Anderson Stuart v Treleaven & 1 Ors
Case
•
[2000] NSWSC 283
•14 April 2000
No judgment structure available for this case.
Reported Decision: [2000] 49 NSWLR 88
New South Wales
Supreme Court
CITATION: Anderson Stuart & Ors v Treleaven & 1 Ors [2000] NSWSC 283 revised - 8/05/2000 CURRENT JURISDICTION:
EquityFILE NUMBER(S): SC 1375/99 HEARING DATE(S): 09/02/00, 10/02/00 JUDGMENT DATE: 14 April 2000 PARTIES :
Peter Primrose Anderson Stuart and Colina Ann Anderson Stuart and Anderson Stuart Estates Pty Limited (Plaintiffs)
Ian G and Andrea M Treleaven (First Defendants)
The Proprietors - Strata Plan No. 10294 (Second Defendants)JUDGMENT OF: Santow J
COUNSEL : M D Young (Plaintiffs)
A Bouris (Solicitor) (Defendants)SOLICITORS: Blessington Judd (Plaintiffs)
Mallesons Stephen Jaques (Defendants)CATCHWORDS: PROPERTY — Case Stated under s101 of Justices Act 1902 (NSW) from order of Strata Titles Board allocating unit entitlements in waterfront block of units purportedly pursuant to s119 of Strata Titles Act 1973 (NSW) — Powers of Supreme Court limited to errors of laws — Scope of — Meaning of "having regard to respective values of the lots" in s119(2) — Relevance of principles of valuation from Spencer’s case and legitimacy of glossing these — No estoppel — Error of law in taking two valuations which Board considered unsatisfactory and taking mean — Other errors of law — Board expressing provisional view invites submissions but then disregards them on ground was functus — Breach of natural justice — Should application be dismissed where valuation evidence insufficient. - WORDS AND PHRASES — "respective values". LEGISLATION CITED: Justices Act 1902 (NSW), s106
Strata Titles Act 1973 (NSW), s119, s130CASES CITED: Allen v Kerr and Anor (SCNSW Court of Appeal, Clarke, Meagher and Powell JJA, 7 August 1995, unreported)
The Australian Gas Light Co v The Valuer General (1940) 40 SR(NSW) 126
Autodesk Inc. v Dyason (No. 2) (1993) 176 CLR 300
Azzopardi v Tasman UEB Industries Limited (!985) 4 NSWLR 139
Bingham v Cumberland County Council (1954) 20 LGR (NSW) 1
Boland v Yates Property Corporation Pty Limited (1999) 167 ALR 575
Comcare Australia v Lees (1997) 151 ALR 647
Crompton v Commissioner of Highways (1973) 32 LGRA 8
Dixon v City of Glenorchy (1978) 15 LGRA 407
Harris v Minister for Public Works (1912) 12 SR(NW) 149
Hope v Bathurst City Council (1980) 144 CLR 1
Humphryis v Spence [1920] VLR 407
Kahler and Anor v Sabaco Pty Limited, (NSWSC, Master Malpass, 6 February 1997, unreported)
Leichardt Municipal Council v Seatainer Terminals Pty Limited & Glebe Island Terminals Pty Limited (1981) 48 LGRA 409
Lombardo v Federal Commissioner of Taxation (1979) 28 ALR 574
McPhee v S Bennet Limited (1935) 52 WN(NSW) 8
Marshall v Whittaker’s Building Supply Co (1963) 109 CLR 210
Mersey Docks and Harbour Borad v Birkenhead Assessment Committee [1901] AC 175
T A Miller Limited v Minister of Housing and Local Government [1968] 2 All ER 633
Minister of State for the Navy v Rae (1945) 70 CLR 339
Misfud v Campbell (1991) 21 NSWLR 725
Mobil Oil Canada Limited v Canada Newfoundland Offshore Petroleum Board (1994) 11 DLR(4th) 1
New South Wales Associated Blue Metal Quarries Limited v Federal Commissioner of Taxation (1956) 94 CLR 509
Pettitt v Dunkeley [1971] 1 NSWLR 376
Public Service Board of New South Wales v Osmond (1986) 159 CLR 656
Raja Vyricherla Narayana Gajapatiraju v Revenue Divisional Officer, Visagapatam ("the Raja’s Case") (1939) AC 302
R v Hunt; Ex parte Sean Investments Pty Limited ("Sean Investments") (1979) 180 CLR 322
R v Chief Constable of the Thames Valley Police; Ex parte Cotton [1979] 77 LGR 689
R v Rigby (1956) 100 CLR 146
Sangster v Henry (1920) 37 WN(NSW) 135
Re Saunders [1993] 2 Qd 335
Ex parte Sharah; Re Cox; Potato Marketing Board v Sharah (1956) 73 WN(NSW) 283
Spencer v the Commonwealth (1907) 5 CLR 418
Stead v State Government Insurance Commission (1986) 161 CLR 141
Sun Alliance Insurance Limited v Massoud [1989] VR 8
Thompson v Palmer (1933) 49 CLR 507
Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387
Wentworth v Wentworth (Santow J, [1999] NSWSC 638, 29 June 1999, unreported)
Western Australian Trustees Limited v Poon (1991) 6 WAR 72
Woolf v City of Camberwell [1931] VLR 162
Xuereb v Viola (1989) 18 NSWLR 453DECISION: Errors of law requiring board's decision to be remitted to it for reconsideration.
REVISED — 8 May, 2000
IN THE SUPREME COURT
OF NEW SOUTH WALES
IN EQUITYSANTOW J
No. 1375/99
PETER PRIMROSE ANDERSON STUART and COLINA ANN ANDERSON STUART and ANDERSON STUART ESTATES PTY LIMITED
PlaintiffsIAN G TRELEAVEN and ANDREA M TRELEAVEN
First DefendantsTHE PROPRIETORS — STRATA PLAN No. 10294
JUDGMENT
Second Defendants14 April 2000
Table of Contents Page1 This is an appeal on a question of law to this Court pursuant to s130 of the Strata Titles Act 1973 (NSW) (“the Act”) by Stated Case under s101 of the Justices Act 1902 (NSW) from the Strata Titles Board (“the Board”). The Plaintiffs seek a review of the decision of the Board in relation to the re-allocation of unit entitlements of the property at 1A Wiston Gardens, Double Bay, being a waterfront block of three units. This is on the basis that this decision is erroneous in law, on a number of stated grounds. The Defendants’ threshold position was that insofar as the Stated Case required this Court to determine questions of fact or to consider additional evidence, it lacked jurisdiction to do so. To the extent the Court has jurisdiction, the Defendants’ contention is that the Court should as a matter of discretion decline to exercise it by upsetting the Board’s determination. Thus the Defendants’ ultimate submission is that on the material properly before the Court on the Case Stated, including any such further material if admitted, no discernible error of law on the part of the Board has been shown. 2 What in practical terms is at stake is not just contribution to outgoings but each parties’ desire to maximise its respective voting entitlement. That in turn depends on the respective values of the lots and the corresponding unit entitlements which are the subject of the re-allocation.
INTRODUCTION
SALIENT FACTSThe Board’s Grounds of Determination
Legal Issues under consideration
Questions of Law and Questions of Fact
Admissibility of evidence on an appeal by Stated Case.
The Plaintiffs’ contentions by reference to para 4 of Stated Case.
4.1 Does "respective" mean "relative"?The meaning of a word in a legislative provision.
4.2 Did the Board place "extraordinary and excessive importance on the comparative areas of the lots"?
The meaning of "respective": Did the Board err in law?
Would the Board have reached the same conclusion?
The "initial enquiry" argumentQuestion of fact or law?
4.3 Rejection of the comparative sales approach.
Disregarding paragraphs 4.2(a), (b) & (c)
The Board took into account extraneous factors.
4.3(a) Does Section 119 require the Board to firstly determine and have regard to the value of each lot?The meaning of "having regard to".
4.3(b) Was the dismissal of the comparable sales approach an error of law?A question of law?
4.3(c) No evidence on which to dismiss comparable sales?
What is the proper approach to valuation?
Which sales are comparable?
4.4 Was the Board’s test of value a valid one?
4.5 Was it an error of law to base an order on the mean between the opinions of two rejected valuation?
4.6 Should the Board first determine respective values?A question of fact?
4.7, 4.8 & 4.9 Was the Board functus officio and should it have accepted further written submissions?
A precondition?
The only requirement is that the request was not "unreasonably made".The Board was functus
4.10 Did the Board err in law by not dismissing the claim on the basis that the valuation evidence was insufficient?
A denial of procedural fairness.
4.11 Did the Board err in law by failing to consider the estoppel argument raised by the applicants?Does the Board have a duty to give reasons?
5 Was the Board’s determination erroneous in point of law?
Should the estoppel argument be remitted to the Board?FINAL CONCLUSIONS
INTRODUCTION
ORDERS
SALIENT Facts
3 The parties to these proceedings were originally named as “The Proprietors of Strata Plan No. 10294” as the Plaintiffs and Ian G and Andrea M Treleavan as the Defendants. That description followed that in the proceedings of the Board from which this is an appeal. At the outset of these proceedings before me I gave leave for the Plaintiffs to file an Amended Summons dated 15 February 2000 naming “Peter Primrose Anderson Stuart and Colina Ann Anderson Stuart (being the owners of Lot 2) and Anderson Stuart Estates Pty Limited (being the owner of Lot 1)” as the Plaintiffs, “Ian G & Andrea M Treleaven” as the First Defendants and “The Proprietors — Strata Plan No. 10294” as a Second Defendants. 4 Strata Plan 10294 was first registered in 1975 and consisted of three lots, each of equal unit entitlement. The lots were of the following respective areas:
5 Lot 1 was on the first and second floors of the building, Lot 2 on its third floor and Lot 3 on its fourth floor. 6 On 16 December 1983 strata plan of subdivision No 20536 was registered in respect of Lot 3 and part of the common property. Lot 3 ceased to exist and the area of the new Lot 4 was shown as 280 sq m, consisting of 37 sq m on the third floor, 205 sq m on the fourth floor and 38 sq m on the fifth floor. The schedule of unit entitlements remained identical. 7 The Defendants sought a re-allocation of unit entitlements under s119 of the Act in order to reflect recommendations made by a valuer. 8 On 7 July and 15 and 16 December 1997 and 23 March 1998 Ms Lillian Horler a senior magistrate acting as the Board heard an application brought by the Treleavens (Defendants in the present matter) pursuant to s119 of the Strata Titles Act 1973. Their application was for an order that the unit entitlements of the three lots comprising the strata plan SP 10294 following the registration of the subdivision SP 20536 of Lot 3 and some common property into Lot 4 on 16 December 1983 should be reallocated in accordance with the certificate of Higgins Valuers Pty Limited. 9 The application was opposed by the Proprietors of Strata Plan 10294 (the Applicants in the present matter). The Applicants are the proprietors of two Lots in the property, the Second Defendants being the proprietor of the third lot. 10 At the hearing the Defendants in the present proceedings tendered a valuation signed by Mr Harrigan of Higgins Valuers Pty Limited and called oral evidence in respect of it by Mr Higgins. That valuation assigned the following values and proposed the following unit entitlements in respect of the lots:
Lot 1 124 sq m
Lot 2 149 sq m
Lot 3 205 sq m11 The Plaintiffs in this matter tendered a competing valuation report of Gray Mulroney and called oral evidence from Mr A Gray who assigned the following differing values and unit entitlements:
Unit Value Old Unit Entitlement Proposed Unit Entitlement Unit 1 Lot 1 SP 10294 $120,000 1 17 Unit 2 Lot 2 SP 10294 $180,000 1 25 Unit 3 Lot 4 SP 20536 $420,000 1 58 TOTAL 100 12 On 23 May 1998 the Board published reasons and a number of determinations (the "Provisional View"). In that Provisional View of 23 May 1998, the Board referred to the lack of guidance provided by the Act and the Regulations as to the method of determining unit entitlements. Then it was said that (Provisional View, 23 May 1998, p. 1):
Unit Value Old Unit Entitlement Proposed Unit Entitlement Unit 1 Lot 1 SP 10294 $185,000 1 224 Unit 2 Lot 2 SP 10294 $275,000 1 333 Unit 3 Lot 4 SP 20536 $365,000 1 443 TOTAL 1000 13 On 29 July 1998 the Board made an Order, formalised on 3 August 1998 that:
"the Board may decline to make a reallocation order if it finds itself with insufficient evidence of respective values to do so, even if it has sufficient evidence to enable it to conclude that the existing ratios of entitlements are unreasonable having regard to respective values.":
14 Section 119(2) of the Act states:
The Board’s Grounds of Determination
"Accordingly, pursuant to section 119(1) being of the view that the allocation of unit entitlements among the lots the subject of SP10294 and SP20536 was at 16 December 1983 unreasonably made, having regard to the respective values of the lots at that time, I now make an order allocating unit entitlements among the lots as follows:
Lot 1 21
Lot 2 28
Lot 4 51"
15 The Board in its Provisional View of 23 May 1998 said, as to s119:
"119(2) An order may be made only if the Board considers, after having regard to the respective values of the lots and (if a strata development contract is in force in relation to the strata scheme ) to such other matters as the Board considers relevant, that the allocation of a unit entitlements among the lots:
(a) was unreasonable when the strata plan was registered or when a strata plan of subdivision was registered; …"
16 In reaching its Provisional View of 23 May 1998, the Board determined that the focus of s119 of the Act was on the respective values of the lots in that plan under consideration. The Board determined that the term "respective values" meant the values of the lots "relative to each other". 17 The Board further determined that although the term "value" in s119 must mean "market value", the sales price of units in the subject parcel or of comparable lots in other strata plans would not ordinarily alone determine market value, since sale price differentials may reflect, inter alia, internal refurbishment in one lot and not another. The Board determined therefore that comparative areas must "play a significant role in the valuation exercise". The board did acknowledge that comparative areas are not necessarily determinative of relative market values. However, since the Board had already determined that the exercise was "to determine the relative value of lots in the one parcel", the use of lot area was deemed to be appropriate. 18 The Board further determined that although s119(2) required that the valuation certificate must accompany a s119(1) application, the Board was not bound by the valuation of unit entitlements expressed in any such certificate. 19 With respect to the valuations, the Board found that the method of neither valuer satisfactorily performed the exercise or achieved the result called for by s119. Instead the Board made a calculation on the basis of floor area using the total areas of the various lots (see Provisional View, 23 May 1998, p. 5). The resulting unit entitlements (namely Lot 1: 22; Lot 2: 27; Lot 3: 51) were then averaged as against the mean unit entitlements of the valuers. The conclusion reached on 23 May 1998, then, was as follows:
* Its focus is on the respective values of the lots in the plan under consideration: that is their value relative to each other
* Although value must mean "market value", sale price of units in the subject parcel or of comparable lots in other strata plans would not ordinarily alone determine market value, since sale price differentials may reflect, inter alia, internal refurbishment in one lot and not another.
