Dropulich v McHarg - [2008] VSC 238

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 7426 of 2006

SILVIA DROPULICH, DUSAN DROPULICH AND ANGELA DROPULICH	Plaintiffs
V
LOLA ELAINA McHARG, VOLLENE McHARG AND BODY CORPORATE No RP9991	Defendants

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JUDGE:	WILLIAMS J
WHERE HELD:	Melbourne
DATES OF HEARING:	6, 7, 11 and 12 March 2008
DATE OF JUDGMENT:	2 July 2008
CASE MAY BE CITED AS:	Dropulich & Ors v McHarg & Ors
MEDIUM NEUTRAL CITATION:	[2008] VSC 238

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DECLARATION – INJUNCTION – Strata subdivision – Implied easements and rights under s 12 (2) and s 12 (4) Subdivision Act 1988 over common property – Whether licence granted to unit owner in relation to part of common property – Whether licence ratified by special resolution – Whether future licence should be expressly subject to easements and rights under s 12 (2) and (4) Subdivision Act 1988.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr P Lacava SC and Mr D Ferrari	Brand Partners
For the First and Second Defendants	Mr T Best	Angela Torcasio
For the Third Defendant	Mr M Simon	LFS Legal

TABLE OF CONTENTS

The application .…………………………………………………………………………………… 1

The issues............................................................................................................................................ 1

The fourth amended statement of claim.................................................................................... 3

The legislation.................................................................................................................................... 5

The Strata Titles Act 1967.............................................................................................................. 5
The amendment of the by-laws................................................................................................... 6
The Subdivision Act 1988 and regulations.................................................................................. 8

Background facts.............................................................................................................................. 10

The VCAT proceeding............................................................................................................... 12
The Magistrates’ Court proceeding.......................................................................................... 14
The Supreme Court proceeding............................................................................................... 17

Submissions...................................................................................................................................... 20

Conclusions....................................................................................................................................... 21

The Licence Agreement and the ratification ballot................................................................ 21
The terms of a future licence..................................................................................................... 22
Relief restraining the McHargs from preventing use of the courtyard.............................. 24
Relief against the body corporate............................................................................................. 25
Summary of conclusions............................................................................................................ 25

HER HONOUR:

The application

This is an application for declaratory and injunctive relief.

The following facts are either matters of common ground or about which I am satisfied by the evidence. The plaintiffs, Ms Silvia Dropulich and her parents, Mr Dusan Dropulich and Mrs Angela Dropulich, are the registered proprietors of unit 3 in a four unit development at 23 Camden Street, St Kilda. Ms Dropulich has lived there since about May 2003. The first and second defendants, Mrs Lola McHarg and her daughter, Ms Vollene McHarg, own unit 1 which is situated directly beneath unit 3. Mrs McHarg has lived in unit 1 since about 16 May 2003. The third defendant (which I will describe as “the body corporate”, despite it now being described as an owners corporation under the Owners Corporations Act 2006) is the body corporate in relation to the property.

There is an area of common property around the McHargs’ unit. It is described in this proceeding as a courtyard. The courtyard is surrounded by a fence which has a gate with a lock. Mrs McHarg and Ms McHarg both have keys. Keys are also held by a maintenance man and the manager of the body corporate, Mr Bill Morris, (who presently has two). Both the occupier of unit 2 and Ms McHarg also have keys…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Dropulich v McHarg

Details

AGLC: Dropulich v McHarg [2008] VSC 238
Case: [2008] VSC 238
Decision Date: 2 July 2008

CaseChat Overview and Summary

The case of Dropulich v McHarg involved a dispute between unit owners in a strata subdivision. The central issue was whether an implied easement or right existed over a portion of the common property, and if so, whether it could be overridden by a future licence. The matter was heard in the Supreme Court of South Australia. The plaintiff sought a declaration and an injunction against the defendant, who had been granted a licence over part of the common property.

The legal issues the court had to decide included whether the licence granted to the defendant was ratified by a special resolution, whether an implied easement or right existed over the common property under section 12(2) and section 12(4) of the Subdivision Act 1988, and if a future licence should be expressly subject to any such easements or rights. The court also had to determine whether the defendant’s actions constituted an unauthorised use of the common property.

The court examined the relevant legislation, case law, and the terms of the licence. It found that the defendant’s licence had been ratified by a special resolution, and that there was no express easement or right over the common property. However, the court held that an implied easement or right could exist under section 12(2) and section 12(4) of the Subdivision Act 1988. The court concluded that the defendant's licence was unauthorised as it did not account for these implied rights. Consequently, the plaintiff was granted a declaration and an injunction against the defendant’s continued use of the common property.

The court ordered that any future licence granted to the defendant must expressly reference and be subject to the easements and rights under section 12(2) and section 12(4) of the Subdivision Act 1988. This decision reinforces the importance of considering implied rights and easements when granting licences over common property in strata subdivisions.

Orders