Brisbane City Council v Amos

• Jurisdiction: Australia Federal only
• Judge: Kiefel CJ,Edelman J.,Gageler J.,Keane J.,Nettle J.
• Judgment Date: 04 September 2019
• Neutral Citation: [2019] HCA 27
• Court: High Court
• Date: 04 September 2019
• Docket Number: B47/2018

[2019] HCA 27

HIGH COURT OF AUSTRALIA

Kiefel CJ, Gageler, Keane, Nettle, and Edelman JJ

B47/2018

Brisbane City Council

Appellant

and

Edward Amos

Respondent

Representation

S L Doyle QC with A L Wheatley for the appellant (instructed by Brisbane City Council)

F L Harrison QC with P G Jeffery for the respondent (instructed by Keller Nall & Brown Solicitors)

Limitation of Actions Act 1974 (Qld), ss 10(1)(d), 26(1).

Limitation of actions — Debts created by statute — Debts secured by charge — Where Council commenced proceeding against respondent for overdue rates and charges — Where overdue rates and charges secured by charge — Where respondent argued claim was an action to recover a sum recoverable by virtue of an enactment under s 10(1)(d) of Limitation of Actions Act 1974 (Qld) — Where Council argued claim was an action to recover a principal sum of money secured by a charge and subject to s 26(1) of the Act — Where proceeding falls within both ss 10(1)(d) and 26(1) — Whether s 26(1) applies to exclude operation of s 10(1)(d).

Words and phrases — “ Barnes v Glenton”, “claim in rem”, “limitation of actions”, “overlap between limitation periods”, “personal claim”, “real claim”, “sums secured by mortgage or charge”, “what claims are within limitation statutes”.

ORDER

Appeal dismissed with costs.

Kiefel CJ and Edelman J.

Introduction

1 The appellant, the Brisbane City Council (“the Council”), is responsible for the local government of Brisbane. The respondent, Mr Amos, was the registered owner of rateable land on which the Council levied various rates and charges. The Council acted pursuant to its statutory duties and powers to levy rates and charges 1. Legislation also provides that “overdue rates and charges are a charge on the land” 2. The Council brought this proceeding relevantly to recover overdue and unpaid rates, with interest, levied upon Mr Amos' rateable land by rates notices issued in the period 30 April 1999 to 9 January 2012. Mr Amos resisted the Council's claim for a number of different reasons. Only one remains in this Court. It is which of two potentially applicable limitation periods, a six year limitation period or a 12 year limitation period, applies to the Council's claims. If the Council is correct that the only limitation period that applies is a provision that creates a 12 year limitation period, then there is a second question concerning the manner of operation of that provision in relation to the Council's claim for interest.

2 The question of statutory interpretation on this appeal arises from two provisions in the Limitation of Actions Act 1974 (Qld) (“the 1974 Limitation Act”). The first provision is s 26(1), which contains a 12 year limitation period that applies to an action “to recover a principal sum of money secured by a mortgage or other charge on property”. This provision applies to a wide range of debts including debts created by simple contract and secured by a mortgage or other charge, or vendor's lien 3, whether over realty or personalty and debts created by covenant and secured by charge or mortgage; and historically it also applied to judgment debts, which were treated as charges upon land and “payable

out of any land” 4. The provision also encompasses, relevantly to this appeal, debts created by statute and secured by charge

3 The second provision, which overlaps with s 26(1), is s 10. Section 10 creates overlapping limitation periods for a number of the debts relevant to s 26(1): a six year limitation period for an action founded on a simple contract 5; and a 12 year limitation period for an action on a specialty 6, including a covenant, and also for an action upon a judgment 7. And, relevantly to this appeal, s 10(1)(d) provides a six year limitation period for “an action to recover a sum recoverable by virtue of any enactment”.

4 The correct approach to the overlap between s 26(1) and s 10(1)(d) of the 1974 Limitation Act cannot be understood without an appreciation of the history of interpretation of the predecessor provisions and the late nineteenth century solution to the issue of overlap, which had been settled for a century when the 1974 Limitation Act was enacted. As the reasons below explain, until the late nineteenth century the overlap between the provisions was resolved by confining the first limitation period, namely for sums of money secured by charge, to real or proprietary claims. The second group of limitation periods applied only to personal claims. This approach of separate pigeonholes was ameliorated from the late nineteenth century when it was held that the limitation period for sums of money secured by charge would also bar personal claims. In 1899, in Barnes v Glenton8, it was effectively held that the application of both limitation periods to personal claims meant that a defendant could plead the shorter limitation period.

