Since the mid 1960s there has been a standard contract for the sale of land. More recently there has been a standard contract for the sale of businesses. New editions are prepared about every five years by the Law Society and the Real Estate Institute and take into account new legislation, court cases and suggestions from solicitors, real estate agents and some government departments. Just about everyone uses them. There are many advantages, they are revised often, so they are up to date; they are well known, so people not only know the clauses but also what the courts have said about them, they are designed to be fair to all the parties concerned.
There are also several standard leases- some prepared by the Law Society, some by the Real Estate Institute They haven’t been quite as successful perhaps because it is harder to design a lease that will fit all purposes.
There are also standard easements terms: the first set of these was written many years ago and appear as a schedule in the Conveyancing Act. Since then others have been added with more up to date language. Easements are generally a right by a neighbouring owner over another owners property- perhaps the most common is a right of way. Others include easements allowing one owner to pipe waterthrough the neighbour’s land, to carry electricity wires through the neighbour’s l land, for support of a building, even for recreation. There are many other examples and only the most common have been given a standard form. Many solicitors use them widely. Again they have most of the advantages of the standard contracts- they are updated, (though once an easement in a particular form is created it stays in that form until the parties agree to change it –if they ever do), they are designed to be fair and court cases establish the meaning.
Or rather they did have those advantages. Because recently some court cases have greatly changed the meaning of the most common – the easement for a right of way.
Until recently the law was (as the standard textbook on Land Law in Australia said)the document creating the easement is construed according to the natural meaning of its words, read in the light of circumstances existing at the time of the grant. This reflects the now settled principle that “interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the grant
Two examples of this will show what it means. A famous English case involved a right of way allowing access ‘at all times and for all purposes” over a rural laneway 9 ft wide. The court noting that at the time the easement was created the land was farming said the right did not allow buses to be driven along it –even though the land use had changed; a bus company having bought the land benefited by the easement . It wanted to use the land as a depot. It lost.
A second more recent case involved two adjoining commercial blocks. One had an easement over the other again for … “for all purposes connected with the use and enjoyment “ of the land benefited which was used as a fruit shop. The delivery drivers wanted to park their vehicles on the right of way while loading and unloading.
The Queensland Court of Appeal held there was no right to stop to load and unload becasue. Crucial to their decision was a finding that, at the time the easement was granted (1955), the land benefited by the easement was not built on to the extent that it now was. The right of way ran to the rear of the dominant land, and in 1955 the rear area was undeveloped. Vehicles using the right of way could (in 1955) enter the dominant land and load and unload; there was no need for them (in 1955) to stop to load and unload on the right of way itself.
And that was the quite clear law- you looked at the circumstances – including the land use- at the time the easement was created.
But not any more. in Sertari Pty Ltd v Nirimba Developments Pty Ltd the NSW Court of Appeal said the only things to take into account are the document that created the easement, the plan of the land the the pysical characteristics of the benefited and burdened land.
That case shows the difference and also the enormous problems this change has created for people whose land is burdened by an easement.
The easement was created over a hotel car park at to provide an secondary route to a Telecom installatoin on what was then Schofields Aerodrome. The aerodrome was owned by the Commonwealth government and used as a back up to Richmond RAAF base.
The easement required the owner of the land burdened to pay the costs of maintaining the access way. The council had required the easement to be created as a condition of the hotel development
Recently the aerodrome was sold, subdivided and the land remaining as benefited was being redeveloped as a medium density housing estate with 236 homes on about 2ha. The council rejected the development, partly because the easement would be the only access and the hotel owner objected to the use (it would stop a lot of patrons parking in the parking area. Such a busy road would also create problems for pedestrians- not only hotel patrons. . The developer successfully appealed against the hotel owners refusal to the court of appeal. IT said that the easement was one which allowed access for all purposes. The court said in considering the easement you could not take into account the history (as had been done in previous cases) and that the hotel owner had to agree because it was a right of way for all purposes. It also said that it was not interested in whatever traffic problems its decision might cause.
Some links.
