of each
year.
Table VII.
2.8
1.
Let them keep the road in order. If they have not paved it, a
man may drive his team where he likes.
9.
Should a tree on a neighbor's farm be bend crooked by the
wind and lean over your farm, you may take legal action for
removal of that tree.
10.
A man might gather up fruit that was falling down onto
another man's farm.”5
Under Roman Law, theoretical absolute ownership of land by a private citizen was
possible (absolutum et directum dominium), subject to the practical exception of State
necessity (dominium eminens or “eminent domain”). The term “eminent domain” is
defined in Butterworths Australian Legal Dictionary as:
“The inherent right of the government to acquire private property for
public purposes.”6
4
5
6
The Honourable Dr P E Nygh and P Butt (General Editors), Butterworths Australian Legal Dictionary,
Butterworths, Sydney, 1997, p1235.
Oliver J Thatcher (ed), The Library of Original Sources (Milwaukee: University Research Extension Co,
1901), Vol III: The Roman World, pp9-11 (modernised by Professor J S Arkenberg, Department of
History, California State (Fullerton), cited at Internet site:
http://www.fordham.edu/halsall/ancient/12tables.html (current at March 16 2004).
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2.9
CHAPTER 2: The Nature of Freehold and Leasehold Interests in Land
The concept of eminent domain is discussed in greater detail in Chapter 3. As to the
extent to which the Roman State used its power of eminent domain over private
landholders, Errol E. Meidinger notes:
“Legal scholars have unearthed little direct evidence on the use of
eminent domain in ancient times. They wonder, practically in unison,
whether the straight roads and aqueducts of ancient Rome might
indicate some eminent domain-like power. …
Notably lacking in the Roman evidence are two features now thought
central to eminent domain: established rights of the injured party to
compensation and a legal proceeding to determine the validity and
extent of the taking. …
In Rome it seems (as it may seem about our times to future scholars)
that the public-private accommodation was somewhat fluid and
ambiguous. The strong emphasis on inviolable private property that
prompts some to doubt the existence of eminent domain was
counterposed against an equally impressive and purposive state.
Jones [Expropriation in Roman Law, 45 L.Q. REV. 512, 521 (1929)]
suggests [at pp523-524] that the prospects of aggrieved property
owners may have varied substantially according to their political
positions and the nature of the taking. Nonetheless, there is a good
deal of evidence to indicate that the Romans took privately held
property to further a variety of public purposes. The mode and terms
of taking probably varied with particular situations and the
accommodations reflected the relative powers of the parties and local
exigencies. A more durable, standardized compromise would await
other times and societies.”7
2.10
With respect to the colonies of Rome, including Britain, the system of land law
applied in these areas by the Romans was quite different:
“The non-Italian provinces were classified as conquered territory,
whose inhabitants were primarily Roman subjects with status as
"dediticii" = capitulants (no legal rights.) There were very few
Roman citizens. Augustus divided the provinces into two classes:
those that required active defense and those that did not. The Senate
ruled the latter vesting imperium in governors; the rest - the "imperial
provinces," were governed by the Emperors own legates, procurators
or prefects. The army was generally quartered in the imperial
6
The Honourable Dr P E Nygh and P Butt (General Editors), Butterworths Australian Legal Dictionary,
Butterworths, Sydney, 1997, p412.
7
Errol E Meidinger, “The “Public Uses” of Eminent Domain: History and Policy”, Environmental Law,
Vol 11, No 1, Fall 1980, pp7-8, at Internet site:
http://www.law.buffalo.edu/homepage/eemeid/scholarship/EminentDomain.pdf (current at April 14
2004).
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Public Administration and Finance Committee
SEVENTH REPORT
provinces. (England was occupied in such a manner from
approximately 43 A.D. - 400 A.D.)
The land of the conquered non-Italian provinces was considered the
property of the Roman state or "ager publicus" and was held by the
possessors under charter or revocable grant and not in dominium.
The relationship of the non-Roman citizen to the Emperor in the
imperial provinces was that of non-citizen familia to the pater
familias - both in respect to property and imperium.
Considerable revenue came from "leasing" of these lands and from
contracting with "Publicans," who operated state forests and public
works, as well as the state monopoly on mines, fisheries and salt. The
provinces paid a tributum soli (land tax) and a tributum capitis (head
poll tax based on personal property.) Funds went into the national
Treasury (aerarium) for lands controlled by the Senate; and to the
imperial Treasury (fiscus), for those lands classified as imperial. (In
effect, legal land ownership of the Imperial "ager publicus" was in the
Emperor.)”8
2.11
Historian Colin Wells observed that, for the colonies, gaining Roman citizenship was
of immense benefit in terms of ownership of property:
“The main benefit of the [Roman] citizenship in Gaul will have been
to bring the new citizen under the Roman law of property, which
probably meant that they could now be held to own wholly and in
perpetuity land which probably under Celtic tribal law belonged to
the tribe, although in some way assigned to the chief or one of the
other tribal nobility.”9
The English Feudal Land System
2.12
The English feudal land system developed by the Normans from the 11th century, on
which the real property law systems in modern-day United Kingdom, Australia,
United States, Canada and New Zealand are based, adopted a variation to the Roman
approach - the conquering Norman King claimed ownership of all of the land and
merely granted to citizens (initially only favoured knights) an interest in portions of
the Crown estate, as required:
8
“Land Ownership in the Territories of Rome”, Understanding American Property Rights (Online
Studies), 1998-2000, (Primary References: Will Durant, The Story of Civilization: Part III, Caesar and
Christ, A History of Roman Civilization and of Christianity from their beginnings to AD 325, Simon and
Schuster, New York c1944; John Cook, Law and Life of Rome, Cornell University Press, c1967.), at
Internet site: http://famguardian.org/Publications/PropertyRights/agerpub.html (current at April 14 2004).
9
Colin Wells, The Roman Empire, (Cambridge: Harvard University Press, 1984), cited in Ancient Romans
contributions to private property rights, by Jim Powell, at Internet site:
http://www.libertystory.net/LSBIGSTORIESROMANPROPERTYLAW.htm (current at April 14 2004),
p1.
8
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CHAPTER 2: The Nature of Freehold and Leasehold Interests in Land
“Land ownership in ancient England, as with most objects, depended
primarily on possession. You had it, you owned it. You wanted it, you
fought for it. You found it, you kept it. There were no courts or police
force ready to recognize or enforce "legal rights" as we know them
today.
All this changed with the conquest of England in 1066 by the Norman
conquest. William decreed that he owned all of the land in England by
right of conquest. Not one acre of England was to be exempted from
this massive expropriation. This sudden vacuum of privately-held land
was promptly filled by a variety of huge land grants given by the new
King to either his Norman officers or to those of the English who were
ready to recognize him as king.
The underlying principle of the system was that nobody owned land
but the king. The expressions dominion directum and dominion utile
are often used to describe the relative ownership of king and lords;
the former as landlord the latter as tenant.
This represents a significant difference between real estate and
chattels. Chattels can be owned outright. It can also be contrasted
with those countries that have an allodial system (absolute ownership
of land). Even today, in those countries that have inherited the
tenurial system, all land belongs to the Crown; persons only own an
estate in the land.“10
2.13
In his book Property and Freedom, Richard Pipes states that:
“At the time of the Norman Conquest the landed estates of the English
royalty stood at their zenith. The conquerors abolished allodial
holdings: previous owners, if permitted to keep their estates, became
royal tenants in chief. Norman royalty not only inherited the holdings
of the deposed Anglo-Saxon kings but also the confiscated real
properties from the lords who had offered them resistance, much of
which they distributed among their tenants. The tenants in chief were
required to provide the king with fixed quotas of cavalry. To ensure
that they had the required number of horsemen, they, in turn, granted
estates to knights. Thus the feudal chain was forged. But William the
Conqueror assumed that all the land, secular as well as clerical,
belonged to him and was held by his tenants on feudal terms. A tenant
in chief who failed in his duties forfeited his lands to the crown.”11
10
Lloyd Duhaime, “History of Real Estate Law: The Old English Landholding System”, Duhaime &
Company, Victoria, British Columbia, Canada, November 1996, at Internet site:
http://www.duhaime.org/Real-estate/rehist1.htm (current at April 14 2004).
11
Richard Pipes, Property and Freedom, Alfred A Knopf (New York), 1999, p126.
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Public Administration and Finance Committee
2.14
SEVENTH REPORT
By the time of the Domesday Book in 1086, the Western European feudal system of
land tenure had been imposed by the Norman kings throughout England. Peter Butt
notes that:
“Of all the land of England surveyed in the Domesday Book, about
one-fifth was held directly by the King, about one-quarter by the
Church, and about one-half by the King’s greater followers. These
last numbered about 1,500 tenants-in-chief, each holding by some
service of the King as overlord. Of these, a small number (probably
no more than 12) held about one-quarter of all the landed wealth of
England in 1086. …
What especially distinguished English feudalism from its Continental
counterpart was its universality. This was based on the premise perhaps a fiction - that William the Conqueror was the paramount
lord of all the land in England. This is explained partly by the fact of
conquest, partly by confiscations following the various rebellions
which occurred in the early years of Norman rule, and partly by the
feudal instincts of later lawyers who construed the submission of the
Saxons as a surrender and regrant of their lands on the lines of the
old benefice. A grant from the King became the basis - actual or
fictional - of all landholding. No longer was any land allodial."12
2.15
The allocation of land to selected lords by the first Norman kings was tied to the
ability of the lords to perform important public duties, most important of which was to
provide the King with knights in time of war. Armies of knights were amassed by
way of the lords effectively ‘subletting’ their granted lands to their own ‘vassals’ to
live and work on in exchange for the vassals undertaking military service as required.
The historian Ordericus Vitalis noted that William the Conqueror “…allocated lands
to knights in such a way and so arranged their contingents that the kingdom of
England should always have 60,000 knights at the ready and produce them
immediately at the King’s command as necessity required.”13 Although it is likely
that 5,000 or so14 knights was a more realistic figure for the time, the importance of
the expectation of public service on the part of a recipient of a grant of land from the
King cannot be overstated.