* Comparative areas , although also not necessarily exclusively determinative of relative market values, must, since the exercise is to determine the relative value of lots in the one parcel, play a significant role in the valuation exercise.
* Although a valuation certificate must accompany the s119 application (s119(2)) the Board is clearly not bound by the valuation of unit entitlements expressed in any such certificate.": Provisional View 23 May 1998, p. 2
20 After the Board had made these determinations, both parties made further written submissions in respect of those matters. However, on 29 July 1998 the Board stated that it had not invited submissions as to the correctness of its earlier determinations and that they had been final judicial determinations in respect of which the Board considered itself functus. It must have been difficult for the parties to understand how, invited by the Clerk of the Board on 26 May 1998 to make submissions, their submissions were then disregarded as trenching upon “final judicial determinations” when these were included in a document entitled “Provisional View”. I return to the implications of that at paras 159 and following 21 It was asserted by the Plaintiffs that the Board had made errors in law in its interpretation of s119(2).
"In my view, there is sufficient evidence before me… for me to take the view that the following would be an appropriate reallocation of unit entitlements as at 16 December 1983:
Lot 1 21
Lot 2 28
Lot 3 51
…
This represents my provisional view of the state of the evidence before me and the conclusions I would draw from it, provided for the assistance of the parties. Unless I receive further submissions in writing from the parties within 28 days, I shall make orders specifying a reallocation in terms of the provisional conclusion on that date."
Legal Issues under consideration
22 The applicant in the present proceedings seeks a declaration that the determination of the Board was erroneous in law upon a number of grounds as contained in the Stated Case. These grounds form the principal questions to be answered in the present proceedings. It was submitted on behalf of the respondent that the Stated Case before the court contained no discernible error of law on the part of the Board. 23 While the original Stated Case was amended by consent to ask the Court to determine whether the determination of the Board was erroneous in point of law (T, 1), it remains to be answered whether such an error was made. 24 Before the specific questions relating to the determinations of the Board are dealt with, there are a number of threshold issues that must be addressed. First, it was submitted by the Defendants that the Stated Case and the contentions of the Plaintiffs required this Court to make determinations of fact and that, accordingly it is not appropriate for this Court to engage in such determinations. Second it was argued that this Court could not consider additional evidence for the purpose of determining whether the Board had come to a determination where there was no evidence suggesting that it could or should reach such a conclusion. 25 After those threshold questions are addressed, I will deal with each of the Plaintiffs’ contentions in turn as contained in the Stated Case.
Questions of Law and Questions of Fact
26 It was submitted by the Defendants that the contentions of the Plaintiffs suffered from the flaw identified by the High Court in R v Rigby (1956) 100 CLR 146 at 149:
27 The Defendants asserts that the matters brought to this Court by the Plaintiffs are merely matters of fact and degree of weight and outside the competence of this Court: see s130 of the Act, R v Rigby (supra) at 150-1. Section 106 of the Justices Act 1902 (NSW) (now replaced by an appeal procedure), being the governing section applicable to these proceedings allows this Court to "hear and determine the question or questions of law arising" on the stated case. 28 The Defendants contend that paras 4.1 to 4.5 of the Stated Case in general amount to an attempt by the Plaintiffs to argue that the Board misconstrued the evidence and should have otherwise construed it. The Defendants assert that the Plaintiffs seek to say that the approach of the Board was wrong on the evidence rather than pointing to an error of law. The jurisdiction of this Court to deal with each of these contentions is dealt with separately below. 29 Furthermore, the Defendants submit that even the wrongful admission or rejection evidence is not a "determining fact" for purposes of a case stated unless the effect of reception or rejection of the evidence (as the case may be), would have been that the decision would have gone the other way. They rely on Humphryis v Spence [1920] VLR 407 at 410. 30 Humphryis v Spence (supra) was an appeal from the Court of Petty Sessions to the Supreme Court of Victoria on conviction under the Police Offences Act 1915 (Vic). It appears that the passage relied upon by the Defendants in the present case is the following:
"The so-called case stated also comprises a statement of some contentions made on each side, which, subject to an exception to be mentioned, concern matters, which in our opinion are simply questions of fact... The case stated goes on to state certain conclusions reached by that court extracted from the judgment which really turn on matters of evidence and afford no basis for any matter of law."
31 The relevance of the Defendants’ authority in the present case is questionable. In particular s147 of the Justices Act 1915 (Vic) is not comparable to s106 of the NSW legislation, as the former requires that the lower court “states the facts specially for the determination of the Supreme Court thereon”. Nevertheless, while it is not the task of this court to reconsider the factual questions before the board, there are some questions of law (such as whether a conclusion of fact was made in the absence of evidence that could have supported that conclusion) that involve this court looking at the factual material before the Board. 32 Whether each contention, taken on its own, constitutes a question of fact or a question of law is dealt with below.
"… the wrongful admission or rejection of evidence may not be a "determining fact" under section 147 of the Justices Act 1915 [Vic.] unless the Court of General Sessions can say that if the evidence had not been received or rejected, as the case may be, the decision would have been the other way." (at p. 410)
Admissibility of evidence on an appeal by Stated Case.
33 A considerable amount of time was spent before me in argument over the admissibility of a bundle of exhibits to the affidavit of F L Andreone of 19 January 2000, sought to be tendered by the Plaintiffs. The exhibits included the transcript of proceedings before the Board, the valuation evidence before the board, the submissions of the parties to the board and their further submissions. Exhibits FLA 1-16 constituted the factual evidence before the Board. The balance of the exhibits constituted submissions and were admitted without objection. 34 On the second day of the hearing I ruled that:
35 The relevant paragraphs of the Plaintiffs’ facsimile read as follows:
"FLA 1-16 are admitted only in relation to paragraphs 1(a), 1(b), and 2(a) of the Plaintiffs’ facsimile of 9 February 2000.
36 By so admitting the evidence for that limited purpose only and in support of those propositions of “no evidence”, I am satisfied for the reasons below that I would be dealing with a question of law, namely that the Board had no evidence before it to make the relevant finding of fact. A “no evidence” contention, where not merely colourable, is a question of law; see The Australian Gas Light Co v The Valuer General (1940) 40 SR(NSW) 126 and also Comcare Australia v Lees (1997) 151 ALR 647 (Federal Court of Australia, Finkelstein J). 37 By “not colourable” is meant that evidence in support of a ‘no evidence’ argument should only be allowed to be adduced in cases such as this where the ‘no evidence’ point is not merely colourable but where it enjoys a real possibility of success. In Lombardo v Federal Commissioner of Taxation (1979) 28 ALR 574 at 578, Bowen CJ concludes:
“1. In respect of grounds of determinations 3.4, 3.11, 3.13, 3.16 and 3.19 and to the Board’s adoption of the gross floor areas (inclusive of storage and balconies) of the three lots as a basis for determining the value of the lots and appropriate unit entitlements:
(a) there was no evidence before the Board that it was appropriate to value the lots on the basis of their gross floor area inclusive of storage and balcony areas;
(b) there was no evidence that balcony or storage areas within the lots had the same value per sq m as internal habitable rooms.
2. In respect of ground of determination 3.3:
(a) there was no evidence expert or otherwise before the Board that sales prices of units in the subject parcel or of comparable lots in other strata planes were unreliable because sale price differentials might reflect internal refurbishment in one lot and not another.”
38 The Plaintiffs’ case before this Court was that the Board had erred in law on several occasions by reaching a determination where there was no evidence upon which the Board could have reached that conclusion. 39 The Plaintiffs also requested to have the evidence allowed for the purpose of proving that there was positive expert evidence before the Board that it was not appropriate to value the lots on the basis of their area and that there was expert evidence before the Board that storage and balconies were not of equivalent value to habitable room space. In support of that argument, in a further written submission of 16 February 2000, the Plaintiffs cited Misfud v Campbell (1991) 21 NSWLR 725 at 728 per Samuels JA. The further written submissions were made pursuant to an invitation said to be implicit in my words at T, 55.33-36 and I have taken those into account. In the case referred to, Samuels JA referred to a failure to refer to evidence critical to an issue in a case as something that worked a miscarriage of justice and an error of law. 40 It was submitted by the Plaintiffs that not only was there no evidence of the critical findings 1(a), (b), and 2(a) in the facsimile as quoted above, such findings being necessary to render supportable the Board’s ultimate findings as a piece of reasoning, but critical evidence to the opposite of those findings was not referred to. 41 That being said, the case of Misfud v Campbell (supra) does not stand for any universal proposition that this Court can or should rule on whether, given the factual evidence before the Board below, that Board should have reached the opposite conclusion. All that the case stands for is this. Where the Board has ignored evidence before it in the assertions of fact of one party, where it is so critical that to ignore it would work a miscarriage of justice, will have erred in law. Having already succeeded in adducing the evidence above in support of its "no evidence" argument, the Plaintiffs suffer a miscarriage of justice from the Board’s failure to give any weight to the "positive expert evidence." The evidence contained in FLA 1-16 is, therefore, admitted and will be referred to for the purposes of adjudicating the "no evidence " points raised by the Plaintiffs.
"A question of law is involved in a decision where there was no evidence upon which the Board could have reached its decisions, the implication being that the Board must have misdirected itself as to the correct legal interpretation of the statute or made perverse finding. A submission of "no evidence", however, involves the difficulty that unless some restrictions are applied, an appeal is open to any aggrieved appellant who chooses to make such a submission…
Without attempting an exhaustive summary, it may be said that a "question of law" will be involved in a decision in the following circumstances:
1. If it was expressly raised and the Board made a ruling on it as a relevant factor in its decision;
2. If it is obvious from the decision or transcript of the case that the Board in arriving at its decision has misunderstood the law in some relevant particular;
3. Technical words had necessarily to be construed before the statute could be applied;
4. Where a particular set of facts had of necessity to be within or without the statute;
5. Where, in a submission of "no evidence’ there is a real possibility of success."
The Plaintiffs’ contentions by reference to para 4 of Stated Case.
42 Having dealt with the preliminary questions, I will now deal with each of the Plaintiffs’ contentions in turn; the reference to 4.1 and following corresponds to the paragraphs of the Stated Case.
4.1 Does "respective" mean "relative"?
43 It was contended on the part of the Plaintiffs that the Board had erred in law by determining that "respective values" of the lots meant their value "relative to each other". Paragraph 4.1 of the Stated Case says:
44 The process contemplated by s 119(2) of the Act, it is submitted by the Plaintiffs, is that the Board must determine the value of each of the lots individually before using those valuations to calculate unit entitlements. The Defendants have raised several arguments to dispute the Plaintiffs’ assertion that the Board erred in law by misinterpreting the term "respective".
"The Appellants contend that my determination was erroneous in law upon the following grounds:
4.1 In respect of grounds for determination 3.1, 3.2, 3.7, 3.9, 3.10 and 3.11. I erred in law in interpreting "respective" in section 119(2) of the Strata Titles Act as equating to "relative" in meaning so as to focus initial enquiry on the values of the three lots relative to each other.
The meaning of a word in a legislative provision.