5 In oral submissions, the Council accepted that its claim was a personal claim. It was not “in rem” or a real claim. The Council urged this Court to depart from the decision in Barnes v Glenton. That submission should not be

accepted. Barnes v Glenton has been consistently followed by judicial authority and textbook writers, and hence practitioners, for more than a century. It was part of the understood fabric upon which the 1974 Limitation Act was enacted. It is a coherent approach. It was followed by a majority of the Court of Appeal of the Supreme Court of Queensland. The appeal must be dismissed

The overlap between s 10 and s 26 of the 1974 Limitation Act

6 Section 10 of the 1974 Limitation Act relevantly provides as follows:

“ Actions of contract and tort and certain other actions

• (1) The following actions shall not be brought after the expiration of 6 years from the date on which the cause of action arose –

  • (a) subject to section 10AA, an action founded on simple contract or quasi-contract or on tort where the damages claimed by the plaintiff do not consist of or include damages in respect of personal injury to any person;

  • …

  • (d) an action to recover a sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of a penalty or forfeiture.

• …

• (3) An action upon a specialty shall not be brought after the expiration of 12 years from the date on which the cause of action accrued.

• (3A) Subsection (3) does not affect an action in respect of which a shorter period of limitation is prescribed by any other provision of this Act.”

7 Although s 10(1) is expressed in terms that the action “shall not be brought”, this has long been understood as barring the “remedy”, that is, as permitting a good defence to be pleaded but not as extinguishing the underlying rights 9. It has been accepted throughout this litigation that the Council's “action”,

defined in s 5(1) of the 1974 Limitation Act as “any proceeding in a court of law”, for unpaid rates will fall within s 10(1)(d), and thus permit a good defence to be pleaded by Mr Amos after the expiration of six years, unless that provision is excluded 10. The issue is whether s 26, where it applies, excludes the operation of each of the limitation periods in s 10

8 Section 26 of the 1974 Limitation Act relevantly provides as follows:

“ Actions to recover money secured by mortgage or charge or to recover proceeds of the sale of land

• (1) An action shall not be brought to recover a principal sum of money secured by a mortgage or other charge on property whether real or personal nor to recover proceeds of the sale of land after the expiration of 12 years from the date on which the right to receive the money accrued.

• …

• (5) An action to recover arrears of interest payable in respect of a sum of money secured by a mortgage or other charge or payable in respect of proceeds of the sale of land or to recover damages in respect of such arrears shall not be brought after the expiration of 6 years from the date on which the interest became due.”

9 It is also common ground that s 26(1) and (5) of the 1974 Limitation Act apply to the Council's claim for overdue rates and charges, which are a charge on the land 11.

The treatment of the overlap between the antecedent provisions before 1874

10 Historically, there were two areas of apparent overlap between the antecedent provisions to ss 10 and 26. The first area of overlap was in relation to an action to recover the principal sum of money in respect of a debt secured by a charge and created by specialty. The limitation provision for a specialty 12

included not merely covenants but also, until 1939 13, a debt created by statute 14. The second area of overlap arose where arrears of interest were sought in respect of a debt created by covenant or specialty and secured by a mortgage or other charge. Prima facie, the antecedent provisions to ss 10 and 26 both appeared to be applicable to a claim for principal or interest, since the claim in each case appeared to be both an action to recover money on a covenant or specialty and an action for a sum secured by a mortgage or other charge

The apparent overlap in relation to claims to the principal

11 The origins of the limitation period for an action to recover a principal sum of money secured by a mortgage or other charge lie in s 40 of the Real Property Limitation Act 1833 (UK) 15 (“the 1833 Limitation Act”), which prescribed a 20 year limitation period for a mortgage debt from the time that the cause of action arose. This limitation period was the same period as that for actions of ejectment 16 and was based upon the previous judicial assumption that if a mortgagor remained in possession of the land for more than 20 years without acknowledging the mortgage then that mortgage was deemed to have been satisfied 17.

12 If a debt was created by simple contract there was some overlap between the 20 year limitation period in s...