2.16
In his book Land Law, Peter Butt notes that the English doctrine of land tenures
developed on a much wider scope than its Continental counterpart, with land
subsequently being granted by the King not just for the provision of military or
aristocratic services by his subjects (“knight service”), but also the supply of a wide
variety of other public and personal services, such as: domestic staff, weapons, food,
transport, and entertainment (“serjeantry”); and religious services such as the saying
12
Peter Butt, Land Law, Fourth Edition, Lawbook Co, Sydney, 2001, pp58-59.
13
Ibid, p59.
14
Ibid.
10
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CHAPTER 2: The Nature of Freehold and Leasehold Interests in Land
of masses for the donor or donor’s family (“frankalmoin”).15 Unlike under Roman
Law, there was no absolute ownership of property in medieval England, and a tenant’s
interest in their land was never more than temporary and for so long as they performed
the services required of them. 16
The Application of English Land Law in Australia
2.17
Upon the taking of possession of Australia in 1770 by Britain, all land of the territory
vested in the British Crown and all land titles issued in Australia since that date are
derived from Crown grants.
2.18
For the first 40 years after British settlement of Australia in 1788, the principal means
by which the Crown alienated land in New South Wales was by way of land grants to
military officers, free settlers and former convicts to encourage the cultivation of land.
These grants were often subject to conditions, such as requirements: to accept and
maintain convicts; to cultivate a specified number of acres within five years; and/or
that the grantee not sell the land within five years.17 Grantees were usually required to
pay an annual sum of money to the Crown in exchange for the land grants (which
amounted to five per cent of the value of the land by 1825). From 1842 onwards
Crown land in New South Wales could only be alienated by way of sale.18
2.19
It has been observed that the Australian colonies “…never wholeheartedly adopted…”
the technical distinction at English law between real property (that is, land and
interests in land) as opposed to personal property (that is, all property, or chattels,
other than land and incorporeal hereditaments19).20 It is noted that from 1813, debt
recovery laws in the Australian colonies treated real and personal property almost
alike. 21
2.20
The individualistic nature of the Australian approach to real property law was
demonstrated at the start of the 20th century when all Australian States enacted
uniquely simple and administratively inexpensive dividing fences legislation,
reflecting the distinctly Australian concern for a detached dwelling on a clearly
defined quarter acre block.22
2.21
The Crown’s continuing relationship with private landholders in respect to their land
in Australia has, as in other land systems based on the English model, been largely
theoretical with the state imposing few of the original feudal obligations on
15
Ibid, p59-60.
16
Ibid, p80.
17
Ibid, p754.
18
Ibid, p755.
19
The Honourable Dr P E Nygh and P Butt (General Editors), Butterworths Australian Legal Dictionary,
Butterworths, Sydney, 1997, p873.
20
Bradbrook, et al, Australian Real Property Law, Third Edition, Thomson Lawbook Co, 2002, p5.
21
Ibid.
22
Ibid, p8.
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11
Public Administration and Finance Committee
SEVENTH REPORT
landholders, save for land rates and taxes imposed by state and local governments.23 It
has been observed that the state has generally preferred to use grants of leasehold
tenure in land where the state has wished to impose more unique or onerous
obligations on a particular landholder.24
THE BRITISH SETTLEMENT OF WESTERN AUSTRALIA
2.22
In 1828, the following written instructions were given to Lieutenant Governor Stirling
for the conduct of the British Settlement of the Swan River Port on the West Coast of
New Holland:
“Amongst your earliest duties will be that of determining the most
convenient site for a Town, to be erected as the future Seat of
Government.
You will be called upon to weigh maturely the advantages, which may
arise from placing it on so secure a situation as may be afforded on
various points of the Swan River, against those which may follow
from establishing it on so fine a Port for the reception of shipping as
Cockburn Sound is represented to be: and more effectually to guard
against the evils, to be apprehended from an improvident disposal of
the land in the immediate vicinity of the Town, you will take care, that
a square of three Miles (or one thousand nine hundred and twenty
Acres) is reserved for its future extension, and, that the land within
this space is not granted away (as in ordinary cases) but shall be held
upon leases from the Crown, for a Term not exceeding twenty one
years. You will, from the commencement of the undertaking, be
observant of the necessity of marking out, and reserving for Public
purposes, all those peculiar positions within, or in the vicinity of the
projected Town, which, from natural advantages, or otherwise, will
probably be essential to the future welfare of the Settlement.
In laying the foundations of any such Town, care must be taken to
proceed upon a regular plan, leaving all vacant spaces which will in
future times be required for thoroughfares, and as the sites of
Churches, Cemeteries, and other Public Works of utility and general
convenience.
You will cause it to be understood that His Majesty has granted to you
the power of making all necessary locations of Land.
…
You will bear in mind, that, in all locations of Territory, a due
proportion must be reserved for the Crown, as well as for the
maintenance of the Clergy, support of Establishments for the
23
Ibid, p14.
24
Ibid.
12
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CHAPTER 2: The Nature of Freehold and Leasehold Interests in Land
purposes of Religion, and the Education of youth, concerning which
objects more particulars will be transmitted to you hereafter.
I think it necessary, also, to caution you, thus early (as Land on the
Sea or River Side will, naturally, be the first to be located) that you
must be careful not to grant more than a due proportion of Sea or
River Frontage to any Settler. The great advantage to be derived from
an easy Water Communication will of course not escape your
consideration, and this advantage should be divided amongst as many
Settlers as can conveniently benefit by their position in the vicinity.”25
The Allocation of Land in Western Australia from Colonial Settlement to the Present
2.23
The allocation of Crown Land to settlers in Western Australia in 1829 was initially
proportional to the amount of capital introduced, at the rate of forty acres for every
sum of £3, and of 200 acres for every labourer brought into the colony. These grants
were subject, however, to improvement conditions (such as forfeiture of the land to
the Crown if the land had not been improved within ten years of the grant26). 27
2.24
In 1831, instructions were given by the British Colonial Office to Lieutenant
Governor Stirling regarding the administration of land transfers in the colony, which
stressed the need for certainty and uniformity in practice to ensure the maintenance of
the confidence of the settlers in the new system of land grants:
“From the 18th to the 25th Clause of your Instructions you will find
all the Regulations which have been thought necefsary for your
guidance in effecting a complete Territorial division of the Colony
into Counties, Hundreds, & Parishes, nor am I aware that any
addition could be advantageously made to that body of Rules, or that
they demand any further elucidation.
The series of Instructions from 26th to 32nd Clause, respecting the
granting of waste Land to Private Settlers, together with my
accompanying despatch will, I trust, place you in full pofsefsion of the
views of His Majesty’s Government on that important subject.
It however remains to be stated that the Grants thus to be made
should be drawn up in one uniform style. For your afsistance I
enclose the draft of such a form of Grant as is fit to be adopted on
every such occasion.
25
Lieutenant-Governor Stirling's Instructions 30 December 1828 (UK), December 30 1828, pp1-2, at
Internet site: http://www.foundingdocs.gov.au/places/wa/wa2.htm (current at February 3 2004).
26
Neil Jarvis (ed), Western Australia: An Atlas of Human Endeavour, The Department of Lands and
Surveys (Western Australia) in Association with the Education Department of Western Australia, Perth,
1986, p57.
27
“Early History of Land Tenure”, special article, Year Book Australia 2002, Australian Bureau of
Statistics, at Internet site:
http://www.abs.gov.au/Ausstats/[email protected]/94713ad445ff1425ca25682000192af2/88fd067140fc3f4dca256
9e300102388!OpenDocument (current at February 3 2004), p1.
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13
Public Administration and Finance Committee
SEVENTH REPORT
Connected with this subject is the very important consideration which
respects the alienation of Lands by sale & conveyance. The difficulty
of adopting the English System of conveyancing has been
acknowledged in all Colonies dependant on the British Crown, & has
been remedied in most by the introduction of two efsential Laws. The
first establishes some simple Forms to the use of which is attributed
the effect of a complete alienation & transfer from the Seller to the
Buyer of the Property. The second establishes a general office of
Regsitry in which every transaction of this nature is recorded, &
which Record is declared efsential to the validity of the transfer. You
cannot too soon adopt Regulations of this nature, & for your
afsistance I enclose a copy of an Act pafsed for a similiar purpose in
the Island of Van Diemen’s Land. In a Settlement of which the wealth
& resources must, to a great extent, consist in agriculture, whatever
tends to relieve the Proprietors of the Soil from uncertainty,
respecting their Titles, or from embarafsment in the conveyance of
their property must eminently conduce to the general welfare.”28
2.25
Despite the above plan for a uniform subdivision of land in the colony, the plan was
never implemented; in part due to the practical problem of allocating evenly measured
land parcels in circumstances where there was a lack of surveyors and the farming
potential of land was so variable. 29
2.26
As the colony’s population grew rapidly, and the colony obtained a measure of self
government, the terms for the grant of Crown Land changed:
“The original regulations under which grants were made to the first
settlers were amended by others of a similar nature issued by the
Imperial Government on the 20th July, 1830, which in turn were
replaced in 1832, when free grants were abolished and land was sold
at a minimum price of five shillings per acre. In 1837 the price of
allotments in Perth, Fremantle, and Albany was fixed at a minimum of
£5 an acre. New land regulations were issued by the Colonial Office
[in] 1843, 1864, 1873, 1882, and 1887, when the whole of the
regulations were amended and consolidated. The colony was divided
into six divisions in all, of which sale by auction was permitted, but
otherwise the conditions of occupation differed in each division.
... In the year 1890 Constitutional Government was granted to the
colony, and from time to time various amendments were made in the
28
Despatch No 2 Re Legal and Judicial Subjects, April 28 1831 (UK), at Internet site:
http://www.foundingdocs.gov.au/places/wa/wa5ii.htm (current at February 3 2004), pp3-4.
29
Neil Jarvis (ed), Western Australia: An Atlas of Human Endeavour, The Department of Lands and
Surveys (Western Australia) in Association with the Education Department of Western Australia, Perth,
1986, p57.