45 The Defendants first put that the question of the meaning of the word "respective" was a question of fact and therefore outside the concern of this court. In support of that assertion, the Defendants cited Davidson J in The Australian Gas Light Co v The Valuer General (supra) at 137:
46 At 146, Davidson J concludes, after reviewing the various authorities on the matter:
"In cases in which an appellate tribunal has jurisdiction to determine only questions of law, the following rules appear to be established by the authorities:
(1) The question what is the meaning of an ordinary English word or phrase as used in the Statute is one of fact not of law : Girls’ Public Day School Trust v Ereaut [1931] AC 12 at 25, 28; Life Insurance Co. of Australia Limited v Phillips 36 CLR 60 at 78; McQuaker v Goddard [1940] 1 All ER 471. This question is to be resolved by the relevant tribunal itself, by considering the word in its context with the assistance of dictionaries and other books, and not by expert evidence: Camden v Inland Revenue Commissioners [1914] 1 KB 641; In re Ripon (Highfield) Housing Confirmation Order , 1938. White and Collins v Minister of Health [1939] 2 KB 838 at 852; although evidence is receivable as to the meaning of technical terms: Caledonian Railway v Glenboig Union Fireclay Co. (6) ; Attorney-General for the Isle of Man v Moore [1938] 2 All ER 263 at 267; and the meaning of a technical legal term is a question of law: Commissioners for Special Purposes of Income Tax v Pemsel [1891] AC 531 at 580.
(2) The question whether a particular set of facts comes within the description of such a word or phrase is one of fact: Girls Public Day School Trust v Ereaut [op cit.]; Attorney-General for the Isle of Man v Moore [op cit.]
(3) A finding of fact by a tribunal of fact cannot be disturbed if the facts inferred by the tribunal, upon which the finding is based, are capable of supporting its finding, and there is evidence capable of supporting its inferences: Farmer v Cotton’s Trustees [1915] AC 922 at 931; Currie v Inland Revenue Commissioners [1921] 2 KB 332 at 338-341; Inland Revenue Commissioners v Lysaght [1928] AC 234 at 246-7, 249-251.
(4) Such a finding can be disturbed only (a) if there is no evidence to support its inferences, or (b) if the facts inferred by it and supported by evidence are incapable of justifying the finding of fact based upon those inferences: In re Ripon (Highfield) Housing Confirmation Order , 1938. White & Collins v Minister of Health [1939] 2 KB 838, or (c) if it has misdirected itself in law: Farmer v Cotton’s Trustees [1915] AC 922 at 930-1; Colonial Mutual Life Assurance "
47 There are no "particular circumstances" in the present case requiring this court to determine a question of fact before attributing to the word "respective" a precise meaning. The Defendants, however, also cited in support of its contention that the statutory interpretation of the meaning of the word "relative" is a question of fact, relying upon Lombardo v Federal Commissioner of Taxation (supra). At 578, Bowen CJ approves of the words of Jordan CJ in Australian Gas Light at 126 of that judgment. Bowen CJ adds:
"On these decisions I would with great diffidence conclude: (1) that the construction of a statute or any other instrument is always a question of law; (2) That the first question for decision as a matter of construction is whether words in the instrument were intended to be used in their strictly legal sense or with their ordinary meaning; (3) If it is determined as a matter of law that the strictly legal sense or the ordinary sense as the case may be was intended that sense must be applied by the Judge or Court; (4) If it be determined that the legal or ordinary sense may not have been intended there is then a further question of law to be decided, namely whether there are particular circumstances requiring a determination of fact, firstly as to the nature of such circumstances and secondly as to the meaning which would be applied to particular words or phrases in the vernacular of people concerned in the occupation, trade, calling or circumstances dealt with by the statute; (5) With the aid of findings on those points the statute must be construed as a question of law."
48 It is clear that the construction of a statute is a question of law. Furthermore, the meaning of “respective” only arises in interpreting the statute in which the word appears. 49 Words in a statute, when their meaning is clear and admits no ambiguity, must be given their plain and natural meaning (see Gifford on "Statutory Interpretation" at pp 3-10). In Hope v Bathurst City Council (1980) 144 CLR 1 at 7-8, Mason J quotes Kitto J in New South Wales Associated Blue Metal Quarries Limited v Federal Commissioner of Taxation (1956) 94 CLR 509 at 511:
"In the above situations where an application of the statute is clearly a question of fact, a question of law will only arise if there was no evidence to support the conclusion of fact or it is obvious from the transcript of the case that the Board has misunderstood the law in some relevant particular: Edwards (Insp of Taxes) v Abairstow [1956] AC 14 at 33 per Lord Radcliffe.
On the other hand a question of law will be involved where technical legal words must be construed before the statute can be applied to the found facts. Also, as stated previously, where the facts must fall clearly within or without the statute."
50 Therefore, whether the word "respective" is to have a meaning other than its meaning in ordinary speech is in any event a question of law and one which this Court is competent to determine on an appeal from the Board. I do not consider that the meaning of the word "respective" in its statutory context gives rise to any real ambiguity. It is my determination, itself a matter of law, that the Act uses the expression "respective" (to quote Kitto J) in the "sense… which [it has] in ordinary speech", viz.:
"The judgment of Kitto J in N.S.W. Associated Blue-Metal Quarries Limited. v Federal Commissioner of Taxation is illuminating. Kitto J observed that the question whether certain operations answered the description "mining operations upon a mining property" within the meaning of s122 of the Income Tax Assessment Act 1936 as amended, was a mixed question of law and fact. He went on to explain why this was so: ‘First it is necessary to decide as a matter of law whether the Act uses the expressions ‘mining operations’ and ‘mining property’ in any other sense than that which they have in ordinary speech’".
51 That this be the natural and plain meaning of the word "respective" applicable in the present context is supported by the words of section 119(4) which reads:
The meaning of "respective": Did the Board err in law?
"pertaining individually or severally to each of a number of persons, things, etc.; particular": Macquarie Dictionary
52 It is clear in this case that the Board did not interpret the words "after having regard to the respective values of the lots" in their ordinary and grammatical sense of "after having regard to the particular or individual values of the lots" or "after having regard to the values of each of the lots severally". 53 The Defendants argue, however, that the Board’s finding that the word "respective" meant "relative" was a determination not ‘in globo’, but rather "respective" had that meaning in the circumstances of the present case. In support of this assertion, the Defendants quote the Stated Case at paragraph 3.2: "It determined that its focus was on the respective values of the lots in that plan under consideration that is, their values relative to each other" [emphasis is the Defendants’]. 54 The Defendants argue that the Board’s determination of the meaning of the word ‘respective’ was based on a number of contended factual determinations by the Board, especially, it seems, the Board’s rejection of the valuation evidence before it. But that is to put the cart before the horse; the starting point is to determine what s119 requires. 55 I am satisfied that to interpret the "word" respective in a manner other than its ordinary meaning in the present context is to misinterpret the statutory task of the Board as set by s119, and is thus an error of law. 56 I will deal later with the Defendants’ argument that it is an erroneous argument on the part of the Plaintiffs to say that the comparable sales approach is the exclusive test to be employed by the Board in determining unit entitlements.
“(4) An application for an order must be accompanied by a certificate specifying the valuation, at the relevant time of registration (or immediately after the change in the permitted land use of each of the lots to which the application relates" [my emphasis]
Would the Board have reached the same conclusion?
57 Then the Defendants suggests that, even if the Plaintiffs’ contended meaning of "respective" were adopted, the Board would have come to the same conclusion as it did in its Provisional View of 29 May 1998. Given that the Board had rejected the comparative sales approach of the valuer for the Plaintiffs, it is asserted that the Board would have taken into account the same factors (such as area, access, aspect, light and air) and would have reached the same conclusion. 58 I do not need at this point to decide here whether, but for that one error, the Board would have come to a different conclusion. Such an inquiry need only be made when considering whether the matter should be returned to the Board after all of the Plaintiffs’ other contentions have been dealt with.
The "initial enquiry" argument
59 The contention in paragraph 4.1 of the stated case identifies the error of law of the Board as "interpreting respective… as equating to ‘relative’ in meaning so as to focus initial enquiry on the comparative areas of the lots." The Defendants argue that the use of the words ‘initial enquiry’ betrays the nature of the contention as one going to the merits of the Board’s decision and reasoning process and thus outside this Court’s jurisdiction. However, given the circumstances of the case, it is clear that the word "initial enquiry" refer to the fact that the Board only initially considered the value of the lots. Subsequently, the board considered a host of other factors, such as living area. The words "initial enquiry" do not, therefore, have any bearing on the matter of the Board’s interpretation of its task under s119.
4.2 Did the Board place "extraordinary and excessive importance on the comparative areas of the lots"?
60 The Plaintiffs argue that the Board’s alleged erroneous interpretation of the word "respective" in s119(2) led the board to make further errors of law. The first of these is said to be that the Board placed extraordinary and excessive importance on the comparative areas of the lots. 61 The Stated Case reads:
62 The Plaintiffs asserts that the Board did not properly have regard to the value of the lots. This asserted error of law had two parts. Firstly, it is argued that there was no evidence before the board that values moved in tandem with the gross areas of the lots or that valuation could be calculated from a comparison of gross area. Secondly, it is asserted that there was no evidence that storage and balcony areas were of like value to inhabitable rooms. Thirdly it is asserted that the Board overlooked crucial evidence of various sorts; here the issue of jurisdiction again arises.
“The Appellants contend that my determination was erroneous in law upon the following grounds:
4.2 In respect of grounds of determination 3.4, 3.11, 3.13 and 3.19, and as a consequence of the error of law in 3.1 and 3.2 (identified in 4.1 above), I erred in law in placing extraordinary and excessive importance on the comparative areas of the lots when:
(a) neither valuer gave evidence that the values of lots moved in direct relationship to or were to be determined on the basis of their physical areas;
(b) That is was common ground on the evidence of the valuers that storage space and open balcony space were not as valuable per sq.m as habitable living area;
(c) That in assessing the gross floor areas in 3.13 I overlooked the unchallenged evidence that:
(i) Lot 1’s area, which I described as storage, was a mixture of a laundry and storage;
(ii) Lot 2’s area included an open balcony;
(iii) Lot 4’s area adopted by me as the area excluding storage included open balcony areas, part-height under roof storage cupboards, two internal staircases and a bedroom having its only access to bathroom/toilet by going outside the unit.”
Question of fact or law?
63 The Defendants, in reply argue, first, that there is no area of law complained of in paragraph 4.2 of the Stated Case.. 64 The contention in paragraph 4.2 of the stated case refers to "extraordinary and excessive importance". The Defendants submits that the complaint, therefore goes to a finding of fact rather than raising a point of law. The determinations complained of by the Plaintiffs are as follows:
65 The other two determinations complained of were the Board’s calculation of unit entitlements based on floor areas. The Board’s final conclusions are quoted above in the factual background. 66 The Plaintiffs’ contention is essentially that there was no evidence upon which the Board could make the determinations complained of. Here then, we are dealing with the question of "whether there is any evidence of a particular fact", being a question of law: see earlier and McPhee v S Bennet Limited (1935) 52 WN(NSW) 8 at 9. That here this court is asked to make a determination of law is made clear by applying the principles expounded by Glass JA in Azzopardi v Tasman UEB Industries Limited (!985) 4 NSWLR 139 at 155-6:
“3.4 I further determined that comparative areas, although not necessarily exclusively determinative of relative market values, must, since the exercise is to determine the relative value of lots in the one parcel, play a significant role in the valuation exercise.
3.11 I found that first and foremost one would expect to pay a price for each commensurate with the livable are[a], actual and perhaps potential, relative to the other two.”
67 While Azzopardi’s Case involved a different legislative regime to the present case, the principles can be applied in the present circumstances since, as in Azzopardi’s case, this court is, by legislative fiat, only permitted to review the decision of the Board on questions of law: s130 Strata Titles Act, s106 Justices Act 1902. Where the contention of the Plaintiffs is that the Board made a determination where there was no evidence to support the finding, that contention is a question of law. This is in line with the Court of Appeal in Allen v Kerr and Anor (SCNSW Court of Appeal, Clarke, Meagher and Powell JJA, 7 August 1995, unreported):
"…To say of a finding that it is perverse, that it is contrary to the overwhelming weight of the evidence, that it is against the evidence and the weight of the evidence, that it ignores the probative force of the evidence which is all one way or that no reasonable person could have made it, is to say the same thing in different ways. Upon proof that the finding of a jury is vitiated in this way, it will be set aside because it is wrong in fact. Since the Act does not allow this Court to correct errors of fact, any argument that the finding of a Worker’s Compensation Commission judge is vitiated in the same way discloses no error of law and will not constitute a valid ground of appeal. It is also pointless to submit that the reasoning by which the court arrived at a finding of fact was demonstrably unsound as this would not amount to an error of law: R v District Court of the Metropolitan District Holden at Sydney; ex parte White (1966) 116 CLR 644 at 654.
A finding of fact in the Commission may nevertheless reveal an error of law where it appears at that the trial judge has misdirected himself ie has defined otherwise than in accordance with law the question of fact which he has to answer. A possibility of this kind exists with ultimate findings of fact but not with respect to primary findings of fact such as whether the applicant suffered injury on a particular date. Further an ultimate finding of fact, even in the absence of a misdirection, may reveal error of law if the primary facts found are necessarily within or outside a statutory description and a contrary decision has been made, Hope v Bathurst City Council (1980) 144 CLR 1 at 10; Australian Gas Light Co v Valuer-General (1940) 40 SR (NSW) 126 at 138; 57 WN 53 at 55…."