The Conveyancing Act Easements
Easements in gross- for government departments http://www.austlii.edu.au/au/legis/nsw/consol_act/ca1919141/sch4a.html
“Normal easements” for adjoining landowners http://www.austlii.edu.au/au/legis/nsw/consol_act/ca1919141/sch8.html
Sertari Pty Ltd v Nirimba Developments Pty Ltd
http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/nsw/NSWCA/2007/324.html?stem=0&synonyms=0&query=title(Sertari%20Pty%20Ltd%20near%20Nirimba%20Developments%20Pty%20Ltd%20)
Sunday, March 13, 2011
Sunday, March 6, 2011
I last wrote about how seventeenth Century English history remains important in Australia. Then I wrote about the results of the English Civil War and how it led to a stronger division between the judicial and the executive branches of government. This time I look at a more commercial example and periods both before and after the Civil War.
The opening paragraph of the High Court judgement in Cadia Holdings v The State of New South Wales is
In 1568, an English court held that the Crown had the prerogative right to mines of gold and silver and other metals, such as copper, with which gold or silver in those mines was mixed.1 In a context of constitutional upheaval, that right was modified, in favour of the owners of base-metal mines, by an Act of the English Parliament in 1688.2 It was modified again in 1693.3 Those events, which occurred more than three centuries ago, determine today the amount of royalties payable to the New South Wales Minister for Mineral Resources in respect of copper mined by Cadia Holdings Pty Ltd from land near Orange.
Today the best known part of the royal prerogative is the governor’s reserve powers because –at least here- most of the prerogative is exercised by the executive government- Cabinet and public servants acting –directly or indirectly- on instructions from the Cabinet. And that was true even in 1568, the reigning monarch Queen Elizabeth I didn’t herself mine gold. She had the right to, she charged a price – which even today we call a royalty- to allow others to do so.
Many reasons were given for the King retaining ownership of gold and silvers- the most important being that in those days currency was either issued in gold and silver. Even after paper money was issued the paper notes were able to be converted to gold until 1930 in Australia and later is some other countries. Up to 1966 when decimal currency was introduced the ‘silver’ coins – the threepence, sixpence, shilling and florin were made from silver alloy. And even the first 50c coin was silver alloy (it had so much silver that melted down and sold for its silver content it was actually worth more than 50c for a while)
In England only gold and silver, and metals with which the gold and silver were mixed in the mines were the subject of the prerogative. All other minerals- and metals like copper mined where no gold was mined- belonged to the owner of the land in which the mineral was found. And so the owner could charge the ‘royalty’ not the king. This is unlike the situation in most of Europe- where all minerals belonged to the King. Some economic historians see this difference as being one of the main reasons the Industrial Revolution started in England.
In the early days of the colony the same rules applied- at least to the most common mineral mined in those days- coal and even today some landowners in the Valley also own the coal rights and can charge a royalty.
But to return to the constitutional upheavals and Cadia Holdings. In 1688 the Roman Catholic and absolutist King James II was overthrown and his Protestant son in law became King William III. One of the reasons for this was again an interference with the courts. James II used (his opponents said he abused) his prerogative power of granting pardons to people who broke the law. Even today it is the Governor who pardons people wrongly convicted of a crime or who give the police help in investigating crimes when they themselves have been accomplices.
James II gave wholesale pardons to people for all sorts of acts and ‘dispensed’ with some of the laws which imposed qualifications on people to hold public office or be elected to local government. People were concerned that he was ‘stacking’ local government bodies, juries and so on with his own supporters and that in time would lead to parliament itself being stacked.
He was removed by the “Glorious Revolution” and as part of the constitutional changes public servants were forbidden to stand for parliament- which today remains in section 44 of the Commonwealth Constitution
Another change to the law at time meant that Cadia Holdings did not have to pay eight million in royalties to the State Government.
James II had tried to become financially independent of Parliament so that- to take another complaint against him- he was able to afford a large standing army which people felt he would use to oppress them. The prerogative incomes- such as royalties were not (at least then) controlled by parliament, so that an act which exempted “mines of copper” from the prerogative reduced the income the King could get without parliamentary help. And that is what the 1688 Act did.
But the mine at Orange was one containing both gold and copper. The State government said (and the NSW Court of Appeal agreed with it) that , that the ore fthe Cadia mines contained gold, the copper could not be recovered from the mines separately from the gold; and the Crown’s ownership of the gold was not affected by the 17th-century statute so that the copper was part of a ‘gold mine’ and so liable to the higher rate of royalties.
Or to put it another way the mine was a gold-copper mine, not a copper mine with a small amount of gold in it (and a copper mine with traces of gold would be exempt under the 1688 statute
Cadia’s argument was that the Act exempted copper (or any other mineral) when it was mixed with gold or silver. And so the High Court found: that the 1688 Act allowed a dual categorisation of mines as both gold mines and copper mines. And a mine containing a substantial amount of copper and a substantial amount of gold is both a copper mine and a gold mine. So that the royalties for the copper were assessed on the lower rate of a privately owned mineral.