14
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SEVENTH REPORT
CHAPTER 2: The Nature of Freehold and Leasehold Interests in Land
land laws until the year 1898, when a Land Act was passed amending,
repealing, and consolidating previous legislation as to the sale,
occupation, and management of Crown lands.”30
2.27
By 1850, minimal clearing of land for agricultural purposes had taken place in the
colony, and the clearing that had taken place was usually just for the establishment of
pastoral homesteads and subsistence farming.31 Between 1840 and 1887, land in the
South West of the State was allocated primarily as pastoral leases.
2.28
Regulations introduced in 1887 encouraged the ‘conditional purchase’ of freehold
land for agriculture at a minimum price of ten shillings an acre, payable in equal
instalments over 20 years. Conditional purchasers had to satisfy minimum
requirements for the fencing and improvement of the land. 32 The conditional purchase
system continued throughout most of the 20th century.
2.29
Development conditions were also applied as part of the returned servicemen
settlement and group settlement land schemes after each of the two World Wars:
“Those who settled on land after the First World War were given
financial assistance but still required to adhere to conditional
purchase conditions, and returned servicemen after the Second World
War were placed on developed farms, under perpetual lease
conditions with low annual rentals.”33
2.30
A 1986 DOLA publication noted that Western Australia was one of the few parts of
the Western world to undergo large-scale land development in the 20th century, with
more than 3,300 new farms established in the south-west of the State between 1945
and 1986.34 Over 1,100 of these farms (which varied in size from less than four
hectares for intensive market gardens near Perth to 1600ha wheat/sheep properties)
were created under the War Service Settlement Scheme following World War Two. 35
From the late 1950s, the Settlement Scheme was extended from returned servicemen
only to civilians, although the land offered to the civilians was far less developed. By
the end of the settlement program in 1969, which was abolished following a glut of
wheat on the world market, more than 2000 new farms had been created.36
30
“Early History of Land Tenure”, special article, Year Book Australia 2002, Australian Bureau of
Statistics, at Internet site:
http://www.abs.gov.au/Ausstats/[email protected]/94713ad445ff1425ca25682000192af2/88fd067140fc3f4dca256
9e300102388!OpenDocument (current at February 3 2004), p1.
31
Neil Jarvis (ed), Western Australia: An Atlas of Human Endeavour, The Department of Lands and
Surveys (Western Australia) in Association with the Education Department of Western Australia, Perth,
1986, p77.
32
Ibid, p57.
33
Ibid.
34
Ibid, p81.
35
Ibid.
36
Ibid.
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15
Public Administration and Finance Committee
SEVENTH REPORT
2.31
Currently in Western Australia, the primary legislation dealing with land related issues
are the Land Administration Act 1997 and the Transfer of Land Act 1893.
2.32
Immediately prior to June 30 2003, land was administered in Western Australia by a
single State Government agency, DOLA. A major restructure of DOLA’s operations
commenced in 2002. The restructure involves the establishment of a new statutory
authority (the Department of Land Information (DLI); which is presently still in
operation as a department, but is moving towards becoming a statutory authority) to
administer land titles and provide valuation services and land information, and the
incorporation of DOLA’s Crown land management role and the Pastoral Lands Board
within DPI.
2.33
In a Statement to the Legislative Council in November 2002, the Parliamentary
Secretary to the Minister for Planning and Infrastructure, Hon Graham Giffard MLC,
outlined the aims of the restructure as follows:
“The new statutory authority will have the commercial flexibility to
deliver a greater return to the State and community. It will continue to
administer land titles, provide government with valuation services
and make available land information including maps and online
services. Fees for statutory services such as land title registration and
certified extracts of the valuation roll will still be regulated. However,
the new organisation will become self-funding and be able to reinvest
revenue into customer service, to ensure that Western Australia
remains at the cutting edge of land information systems. This will see
the development of new online services and improvements in the
quality of the information available to the public. For example, land
information held by DOLA includes lot boundaries, land areas,
property valuations and land contour information. New online
systems could cross reference this data with information on water
rates and land tax details to help people who are buying properties. It
will also help conveyancers and surveyors do their jobs more easily
and effectively.
DOLA's crown land management role and the Pastoral Lands Board
are to be transferred to the Department for Planning and
Infrastructure. This move will enable the Government to integrate the
management of crown land, which accounts for 93 per cent of the
State's surface, with our broader land use and transport planning
objectives. The new statutory authority, which is expected to be
established in 2004, will be based in Midland. The changes follow an
extensive review of DOLA's future and consultation with industry and
stakeholders.”37
37
16
Hon Graham Giffard MLC, Parliamentary Secretary representing the Minister for Planning and
Infrastructure, Western Australia, Legislative Council, Parliamentary Debates (Hansard), Wednesday,
November 13 2002, p3010.
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SEVENTH REPORT
CHAPTER 2: The Nature of Freehold and Leasehold Interests in Land
THE DEFINITION OF “LAND” IN WESTERN AUSTRALIA
2.34
Under s 3 of the Land Administration Act 1997, “land” is defined as:
“(a)
2.35
all land within the limits of the State;
(b)
all marine and other waters within the limits of the State;
(c)
all coastal waters of the State as defined by section 3(1) of the
Coastal Waters (State Powers) Act 1980 of the
Commonwealth; and
(d)
the sea-bed and subsoil beneath, and all islands and
structures within, the waters referred to in paragraphs (b)
and (c).”
As noted above, all land is administered in Western Australia on behalf of the State,
and the Crown as the ultimate or radical title holder, by either the Land Asset
Management Section of DPI (in the case of Crown lands and lands acquired by the
Crown) or the (soon-to-be statutory authority) DLI, in a number of different tenures or
interests, including:
•
Fee simple
•
Pastoral leases
•
Conditional purchase leases
•
General leases (99 or 999 year leases)
•
Perpetual leases
•
Reserves
•
Licences and Profits a Prendre
•
Easements
•
Roads and Mall Reserves
•
Unallocated Crown land
2.36
Under the doctrine of estates, inherited by Australia from English law, the land (which
is always owned by the Crown) is treated as separate from the interest or estate in the
land given by the Crown to its private subjects. The type of estate given (that is, fee
simple, for life, etc.), determines the duration of the interest. A private landholder can
thus never own more than an estate in the Crown’s land, and never the land itself.38
2.37
As was stated in Walsingham's Case in 1578:
"The land itself is one thing and the estate in land is another thing:
for an estate in the land is a time in the land, or land for a time: and
38
“Real Property”, Halsbury’s Laws of Australia Online, Butterworths (subscription service), December 1
1997, (current at February 6 2004), para 355-2000.
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Public Administration and Finance Committee
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there are diversities of estates, which are no more than diversities of
time; for he who hath a fee simple in the land has a time in the land
without end, or land for a time without end; and he who has land in
tail has a time in land, or the land for a time, as long as he has issue
from his body; and he who has an estate in land for life has no time
longer than his own life; and so of one who has an estate in land for
the life of another, or for years."39
2.38
Land in Western Australia may be conveniently classified for the purposes of the
Inquiry as either Crown land (held either solely by the Crown or in its proprietary
capacity as landlord) or Freehold land.
2.39
The following table compiled from information contained within the 2002-2003
Annual Report of DOLA shows the breakdown of land tenure in Western Australia:
Table 2.1
Land Tenure in Western Australia (as at June 30 2003) 40
Land Tenure Type
Area of State Covered
(Kms)
Percentage
Unallocated Crown Land
925,700
37%
Pastoral Leases
898,700
36%
Aboriginal Reserves
202,800
8%
Private Freehold
182,600
7%
National Parks and Conservation Reserves
171,800
6%
Other Leases
74,300
3%
Other Managed Reserves
23,700
1%
Unmanaged Reserves
21,700
1%
State Forests and Timber Reserves
21,200
1%
Reserves Managed by Local Governments
5,000
-
Total
2,527,600
100%
2.40
Attached to this report at Appendix 4 is an A3 map of Western Australia indicating the
various types of land tenure as at June 30 2003. The map was provided to the
Committee by DLI. Larger, more detailed, versions of this map are available from
DLI.
39
Cited in “Allodial”, (Ref: John Bouvier, A Law Dictionary Adapted to the Constitution and Laws of the
United States of America and the Several States of the American Union, Childs & Peterson, c1856.), at
Internet site: http://famguardian.org/Publications/PropertyRights/R3allod.html (current at April 14 2004).
40
Department of Land Administration, Annual Report 2002-2003, Government of Western Australia, Perth,
August 31 2003, p39.
18
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SEVENTH REPORT
2.41
CHAPTER 2: The Nature of Freehold and Leasehold Interests in Land
Also attached at Appendix 5 is an A4 map showing the extent of natural and cleared
vegetation in Western Australia from 1988 to 2003. This map was also provided to
the Committee by DLI (based on Department of Agriculture data). Larger, more
detailed, versions of this map are available from DLI and the Department of
Agriculture.
CROWN LAND
2.42
The State of Western Australia has an area of approximately 2,527,620 square
kilometres (not including submerged coastal land), approximately 93 per cent of
which is the “Crown estate” - that is, land which has not been alienated in fee simple
to private parties.41 Western Australia has approximately 38 per cent of Australia’s
total Crown lands.42
2.43
By s 3 of the Western Australia Constitution Act 1889 (Imp.), the Western Australian
Parliament is given power to legislate with respect to Crown land:
“The entire management and control of the waste lands of the Crown
in the colony of Western Australia, and of the proceeds of the sale,
letting and disposal hereof, including all royalties, mines and
minerals, shall be vested in the legislature of that colony.”43
2.44
The Land Administration Act 1997 is the Western Australian Parliament’s current
primary statute governing dealings in Crown land.