68 However, the question merely of the weight to be given to evidence of a correlation between area and value could not, if such evidence exists, be the subject of review in this case since it would be a question of fact: see Azzopardi’s Case, and also Kahler and Anor v Sabaco Pty Limited, (NSWSC, Master Malpass, 6 February 1997, unreported). To the extent that the Plaintiffs’ contention goes to anything more than a lack of evidence of facts decided by the board, this Court cannot enter into the argument. Therefore, that it was "common ground on the evidence of the valuer that storage space and open balcony space were not as valuable per sq. m as habitable living area" and that the Board may have made an error in calculating the gross floor areas of the lots, cannot be the subject of inquiry by this Court. The only error of law asserted in contention 4.2 is that the Board concluded as it did in the absence of any evidence that values of lots moved in direct relationship to or were to be determined on the basis of their physical areas.
"It was not open to [the Plaintiffs] to argue that the ultimate factual conclusions were wrong. He could do that only if an appeal lay on questions of fact, and it is clear that it did not. He was limited to errors of law, if any, which underlay the factual finding. Such errors may occur where, for instance, there is no evidence to support a finding, where a tribunal has misdirected itself on the legal principles applicable or where the primary facts found are necessarily within or outside a statutory description and a contrary finding has been made": per Clarke JA at p.1
Disregarding paragraphs 4.2(a), (b) & (c)
69 The Defendants submits that with respect to sub-paragraphs (a) to (c) of paragraph 4.2 of the Stated Case, they are not ‘facts’ binding on the Court. Furthermore it is asserted that the material is contentious and argumentative and should not find any place in a Stated Case (the Defendants here referred to Marshall v Whittaker’s Building Supply Co (1963) 109 CLR 210 at 216-217). While paragraphs (b) and (c) are matters of fact and involve this Court making findings of fact (which is not the task of this court), paragraph (a) is of a different “no evidence” type. 70 The Defendants did not take the Court to any evidence that could have supported the determinations referred to in contention 4.2. It is clear that there was no evidence before the Board, including from the various experts, that could have supported the Boards determinations. The Plaintiffs’ contention is, therefore, made out in respect of the weight accorded to floor area where there was no evidence to support such an approach.
71 The Defendants says that the valuer must have regard to all material relevant to value and to check the valuation by as many methods as may be available (including but not limited to a hypothetical sale). They cite in support the case of Minister of State for the Navy v Rae (1945) 70 CLR 339 at 344. 72 That case involved the acquisition of a ship by the Commonwealth; the dispute arising over the compensation paid by the Commonwealth to the owner of the vessel. The valuation in dispute, then, was the valuation carried out by the board in that case of the ship. The court confirms that the market value of the ship was the most appropriate test. Other factors are to be considered if there is no market for the chattel. The paragraph on which the Defendants, no doubt, relies, is readily distinguishable as being specific to the circumstances of that case. That paragraph reads:
The Board took into account extraneous factors.
73 It is the next paragraph that contains the general principle, namely, that "if there is a market for a ship that is the most satisfactory test of its value… But where there is no market, you must ask what is its value as a going concern to its owners at the time of acquisition.": per Dixon J at 344. The case of Minister of State for the Navy v Rae (supra) does not assist the Defendants in the present case. The applicable principle is not that the "valuer must have regard to all material relevant to value and to check the valuation by as many methods as may be available". Rather, the principle for valuation is that based either on the “hypothetical prudent purchaser” as formulated by Isaacs J or on “the willing but not anxious vendor and purchaser”, as enunciated by Griffiths CJ, in each case as laid down in Spencer v the Commonwealth (1907) 5 CLR 418. In Boland v Yates Property Corporation Pty Limited (1999) 167 ALR 575 Gleeson CJ (at para 79) adopts the willing but not anxious purchaser test as enunciated by Griffiths CJ. He rejects as a gloss on that test, the so-called “head start” theory of special value, so carrying a warning against other unwarranted glosses not compatible with fundamentals of the Spencer test. I return later to the principles of valuation; see paras 107 and following. 74 The Defendants’ argument that the valuer must have regard to all material relevant to value does not meet the contention of the Plaintiffs that the Board paid excessive regard to floor area; they correctly in my view contend that there was no evidence in support of the Board’s determinations in that regard. Even if the Board is able to look to indicators other than comparable sales, the Board may not choose to consult those alternative indicators of value without any evidentiary basis that suggests that such an approach is a valid method of determining (or at least estimating) the value of the relevant land. 75 While the Defendants also argue that the Board did not decide purely on the basis of area, that does not seem to me to be any answer. The Plaintiffs’ assertion is rather as to excessive and improper weight being given to one factor, being floor area, does not depend on that being the only factor taken into account by the Board. The Plaintiffs’ argument as to whether the Board needed, according to the terms of the Act, to ascertain a value for each of the units is a different argument and is dealt with below. 76 Furthermore, it is true that the final conclusions of the Board as to the proper unit entitlements did differ marginally from the entitlements calculated solely on the basis of area. While put forward by the Defendants as an answer to the Plaintiffs’ contention in paragraph 4.2 of the Stated Case, given my conclusion above (namely that the Board did take into account area as a determinant of value without evidence suggesting that it was a valid approach), the fact that the final unit entitlements reached by the Board differ from those based solely on floor area is irrelevant. The issue is not whether living areas formed the sole determinant of the final unit entitlements. Rather the issue is whether, given that the board had no evidence on which to base its course of action, the weight given to floor area in the determination of the respective values of the lots was excessive. I have already answered that question in the affirmative.
"In reaching a conclusion as to compensation for the taking of a piece of property such as that now in question, it is necessary, or at all events wise, to pursue as many means of estimation as are open, to compare them, and then, as an exercise of judgment, to fix what, upon considerations this process suggests, appears to be a fair compensation.": per Dixon J at 344
4.3 Rejection of the comparative sales approach.
77 Paragraph 4.3 of the stated case reads:
78 The grounds referred to in the contention state:
"In respect of grounds 3.1, 3.2, 3.3, 3.7 and 3.10:
(a) I erred in law in not interpreting Section 119 Strata Titles Act as requiring the Board to firstly determine and have regard to the value of each lot;
(b) I further erred in law in dismissing the comparable sales approach to valuing each of [the] lots, particularly having regard to the approach of both valuers as per 2.9 above;
(c) I further erred in law in dismissing the said comparable sales method on the particular ground set out in 3.3 when neither valuer dismissed the comparable sales method on that ground and there was no evidence of such suggested internal refurbishment."
79 I will deal with each subparagraph in relation to para 4.3 in turn.
"3.1 In considering the question of a re-allocation of unit entitlements as envisaged by Section 119, I turn to the Act and Regulations to see what the legislation said with regard to how unit entitlements were to be determined in the first instance. Having regard to the importance of the unit entitlements ascribed to any lot vis a vis any other lot in establishing the lot proprietors’ share of expenses, obligations, surpluses, resumption or insurance payouts, water and council rates, as well as voting power on a poll, I was surprised to find the Act and Regulations to be almost silent on the subject. I considered Section 8 (Registration of Plans) and regulation 17 (Schedule of Unite Entitlements), Section 10 and Section 11, and found that only in Section 119, when a re allocation of entitlements is being sought, does the question of how unit entitlements were initially made on registration of a plan or subdivision plan arise, in the requirement in the Board to determine whether or not they were unreasonably made having regard to the respective values of the lots at the time.
3.2 In considering section 119 in my Reasons of 23 May 1998 I determined that its focus was on the respective values of the lots in that plan under consideration that is, their values relative to each other .
3.3 I further determined that although value in section 119 must mean "market value", sales price of units in the subject parcel or of comparable lots in other strata plans would not ordinarily alone determine market value, since sale price differentials may reflect, inter alia, internal refurbishment in one lot and not another.
3.7 Because of my findings in 3.1 and 3.2 I found that the method of neither valuer completely satisfactorily performed the exercise, or achieved the result, called for by Section 119.
3.10 I found that Mr Gray’s empirical enquiry of comparison of each lot separately with "comparable" units in other waterfront buildings led to conclusions that failed to reanchor the enquiry as a question for the comparative values of each of the subjective lots relative to each other." [emphasis supplied]
4.3(a) Does Section 119 require the Board to firstly determine and have regard to the value of each lot?
80 The Board did not, in its provisional view of 23 May 1998 nor in its final orders of 29 July 1998 make any findings about "the respective values of the lots". The Plaintiffs asserts that it is a condition imposed by subsections 2 and 4 of s119 of the Strata Titles Act that a valuation must be decided upon before any finding can be made that the existing unit entitlements were unreasonable. 81 The words of s119(2) allow the Board to make an order under subsection 1 "only if the Board considers, after having regard to the respective values of the lots" that “the allocation of unit entitlements among the lots” was or became “unreasonable” as elaborated in sub-paras (a) and (b). 82 The use of the word "after" in s119(2) clearly indicates that the Board is to ‘have regard to’ the value of the lots before moving on to calculate revised unit entitlements. Exactly what that means in the present circumstances depends on the meaning of the phrase "having regard to".
The meaning of "having regard to".
83 The Defendants argue that the phrase "having regard to" or variants thereof means, in respect of matters to which it refers, that those matters must be taken into account and given weight as fundamental elements in the relevant determination to be made, but not as an exclusive element. The primary authority cited by the Defendants was R v Hunt; Ex parte Sean Investments Pty Limited ("Sean Investments") (1979) 180 CLR 322 at 329. The Plaintiffs, however, takes issue with the Defendants’ application of that authority. 84 Sean Investments concerned s40AA of the National Health Act 1953 (Cth) (as amended), which states at subsection 7:
85 Of the words "have regard to", Mason J wrote, at 329:
"The Permanent Head shall, in determining the scale of fees in relation to a nursing home for the purposes of sub-paragraph (i) of paragraph (c) of the last preceding sub-section, have regard to costs necessarily incurred in providing nursing home care in the nursing home" [my emphasis]
86 Further, Murphy J writes:
"When sub-s.(7) directs the Permanent Head to "have regard to" the costs, it requires him to take those costs into account and to give weight to them as a fundamental element in making his determination… However, the sub-section does not direct the Permanent Head to fix the scale of fees exclusively by reference to costs necessarily incurred and profit. The sub-section is so generally expressed that it is not possible to say that he is confined to these two considerations. The Permanent Head is entitled to have regard to other considerations which show or tend to show that a scale of fees arrived at by reference to costs necessarily incurred, with or without a profit factor, is excessive or unreasonable".
87 That case, then, stands for the proposition that the words "have regard to the respective values of the lots" require the Board to take those values into account as a fundamental element in the making of its decision. That requirement, however, cannot be so interpreted as to determine the outcome of the Board’s decision. It remains within the Board’s discretion, given its consideration of other relevant factors, to make or refuse an order under s119(1). 88 The Defendants submit, then, that there is no statutory requirement that the Board determine the respective values of the lots as a precondition to the exercise of the Board’s discretionary power. Rather, the Board is simply required to have regard to those values. One way for the Board to fulfil that requirement is by considering a certificate presented by a valuer. It is further submitted that the Board is not required to accept any valuers certificate. 89 There is no requirement in s119(2) that the values of the lots determine the unit entitlement calculations of the Board. Furthermore, there is no requirement to adopt any particular valuer’s report. Rather the Board is to have regard to the values of each of the lots. While that value may be obtained from a particular valuer’s report, that is not to say that all valuers’ reports must be accepted or that other evidence as to value cannot be accepted. In Western Australian Trustees Limited v Poon (1991) 6 WAR 72, the Court of Appeal of the Supreme Court of Western Australia considered a default provision of a lease providing for determination of "current market rental value" of premises. Clause 1.02 of the agreement in that case contained a definition of that term as meaning "the best Annual Rent that can be reasonably obtained for the premises" and sub-clause (d) continued: "Having regard to current market values of comparable premises in the Perth Metropolitan area". Malcolm CJ said at 80-81:
"The requirement that the Permanent Head (and on review, the Minister) shall have regard to the costs necessarily incurred, tends in itself to show that his duty in respect of those costs is limited to having regard to them. He must take them into account and consider them and give due weight to them, but he has an ultimate discretion" (at 334)
90 Further at 82-83, Malcolm CJ said:
"The defined task of the valuer…. was to determine the best annual rent that can be reasonably obtained for the premises on the assumptions set out in the definition, having regard to the current market rental values of comparable premises. The discretion so conferred cannot be regarded as unfettered, merely because the words "having regard to" do not mean "slavishly adhered to" and the decision whether or not particular premises are "comparable" involves a value judgment… The determination whether a given sale is comparable or particular premises are comparable involves the making of an expert judgment or the formation of a professional opinion in accordance with the accepted principles of valuation: See Mason v Skilling [1974] 1 WLR 1437; [1974] 3 All ER 977 and Halsbury’s Laws of England (4th ed 1981); Vol 27, par 731, pp 585-586.
The valuer cannot disregard current market rental values of comparable premises. The weight given to other current market rental values will necessarily depend upon the degree of comparability. This is a matter for expert assessment and not for the exercise of an unfettered discretion. I am unable to accept that the valuer’s discretion is "unfettered" in any relevant sense."