The opening paragraph of the High Court judgement in Cadia Holdings v The State of New South Wales is
In 1568, an English court held that the Crown had the prerogative right to mines of gold and silver and other metals, such as copper, with which gold or silver in those mines was mixed.1 In a context of constitutional upheaval, that right was modified, in favour of the owners of base-metal mines, by an Act of the English Parliament in 1688.2 It was modified again in 1693.3 Those events, which occurred more than three centuries ago, determine today the amount of royalties payable to the New South Wales Minister for Mineral Resources in respect of copper mined by Cadia Holdings Pty Ltd from land near Orange.
Today the best known part of the royal prerogative is the governor’s reserve powers because –at least here- most of the prerogative is exercised by the executive government- Cabinet and public servants acting –directly or indirectly- on instructions from the Cabinet. And that was true even in 1568, the reigning monarch Queen Elizabeth I didn’t herself mine gold. She had the right to, she charged a price – which even today we call a royalty- to allow others to do so.
Many reasons were given for the King retaining ownership of gold and silvers- the most important being that in those days currency was either issued in gold and silver. Even after paper money was issued the paper notes were able to be converted to gold until 1930 in Australia and later is some other countries. Up to 1966 when decimal currency was introduced the ‘silver’ coins – the threepence, sixpence, shilling and florin were made from silver alloy. And even the first 50c coin was silver alloy (it had so much silver that melted down and sold for its silver content it was actually worth more than 50c for a while)
In England only gold and silver, and metals with which the gold and silver were mixed in the mines were the subject of the prerogative. All other minerals- and metals like copper mined where no gold was mined- belonged to the owner of the land in which the mineral was found. And so the owner could charge the ‘royalty’ not the king. This is unlike the situation in most of Europe- where all minerals belonged to the King. Some economic historians see this difference as being one of the main reasons the Industrial Revolution started in England.
In the early days of the colony the same rules applied- at least to the most common mineral mined in those days- coal and even today some landowners in the Valley also own the coal rights and can charge a royalty.
But to return to the constitutional upheavals and Cadia Holdings. In 1688 the Roman Catholic and absolutist King James II was overthrown and his Protestant son in law became King William III. One of the reasons for this was again an interference with the courts. James II used (his opponents said he abused) his prerogative power of granting pardons to people who broke the law. Even today it is the Governor who pardons people wrongly convicted of a crime or who give the police help in investigating crimes when they themselves have been accomplices.
James II gave wholesale pardons to people for all sorts of acts and ‘dispensed’ with some of the laws which imposed qualifications on people to hold public office or be elected to local government. People were concerned that he was ‘stacking’ local government bodies, juries and so on with his own supporters and that in time would lead to parliament itself being stacked.
He was removed by the “Glorious Revolution” and as part of the constitutional changes public servants were forbidden to stand for parliament- which today remains in section 44 of the Commonwealth Constitution
Another change to the law at time meant that Cadia Holdings did not have to pay eight million in royalties to the State Government.
James II had tried to become financially independent of Parliament so that- to take another complaint against him- he was able to afford a large standing army which people felt he would use to oppress them. The prerogative incomes- such as royalties were not (at least then) controlled by parliament, so that an act which exempted “mines of copper” from the prerogative reduced the income the King could get without parliamentary help. And that is what the 1688 Act did.
But the mine at Orange was one containing both gold and copper. The State government said (and the NSW Court of Appeal agreed with it) that , that the ore fthe Cadia mines contained gold, the copper could not be recovered from the mines separately from the gold; and the Crown’s ownership of the gold was not affected by the 17th-century statute so that the copper was part of a ‘gold mine’ and so liable to the higher rate of royalties.
Or to put it another way the mine was a gold-copper mine, not a copper mine with a small amount of gold in it (and a copper mine with traces of gold would be exempt under the 1688 statute
Cadia’s argument was that the Act exempted copper (or any other mineral) when it was mixed with gold or silver. And so the High Court found: that the 1688 Act allowed a dual categorisation of mines as both gold mines and copper mines. And a mine containing a substantial amount of copper and a substantial amount of gold is both a copper mine and a gold mine. So that the royalties for the copper were assessed on the lower rate of a privately owned mineral.
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