2.45
The introduction of the Land Administration Act 1997 simplified the process for the
administration of Crown land by applying the conveyancing practices of the Torrens
registration system. The registration system for Crown land thus mirrors the freehold
land registration system. 44 Certificates of Crown land title are created in the name of
the “State of Western Australia” as the proprietor of the radical title for allocated
parcels of Crown land, and are similar in format to, although clearly differentiated
from, freehold certificates of title. 45
The Crown’s Proprietary Power Over Land – The Granting of Leasehold Interests in
Land
2.46
As at June 30 2003, there were 527 pastoral leases covering approximately 95 million
hectares (36 per cent of the State) and 474 stations. 46 Fifty four percent of pastoral
leases are held by individuals, ten per cent are held by mining companies, 33 per cent
41
Department of Land Administration, Land Acquisitions, April 1999, at Internet site:
http://www.dola.wa.gov.au/home.nsf/(FrameNames)/Publications (current at April 14 2004).
42
Department of Land Administration, Government Land Administration in Western Australia, 2001,
foreward.
43
Ibid, p46.
44
Ibid, pp10-11.
45
Ibid, p11.
46
Department of Land Administration, Annual Report 2002-2003, Government of Western Australia, Perth,
August 31 2003, p42.
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Public Administration and Finance Committee
SEVENTH REPORT
are held by other companies, and three per cent are foreign owned. 47 Almost all of
these pastoral leases were granted prior to 1975. Other types of Crown leases are
conditional purpose leases (about 122 remained as at June 30 2000 over a total area of
177,000ha), general leases (over 1,780 in place as at June 30 2000 for over 250
different purposes), ‘99 year’ leases (about 150 remained as at June 30 2000), ‘999
year’ leases (about 185 as at June 30 2000, generally for community infrastructure
purposes such as church sites), leases over, under or on roads (less than 20 as at June
30 2000), and perpetual leases under the States’ War Service Land Settlement
Agreement Act 1954-74 (about 720 as at June 30 2000 comprising a total area of
around 645,000ha).48
2.47
A set of core attributes applying to all classes of Crown leases has received wide legal
and customary acceptance. The most significant rights of a lessee attaching to a lease
are:49
a)
The entitlement to the exclusive use and enjoyment of the land (subject to the
limited rights of Aboriginal people to enter and to engage in traditional
activities), with the laws of trespass applying equally to freehold and
leasehold land.
b)
The right to engage in approved land use activities.
c)
Pre-emptive rights to seek changes to the title or to apply to engage in other
land uses.
d)
Veto rights over other prospective users (excluding Aboriginal peoples
engaging in traditional activities, and individuals and companies involved in
mining and mineral exploration).
e)
Security of tenure, either by perpetual or long-term title, with the latter having
roll-over provisions and a pre-emptive right of renewal.
f)
Rights to transfer or sell the lease, subject to Ministerial approval, which is
not customarily withheld.
g)
The right to receive the full value from the sale of the lease title and all capital
improvements.
Pastoral leases
2.48
A pastoral lease is a lease over Crown land which gives the lessee the right to graze
stock on the natural vegetation. Pastoral leases in Australia developed from the
conditions faced by British settlers in the early 19th century:
47
Ibid.
48
Department of Land Administration, Government Land Administration in Western Australia, 2001, pp2223.
49
John Holmes, “The Policy Relevance of the State’s Proprietary Power: Lease Tenures in Queensland”,
pp240-256, Australian Journal of Environmental Management, Vol 3, December 1996, p253.
20
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SEVENTH REPORT
CHAPTER 2: The Nature of Freehold and Leasehold Interests in Land
“Official efforts were made to constrain the early settlement to an
area surrounding Sydney. Nonetheless, actual development spread
well beyond the official limits giving rise to the class of pastoralists
known as the squatters. Subsequently some security of title was
sought for this illegal landholding and the early colonial legislature
was sympathetic to squatter’s claims. A system of Crown grants of
leasehold interests evolved. Much of rural Australia remains subject
to Crown leasehold arrangements.”50
2.49
In Western Australia an eight member Pastoral Lands Board administers the pastoral
lease system under the direction of the Minister for Lands. 51 Pastoral leases are
granted and held on the condition that certain improvements are made to the land
(such as fencing, wells, etc.), and that stock levels are maintained. 52 Aboriginal
people have a right to enter upon any unenclosed and unimproved parts of a pastoral
lease “…to seek their sustenance in their accustomed manner.”53 All pastoral leases
in Western Australia will expire on June 30 2015, and the terms for the renewal of
each lease will need to be negotiated at that time. 54 The Committee notes that ongoing
activities have already commenced within the Government and industry as part of the
lead-up to the expiry, and renewal, of these pastoral leases.
2.50
A pastoral lease grants to the lessee an exclusive right to conduct activities associated
with ‘pastoralism’, while approval from the Government is required for the lessee to
undertake activities not connected with pastoralism such as forestry, operating an ecotourism business or undertaking a private conservation initiative. 55 Typical pastoral
lease conditions include:
•
general conditions, such as the term or length of the lease and the rental rate;
•
land management and use conditions, such as controls on stock type and
levels, maintenance of fencing, watering points, and lessee’s “duty of care” to
follow sound land management practices; and
•
reservation conditions, such as the Government’s rights to timber and soil, and
public access rights.56
2.51
In Western Australia, permits issued under the Land Administration Act 1997 are used
to regulate non-pastoral activities on land that is subject to a pastoral lease. However,
50
Bradbrook, et al, Australian Real Property Law, Third Edition, Thomson Lawbook Co, 2002, p5.
51
Division 2, Part 7, Land Administration Act 1997.
52
Ibid, ss 107 and 111.
53
Ibid, s 104.
54
Department of Land Administration, Government Land Administration in Western Australia, 2001, p44.
55
Productivity Commission, Pastoral Leases and Non-Pastoral Land Use, Commission Research Paper,
AusInfo, Canberra, 2002, pxii.
56
Ibid, pxiii.
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Public Administration and Finance Committee
SEVENTH REPORT
such permits are generally only issued for short timeframes and cannot be transferred
with the lease title. 57
2.52
The Crown’s ‘proprietary power’ derives from the Crown’s exercise of its sovereign
power of ultimate ownership of land to make itself the beneficial owner or landlord of
unalienated land.58 The proprietary power is most commonly exercised in countries of
recent British settlement, such as the United States, Canada, New Zealand and
Australia.59 A general reluctance to convert Crown leases to freehold land is also a
common phenomenon is these countries:
“In Australia, as in other recently colonised countries, it was
generally assumed that there would be a progressive transition
towards enhanced private property rights as the land became more
closely settled and intensively used for private purposes. Apart from
land required for public purposes, all land would be freehold, with
the State thereby abandoning its tenure-related proprietary power
over land in private use. Any necessary limitations and controls
would be exercised through the sovereign power.
However, this process of land privatisation has remained incomplete,
not merely because certain land parcels have been set aside for public
purposes, but also because, over extensive tracts of land, the full
award of private freehold title has been seen as not justified, on
economic and social grounds.”60
2.53
In Canada, less than ten per cent of land is held under private title. 61 In the American
State of Alaska, less than one per cent of land is held in individual private title. 62 In
the contiguous 48 states of the United States, 21 per cent of land is federally owned,
with most of this federal land being in the western rangelands where grazing and other
private uses are allowed under a permit system, which does not award land title or
exclusive occupancy rights to permit-holders.63
2.54
In Australia, pastoral lease tenures account for 42 per cent of Australia’s land area and
67 per cent of all land held under private title (leasehold and freehold):
“In Australia and, to a lesser extent, New Zealand, the rapid spread
of extensive grazing over vast areas posed a challenge to colonial
governments in reconciling the immediate needs of pastoralists with
57
Ibid, pxiv.
58
John Holmes, “The Policy Relevance of the State’s Proprietary Power: Lease Tenures in Queensland”,
pp240-256, Australian Journal of Environmental Management, Vol 3, December 1996, p242.
59
Ibid.
60
Ibid, p243.
61
Ibid.
62
Ibid.
63
Ibid.
22
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SEVENTH REPORT
CHAPTER 2: The Nature of Freehold and Leasehold Interests in Land
other emerging or potential interests. Out of these challenges
emerged a unique land tenure system, by which leasehold titles
became flexible instruments for the selective award of those property
rights needed by titleholders to engage in approved activities, while
reserving all other rights to the state. This left the state with some
capability to reshape the tenure system in response to subsequent
demands.”64
2.55
In New Zealand, a process of tenure review has seen agreements reached between the
government and lessees whereby pastoral tenure has been converted to freehold
tenure. By negotiation, land on pastoral leases with commercial production potential
is excised as freehold land whilst land with high conservation values is transferred to
the public conservation estate.65
2.56
The Industry Commission’s 1998 inquiry into Ecologically Sustainable Land
Management66 was supportive of pastoralists adopting alternative economic activities
to improve both their own economic circumstances and the economically sustainable
management of the land. However, it was subsequently noted by the Productivity
Commission that:
“The development of non-pastoral land uses may not be an option on
all pastoral lease land. However, current pastoral lease
arrangements may constrain ecologically sustainable management
and the further emergence of economically-viable non-pastoral land
uses. The arrangements typically inhibit competition between pastoral
and non-pastoral land uses, and can sometimes preclude alternative
uses of the land. As a consequence, innovative land uses and potential
economic and ecological gains, that could benefit land managers and
the wider community, may be stifled.”67
2.57
It has been argued in other jurisdictions that the system of Crown leases may no
longer be relevant, and that it would be simpler and more efficient for the State to
issue only freehold titles, legislating where necessary to impose any relevant limits on
the rights of the titleholders.68
FREEHOLD LAND
2.58
The word “freehold” is defined in Butterworths Australian Legal Dictionary as:
64
Ibid, pp243-244.
65
Productivity Commission, Pastoral Leases and Non-Pastoral Land Use, Commission Research Paper,
AusInfo, Canberra, 2002, pxiv.
66
Industry Commission, A Full Repairing Lease – Inquiry into Ecologically Sustainable Land
Management, Report No 60, AGPS, Canberra, 1998.
67
Productivity Commission, Pastoral Leases and Non-Pastoral Land Use, Commission Research Paper,
AusInfo, Canberra, 2002, p1.