91 The reasoning and conclusions of Malcolm CJ mean that a decision of the Board which does not ascertain (nor even discuss) the market values of each of the lots so as to have regard to them does not have regard to those values and is erroneous in law. The error is that the statutory task set by s119(2) has not been performed. Value must be taken into account by the Board. 92 The Board is not bound to apply the rules of evidence and may inform itself in such manner as it thinks fit (s132(2) of the Act). The Defendants argue that s132 supports the proposition that s119 should not receive a construction that implies into the provision any requirement as to determinations of value, which are not strictly necessary for the ultimate task of establishing unit entitlements under s119. 93 As demonstrated, the requirement that the board have regard to the value of the lots is not an implied requirement but one contained in the express terms of the statute. The words of s132(2), then, cannot affect the construction of s119(2) and the requirements therein. 94 In the circumstances of this case it is finally submitted by the Defendants that the Board was entitled to have such regard to the opinions of the valuers as it felt appropriate. It was entirely appropriate, then, on the submission of the Defendants that the Board used the valuers’ opinions as it did, namely in part of the calculation of unit entitlements. It is submitted that the Board did consider the respective values assigned by the valuers and analysed their deficiencies. While the Board did then adjust the unit entitlements without making a finding as to respective monetary values in 1983, the board was not required to do so. In the absence of any one valuer’s certificate being found satisfactory by the Board, the Board had to carry out its ultimate task of allocating the unit entitlements in the best way it could. In support of this proposition, the Defendants cited Bingham v Cumberland County Council (1954) 20 LGR (NSW) 1 at 18-19, saying the Board was “doing the best it could on the materials before it”. 95 In reply, the Plaintiffs’ submit as follows:
"It was also submitted on behalf of the respondent that the words "having regard to" in par (d) of the definition do not suggest that the valuer is bound to adhere to or comply with current market rental values of comparable premises. It was suggested that these words may mean no more than the valuer is not precluded form taking current market rental values of comparable premises into account, although he is not bound to take them into account…I am unable to accept this submission. In the Police Complaints Board case the Board was required to take the specified matter into account by reason of the words "shall have regard to". The decisions in other cases are to the same effect. In the present context the best rental that can reasonably be obtained is to be determined on the basis of the specified assumptions and by taking into account the current market rental values of comparable premises. The latter requirement simply expresses an accepted principle of valuation".
96 As discussed above, Bingham’s case does not assist the Defendants here. It does not have any bearing on the meaning of the phrase "have regard to" in s119(2) of the Act. Rather, it can only be relevant to the test of valuation used to obtain a value to which the Board must then have regard. 97 Furthermore, the use of the competing valuation evidence in the final calculation of unit entitlements cannot, in the present case constitute ‘having regard to’ the values of the lots. There was no justification given by the Board nor otherwise apparent for the averaging of the competing valuations to obtain a ‘value’ to which the Board could have regard, more especially when the Board was not satisfied with either valuation. The mean of the valuers’ opinions does not, without justification, result in a ‘value’. Rather it merely results in a figure, the genesis of which is in some doubt, to which the Board then had regard. 98 Furthermore, even if there were evidence to support the proposition that the mean value actually constituted a valuation figure, this Court would not find that the degree of consideration of value met the standard of the test in Western Australian Trustees Limited v Poon (supra). 99 Finally, in respect of the phrase ‘have regard to’, the Defendants submits that the Spencer test cannot compel a conclusion as to the proper construction of section 119. While the Defendants’ submission is correct, that is, the Spencer test does not compel a conclusion as to the proper construction of s119, it is clear from my reasons above that that is not the issue. What is involved is identifying, once that construction task is complete, what are “the respective values of the lots”, value being determined by the Spencer test. 100 I am satisfied that the Board did not "have regard to the respective values of the lots”. Rather, after rejecting the valuation evidence of each of the valuers, no regard is had to the value of the lots, but rather to other factors which, while going to value, did not constitute value. That the Board used the unit entitlements calculated by each of the valuers does not satisfy the requirement of s119(2). Averaging the two valuations, neither judged satisfactory, without any evidence that such an average would result in an accurate valuation of each of the lots, could not be said to "have regard to the respective values of the lots".
"It simply is not a permissible reading of the PV to cobble together odd references to features of the property or lots contained within the paragraphs rejecting the two valuers and then airily to suggest this satisfied the statutory obligation to have regard to the market values of each of the lots.
Nor is it helpful to talk of the board "doing the best it could". This is to confuse the task that the Board had with those cases where valuers or specialist valuation tribunals or Courts are bound to arrive at a specific value for land resumed or injuriously affected under entirely different statutory regimes. In this sense the reference to Bingham’s case is misleading. In this case the matter which the Board must first have regard to is specifically identified, and the Board is under no statutory compulsion to reorder unit entitlements." [Plaintiffs’ submissions in reply]
4.3(b) Was the dismissal of the comparable sales approach an error of law?
101 The Board had, in its Provisional View of 29 May 1998, dismissed both of the expert valuers’ evidence. In respect of Mr Gray’s valuation, the Board decided that:
102 The approach taken by each of the valuers was contained in the Stated Case at paragraph 2.9. That paragraph states:
"With Mr Grey’s (sic.) calculations, I found the difficulty, which I was unable to articulate clearly in discussion with Mr Young, that there were so many additions and subtractions, to allow for size differences, to allow for terraces and garages, vis a vis storage areas, to allow for 2-lot plans where one lot had no waterfrontage and/or no view, to pro rate total price over different types of lot (Castra Place), that it was difficult to see that anything could really be obtained, ultimately , from the calculations other than an average price per square metre for 1983 Eastern suburbs waterfrontage units. With his ultimate conclusion as to relative entitlements, based as it was on those calculations, I found that his empirical inquiry of comparison of each lot separately with "comparable" units in other waterfront buildings, led to conclusions that failed to reanchor the inquiry as a quest for the comparative values of each of the subjective lots relative to each other" [Provisional View page 5]
103 There are a number grounds upon which the Defendants asserts that the approach to valuation and the dismissal of the comparable sales approach by the Board is not an error of law.
"The Harrigan/Higgins report contained a definition of market value and stated:
"This valuation task needs to consider the sales of one bedroom units, two bedroom units and four bedroom units in a comparable location with waterfrontage, harbour and water views without garaging facilities and in order to interpret the then market we have considered numerous sales within the immediate vicinity of Double Bay and Darling Point.
and the Gray report listed a number of comparable sales of which it said:
The annexure of extract of strata plans, cancelled certificates of title, dealings and photographs marked "H" and numbered 1 to 98, are a collection of some of the relevant sales information collected and used as a guide as to the market value of each of the subject stratum".
"The only sales that could be considered comparable would have to be waterfrontage and then more weight must be given to smaller blocks.
Values of the subject units have to be discounted when drawing comparisons because of the poor pedestrian access, the number of stairs to be climbed and the absence of parking facilities of any kind".
A question of law?
104 First, the Defendants asserts that to the extent that the contentions of the appellant depend on a suggestion that in departing from any expert, the Board erred in law, that position is unsustainable because it is not an error of law. The valuation task, it is said, is one of fact; Woolf v City of Camberwell [1931] VLR 162 at 168. It appears that the Defendants relies on the approval given in that case by Lowe J to the judgment of Lord Halsbury in the case of Mersey Docks and Harbour Borad v Birkenhead Assessment Committee [1901] AC 175 at 180 which is quoted at 168 in Woolf v City of Camberwell:
105 Lowe J, however quotes extensively from Lord Halsbury and cites a number of other decisions before concluding, at 169:
"I am not aware of any rule of law or any statute which has limited [a valuer] as to the mode in which they shall arrive at [a valuation]. It is not a question of law at all - it is a question of fact."
106 The present case is, indeed, one in which the Plaintiffs assert that the Board misconceived what was involved in the term "valuation". That is a question of law and one rightly addressed by this Court (also see Woolf v City of Camberwell where it was upheld that the meaning of "valuation" within the appropriate valuation was a question of law: at 171 per Mann J).
"For the reasons which I have already indicated, it is only a matter of law when the Judge has shown that he has not applied the rule which the statute has laid down, or has misconceived what was involved in the term "valuation"."
What is the proper approach to valuation?
107 Secondly, the Defendants argued that the dismissal of the comparable sales approach to valuation by the Board did not constitute an error of law. The Plaintiffs on the other hand, asserts that value as a matter of law must be interpreted as market value according to the test in Spencer v The Commonwealth (supra). Having not strictly applied that test to the principles of valuation, the Board, on the Plaintiffs’ view, is in error. 108 In Spencer v The Commonwealth at 440-1 Isaacs J described the ‘value’ of land as:
109 According to her grounds of determination, the Board determined that value in s119 must mean "market value". This in itself is in line with the Spencer’s test. 110 However, the Board then chose to reject the valuations provided by the expert valuers of each party. In respect of the valuation proposed by the Defendants in the present proceedings, the Board determined:
"the fair price of the land, which a hypothetical prudent purchaser would entertain, if he desired to [441] purchase it for the most advantageous purpose for which it was adapted. … To arrive at the value of the land… we have… to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the Plaintiffs and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognisant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason howsoever in the amount which one would otherwise be wiling to fix as the value of the property… Having mentally placed itself in the position of the bargaining parties…. the question for the tribunal is, what is the point at which the parties would meet; what is the sum the one would be willing to give and the other to take?"
111 The Board was not satisfied as to the precise method of valuation by Mr Higgins. While the Board found Mr Gray’s valuation method "very transparent", she added that "that does not necessarily mean that it was any more acceptable, at least as a final solution". Later, the Board said of Mr Gray’s calculations:
"Mr Higgins’ conclusion is largely inscrutable, because his report does not disclose what steps he took in reaching it.": Provisional View, 23 May 1998, p. 4
112 The Board rejected the comparative sales approach saying:
"With his ultimate conclusion as to relative entitlements, based as it was on those calculations, I found that his empirical inquiry of comparison of each lot separately with "comparable" units in other waterfront buildings, led to conclusions that failed to re-anchor the inquiry as a quest for the comparative values of each of the subjective lots relative to each other": Provisional view, 23 May 1998, p. 5
113 As to whether further valuation evidence should be obtained to supplement or replace the valuations of Mr Higgins and Mr Gray, the Board said:
"sales price of units in the subject parcel or of comparable lots in other strata plans would not ordinarily alone determine market value, since sale price differentials may reflect, inter alia, internal refurbishment in one lot and not another": Amended Stated Case paragraph 3.3
114 Since the Board had, therefore, determined that there were no comparable sales from which the respective values of the units could be estimated, the Defendants submits that the Board was entitled to ascertain the value ‘doing the best it could on the materials before it’: See Bingham v Cumberland County Council (supra) at 18-19. 115 In Bingham’s case, the claimant sought compensation for injurious affection under now-repealed provisions of the Local Government Act 1919, as amended. The part of that judgment referred to by the Defendants is concerned with the method of ascertainment of the value of land affected by the local development scheme. After referring to the proper test for valuation of land as laid out in Spencer’s Case, and the comparative sales approach also adopted in Raja Vyricherla Narayana Gajapatiraju v Revenue Divisional Officer, Visagapatam ("the Raja’s Case") (1939) AC 302, Sugerman J said:
"It is obvious, at the end of the day, having regard to the significant disparity between Mr Higgins’ and Mr Grey’s conclusions as to relative unit entitlements, both of them being eminent and expert in their field, that should further valuations be sought they are as likely to be equally divergent, or at least that a renewed exercise under s119 with other expert valuers is likely to be disproportionately expensive to the likelihood of certainty of result.": Provisional View, 23 May 1998, p. 5
"Special difficulties may exist in the application of these principles to the ascertainment of market value in cases such as the present. The affected "market value" is referable to an actual market in the sense earlier stated. But only a limited amount of land in a given locality may be affected in the way which is in question. Sales which are sufficiently close in time, unaffected by changes of circumstances or other extraneous considerations, and of sufficiently comparable properties may, therefore, be few or non-existent. So far as they do exist they may be so inconsistent with each other as to preclude any reliable inference…. The unaffected "market value" is, as I have said, referrable only to a suppositious and not to an actual market. It may however be possible to obtain guidance from evidence of the prices obtained on sale in a market not significantly different or differing only to an extent for which appropriate adjustments may readily be made…
116 While this may appear to assist the Defendants, it must be borne in mind that Sugarman J was discussing the ascertainment of an ‘affected’ and ‘unaffected’ value of a particular piece of land. The ‘affected value’ of the land was the value of the land at the time the development scheme came into operation. The ‘unaffected value’ of the land was the value that land would have had if the scheme had never proceeded. Similar circumstances do not exist in the present case. First, in the present case, there was, before the board, Mr Gray’s valuation based on the comparable sales value of the property (adjusted by a number of factors). That valuation was dismissed by the Board. Secondly, the scheme contained in s119 does not place an obligation on the Board to make a new allocation of unit entitlements. Section 119(1) gives the Board a discretion so to make or refuse an order and certainly may decline to make an order if not furnished by the parties with the materials to perform the statutory task. Section 119(2) provides the conditions placed on the Boards discretion in subs 1. The Board is not, therefore, in the situation of "having to do the best it can" as was the case in Bingham. A similar distinction can be drawn between the present case and that of Harris v Minister for Public Works (1912) 12 SR(NW) 149. 117 The Defendants argue, however, that comparable sales method of valuation is a method only "applicable in cases where sales evidence of other properties directly comparable with the subject one is available, or where reasoned, minor adjustments can be made when applying the evidence to take into account points of difference between the evidence and the subject property": Fricke (ed), “Compulsory Acquisition of Land in Australia” (LBC, 1982) at 344-5. The material before the Court, it is argued, makes it clear that the Board found as a matter of fact that market comparison evidence was not of assistance, inter alia, because the adjustments required by Mr Gray’s method were not minor. The question apparent from the contention is whether that dismissal was due to an error of law on the part of the Board. As explained above, an error of law in these circumstances can only arise where the Board misinterpreted its statutory duty. If the statute can be said to afford other meanings to the word "value" than "market value obtained by the method of comparable sales", then the Plaintiffs’ contention is not made out. While the provisions of the Act do not make clear whether "value" is to be understood in a certain sense, we are preceded by Spencer’s Case, which remains the authoritative statement as to the meaning of "value". Can it be said that the dismissal of the comparative sales approach by the Board runs foul of the principle in Spencer’s case? 118 The facts of Spencer’s case were that there was no way to determine the piece of land in question by reference to comparable sales. While the test referred to above holds the Board to the mental process therein described, it does not constitute a rule that the comparable sales method is the only valid method of ascertaining a ‘value’: see, for an application of this principle, Dixon v City of Glenorchy (1978) 15 LGRA 407 (especially at 417). 119 The contention that the Board erred in law merely by dismissing the comparable sales approach is not, therefore, made out; but see under 4.3(c) below as to whether there was no evidence on which to dismiss comparable sales, itself leading to error of law.
