Are Local Governments the Owners of Land Under Management Orders?


The question as to the identity of the “Owner” of land controlled by a local government under a Management Order arises in the context of the Building Act, eg in the signing of an Application for a Building Permit.  This is a complex question, since the term “Owner” is not used in the Building Act in its ordinary meaning but instead to designate a class of persons, only some of whom are owners in the ordinary sense of the word.  At common law, the owner of Crown land is Her Majesty Queen Elizabeth II in right of the State of Western Australia.  That is why it is called Crown land.  However, Section 5(1) of the Building Act defines the term “Owner” in relation to Crown land as meaning a prescribed person, the State in prescribed circumstances or a person who holds a prescribed interest in land.  The term “prescribed” here refers to a matter prescribed by Regulations under the Act.

The building regulations

Under Regulation 10 (2) of the Building Regulations, for the purposes of the definition of “Owner” in relation to Crown land, the owner is prescribed as being a person who is the proprietor of the land within the meaning of paragraph (b) of the definition of proprietor in the Transfer of Land Act 1893 Section 4(1).  As a result, any person falling within that definition is regarded as an owner of Crown land for the purposes of the Building Act.

The Transfer of Land Act

Having started out with the Building Act and gone on to the Building Regulations, one must then look at the Transfer of Land Act 1893.  It might have been thought simpler to have put a definition of the term “Owner” in the Building Act itself, but the person drafting the Building Act 2011 gave no thought to the philosophical doctrine that the simpler solution is to be preferred.

Section 4(1) paragraph (b) of the Transfer of Land Act defines a proprietor of Crown land as including a management body empowered under the Land Administration Act 1997 to grant or enter into interests in Crown land or to deal with or create any other right or title of a proprietary nature in Crown land.  Thus the journey from the Building Act through the Building Regulations and the Transfer of Land Act finally takes us to the Land Administration Act.

The Management Order

It is then necessary to look at the Management Order.  In general, most Management Orders contain a power to lease for any term not exceeding 21 years, subject to the consent of the Minister for Lands.  That power to lease under the Land Administration Act would bring a local government having such a Management Order into the definition in the Transfer of Land Act 1893 and therefore prescribed by the Building Regulations for the purposes of the Building Act.

Building Lease

Under Regulation 10(1)(a) of the Building Regulations, a person who holds a leasehold interest in the land which entitles that person to undertake building work without the consent of the registered proprietor is deemed to be the owner of the land for the purposes of the Building Act.  This is in contrast to the usual common law position, where a tenant cannot claim ownership, that being firmly vested in the landlord.

It is not unknown for local governments to grant building leases.  Under a building lease, a tenant is usually given an entitlement to erect a substantial building on the land and hold it for a significant period of time while paying only a nominal rent, surrendering the land and the building at the expiry of the term.  This may well occur in a situation where a local government wants the land developed but would prefer the cost and trouble of the development on its land to be undertaken by a private party.

The power to lease for 21 years under most management orders is probably not enough to justify a building lease, but the Minister can consent to a lease for a longer period of time.  If so, one could easily imagine a long term building lease for a substantial development entered into between the local government and the developer.

However, Regulation 10(1)(a) applies only to freehold land.  As a result, the tenant would never be an owner for the purposes of the Building Act in relation to a reserve.

Similarly, under Regulation 10(1)(b), an interest as a purchaser under a contract to purchase an estate in fee simple in freehold land makes the purchaser an owner of that land for the purposes of the Building Act.  This would not apply to a reserve under a management order, since the Minister would have to extinguish the reserve (entirely possible if thought fit) in order to be able to sell the land under a freehold title.

Even if the Minister were to enter into a contract to sell land in a reserve, on the assumption that it would be converted to freehold as part of the sale process, until the conversion of the land to freehold and the extinguishing of the reserve and the management order, Regulation 10(1)(b) could not apply.

Summary

Taking into account all of the above, it can be seen that it is the local government with a power to lease under a management order which is the owner of a Crown Reserve for the purposes of the Building Act and thereby entitled to everything which the Act empowers owners to do, such as signing a Building Permit Application.

For more information on this paper or any other Local Government matter please contact Laurie James on (08) 9321 3755.

The information published in this paper is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.