68
John Holmes, “The Policy Relevance of the State’s Proprietary Power: Lease Tenures in Queensland”,
pp240-256, Australian Journal of Environmental Management, Vol 3, December 1996, p244.
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23
Public Administration and Finance Committee
SEVENTH REPORT
“A type of land-holding originating in feudal times, being land held
by a freeman and subject to services and incidents thought to be
appropriate to the status of a freeman. At common law, there were
three types of freehold estate: fee simple, fee tail and the life estate.
Freeholds are of uncertain duration, unlike leasehold. Historically,
they were also unlike leasehold in that possession was recoverable
under the real actions. The term is used in modern times simply to
mean ownership of land.”69
2.59
It should be noted that freehold title is not one, consistent, type of tenure. The State
retains the power to offer various forms of freehold title, with different rights and
duties applying to the titleholder. A small number of early freehold titles in the South
West of Western Australia, as well as in Queensland and New South Wales awarded
the ordinarily reserved Crown mineral rights on the land to the titleholders, while at
one time in Queensland some freehold titles did not convey timber rights to the
titleholder.70
2.60
The term “fee simple” is defined as:
“The estate in land which is ‘the most extensive in quantum, the most
absolute in respect to the rights it confers of all estates known to
law… and for all practical purposes of ownership, it differs from the
absolute dominion of a chattel in nothing except the physical
indestructibility of its subject’: Commonwealth v New South Wales
(1923) 33 CLR 1. Originated in feudal times as an estate capable of
inheritance (a ‘fee’) which could descend to any heirs whatsoever of
the original grantee.”71
2.61
The key feature of a fee simple interest in land is that it forms part of the estate of the
owner and is able to be transferred at any time, or, upon the owner’s death, be left to
nominated beneficiaries by means of a will (or to statutory beneficiaries in the absence
of a will). For instance, s 10 of the Administration Act 1903 provides that:
“The real as well as the personal estate of every deceased person
shall be assets in the hands of the executor to whom probate has been
granted or administrator, for the payment of all duties and fees and of
the debts of the deceased in the ordinary course of administration.”
2.62
The Committee notes that an estate in fee simple is granted over a defined portion of
land from the Crown estate subject to a vast web of legislation which impacts upon
the use of that land. The most obvious of this legislation is that which relates to the
69
The Honourable Dr P E Nygh and P. Butt (General Editors), Butterworths Australian Legal Dictionary,
Butterworths, Sydney, 1997, pp504-505.
70
John Holmes, “The Policy Relevance of the State’s Proprietary Power: Lease Tenures in Queensland”,
pp240-256, Australian Journal of Environmental Management, Vol 3, December 1996, p245.
71
The Honourable Dr P E Nygh and P Butt (General Editors), Butterworths Australian Legal Dictionary,
Butterworths, Sydney, 1997, p467.
24
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SEVENTH REPORT
CHAPTER 2: The Nature of Freehold and Leasehold Interests in Land
express reservations contained in a freehold grant to the Crown of the minerals in the
land (with the exception of some parcels of land granted throughout the South West of
the State in the 19th century) and the right of the Crown to resume the land.
2.63
Many of the grievances expressed to the Committee over the course of the Inquiry by
private landholders indicate a misunderstanding of, or a frustration with, the
limitations surrounding the concept of a freehold title. As one witness expressed it:
“I thought that freehold land meant that it was free of any hold, which
means you can clear it, put bores in, dig dams, drain or deepen
swamps and carry on certain types of mining. If not, the Government
is misleading the general public.”72
2.64
A town planning consultant who gave evidence to the Committee noted that many of
his clients of continental European origin had difficulty with the concept of the Crown
compulsorily acquiring privately-held interests in property with apparent ease:
“Freehold title from my understanding can be misunderstood.
Ultimately the Crown owns all land. A title gives a landowner a
bundle of rights. However, because the Crown effectively ultimately
owns the land, the Crown also has the right to take away those rights.
I can assure the committee that this has been very difficult for some
Italian clients of mine to ever understand. The European system does
not work like that. If they have ownership of the land, it is a
traditional lineage ownership and the land cannot be resumed easily
for roads etc, whereas here the State has resumption powers because
the Crown has that right.”73
Recommendation 1: The Committee recommends that a brief, plain English,
information sheet be developed by the Department of Land Information which
summarises the main aspects of land law in Western Australia and explains the rights
and obligations of freehold and leasehold landholders. Such a publication should be
made available to the public free of charge.
Recommendation 2: The Committee recommends that the Department of Land
Information liaise with relevant stakeholder and industry bodies to facilitate the
distribution of a plain English information sheet on land law in Western Australia, as
recommended in Recommendation 1, from the offices of local governments, real estate
agents and settlement agents, and to incorporate the information sheet’s contents
within relevant standard conveyancing forms.
72
Mr Kimberley Hough, Transcript of Evidence, November 27 2002, p1.
73
Mr Graham Houghton, Director, Graham Houghton Town Planning, Transcript of Evidence, November
27 2002, pp5-6.
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Public Administration and Finance Committee
SEVENTH REPORT
The Granting of Fee Simple Tenure
2.65
Part 6 of the Land Administration Act 1997 empowers the Minister for Lands to sell
Crown land in fee simple by the registration of a transfer against a Crown Land Title.
The following sections of the Land Administration Act 1997 provide for such a
disposal of Crown land in fee simple: ss 74-75, 78, 80, 83, 85-89.
2.66
An estate in fee simple, is an interest in Crown land derived from the Crown estate
and was, prior to the introduction of a simplified process under the Land
Administration Act 1997, usually granted by way of a Crown Grant, made by the
Queen, to a person (the definition of which could also include a company, statutory
body or incorporated association).74
2.67
As stated above, freehold titles in Western Australia cover a total area of
approximately 182,600 square kilometres, or seven per cent of the total area of the
State.75 As at June 2000 the following approximate totals of certificates of title, not
counting those certificates of title which were at that time subject to a dealing, were in
existence over land in Western Australia:76
2.68
•
74,500 certificates of title were held by local, State and Federal authorities;
and
•
843,000 certificates of title were held by private owners (individuals and
incorporated bodies).
In its 2001 submission to the Committee, DOLA noted that the timeframes vary in
respect to the grant of leasehold and freehold tenure directly from the Crown estate:
“This is mainly due to requisite research, survey and the compilation
of approvals from related Government agencies and other
stakeholders prior to granting the land to lessees or transferring the
land to purchasers.
There are no set timeframes involved in the granting of leasehold or
freehold title over land. However, in theory if all approvals were
available, the administrative process of preparing and lodging
enabling documents would average about one month.”77
Issues Relating to the Freeholding of Crown Land
The impact of native title on the freeholding process
2.69
The Committee notes the impact of native title on the administrative steps involved in
the freeholding of Crown land. The Committee has, however, resolved not to include
74
Submission No 121 from Department of Land Administration, March 7 2002, p11.
75
Department of Land Administration, Annual Report 2002-2003, Government of Western Australia, Perth,
August 31 2003, p39.
76
Department of Land Administration, Government Land Administration in Western Australia, 2001, p9.
77
Letter from Mr Grahame Searle, Acting Chief Executive, Department of Land Administration, April 24
2003, p3.
26
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SEVENTH REPORT
CHAPTER 2: The Nature of Freehold and Leasehold Interests in Land
the wider issue of native title within the express terms of reference of this inquiry.
Native title is a significant and complex issue in its own right, and is too broad in
scope to be adequately addressed within the context of this inquiry. The Committee
notes that issues arising from native title have been examined by a number of State
and Commonwealth parliamentary committees over the past ten years.
The freeholding of land with a high proportion of natural vegetation for agricultural
purposes
2.70
A number of submissions raised concerns that over the years the State Government
has released too much heavily vegetated land as freehold and leasehold in the
agricultural region of the State:
“No land should be released unless that release is in the State’s long
term interests and the State should buy back, where possible, land
that should not have been released in the first place.”78
2.71
The core business of the former Department of Lands and Surveys in the 1970s was to
release arable lands, mainly by way of conditional purchase tenure. It was recognized,
however, by the early 1980s that arable land stocks had been exhausted.79 DOLA
noted in April 2003, however, that:
“The release of Crown land by the Department of Lands and Surveys
in agricultural areas, and in present times by DOLA, has never
occurred without referral to related stakeholders dealing with
environmental protection, agriculture, conservation, mining, planning
and local government.
Any concerns by stakeholders must be addressed prior to release,
including assessments and impact studies relating to agriculture,
conservation and protection of the environment. In recent times this
includes the completion of environmental impact surveys,
archaeological and ethnographic surveys and Aboriginal heritage
surveys, among other assessments.”80
2.72
The issue of land clearing for agricultural purposes is dealt with extensively in
Chapter 7 of this report.
Revestment of Land
2.73
Pursuant to s 82 of the Land Administration Act 1997 and s 243 of the Transfer of
Land Act 1893, freehold land that is acquired by the Crown through purchase or
compulsory acquisition may be revested in the Crown. In such circumstances, the
Registrar of Titles will cancel the relevant Certificate of Title and the subject land will
78
Submission No 69 from B and G Betts, December 14 2001, p3.
79
Letter from Mr Grahame Searle, Acting Chief Executive, Department of Land Administration, April 24
2003, p4.
80
Ibid.
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Public Administration and Finance Committee
SEVENTH REPORT
be re-identified by a new lot or location number and dealt with the same way as other
Crown land. 81
Easements
2.74
Butterworths Australian Legal Dictionary defines an “easement” in the following
terms:
“A right enjoyed by a person with regard to the land of another
person, the exercise of which interferes with the normal rights of the
owner or occupier of that land: Municipal District of Concord v
Coles (1906) 3 CLR 96.”82
2.75
A 2001 DOLA publication defines an easement as follows:
“An easement is a grant of rights over land by the property owner in
favour of another person, to enter onto land for the purpose of
installing and maintaining facilities such as cables, pipelines, etc. An
easement may also grant the right to cross over land in order to gain
access to another parcel of land.”83
2.76
Although at common law for an easement to be valid it must benefit the holder of
another, neighbouring, parcel of land (the “dominant tenement”), s 195 of the Land
Administration Act 1997 expressly provides that the State of Western Australia, a
State instrumentality, a statutory body corporate or a local government may create an
easement without a dominant tenement. This provision enables public works and
service infrastructure (such as for water and power services) to be constructed and
maintained on freehold land by way of an easement corridor, without the necessity for
the State or other body having to acquire the freehold of either the land which is the
subject of the easement or any neighbouring land.