In the absence of sufficient guidance to be had from sales, the valuer may find himself in a position resembling that to which Lord Romer referred in the Raja’s Case in which he "will have no market value to guide him, and he will have to ascertain as best he may from the materials before him what a willing vendor might reasonably expect to obtain from a willing purchaser for the land." In these cases that would not be because the land possessed, in terms of Lord Romer’s judgment, "some unusual, and it may be unique, features as regards its position or its potentialities" but because it derived a certain uniqueness from the character of the provisions and restrictions affecting it and the consequences of the affection, which would take a sale of it outside the ordinary run of transactions in otherwise comparable lands and thus preclude direct comparison.": at 18
Which sales are comparable?
120 Thirdly, the Defendants argue that the question of which sales are comparable and which are not is a matter of degree and a question for the expert and, therefore, a matter of fact. 121 While it can readily be accepted that whether a certain sale is comparable to the property in question is a question of fact, the contentions of the Plaintiffs do not require this Court to determine whether the sales were, indeed comparable, only that the method of comparable sales should not have been dismissed. That question, as explained above, is a question of law.
4.3(c) No evidence on which to dismiss comparable sales?
122 The Plaintiffs assert that the Board erred in law by dismissing the comparable sales method on the grounds that there was no evidence of refurbishment that might justify the Magistrate’s finding in paragraph 3.3 of the Stated Case. 123 Paragraph 4.3(c) of the stated case contains the words "when neither valuer dismissed the comparable sales method on that ground and there was no evidence of such suggested internal refurbishment". The Defendants submit that this Court should not accept this paragraph as stating any ‘ultimate fact’ determined by the Board but merely as an assertion on the part of the Plaintiffs. 124 In light of my decision above that points going to a ‘no evidence’ argument on the part of the Plaintiffs are questions of law, the ‘fact’ of whether the Board made a decision without the aid of any anterior finding of fact is one capable of determination by this Court. A proposition which is not merely colourable that there was no evidence by which a Board could have reached its decision or made a material finding does raise a question of law. 125 Was there evidence before the Board, then, upon which it could have made the determination that "sales price differentials may reflect, inter alia, internal refurbishment in one lot and not another"? Since the evidence before the Board was admitted before me for the purpose of determining this question and since the Defendants did not identify any evidence contrary to the Plaintiffs’ assertion that there was no evidence of internal refurbishment, I find that there was no evidence to support the determination of the Board in paragraph 3.3. The Board’s determination in paragraph 3.3 of the Stated Case therefore constitutes an error of law.
4.4 Was the Board’s test of value a valid one?
126 Paragraph 4.4 of the Stated Case reads:
127 The rejection of the comparative sales approach and the adoption of a floor area approach is said to be erroneous. Instead, the Board substituted a value according to a test explained in the Provisional View of 23 May 1998 at paragraph 4.7:
“4.4 In respect of grounds of determination 3.9 and 3.10 (and of the criticisms of Mr Gray therein):
(a) I erred in law in finding that the proper exercise for a valuer such as Mr Gray was to arrive at what a prospective willing but astute or cautious buyer, neutral as to number of bedrooms and bathrooms required, who wanted to buy one or all of the units in this particular block would pay for each of them as against the other two, in the state the common property was in in 1983;
(b) Likewise I erred in law in criticising Mr Gray’s empirical approach comparing each lot separately with other "comparable" units in other waterfront buildings rather than searching for the comparative values of each of the subjective lots relative to each other."
128 The determinations complained of in the stated case, then, read:
"Ultimately, the exercise is not to arrive at what price buyers seeking respectively a large one bedroom, large two bedroom and large ¾ bedroom two and a half bathroom Eastern suburbs waterfront strata title would respectively have paid for units in 1A Wiston Gardens, compared with other Eastern suburbs waterfront apartment blocks… Rather it is to arrive at what a prospective willing but astute or cautious buyer, neutral as to number of bedrooms and bathrooms required, who wanted to buy one or all of the units in this particular block would pay for each of them as against the other two, in the state that the common property was in 1983."
129 At the outset it is necessary to point out that the contention at paragraph 4.4 is considerably different to the contention at paragraph 4.3(b). That paragraph concerned merely the dismissal of the comparative sales approach. Paragraph 4.4, on the other hand, deals with the test of valuation as enunciated by the Board. 130 There are two ‘benchmarks’ to which the Board’s test of value must comply. The first is the requirements of s119(2). While s119(2) does not contain a test for or definition of ‘value’, it does indicate that the relevant values of the lots are the "respective" values of the lots. As determined above, the word "respective" in the context of s119(2) means ‘particular’. Any test, then, must be concerned with finding the particular value of each of the lots in the property. The Board’s test of value expressly disavows this principle determined as it is by the statute. In this respect, the test suggested by the Board is erroneous in law. 131 The second benchmark is the benchmark of ‘value’. Spencer’s Case as extracted above is the applicable principle for the valuation of land with Boland (supra) a recent warning against unnecessary glosses. The question, then, is whether the test for value applied by the Board complies with the Spencer test. The Board’s reference to a "prospective willing but astute or cautious buyer" cannot be said to be erroneous. However the caveat that they be "neutral as to number of bedrooms and bathrooms required" takes the hypothetical buyer outside that described by the Spencer test, as one being "cognisant of all circumstances which might affect [the land’s] value…". 132 The approach is, therefore, erroneous at law as it misconstrues the statutory requirements of s119(2) of the Strata Titles Act and strays from the meaning of "value" as espoused by the High Court in Spencer’s Case.
"3.9 I found that Mr Gray’s method was more transparent but that did not mean it was any more acceptable at least as a final solution. I found that the proper exercise was to arrive at what a prospective willing but astute or cautious buyer, neutral as to number of bedrooms an bathrooms required, who wanted to buy one or all of the units in this particular block would pay for each of them as against the other two, in the state that the common property was in in 1983.
3.10 I found that Mr Gray’s empirical enquiry of comparison of each lot separately with "comparable" units in other waterfront buildings led to conclusions that failed to reanchor the enquiry as a quest for the comparative values of each of the subjective lots relative to each other."
4.5 Was it an error of law to base an order on the mean between the opinions of two rejected valuation?
133 Paragraph 4.5 of the Stated Case reads:
134 In the Provisional View of 23 May 1998, the Board considered that neither the parties’ valuations were "completely satisfactorily performed". Having found that neither valuer’s evidence was satisfactory, however, the Board did, in the final result use the valuations in the calculation of the unit entitlements derived from floor area and the mean of the unit entitlements from the two valuations. 135 This was, on the submission of the Plaintiffs, an error of law on the part of the Board. The Plaintiffs assert that since the Board found the two valuers unacceptable then logically it could not make or derive a unit entitlement which was a mean between the unacceptable. The Plaintiffs assert that this, in the absence of further findings that the unit entitlement also reflected an accurate value of the lots, amounted to an error of law. 136 The Defendants, on the other hand, maintain that the Board did not "base in part an order under s119(1) Act on a mean between the opinions of two valuers". It is however self-evident that the Board did, in part base its final conclusion on a mean between the unit entitlements calculated by each of the valuers: see paragraphs 3.13-3.20 of the Stated Case. 137 Further the Defendants assert that, however the unit entitlements were reached, the calculation involves a question of fact and not of law. Once again, where there is no evidence before the Board on which to base the conclusion that the mean of the valuer’s unit entitlements reflected the true value of the lots, that is a matter involving a question of law. 138 It being clear that there was no evidence on which to base the Board’s determinations as referred to in the Plaintiffs’ contention at paragraph 4.5 of the stated case and in the light of the Board’s determinations at paragraphs 3.7 and 3.8 of the stated case, the Board has erred in law.
"4.5 In respect of grounds of determination 3.15, 3.16, 3.17, 3.19 and 3.20 I erred in law in basing in part an order under s119(1) Strata Titles Act on a mean between the opinions of two valuers when:
(a) I had made findings 3.7 and 3.8;
(b) I had made no finding that their valuations were equally wrong lot by lot."
4.6 Should the Board first determine respective values?
139 Paragraph 4.6 of the stated case reads:
140 It is asserted that without first determining the value of the units, the discretionary power under s119(2) could never be enlivened.
"4.6 In respect of grounds of determination 3.19 and 3.20 I erred in law in making an order pursuant to Section 119(1) without first determining the respective values of each lot under Section 119(2)"
A question of fact?
141 The Defendants first asserts that paragraph 4.6 involves a question of fact and not law. This is clearly wrong. Whether s119(2) requires the Board to carry out a calculation of value before making an order pursuant to s119(1) is a question of statutory construction and is a question of law.
A precondition?
142 Secondly the Defendants argues that s119 contains no principle that the board needs to calculate and make a determination as to the respective values of the lots before moving on to calculate unit entitlements. 143 This was dealt with above in relation to contention 4.3(a). 144 It is sufficient to point out here that it is clear that “having regard to the respective values of the lots” is a precondition of the exercise of the power in s119(1). Thus it is true to say that the Board is first required to have regard to the respective value of the lots. Secondly, the Board is to consider whether the unit entitlements allocated at the date of registration of the strata plan or strata plan of subdivision were unreasonable or have become unreasonable. After those two matters have been considered, and only after those matters have been considered, does s119(2) enliven the power in s119(1) to change the allocation of unit entitlements.
The only requirement is that the request was not "unreasonably made".
145 Third, and counter to the Plaintiffs’ assertion that value needs to be determined as a precondition for the Board’s exercise of power under s119(1), the Defendants argue that if any precondition to the exercise of that power exists, it is the requirement to dismiss applications where the original unit allocations were not "unreasonably made": s119(2). It is submitted that the use of the word "unreasonable" suggest that the section is not concerned with absolute arithmetical accuracy as to values. The Defendants go on to submit that "the section [ie s119] leaves room for discretionary matters… and the Board is not bound, as a matter of principle to change an original allocation simply because the Board would have reached a slightly different allocation". 146 That group of submissions does not meet the Plaintiffs’ argument. The fact that there are requirements in addition to the requirement to ascertain value does not rule out the existence of the valuation requirement if it can otherwise be truly said to exist. Furthermore, it is not the Plaintiffs’ submission that determined value binds the discretion of the Board to change the unit allocations. It is, rather, that the Board cannot exercise that discretion unless and until it has a determined valuation for each lot on which to base that discretion.
4.7, 4.8 & 4.9 Was the Board functus officio and should it have accepted further written submissions?
147 The Stated Case contains the following contentions:
148 In the provisional view of 23 May 1998, the Board concluded:
"4.7 In respect of 3.20 I erred in law in holding in my Order of 29 July 1998 that following publication of my Reasons of 23 May 1998 I was functus officio in respect of the issue of the proper construction of Section 119 or any other issue.
4.8 In respect of 3.20 I erred in law in not accepting the written submissions of the parties concerning the proper construction of Section 119 and other matters as referred to in those submissions.
4.9 In respect of 3.20 I erred in law in that if I was intending by Reasons of 23 May 1998 to give the parties the choice of three alternative allocations I consider satisfactory and/or the opportunity to obtain and adduce further valuation evidence, I erred in law in communicating my Reasons of 23 May 1998 in its terms as set out in 3.19 and offering the parties only the opportunity to make further written submissions."
149 Furthermore, attached to the Stated Case, there was a facsimile sent from the Strata Titles Board, by the Clerk of the Board dated 26 May 1998 to the solicitors for the Plaintiffs in the present matter. That document contained the words:
"This represents my provisional view of the state of the evidence before me and the conclusions I would draw from it, provided for the assistance of the parties. Unless I receive further submissions in writing from the parties within 28 days, I shall make orders specifying a reallocation in terms of the provisional conclusion on that date.": Provisional View 23 May 1998, p.6
150 In a statement of orders on 29 July 1998, the Board said:
"If you choose to make further written submissions, these will be required to be filed at this Office by 22 June 1998"
151 The Plaintiffs says that in so refusing to consider the further submissions, the Magistrate erred in two ways.
"I thank Messrs Young and Bouris respectfully for their further submissions, received by me on 30 June, a few days before I went on leave.
