Mills v Stokman
116 CLR 61(Judgment by: Kitto J)
Between: Daphne May Mills
And: Martin Cornelis Stokman
Judges:
Barwick CJ
McTiernan J
Kitto JTaylor J
Menzies J
Subject References:
Real Property
Profits a prendre
Whether sale of goods or grant of interest in land
Assignment
Whether authority to enter enforceable against new purchaser
Legislative References:
Sale of Goods Act 1923 (NSW) - s 5; s 22; s 23
Real Property Act 1900 (NSW) - s 42
Judgment date: 19 May 1967
SYDNEY
Judgment by:
Kitto J
The respondents' claim for a declaration that the slate in the mound is the property of Stokman and for relief upon that basis was, in my opinion, rightly dismissed by Myers J. upon the ground that the whole mound is part of the land and therefore the property of the appellant Daphne Mills. It may be right to conclude that the materials forming the mound became personalty upon being dug up and were later re-incorporated into the soil by being dumped on the land with the intention (to be inferred from the evidence, exiguous though it is) of being abandoned so as to become a permanent accretion to the surface. On the other hand the right conclusion may be that the materials were never so severed from the soil as to be converted into personalty. I should myself be inclined to favour the latter view on the ground that there is an element of intention in severance, just as there is in the kind of attachment which makes a chattel part of the realty, and that the proper inference from the known facts is that the company that worked the quarry and built the dump did not have the requisite intention of permanent severance with respect to anything but so much of the slate as it carried away.
As regards the portion of the mound which is upon land under common law title-and that is the greater part of it-I agree with the Chief Justice in thinking that upon the evidence it should be held that Daphne Mills acquired the legal estate with notice of an equitable interest, created in favour of the respondent Warren by the agreement of 14th November 1955 and enuring for the benefit of the respondent Stokman by virtue of the agreement of 19th February 1960. The intendment appearing from the first agreement is that Warren should have a right to enter upon the land and remove the slate so as to acquire the beneficial ownership of it, and that the right should not be defeasible by any action on the part of the vendors: cf. Fitzgerald v Firbank. [F4] This was plainly an intention to create a right not only as against the vendors but as against all the world, for it was conferred without any specified limit of time (though perhaps impliedly limited to a reasonable time: cf. Reid v Moreland Timber Co Pty Ltd [F5] ), and was in aid of what the parties joined in describing as an absolute sale of the slate. The agreed price having been paid, the result, on the footing that the slate was part of the soil, was that, although for want of a deed the only rights which resulted at law were rights enforceable against the vendors personally, the agreement was specifically enforceable and Warren therefore acquired in the contemplation of equity the rights and the interest in the land which a grant by deed in conformity with the agreement would have given him: Mason v Clarke. [F6] That is to say he acquired an interest in the nature of a profit a prendre , an irrevocable licence coupled with an interest and therefore binding not only upon the vendors but upon anyone taking the land from them with notice: In re Refund of Dues under Timber Regulations; [F7] Reid v Moreland Timber Co Pty Ltd. [F8] The opposite view, which was accepted in the Court of Appeal, namely that by reference to the provisions of the Sale of Goods Act it should be held that the effect was to make the slate goods for relevant purposes, is, I think, not sustainable. I content myself with referring on this point to the reasons of the Chief Justice and to the case of Stratford (H. M. Inspector of Taxes) v Mole and Lea. [F9]
The rights of entry and removal thus conferred upon Warren were expressly made exercisable by his agents, and by the agreement of 1960 he appointed Stokman his agent to exercise those rights and agreed that the slate should belong to Stokman. It seems that at the hearing before Myers J., counsel for the respondents, being invited to elect whether the statement of claim should be read as alleging an assignment to Stokman of the rights of entry or as an appointment of Stokman as Warren's agent, elected in favour of assignment. This arose out of a suggestion that Stokman was either an assignee from Warren or an agent for him, so that either he or Warren was the only proper plaintiff and the other should not have been joined. In truth, however, there was no election to be made. The assignment was equitable, so that Warren became a trustee for Stokman of such rights as the agreement of 1955 gave him at law, and as such was a necessary co-plaintiff with Stokman if Stokman be regarded as suing as equitable assignee: Performing Right Society Ltd v London Theatre of Varieties Ltd; [F10] and there is nothing inconsistent with this in saying that as Warren's rights at law were exercisable by his agent and Stokman claims to exercise them as agent but nevertheless for his own benefit, Stokman is a proper plaintiff even in respect of what he claims to be entitled to do as agent.
As regards so much of the mound as stands upon land under the provisions of the Real Property Act, I think the position is different, because the appellant Daphne Mills, having become the registered proprietor, is unaffected by any interest not on the register, even though she took with notice of it. If the case were one of fraud it would be otherwise; but merely to take a transfer with notice or even actual knowledge that its registration will defeat an existing unregistered interest is not fraud: Real Property Act, 1900 (N.S.W.), s. 43; and see the cases collected by Gibbs J. in Friedman v Barrett; Ex p. Friedman. [F11]
In the result I would vary the order appealed from by omitting the declaration as to the ownership of the slate, and by limiting the injunction so as to apply to so much only of the land as is not under the provisions of the Real Property Act. With a similar limitation I would add a declaration as asked in par. (B1) of the prayer of the statement of claim. Otherwise I would dismiss the appeal with costs.