2.77
The most common type of easement, apart from service and infrastructure easements
for water and sewerage pipes and electricity transmission lines, is a right of way over
the subject land. The range of easement types, and the rights they confer over the
subject land, are numerous and include such rights as:84
a)
to discharge water;
b)
to occupy a pew in a church;
c)
to use a toilet or kitchen on another’s land;
d)
to use an airfield for testing aeroplanes;
81
Department of Land Administration, Government Land Administration in Western Australia, 2001, p29.
82
The Honourable Dr P E Nygh and P Butt (General Editors), Butterworths Australian Legal Dictionary,
Butterworths, Sydney, 1997, p401.
83
Department of Land Administration, Crown Easements, November 2001, at Internet site:
http://www.dola.wa.gov.au/home.nsf/(FrameNames)/Publications , p1 (current at February 6 2004).
84
Halsbury’s Laws of Australia Online, Butterworths (subscription service), December 1 1997, (current at
February 6 2004), para355-12005.
28
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SEVENTH REPORT
CHAPTER 2: The Nature of Freehold and Leasehold Interests in Land
e)
to create noise over adjoining land;
f)
to fix signs, hoardings or advertising on another’s land;
g)
to enjoy a recreation area;
h)
to enter upon another’s land to repair a building on neighbouring land;
i)
to construct banks on another’s property in the course of a mining operation;
and
j)
to use an area of land as a garden.
2.78
Easements may not necessarily grant a right to physical entry of another’s property,
and may simply confer a right on a neighbouring landholder to the free flow of air
through defined apertures on the subject land, or to receive light for a building, or
water through pipes.85
2.79
Easements may be created by a number of mechanisms:
a)
by the express grant of a landholder in favour of another (see, for example,
Part IVA of the Transfer of Land Act 1893 in the case of subdivisions) or
through reservation on sale;
b)
by an empowering statute in the case of easements for service infrastructure,
such as electricity transmission lines and water pipelines (see, for example, ss
36-37 Energy Operators (Powers) Act 1979);
c)
by a grant of the Minister for Lands (s 144, Land Administration Act 1997);
d)
by order of the Supreme Court under Part XIII of the Property Law Act 1969;
or
e)
by prescription (that is, where the landholder has knowledge of the use of
their land by another person over a period of time and fails to object: Dalton v
Angus (1881) 6 App cas 740).
The Torrens System of Land Titling
2.80
Butterworths Australian Legal Dictionary defines “Torrens title” as follows:
“A system of land title where a register of land holdings maintained
by the State guarantees indefeasible title to land included in the
register. The system gives title by registration, as opposed to old
system title, which depends on proof of an unbroken chain of title
back to a good root of title.”86
2.81
The Torrens system of land titling, named after the deviser of the system, Sir Robert
Torrens, was introduced in South Australia in 1857 to simplify the then existing Deeds
85
Halsbury’s Laws of Australia Online, Butterworths (subscription service), December 1 1997, para35512010 (current at February 6 2004).
86
The Honourable Dr P E Nygh and P Butt (General Editors), Butterworths Australian Legal Dictionary,
Butterworths, Sydney, 1997, p1172.
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29
Public Administration and Finance Committee
SEVENTH REPORT
system inherited by the Australian colonies from England. The Torrens system is
arguably Australia’s best export, having been adopted in various forms in Great
Britain, Canada, and large parts of Europe, Asia, and the Pacific region. 87
2.82
Since the commencement of the Transfer of Land Act 1875, all grants of land in
Western Australia have been recorded in accordance with the Torrens system. 88
Furthermore, since 1997, a freehold interest in Crown Land may be created and
transferred out of the Crown estate by way of a transfer of land registered pursuant to
the Transfer of Land Act 1893.89
2.83
Under s 48(1) of the Transfer of Land Act 1893 a Register of Titles is maintained,
whereby a separate Certificate of Title is created and maintained for each parcel of
land, recording details of the property description, the nature of the estate held in the
land, the name of the registered proprietor, and a record of any dealings or
encumbrances affecting the land. Section 48(1) reflects one of the key principles
enshrined in the Torrens system of land administration - referred to as the “Mirror
Principle”. As the 2001 submission from DOLA states:
“In theory, a potential purchaser need only examine the content of the
Certificate of Title for a particular property to examine the nature
and extent of any dealings affecting the land. That is, the Certificate
of Title mirrors (reflects) the rights, restrictions and responsibilities
that burden the land.”90
2.84
2.85
In addition to the “Mirror Principle”, there are two other key principles that underpin
the Torrens system:
•
the “Curtain Principle” – undisclosed interests and estates that sit behind the
title do not impact upon the registered proprietor, regardless of the time of
their creation; and
•
the “Indemnity Principle” – those who suffer loss by relying upon the face of
the title may be compensated out of an assurance fund.
It has been stated that the basic goal of the Torrens system is:
“… to make the governmentally maintained record a conclusive
statement of ownership and the condition of title. This conclusive
statement is intended to function as a ‘mirror’ of the true state of the
title and as a ‘curtain’ between the present and the past which should
87
Lynden Griggs, “The Assurance Fund: Government Funded or Private?”, The Australian Law Journal 76
ALJ 213, April 2002, pp250-257, footnote No 3, p257.
88
Submission No 121 from Department of Land Administration, March 7 2002, p11.
89
Ibid.
90
Ibid, p14.
30
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SEVENTH REPORT
CHAPTER 2: The Nature of Freehold and Leasehold Interests in Land
make it unnecessary to conduct the kind of historical searches
performed in recording systems.”91
2.86
Section 68 of the Transfer of Land Act 1893 provides expressly that the estate of the
registered proprietor on the Certificate of Title is paramount against all other interests,
subject to the exceptions listed in that section. Those exceptions include, among other
things, easements, lands included in a title by misdescription and rights acquired by
adverse possession.
2.87
Although at times, such as with the recent finance brokers’ pooled ‘first mortgage’
schemes in this State, the principle of indefeasibility of title appears to operate
unfairly with respect to unregistered interests in land, the principle remains central to
the State’s system of land administration. Owen J of the Supreme Court of Western
Australia recently stated:
“The principle of indefeasibility is well understood by lawyers and by
the commercial community. In my view it must be given the utmost
respect and should be applied according to its tenor.
…
I do not deny that there is an element of unfairness to the unregistered
investors in not treating them the same way as the registered holders
fall to be considered because of the [Transfer of Land Act 1893]. Nor
do I underestimate the emotional and financial pain that this whole
sorry episode has caused for the investors generally. … A court
needs to proceed with caution. It must not, through sympathy for the
plight of the unregistered investors, develop a rule of equitable
principle that is so broad as to make inroads into the principle of
indefeasibility. That principle must be paramount. Unless there is
identified some personal conduct by the registered proprietor or by
some person for whose conduct he or she is responsible, the general
rule is that registered title ought to prevail. This provides an
important element of certainty in the administration of the [Transfer
of Land Act 1893].”92
2.88
There continues to remain in Western Australia some small pockets of freehold land
which are still governed under the old common law deeds system and the Registration
of Deeds Act 1856. This land accounts for one per cent of the land in Western
Australia and is located in some of the earliest settled areas of the State, such as
Bunbury, Busselton, Albany, York, Midland and Fremantle. 93 Provision is made
91
McCormack (1992) 18 WMLR 61 at 81, cited in “The Assurance Fund: Government Funded or
Private?”, by Lynden Griggs, The Australian Law Journal 76 ALJ 213, April 2002, pp250-257, footnote
No 3, p250.
92
Mark Anthony Conlan (as Liquidator of Oakleigh Acquisitions Pty Ltd) & Ors v Registrar of Titles & Ors
[2001] WASC 201 (3 August 2001), per Owen J, at paras 196 and 289.
93
Government Land Administration in Western Australia, Department of Land Administration, 2001, p10.
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Public Administration and Finance Committee
SEVENTH REPORT
under Part II of the Transfer of Land Act 1893 for old system land to be brought under
the Torrens system.
THE SYSTEM OF LAND ADMINISTRATION IN WESTERN AUSTRALIA
2.89
There is a large amount of legislation, both State and Federal, that impacts upon land
administration in Western Australia. DOLA advised in its 2001 submission that
DOLA itself then administered 33 Acts of Parliament, and utilised an additional
number in common with other Planning and Infrastructure portfolio agencies, and its
operations were impacted upon by at least another 108 State and Federal Acts.94
2.90
In its 2001 submission to the Committee, DOLA advised that the purpose of land
administration in Australia is to ensure the integrity of the official record of rights and
interests in land and property so that: 95
2.91
a)
transactions in land and property can occur efficiently and effectively;
b)
information concerning the rights, restrictions and responsibilities of land are
readily available;
c)
planning decisions are based upon current, complete and correct land
information; and
d)
the system supports the formation of capital, based on land and property.
DOLA submitted that the importance of land administration in a Western capitalist
state lies with the ability of private individuals and corporations to generate capital
using the security of land tenure as the basis to obtain a mortgage over property. 96
The following table shows the number and value of transfers and mortgages in
Western Australia between 1991/92 and 2000/01:
Table 2.2
Transfers and Mortgages in Western Australia (1991/02 to 2000/01) 97
YEAR
NUMBER OF TRANSFERS
TRANSFERS
CONSIDERAT
IONS
NUMBER OF
MORTGAGES
MORTGAGE
PRINCIPAL
1991/92
69,960
$7.2B
80,914
$9.8B
1992/93
81,592
$9.2B
90,729
$13.0B
1993/94
97,704
$11.9B
110,160
$18.6B
1994/95
81,431
$11.3B
93,208
$16.4B
94
Submission No 121 from Department of Land Administration, March 7 2002, pp10, 12, 33-36.