It seems that my final paragraphs under the head CONCLUSION in my reasons dated 25 May 1998 in this matter have been misunderstood by both legal representatives, no doubt due to a lack of clarity in my choice of words. I was not inviting submissions as to the correctness or otherwise of my conclusions as to the proper construction of s119. They were final judicial determinations, in respect of which I considered myself functus, and as such my determinations reviewable only by the Supreme Court.
Rather, I was seeking to give the parties the choice of three alternative allocations I considered to be satisfactory; or the opportunity to obtain and adduce further valuation evidence on the basis of my construction of s119.
In the event it seems clear there will be no agreement or further evidence."
The Board was functus
152 First the Plaintiffs asserts that the Board made an error of law in that it was not, as it decided, functus in respect of the provisional view of 23 May 1998. 153 In respect of whether the board truly was functus of the issues raised in the 23 May 1998 Provisional View, it is submitted on behalf of the Plaintiffs that since no order had been made under s119 until the publication of the orders of 29 July 1998, according to common law principles, no court or tribunal could be functus as determined by the Board. 154 The Board, in its final orders of 29 July 1998, said, of the determinations contained in the Provisional View: "They were final judicial determinations, in respect of which I considered myself functus, and as such my determinations reviewable only by the Supreme Court". It is clear that the Board considered itself functus according to the normal judicial application of the word. 155 A court does have power to alter its judgment prior to entry of that judgment: Autodesk Inc. v Dyason (No. 2) (1993) 176 CLR 300. Furthermore where no judgment in terms has been handed down, there is not even anything to alter, or to be the subject of res judicata or issue estoppel: compare in the context of an appeal to this Court from a Taxing Officer, Wentworth v Wentworth (Santow J, [1999] NSWSC 638, 29 June 1999, unreported) as to the status of a judgment entered or not yet entered and the scope for re-opening or varying such a judgment. 156 In the present circumstances, the Board could not at the time be said to be functus of its determinations as to the construction of s119. It had not made any orders, even of an interim type to that effect. Nor had it handed down a judgment. There were no orders certified and served as such on the body corporate (see s144 Strata Titles Act 1973). Furthermore, the Board in terms of the invitation it made, expressed itself open, at least, to further submissions on its factual findings and conclusions as to unit entitlements (see Orders of 29 July 1998). Given that the Board was not functus of those determinations, it could not be said that it was functus of its determinations as to the construction of s119 when it had not made any orders in respect of those matters or issued what could in terms constitute a judgment or final determination. 157 In respect of paragraph 4.9 of the Stated Case, the Defendants argue that since there was no obligation on the Board to invite the parties to adduce further evidence, the words of Provisional View were enough to constitute the Board’s judgment and orders. In respect of the matters of construction, being those matters which the Board as at 29 July 1998 considered itself functus, it is impossible to see those determinations as constituting a final judgment or determination, when headed “Provisional View” and accompanied by the invitation to make further submissions nor as constituting orders on those matters. 158 The Board was in error at law in deciding, in its orders of 29 July 1998, that it was functus in respect of the construction of s119 in its Provisional View of 23 May 1998.
A denial of procedural fairness.
159 Secondly, the Plaintiffs asserts that this error resulted in a denial to the Plaintiffs of procedural fairness in that the Board had, in its Provisional View of 23 May 1998, represented that it would receive further submissions and then at 29 July 1998 refused to countenance such submissions. The Plaintiffs’ claim that, misled by the terms of the Provisional View and the letter of 26 May 1998, they relied on their supplementary submissions and did not pursue the matters referred to in the Board’s order of 29 July 1998. They were denied, they say, the chance to properly argue their case. The Plaintiffs maintain that even if the Board had not stated the view of 23 May 1998 to be a "provisional" view, "so radically different was [the Board’s] view of the nature of the Board’s function under s119(2) that [the Plaintiffs was] entitled to be heard" [T, 64:45]. While the Board could have, it is argued, published its Provisional View as its final reasons and order, it did not do so. 160 In further support of this second argument, both the Plaintiffs and Defendants, acting reasonably, interpreted the Provisional View and the letter of 26 May 1998 as allowing further submissions on the issues covered in the provisional view, including the construction of s119 of the Strata Titles Act 1973 (see T, 74, where Mr Bouris conceded that the Provisional View misled both sides). Was the Board then required, by the insistence of natural justice, to observe the audi alteram partem rule? 161 The audi alteram partem rule, being an expression of the fair hearing principle, means that, for example an arbitration must allow each party to comment on and contradict the material offered by an opponent (unless the parties otherwise agree): T A Miller Limited v Minister of Housing and Local Government [1968] 2 All ER 633 (there the ‘material’ was hearsay evidence). 162 Having erred in deciding that it was functus in respect of the construction of s119, the Board was in truth capable of accepting further submissions as to the construction of s119. That it did not, in the result, consider those submissions might be said to have disadvantaged each party equally, and in a way that was inherently possible under s132(2) of the Act in any event. Thus s132(2) of the Act allows the Board to inform itself "with or without any hearing". However, that cannot be determinative in these circumstances. The effect of representing that such further submissions would be considered does have the effect of creating a legitimate expectation in the minds of the parties that the Board would consider those submissions and represents an exercise of the power so to order its proceedings. The representation of the Board, as contained at paragraph 3.20 of the Stated Case, clearly had a bearing on the way in which the parties chose to argue their case (for example, see the further submissions of both parties attached to the Stated Case). To subsequently dismiss those submissions and not give an opportunity to the parties to make further, amended submissions on the matters of fact considered by the Board (see Orders 29 July 1998), was to deny the legal representatives before the Board proper opportunity to argue the case to the best of their ability and in the interests of their clients in accordance with the legitimate expectations engendered. To represent, as the Board did, that it would countenance further submissions in such broad compass as indicated in the Provisional View of 23 May 1998 and then to refuse to consider those submissions or allow further submissions by the Order of 29 July 1998 was, prima facie, in breach of the rules of procedural fairness. 163 Before I decide finally on this matter, though, it is necessary to address the arguments raised by the Defendants in respect of this natural justice point. 164 The Defendants’ first argument is that the denial of natural justice point was not taken by the Plaintiffs (see Defendants’ Written Outline of Submissions 8 February 2000 paragraph 4.8), is clearly wrong. The issue is raised in the Plaintiffs’ contention at paragraph 4.9 of the stated case. The Plaintiffs took the point at paragraph 29 and 30 of its "Outline of Plaintiffs’ Submissions". 165 The Defendants further submit that whether or not the Board was functus of the issues in the Provisional View as of 2 July 1998, there has been no denial of procedural fairness. Firstly, it is argued that even if the Board had allowed the further submissions, the orders of the Board would have remained as they now stand. Secondly, it is asserted that while the words of the Provisional View of 23 May 1998 in respect of further submissions were not clear, in the absence of any requirement of law to give the parties an opportunity to submit further evidence and submissions, that the case of the parties had been concluded as of 23 May 1998 and there was no error of law in not giving countenance to those further submissions. 166 I have ruled above that the Board was not functus following publication of the Provisional View on 23 May 1998. It could not, therefore, be said that, as of that date, the case of the parties had been concluded. 167 In respect of the submission that the Board’s decision would remain the same even if further valuation evidence had been obtained, it is impossible for this Court to determine either way that such evidence would have influenced the Board’s conclusions. If the Board continued to labour under the misconstruction of its task as laid down in s119 of the Act, it seems likely that the Board would have, even in the face of further valuation evidence from the Plaintiffs, reached at least a similar conclusion. However, this Court does not and cannot have before it the evidence necessary to make a determination on this matter. Furthermore, the suggestion that Courts should overlook breaches of natural justice where, in the absence of such breach, the outcome may have remained the same, has been widely criticised (see Aronson & Dyer Judicial Review of Administrative Action (LBC, 1996) at 486-489). The present circumstance is not a "technical breach" of procedural fairness (as was suggested in the case of R v Chief Constable of the Thames Valley Police; Ex parte Cotton [1979] 77 LGR 689 at 350-1). Nor is it a circumstance where the outcome is a foregone conclusion (such as in Mobil Oil Canada Limited v Canada Newfoundland Offshore Petroleum Board (1994) 11 DLR(4th) 1). Furthermore, this present case is diametrically opposite to the situation in Stead v State Government Insurance Commission (1986) 161 CLR 141, where the High Court said:
168 In this case I have already decided that the approach at law of the Board was fundamentally flawed. That the Board might reach the same conclusions at it did even if it had proceeded according to the principles of procedural fairness can, therefore, have no bearing on whether the Plaintiffs’ contention is made out nor on whether I should remit the matter for re-determination. 169 As to the argument that there was no requirement at law to give the parties an opportunity to submit further evidence and submissions, it is clear that while no such requirement does exist, a legitimate expectation in the parties that further submissions would be considered did arise out of the Board’s own representations. Even if not a right in itself, that legitimate expectation is an interest protected by the rules of procedural fairness. The Board’s refusal to admit the further submissions of the parties and its indication that there would be no further evidence (see Orders 29 July 1998), therefore, constitutes a breach of procedural fairness and an error of law.
"By way of illustration, if all that happened at trial was that a party was denied the opportunity of making submissions on a question of law, when, in the opinion of the appellate court, the question of law must clearly be answered unfavourably to the aggrieved party, it would be futile to order a new trial": at 145 (per Mason, Wilson, Brennan, Dean and Dawson JJ) as cited in Aronson & Hunter.
4.10 Did the Board err in law by not dismissing the claim on the basis that the valuation evidence was insufficient?
170 Paragraph 4.10 of the Stated Case reads:
171 The Plaintiffs’ contention here relies on the earlier contention that it was necessary for the Board to determine the value of each of the apartments before proceeding to calculate the unit entitlements. The Plaintiffs’ argument is that in the absence of any valuation evidence satisfying the Spencer test, the Board should dismiss an application under s119 for re-allocation of unit entitlements. That is, when a party cannot lead evidence of value according to the Spencer test of value, that party must necessarily fail. 172 The Defendants point out that evidence given by the valuers going to value, including evidence as to access, aspect, light and air and livable and potentially livable area, were considered by the Board. The Defendants maintain that these were sufficient for the Board to reach a valid determination according to the requirements in Bingham. 173 As discussed above, Bingham’s case was about the proper test for valuation. It does not stand as authority for the proposition that in certain circumstances value does not need to be calculated as long as factors going to value are considered. Furthermore, while valuation may have been difficult in that case, such difficulty did not excuse the relevant authority from calculating a value where the express words of the statute required it. Bingham does not assist the Defendants here. 174 The Defendants also adopts submissions made by it before the Board [FLA 19]. The adoption of paragraph 3 of FLA 19 seems to be an inference that the Defendants submit that in certain circumstances, courts have rejected valuations based on comparable sales. 175 First the Defendants cites Leichardt Municipal Council v Seatainer Terminals Pty Limited & Glebe Island Terminals Pty Limited (1981) 48 LGRA 409 at 435 where Hope JA says:
"4.10 In respect of the whole of my grounds of determination I erred in law in not dismissing the application on the basis that the valuation evidence of the parties was insufficient to ground an order reallocating unit entitlements under Section 119 of the Strata Titles Act 1973."
176 Second, the Defendants cites Crompton v Commissioner of Highways (1973) 32 LGRA 8 at 23-4 per Wells J:
"Whether the differences between land the sale of which is to be relied upon and the land to be valued are so great that the land the subject of the sale cannot be regarded as comparable is a question of fact and degree. The difference may be so great that a court may be constrained to hold that the land is in no sense comparable, and that the adjustments which have to be made are so great that the sale can provide no evidence of the value to be determined, and no basis upon which that value can be assessed"
177 These cases do not assist the Defendants. While they do bear upon the usefulness of comparable sales evidence in the valuation of a property, it has nothing to say as to whether, having on its own admission no satisfactory valuation evidence to go on, the Board could order a re-allocation of unit entitlements under s119(1). 178 Of the other paragraphs in the submissions in FLA 19 referred to in 4.10 of the Defendants’ Submissions of 8 February 2000, the Defendants has not demonstrated their relevance to the present proceedings. The following words, however, do appear in paragraph 24 of FLA 19:
"Obviously, no two sales of land will be found to be the same, or even similar in all respects. Those that bear a close similarity to the assumed sale of the subject land will be more reliable than those whose similarity is less proximate and in respect of which adjustments or allowances must be made before they can be safely introduced into the valuation process. At a particular point it ceases to be safe or sound to treat them as sufficiently similar to the assumed sale of the subject land, and they must henceforward be rejected."
179 I have decided above that the Board, before it can order a re-allocation of unit entitlements, must have before it a value to which it can have regard. While the valuation of the valuers may be disregarded for various reason (as a matter of fact), it is true that the Board cannot proceed under s119(1) before it has had regard to the values of the lots. The words of the statute are clear on this point. It is also true that Spencer’s Case is authority for the basis of a proper valuation of land. A "value" in the sense determined in Spencer’s case must be before the Board. Valuations of the lots are an important matter, as pointed out by the Defendants in FLA 19. All the more reason why s119 of the Act should be read according to its terms, to require the Board to have regard to the respective values of the lots before making orders to reallocate unit entitlements pursuant to s119(1).
"It is submitted that only in very extreme circumstances, not applicable to this case, should the Board decline to make an order under section 119(2), given that other implications arise from a decision as to the proper valuation of lots, for example, the issue of land tax and other imposts. Whilst the Commissioner of Land Tax is empowered under section 65A of the Land Tax Management Act 1956 to seek an order for reallocation of unit entitlements in a strata scheme and other bodies may apply under s 119(3)(c) (including local councils), if the Board has before it evidence that such an allocation is unreasonable, then the Board ought to seek to give effect to that evidence not only as between the parties but ultimately having regard to the fact that third parties do rely on proper valuations being in place and that such reliance ought to be reliance on a correct state of affairs, as a matter of public policy"
4.11 Did the Board err in law by failing to consider the estoppel argument raised by the applicants?
180 The provisional view and orders of the Board did not deal with any estoppel argument on the part of the Proprietors of Strata Plan 10294. The Plaintiffs in the present proceedings asserts that it had made a submission based on estoppel and that it was an error of law on the part of the Board not to give reasons in respect of that submission. 181 The contention at paragraph 4.11 of the Stated Case reads:
182 The Plaintiffs argue that the Board, while an administrative body, is exercising a quasi-judicial function and therefore is required to give reasons for its decision. That requirement to give reasons is also said to arise from the existence of a right of appeal from the Board. In Sun Alliance Insurance Limited v Massoud [1989] VR 8 at 18, Gray J writes that "that the law has developed in a way which obliges a court from which an appeal lies to state adequate reasons for its decision". Furthermore, in Xuereb v Viola (1989) 18 NSWLR 453 at 469, Cole J writes that "natural justice requires that a referee give reasons for his opinion … [The reason being] that it enables the parties and the disinterested observer to know that the opinion of the referee is not arbitrary, or influenced by improper considerations but is the result of a process of logic and the application of a considered mind to factual circumstances." 183 Firstly, the Defendants maintains that the Strata Titles Board is not a body which comes under the duty at law to give reasons for its determination. The Defendants assert, citing Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 at 662 (per Gibbs CJ with whom Wilson J and Brennan J agreed); at 675-676 (per Deane J), that as a statutory decision-maker, the Board does not need to give reasons for its apparent rejection of the estoppel argument. The Defendants further assert that since the board is not a judge or a magistrate and since there is nothing in the Act to give rise to a contrary conclusion, the Board is not under a duty to give reasons either generally or with respect to the estoppel argument. The Defendants also point to the informality of the procedures before the Board and the fact that many of the disputes before the Board are relatively minor neighbourhood disputes. 184 The Act contains no express statutory duty on the Board to give reasons for its orders. Indeed the Act is wholly silent on the matter. In the case of Re Saunders [1993] 2 Qd 335, Derrington J dealt with an argument in similar terms to the present. In that case the argument on one side was that the failure of the Queensland Strata Titles Board to give reasons was an error of law according to various authorities including Pettitt v Dunkeley [1971] 1 NSWLR 376 and Sun Alliance Insurance Limited v Massoud (supra), 19. In reply, "the respondent referred to Public Service Board of New South Wales v Osmond (supra), in which it was held that general rules of common law or principles of natural justice required reasons to be given for administrative decisions, even those made in the exercise of a statutory discretion and liable adversely to affect the interests, or defeat the legitimate or reasonable expectation of others"; Re Saunders per Derrington J at 338. Derrington J in Re Saunders went on to distinguish Osmond’s Case on the ground that "that decision was directed to matters of natural justice, whereas the present issue is directed to a duty of a quasi-judicial tribunal to state reasons where there is a right of appeal from its decision". That states the issue before this Court. While the Board may not be a ‘quasi-judicial’ body, it is at least exercising a ‘quasi-judicial function’. On that question, Derrington J decided as follows:
"4.11 I erred in law in failing to consider or make findings or a determination in respect of the submission of the Respondents that the Appellants were estopped from seeking an alteration of the unit entitlements under Section 119 by the long existence of the existing entitlements, their acquisition of their lot with knowledge of those entitlements and their continuing to take advantage of those existing entitlements by only paying one third of levies to the detriment of the Respondents."
To this the Defendants respond that there was no duty to give reasons, or at any rate reasons as to this particular contention.
Does the Board have a duty to give reasons?
185 Similarly, here, the Board, in light of the right of appeal, should have given reasons for its dismissal of the estoppel point, as it could have been determinative of the result, if decided in favour of the Plaintiffs. 186 Second, the Defendants argues that Pt 51B, r9(b) of the Supreme Court Rules "by inference, supports the proposition that just because there may be an appeal or case stated procedure, it does not follow that reasons must be given" [Defendants Outline of Submissions 8 February 2000 paragraph 4.11]. That rule states:
"… because there was evidence upon the point the Tribunal should also have stated its findings of fact and reasons for them. Technically, there should also have been an account of the reasoning in principle upon the issue …. The difficulty on appeal resulting from this deficiency is obvious and explains the principle requiring the giving of reasons.": at 339
187 The Rules, therefore contemplate a situation of appeal from a tribunal where that tribunal has not made written reasons. The Rules, however, cannot be said to determine the question whether the Board in this case was required to give reasons. The requirement to give reasons rests in the Board itself, and cannot be said to be altered by some general statement about the requirements of a Plaintiffs before a Court of Appeal.
"9 The Plaintiffs shall, unless the Court otherwise directs…. file an affidavit exhibiting:
(a) a copy of the transcript of the proceedings in the tribunal below unless a transcript cannot be obtained in respect of proceedings of that type; and
(b) a copy of the reasons for decision in the tribunal below, unless the tribunal below has not given, and does not intend to give, written reasons ." [my emphasis]
Should the estoppel argument be remitted to the Board?
188 The Defendants submit that the estoppel argument would be destined to fail and should not be remitted to the Board notwithstanding any finding as to whether the Board should have given reasons for its dismissal of the argument. The Defendants argue that the estoppel "runs the wrong way". 189 In the case, referred to above, of Re Saunders, Derrington J ruled that, while the failure to give reasons on the part of the board in that case did amount to an error of law, the defect was not fatal "because the evidence is all one way and as there is no reason to doubt it, it would have been wrong in law to find to the contrary": at 339. 190 The argued estoppel, as contained in paragraph 4.9, is based on the long existence of the existing entitlements, the Defendants’ acquisition of their lot with knowledge of those entitlements and the Defendants’ continuing to take advantage of those existing entitlements by only paying one third of levies to the detriment of the respondents. Framed in that way, the Plaintiffs’ estoppel argument was asking the Board to estop the Defendants from moving from a position of advantage to a position of disadvantage and to the advantage of the Plaintiffs. Unstated, although also evident, is that the estoppel also sought to stop the Defendants from moving from a position of minority voting power to a position of greater or even majority voting power at the meetings of the Body Corporate. 191 Either way it is difficult to see how the Plaintiffs’ estoppel argument could succeed. This is in the absence of any unconscionable behaviour on the part of the Defendants and when continuing in residence at the lot does not constitute a representation sufficient to raise an estoppel either in the sense of Thompson v Palmer (1933) 49 CLR 507 at 547 or in the promissory estoppel sense: see Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387 at 417. There is also no right in the Plaintiffs to maintain the original unit entitlements. Indeed such a right could clearly not exist — s119 of the Act refutes any such proposition. 192 I therefore conclude in a manner similar to that of Derrington J in Re Saunders that, even if the failure to give reasons for the dismissal of the Plaintiffs’ argument in relation to estoppel did constitute an error of law, it is not of itself one which merits remitting to the Board for determination anew.
5 Was the Board’s determination erroneous in point of law?
193 I am satisfied for the reasons set out earlier that the Board erred in law these respects:
194 The Defendants submit that, in the event that this court finds that the Board did err in law, the Court should still dismiss the Summons on the grounds that the ultimate outcome of the case was not affected by those errors. In support of this, the Defendants cites Sangster v Henry (1920) 37 WN(NSW) 135 and Ex parte Sharah; Re Cox; Potato Marketing Board v Sharah (1956) 73 WN(NSW) 283 at 290. 195 In Sangster v Henry, the court considered that the magistrate had made an error in law by applying the words "without reasonable cause" to the whole of the legislative provision where it was clear from the terms of the statute that it was meant only to apply to the first half of that provision. The words statutory provision in that case, however, meant that a similar standard to "without reasonable cause" would apply to the second half of the provision and, given, the facts before the magistrate, it was evident that the same result would be reached. The case was considered not one to be remitted to the magistrate. 196 The case of Ex parte Sharah involved an appeal from a Magistrate in respect of one conviction of on accused and the acquittal of his accomplices under the Marketing of Primary Products Act 1927-1940 for offences involving dealing in potatoes which were the property of the Potato Marketing Board. Brereton J determined that the terms of the Justices Act 1902 ss101 and 106 (which are the provisions applicable in the present proceedings) "make it plain that the appeal is against the determination; and if the magistrate’s decision is justified on the evidence and not affected by an erroneous decision of law the case will not be remitted": at 290. 197 In the present case, it cannot be said that these authorities assist the Defendants. It is not clear, in the present proceedings, that the Board’s decision was justified on the evidence. It would be difficult for this Court to determine that question without hearing the case ab initio, which course is not available under s130 of the Act, s101(1) of the Justices Act 1902. The only remedy available, then, to the Plaintiffs’ application is to remit the matter for re-determination by the Board.
1. the Board did err in law by interpreting "respective" in section 119(2) of the Strata Titles Act as equating to "relative";
2. the Board erred in law by placing extraordinary and excessive importance on the comparative areas of the lots when there was no evidence that the values of the lots could be determined on the basis of their floor area;
3. the Board erred in law by not interpreting section 119 of the Strata Titles Act as requiring the Board to firstly determine and have regard to the value of each lot before moving on to calculate revised unit entitlements;
4. the Board erred in law by rejecting the comparative sales evidence on the ground set out in paragraph 3.3 of the stated case when there was no evidence to support the determination that internal refurbishment made the comparative sale approach inappropriate;
5. the Board erred in law by substituting a test for ‘respective value’ of each lot by a test that did not comply with the statutory requirements of section 119(2) nor the requirements of Spencer’s Case;
6. the Board erred in law by basing its conclusions as to the proper unit entitlements on the mean between the unit entitlements calculated by each valuer where there was no evidence that averaging resulted in a reasonable ‘valuation’ of the lots;
7. the Board erred in law by making an order under section 119(1) without first having regard to the respective values of the lots pursuant to section 119(2).
8. the Board erred in law by, in its Orders of 29 July 1998, finding that it was functus officio in respect of its construction of section 119 in its Provisional View of 23 May 1998.
9. the Board erred in law by denying procedural fairness to the Plaintiffs by creating in the parties a legitimate expectation that their submissions as to the construction of section 119 in the Board’s Provisional View of 23 May 1998, would be countenanced by the Board before the making of its final orders.
10. the Board did err in law by, after having rejected the valuation evidence before it and in the absence of further and better valuation evidence, not declining the application for a review of unit entitlements.
11. the Board did err in law for failing to give reasons for its implicit rejection of the Plaintiffs’ estoppel argument raised before it.
Final Conclusions
198 Much in this case has turned on whether the contentions of the Plaintiffs as contained in the Stated Case constitute questions of law or questions of fact. I have examined each contention carefully on its own terms to determine whether it is one properly dealt with by this court as a question of law. 199 The second aspect of this case was the admission of the exhibits to the affidavit of F L Andreone of 19 January 2000. Being relevant to the various ‘no evidence’ points raised by the Plaintiffs’ contentions and submissions, that evidence was admitted. 200 In respect of the contentions contained in the Amended Stated Case, I conclude that in respect of contentions 4.1, 4.2(a), 4.3(a), 4.3(c), 4.4, 4.5, 4.6, 4.7, 4.9 and 4.11 the Plaintiffs’ claim that the determinations of the Board were erroneous in law has been made out. In respect of all of the mentioned contentions, I direct that the matter be remitted to the Board for a fresh determination of whether the Board should exercise its power under s119(1) and re-allocate unit entitlements. 201 I find that the Board did not err in law in respect of contention 4.3(b) of the Plaintiffs’ contentions as contained in the Stated Case. Furthermore, the Board did not err in law in respect of contention 4.8 of the Stated Case. 202 In respect of contention 4.11, I find that even were the Board to have erred in law by not giving reasons for its dismissal of the Plaintiffs’ argument in relation to estoppel, nonetheless given that that argument would, on legal principles, fail, I do not see any reason to remit it for reconsideration by the Board.
203 I direct the parties to submit short minutes of order to give effect to the terms of this judgment, within fourteen days.
ORDERS
**********
Last Modified: 01/07/2002
Actions
Download as PDF
Download as Word Document
Most Recent Citation
Redgum Developments Pty Ltd v G8 Education Ltd [2020] VSC 142
Cases Citing This Decision
17
Sahade v The Owners - Strata Plan 62022
[2014] NSWCA 208
Campbelltown City Council v Vegan
[2006] NSWCA 284
Cases Cited
29
Statutory Material Cited
2
Rasch Nominees Pty Ltd v Bartholomaeus
[2012] SASC 70
Boland v Yates Property Corporation Pty Ltd
[1999] HCA 64