95
Ibid, p6.
96
Ibid, p4.
97
Ibid, p5.
32
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SEVENTH REPORT
YEAR
CHAPTER 2: The Nature of Freehold and Leasehold Interests in Land
NUMBER OF TRANSFERS
TRANSFERS
CONSIDERAT
IONS
NUMBER OF
MORTGAGES
MORTGAGE
PRINCIPAL
1995/96
73,198
$8.9B
88,031
$13.0B
1996/97
72,298
$12.4B
89,907
$16.7B
1997/98
81,088
$13.1B
95,048
$20.2B
1998/99
83,119
$14.0B
92,977
$20.4B
1999/00
89,390
$16.0B
98,063
$24.6B
2000/01
75,526
$13.4B
86,183
$23.9B
Government Agencies as Landholders
2.92
A large number of Government agencies and instrumentalities either maintain
significant landholdings in their own name or control land on behalf of the Crown.
The following table, based on figures compiled by the Office of the Auditor General,
shows the number of discrete property sites (which may vary in size from a small
residential block to a pastoral lease or nature reserve) held or controlled by the
following ten agencies:
Table 2.3
Property Held by Government Agencies98
Agency
Department of
Land
Administration
Approximate
Number of
Property Sites
Owned
Approximate
Total Site
Value ($m)
Number of
Sites Acquired
(July 2000 to
June 2002)
Number of
Sites Divested
(July 2000 to
June 2002)
58 000
2 350
not available99
not available100
98
Table extracted from information contained in Performance Examination: Grounds for Improvement:
Government Owned or Controlled Contaminated Sites, Report No 6, Auditor General for Western
Australia, November 2002, at Internet site: http://www.audit.wa.gov.au/reports/report2002_06.pdf
(current at February 5 2004), p28.
99
The Committee was advised by DPI (which is now responsible for Crown land and the land acquisition
functions of the former DOLA) that the Department has no means of determining the number of separate
instances of land reverting, by various means, to State ownership or the Crown estate which take place
within any specified timeframe: Letter from Director General, Department for Planning and
Infrastructure, November 7 2003, p2.
100
The Committee was advised by DPI (which is now responsible for Crown land and the land acquisition
functions of the former DOLA) that, due to the Department’s current information systems, it is very
difficult (requiring manual analysis) to obtain statistics for all of the various means by which land may be
divested by the Department for any specified time period: Letter from Director General, Department for
Planning and Infrastructure, November 7 2003, p3.
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33
Public Administration and Finance Committee
Agency
SEVENTH REPORT
Approximate
Number of
Property Sites
Owned
Approximate
Total Site
Value ($m)
Number of
Sites Acquired
(July 2000 to
June 2002)
Number of
Sites Divested
(July 2000 to
June 2002)
Western Power
Corporation
3,000
300
20
50
Western
Australian
Planning
Commission
2,800
350
290
170
Department of
Conservation
and Land
Management
2,100
1,900
30
20
LandCorp
1,600
550
190
750
Commissioner
of Main Roads
1,800
250
340
110
Western
Australian
Government
Railways
Commission
1,500
100
nil
70
Department of
Education
800
850
30
20
Department of
Agriculture
120
40
5
3
GoldCorp
20
unknown
nil
nil
Review of the Land Administration Act 1997
2.93
In January 2004 the DPI released a discussion paper as part of a ministerial review of
the Land Administration Act 1997; such review being required by s 279 of that Act.101
The discussion paper sets out the aims and achievements of the Land Administration
Act 1997, and outlines both planned and suggested amendments to the Act.
2.94
Public submissions were called for in relation to the matters raised in the discussion
paper, with a closing date of February 27 2004.
101
Department for Planning and Infrastructure, Review of the Land Administration Act 1997 Discussion
Paper, January 2004, at Internet site: http://www.dpi.wa.gov.au (current at February 26 2004).
34
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SEVENTH REPORT
2.95
CHAPTER 2: The Nature of Freehold and Leasehold Interests in Land
The Minister for Planning and Infrastructure is required to table a report based on the
review before each House of Parliament by September 30 2004.
THE TYPES OF GOVERNMENT ACTIONS AND PROCESSES THAT MAY IMPACT UPON THE
USE AND ENJOYMENT OF FREEHOLD OR LEASEHOLD LAND
2.96
As this report will show, there are a myriad of ways that all levels of government can
and do impact upon the use and enjoyment of freehold and leasehold land. At one end
of the scale are financial impositions such as land tax and rates, and at the most
extreme end of the scale is the compulsory acquisition of interests in land by the state.
2.97
As an example, the Department of Agriculture alone is responsible for administering
the following Acts and regulations that provide for government actions which may
impact upon landholders:102
2.98
102
•
Soil and Land Conservation Act 1945, and regulations.
•
Stock Diseases (Regulations) Act 1968.
•
Agricultural Produce (Chemical Residues) Act 1983.
•
Stock (Identification and Movement) Act 1970.
•
Agriculture and Related Resources Protection Act 1976.
•
Health (Pesticides) Regulations 1956.
•
Agriculture and Related Resources Protection (Spraying Restrictions)
Regulations 1979.
•
Aerial Spraying Control Act 1966.
The focus of the Inquiry was on the impact of the actions and processes of State
Government agencies and bodies. Some of the specific impacts examined in detail by
the Committee, and included in this report, are:
a)
compulsory acquisition of interests in land;
b)
transmission line and water pipeline easements;
c)
land use zonings;
d)
subdivisions and development approvals;
e)
land clearing restrictions in agricultural areas;
f)
environmental policies relating to urban bushland and wetland conservation;
g)
industrial buffer zones;
h)
heritage lists;
i)
protection of endangered fauna and flora;
j)
conflicting land uses within close proximity;
Submission No 154 from Department of Agriculture, September 18 2002, p1.
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Public Administration and Finance Committee
SEVENTH REPORT
k)
mining rights granted to third parties over privately held land; and
l)
notification and recording of restrictions on land use.
‘PRIVATE PROPERTY RIGHTS’
2.99
Before examining the above-listed impacts in detail, it may be useful to consider the
concept of “private property rights”, both in terms of the concept’s theoretical basis
and how such a concept can practically coexist within the current legal framework.
Concepts of Private Property Rights
2.100
Private property is a central, and emotive issue, in Western society. Professor Alice
Tay wrote in 1978 that:
“Property is that which a man has a right to use and enjoy without
interference; it is what makes him as a person and guarantees his
independence and security. It includes his person, his name, his
reputation, his chattels, the land that he owns and works, the house he
builds and lives in and so on. These things are seen as his property in
early law because they are seen as the reification of his will, as the
tangible, physical manifestation of his work and his personality.”103
2.101
In Semayne’s Case,104 Coke CJ stated that:
“… the house of every one is to him as his castle and fortress.”105
2.102
One definition of “private property rights”, and a discussion of the value of such
rights, is set out below:
“The right to private property is the social-political principle that
adult human beings may not be prohibited or prevented by anyone
from acquiring, holding and trading (with willing parties) valued
items not already owned by others. Such a right is, thus, unalienable
and, if in fact justified, is supposed to enjoy respect and legal
protection in a just human community.
In the development of classical liberalism there emerged in Western
political thought a shift of focus as to the prime value in socialpolitical matters, from the group - a tribe, class, state or nation - to
the human individual. It started with the effort to gradually transfer
power from a few or even one person as the source of collective
authority and power to more segments of society involved in
exercising such authority and power, leading, eventually, to the
sovereignty of the human individual. The way in which power is
diffused when individuals are sovereigns rather than groups is
103
Professor Alice Tay, ‘Law, the citizen and the state’, in E Kamenka, et al (eds), Law and Society,
London, 1978, p10.
104
(1604) 5 Co. Rep. 91a.
105
Ibid, p91b.
36
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SEVENTH REPORT
CHAPTER 2: The Nature of Freehold and Leasehold Interests in Land
through the fact that individuals have only a little and highly
diversified power to wield. In consequences, they aren't likely to
impose themselves on others by, say, starting a war, even when they
disagree very seriously. That, in essence, was the initial motivation
for moving toward individualism, which, when implemented via law
and public policy, is much more conducive to peace and, as a result,
to prosperity than is any form of collectivism. Thus classical
liberalism has had some considerable support on practical grounds its usefulness to attaining various widely sought after objectives.”106
2.103
In her article “Of Estates and Interests: A Tale of Ownership and Property Rights”,
Susan Bright discusses the “myth” that ownership of land confers absolute powers:
“Blackstone, writing in the heyday of liberalism [Commentaries on
the Laws of England, 1765-9], portrayed property as giving ‘sole and
despotic dominion over the external things of the world, in total
exclusion of the right of any other individual in the universe’. The
picture is of the owner pointing both literally and metaphorically to
the boundary of his property and stating that no one, individual or
government, can cross this line without permission; within the
boundary the owner is Ruler, free to do with the land whatever he
wishes. Property thus becomes a powerful concept. It represents
autonomy, control and freedom from interference. The owner is free
to act in any way, in total disregard of the moral and social claims
that those outside the property may have.
This is an image full of rhetoric, but it is a false image. Even the
holder of a fee simple estate, undoubtedly an owner, and the fullest
ownership known to English land law, is not such a Ruler. His
freedom to use the land is wide but not absolute. All sorts of
limitations are placed upon land use, some specific to the particular
land (for example, restrictive covenants and easements) and some
general to all land (such as planning laws, tort laws, and
environmental laws). The idea of the owner having unrestrained
freedom to use, and abuse, the land is a myth; it is not this that can be
used to define what ownership is, at least not ownership of land.”107
The Right to do Only That Which is Not Prohibited
2.104
As noted above, it is often falsely claimed that a freehold landholder has a “right” to
do what they wish with their land. In reality, however, in the absence of the grant of
an express approval from the Crown, a landholder may only do with their land that
106
Tibor Machan, Right to Private Property, The Internet Encyclopedia of Philosophy, 2001, at Internet site:
http://www.utm.edu/research/iep/p/property.htm (current at February 5 2004).
107
Susan Bright, ‘Of Estates and Interests: A Tale of Ownership and Property Rights’, Land Law: Themes
and Perspectives, Susan Bright and John Dewar (eds), (Oxford University Press, New York), 1998,
pp530-531.
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Public Administration and Finance Committee
SEVENTH REPORT
which is not prohibited by the Crown at that particular moment in time. As was stated
in the case of Marshall & Anor v The Honourable Alannah MacTiernan MLA,
Minister for Planning and Infrastructure:108
“The plaintiffs also referred to the provisions of the Interpretation Act
1984. In particular, reference was made to s 37(1)(c) of that Act
which is in the following terms:
"Where a written law repeals an enactment, the repeal does
not, unless the contrary intention appears, effect any right,
interest, title, power or privilege created, acquired, accrued
or established or exercisable or any status or capacity
existing prior to the repeal."
As I understand the plaintiffs' position, they say that in 1961 they
could have constructed a duplex dwelling on the land. Subsequent
amendments to and repeals of various by-laws have meant that they
can no longer construct such a dwelling. It was submitted that by
virtue of s 37(1)(c) their formerly existing right subsists. It is clear,
however, that various enactments have exhibited a contrary intention
to that put forward by the plaintiffs. Perhaps more importantly,
various amendments and repeals did not affect any right which had
accrued to the plaintiffs. Rather, in 1961 there was simply an absence
of a prohibition under the terms of the by-laws as they applied at that
time. The position may have been different if an approval had been
obtained in 1961. However, even then, the sunset provisions of
various subsequent enactments would have protected the plaintiffs'
position. In the present situation, the Interpretation Act is of no
assistance to the plaintiffs.”109
2.105
On appeal to the Full Court of the Supreme Court of Western Australia, Parker J
(delivering the judgment of the Court) stated:
“To the extent that the appellants appear to seek to rely on by-laws
that had operation before the 1989 By-laws, but which are now
repealed, it appears that the appellants misunderstand the effects of s
36 and s 37 of the Interpretation Act 1984(WA). Section 36 and s 37
do not support the contention that the appellants have a continuing
"right" to build the additional dwelling which they propose, whether
or not it would have been a "duplex" within the meaning of any
earlier by-laws, simply because some earlier by-laws may not have
prevented what is now proposed. All relevant earlier by-laws required
an application to the City (with plans and specifications) for a
108
[2001] WASC 294.
109
Marshall & Anor v The Honourable Alannah MacTiernan MLA, Minister for Planning and
Infrastructure, [2001] WASC 294, October 24 2001, per Master Sanderson, at paras 24-25.
38
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SEVENTH REPORT
CHAPTER 2: The Nature of Freehold and Leasehold Interests in Land
building permit, which had to issue before development could have
been commenced on the land. The appellants did not seek or receive a
building permit for the development they now propose while any pre1989 By-laws were in force. If it is assumed that they could have
obtained approval under pre-1989 by-laws (which I do not decide) it
cannot be said that the appellants had any "right" which was
"created, acquired, accrued, established or exercisable" within the
meaning of s 37(1)(c) of the Interpretation Act.”110
Private Property Rights and the Commons
2.106
The position of private landholders may be contrasted with public enjoyment of
resources in “the commons”, where individuals are encouraged to over-exploit public
resources due to the fact that the burdens are shared by all. 111
“The Tragedy of the Commons”
2.107
In an article based on a 1968 presidential address to the Pacific Division of the
American Association for the Advancement of Science, Professor Garrett Hardin
described a disturbing environmental scenario developed in 1833 by William Forster
Lloyd as follows:
“The tragedy of the commons develops in this way. Picture a pasture
open to all. It is to be expected that each herdsman will try to keep as
many cattle as possible on the commons. Such an arrangement may
work reasonably satisfactorily for centuries because tribal wars,
poaching, and disease keep the numbers of both man and beast well
below the carrying capacity of the land. Finally, however, comes the
day of reckoning, that is, the day when the long-desired goal of social
stability becomes a reality. At this point, the inherent logic of the
commons remorselessly generates tragedy.
As a rational being, each herdsman seeks to maximize his gain.
Explicitly or implicitly, more or less consciously, he asks, “What is
the utility to me of adding one more animal to my herd?”. This utility
has one negative and one positive component.
1) The positive component is a function of the increment of
one animal. Since the herdsman receives all the proceeds
from the sale of the additional animal, the positive utility is
nearly +1.
2) The negative component is a function of the additional
overgrazing created by one more animal. Since, however, the
effects of overgrazing are shared by all the herdsmen, the
110
Ibid, at para 54.
111
Bradbrook, et al, Australian Real Property Law, Third Edition, Thomson Lawbook Co, 2002, p14.
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Public Administration and Finance Committee
SEVENTH REPORT
negative utility for any particular decision-making herdsman
is only a fraction of -1.
Adding together the component partial utilities, the rational herdsman
concludes that the only sensible course for him to pursue is to add
another animal to his herd. And another; and another…. But this is
the conclusion reached by each and every rational herdsman sharing
a commons. Therein is the tragedy. Each man is locked into a system
that compels him to increase his herd without limit – in a world that is
limited. Ruin is the destination toward which all men rush, each
pursuing his own best interest in a society that believes in the freedom
of the commons. Freedom in a commons brings ruin to all.”112
2.108
It has been suggested that the success of the agrarian revolution is tied to the enclosure
and private control of land and the removal of rights of commons.113 However, issues
such as the pollution of air and water and the spread of greenhouse gases and salinity
are not as easily addressed by way of fences and the granting of interests in land.
Property as a Source of Income and Superannuation
2.109 Mr Craig Underwood, a Jurien Bay landholder, stated the following at the
Committee’s hearings in Dandaragan:
“I would like to put this issue in perspective as far as property rights
are concerned. Most of us know that property rights are held dearly
and strongly by anybody who owns property, whether it is the corner
deli or a million-acre station in the Kimberley. The first point is the
ability to earn an income. Most years you can earn an income from
your land. However, you cannot budget for bureaucracy. I can budget
for seasonal variations or price fluctuations, and I can work around
droughts and floods, but I cannot budget for bureaucrats. There is no
way that you can commercially have bureaucratic input in your
business. Once that happens, there is no way of backing out, and you
are pretty much dead meat.
Also, for most farmers, their land is their superannuation. We do not
have fancy superannuation policies that we contribute to on a
monthly or weekly basis. Our land is our superannuation. Any of the
bureaucrats involved in this situation would not allow 20 or 30 per
cent of their superannuation to be taken away from them. It is
unacceptable. I do not know why we should accept that either.
The property is also a family legacy. We had plans for our children to
be involved in this business, but that will not happen now. The land
112
Professor Garrett Hardin, “The Tragedy of the Commons”, pp1243-1248, Science, Vol 162, December 13
1968, p1244.
113
Bradbrook, et al, Australian Real Property Law, Third Edition, Thomson Lawbook Co, 2002, p14.
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SEVENTH REPORT
CHAPTER 2: The Nature of Freehold and Leasehold Interests in Land
and business are part of the family legacy. I would like to leave
something to my children or use this property as an asset base from
which to help them with a business, further studies or something
professional.
A person’s property is also his identity. Again, everyone knows that
the butcher shop down the street is run by Joe the butcher, or that
there goes Bill, who manages that farm. Australians put a strong
emphasis on who they are and what they do. I believe that all these
qualities are totally lost in the bureaucracies, unless one happens to
work in one and is the chief executive officer, the senior manager or
this or that. That is one’s identity. That is the only way that there is
any commonality between the people who are dealing with these
things and what we believe in.”114
2.110
The Pastoralists and Graziers Association of Western Australia submitted to the
Committee that:
“Property is all about a bundle of rights. If a person who owns a farm
is denied the right to plough or graze his farm, the farm becomes
worth very little. And yet, a farm is a person’s savings; it is money
they have put away from their earnings, and, in that sense, it is just
like a superannuation policy. If a farmer were to lose his right to
enjoy his property in any way at all - some of the enjoyment lost by
farmers has been considerable; I know of one case in which all
enjoyment has been lost - it would be similar to having one’s
superannuation policy reduced by between 25 and 30 per cent. I am
sure that everyone would view that as an unjust situation. The market
of a free economy depends on exchangeable, holdable and enjoyable
property rights. We are interested in the efficiency that that market
can give, in the economy, and in the employment opportunities that
are provided. In the end, the most fundamental question is one of
justice. If someone put their savings into a certain area, it is true that
the Crown may [take away] those savings. However, it should not do
so without compensating a person for his or her loss. If there is a
public good, it should be a public cost. That does not mean that
holders of various forms of property, such as superannuation policies,
farmlands, or heritage houses in Subiaco, do not have
responsibilities. They do have responsibilities; there is no doubt about
that whatsoever. If such responsibilities are removed, the Crown
should sell the right to do the new thing on that property. In other
words, if it creates a new right the reward should go to the Crown.
During this ongoing argument, the Pastoralists and Graziers
114
Mr Craig Underwood, Transcript of Evidence, at Dandaragan, October 2 2002, p9.
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Public Administration and Finance Committee
SEVENTH REPORT
Association of WA has never sought windfall gains for its members. It
asks only that the rights, ex ante, be respected.”115
GENERAL OBSERVATION OF THE COMMITTEE ON THE CONCEPT OF PRIVATE PROPERTY
RIGHTS
2.111
In light of the above discussion, the Committee has developed a general, in principle,
view regarding the treatment by the State of a landholder who has validly acquired an
interest in a parcel of land with various granted rights (as distinguished from ‘rights’
that the landholder may anticipate may be granted at some time in the future) attached
to that interest.
2.112
The Committee believes that where such an interest in the land, or any granted right
attaching to that interest, is subsequently taken from the landholder by the State
Government for a public purpose, then the State should provide fair compensation to
the landholder.
115
Mr John Hyde, Chairman, Private Property Rights Committee, The Pastoralists and Graziers Association
of WA, Transcript of Evidence, August 19 2002, pp1-2.
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